While finally moving to explain the government’s rationale for the selection of Wales, West Bank Demerara as the site of an ambitious gas-to-shore project, Vice President Bharrat Jagdeo yesterday announced plans for the associated Environmental Impact Assessment (EIA) and other critical studies to be undertaken this year and promised that all details will be made public.
Speaking at a news conference at the Arthur Chung Conference Centre, Jagdeo said financial estimates for the venture were pegged between US$500 million and US$800 million “depending on the size of the pipeline, the geotechnical surveys… all of that. Then when we go out to tender — that is the time we will know the actual cost of it.”
He was firmer on the expected benefits in terms of the cost of power, saying that it could range from some US 6 cents per kilowatt hour (kWh) to US3 cents. “That means if we can, when we build the power plant, get the capital payments down to about another 3 cents or so,” he said, while noting that it is government owned, the cost would be even less, if the capital expenses aren’t amortized. “We are talking about US5 or 6 cents per kWh. Now we are selling at US30cents per kWh… You are looking at a significant reduction in energy cost. Huge! We are working through the numbers and the project is still in the preparatory stage. We are just doing studies so these are just estimates now but this is the magnitude of the studies,” he added.
Given the current estimates, Jagdeo said that government feels that the investment is “very, very, feasible” but would wait for the analysis and studies. “The benefits are enormous. It is a no brainer to even suggest [otherwise],” he emphasised.
In December, Jagdeo had told this newspaper that the former Wales estate was the proposed site for the project, while adding that critical decisions regarding the geotechnical, geophysical and the environmental studies that would advance the project had been made.
Minister of Natural Resources Vickram Bharrat had added that bidding for the contract to lay the pipelines and the construction of the site were to begin this year.
But Jagdeo yesterday explained that decisions were made pertaining to location choice but added that detailed assessments and other studies are needed to advance the project and would be done.
He said a decision on the selection of Wales was undertaken from “internal” analyses of proposals inherited from the former APNU+AFC administration.
A 2017 desk study for the APNU+AFC had identified Clonbrook from a number of locations as the best site for the landing of a gas to shore facility. It had compared locations at Vreed-en-Hoop, Kingston, Garden of Eden, and Canefield. Another study, which was examined by the Guyana Power and Light Company, had suggested the landing at Ogle on the East Coast of Demerara while yet another had suggested Crab Island.
In addition, former presidential advisor Jan Mangal had said that ExxonMobil had already established a team to discuss the project and the Inter-American Development Bank (IDB) had said that it would fund a feasibility study of this country’s coastline to determine the most suitable location for the landing of the pipes and setting up of a power station. While not giving a specific location, Mangal said that it was also recommended that the pipes be laid on the “West Side” of the Demerara River.
Jagdeo said that government had come down to two choices from many considered by the APNU+AFC government — Ogle or another on the East Bank of Demerara. However, given that the majority of Guyana’s population lives on the coastland and in particular Region Four, Jagdeo said that government rejected the region as a possible landing site. When land space, the possibility for future development, population density and access, among other key factors, were taken into consideration, he said Wales was chosen.
He assured that the comparative analysis will be released to the public as would all other studies. Given that the EIA would require public input, he said that this country’s citizenry should not be worried about access to information as his government is committed to a transparent process. “Yes, we will make those available,” he said.
Also advocating for the gas to shore project is former Director of the Environmental Protection Agency (EPA) Dr Vincent Adams but he has been firm that a rigid EIA must be undertaken. He has called on the public to “actively participate” when it is initiated.
“For a project of that magnitude, an EIA must be done…has to be done. Absolutely! There is no going around that. It’s not only about the pipeline but also the onshore operations to refine and distribute the gas which pose high risk to the air, water and soil, and must be mitigated in the plan,” Adams had told this newspaper last month.
Calls have also been made by members of civil society for the environment to be strongly
factored in before a decision is made on the location and by extension the overall project, and that the public be privy to studies and reasons for decisions taken.
At a Moray House panel discussion last month, environmentalist Dr Janette Bulkan said the current administration should change its focus from associated gas-to-shore and use the financing to invest in renewables, as this is where the world is currently heading. She said that this country lacks the monitoring and enforcement capacity to properly oversee a gas-to-shore project as it could not even properly manage the Demerara Harbour Bridge so that mariners not collide so often with it, more so guard against risks to underground pipelines.
“No to gas-to-shore because this is incompatible with Guyana’s INDC [intended nationally determined contribution] with the Paris Agreement” on climate change, she said, while explaining that because of gas flaring from offshore oil operations, this country’s emissions are already high and to have gas-to-shore would exacerbate that.
Jagdeo yesterday said that as government works to bring cheaper energy in the short term, it is working on plans for the adoption of renewables in the long term.
It is to this end that he announced that monies from Norway’s forest pact with this country will be used to fund a solar project for the Essequibo and Linden. “We will be working on renewables and that is why we will restart discussions for Amaila Falls very soon to add to the mix,” he said.
“There will be a significant amount of solar, although it is not baseload because you need battery storage. We are trying to put in a small amount of storage to keep the spinning reserve. Using solar, gas and hydro and that is the key,” he added.