Introduction
My two previous columns had addressed taking stock of 1] the ruling resource price on offer to investors for Guyana’s oil exploration and development blocks [that is the Average Effective Tax Rate, AETR, or Government Take ratio, or share of net revenue flows yielded by the ruling [Stabroek block, PSA] and 2] predictions of Guyana’s supply of recoverable petroleum resources expressed in barrels of oil equivalent, boe [which differs from mine at 28 to 30 million boe;], that is Exxon’s 11 plus billion boe; and the Government of Guyana’s, 24 billion boe].
Because the purpose of the stock-taking exercise is to afford comparison between the outcomes of the pre and post public auctions of Guyana’s oil blocks outcomes, it is required that I consider here the time horizon for ready sales of carbon emitting crude oil, in the face of the unsustainable damage being created by climate change. Today’s column takes up the challenge.
In order to avoid repetition, for this purpose, I continue to accept fully the United Nations and the US Energy Information Administration’s framing of the time horizon for drastic cuts to carbon emitting fuels, which are relentlessly fueling global climate change and transition challenges; as summarized in the next section.
The United Nations Climate Change Quarterly Q1, 2023
The UN Climate Change Quarterly observes that worldwide scientists, researchers, and affected peoples report changes beyond the natural variation of temperatures on land and in the ocean, as well as abnormal trends in the timing of seasons, in rainfall patterns, and in many other systems. “The science on climate change is clear…these abnormal changes result from global warming due to an increased greenhouse effect caused by the vast amounts of greenhouse gases added to the atmosphere by human activities”.
In response, Governments, intergovernmental organisations, non-governmental organisations, businesses, research bodies, civil society and more are working together to build the science and knowledge that allow us to tackle the causes and threats of climate change.
UN Energy Horizon: 2050
For energy, the United Nations had agreed in Paris back in 2015 to limit the global average temperature rise to as close as possible a maximum of 2 degrees Celsius. This target requires reducing energy-related carbon dioxide emissions by more than 70 per cent by 2050 compared to 2015 levels. The UN assess this is only achievable if there is a massive energy transition by 2050; along with vastly improved energy efficiency.
This 2050 energy horizon confirms with the United States Energy Information Administration 2050 forecast of global primary energy consumption by type of energy source. This is addressed in the next section.
US,EIA on Global Primary Energy
The US, EIA data support the UN target, which reveals that, despite the on-going challenges posed by the global climate transition Guyana faces a decades-long opportunity to become, and remain, a significant global player as a primary energy supplier with its petroleum resources. The desired global transition away from petroleum is, at a minimum, around three decades away.
As I have previously observed the US, EIA’s International Energy Outlook had estimated global primary energy shares from pre-Covid 2018 up to 2050. This modeling exercise centred on five modes of primary energy supply. The projected shares by 2050 are: renewables 28, petroleum liquids 27, natural gas 22, coal 20, and nuclear 4, percent.
Revealed trends are petroleum loses its pre -eminence held in 2018 and declines as a share of global primary energy supplies. The share of renewables rises from 15 percent to 28 percent; natural gas remains constant over the period, at 22 percent; with coal’s share falling the most, from 26 prevent to 20 percent, and, finally, nuclear power’s share declines from 5 to 4 percent, remaining a marginal source.
The EIA projects over 2018-50 the fastest growing energy source annually is renewables [ 3 percent]; natural gas [ 1.1 percent] petroleum [ 0.8 percent]. These data are summarized in Schedule 1below.
Looking into the future, clearly there will be an inflection point for global crude oil production circa 2050. This is attained when petroleum is overtaken as the leading primary energy supply, but between now and then its global demand is projected to increase by a whopping 30 percent! Thus, the existential threat to Guyana’s infant oil and gas sector remains a secular prospect. This is a key outcome for 1] the benefit timeline for robust global reliance on petroleum liquids and 2] my appraisal of the probable impacts of the global climate transition on that sector. 
Conclusion
Next week I wrap- up this discussion by offering brief comments on the status of the competing sources of primary energy supply.
