‘What happens if Exxon stops producing gas?’ – Jagdeo shoots down natural gas idea

Amid talks to bring natural gas onshore, Opposition Leader Bharrat Jagdeo is questioning the feasibility and sustainability of the project, suggesting that the move might not be the best for Guyana.

US-owned ExxonMobil and the Guyana Government are in talks about the possibility of bringing the associated natural gas onshore via pipelines to supply cheaper alternative energy for the country’s electricity generation.

But Jagdeo on Thursday cautioned government against charging ahead with the project before conducting a feasibility study to determine if the initiative is indeed better than hydropower.

According to Jagdeo, the government seems to be making technical decisions based solely on politics.

“We have to make decisions based on technical assessments, have professionals do the study … politicians have to let numbers guide them. Instead what we have is a government with some hair-brained scheme that they are running after,” he told a news conference.

The former Guyanese leader further argued that bringing natural gas onshore may not be sustainable in the event of a hiatus or if ExxonMobil altogether stops with the production of oil offshore.

“We didn’t find a gas field, we found oil. So what if oil prices fall so low and the unthinkable happens that ExxonMobil decides to stop production for a while because they’re making huge losses … we would have made a huge investment, what would happen to the gas supply then,” he questioned, noting that the government should stop chasing headlines.

He even suggested that the government conduct a study on the use of natural gas as a source for generating electricity in the future and then make a comparison with Amaila Falls Hydropower Project.

Jagdeo maintained that the Amaila Project was the best chance Guyana had at cheaper and cleaner energy and used the opportunity to remind that Guyanese would have already been experiencing the benefits from the initiative had the APNU/AFC allowed the project to progress.

“Constructing Amaila Falls would cut electricity cost by more than 50% for the energy produced by Amaila Falls Hydropower Project or US$3.3B over 20 years,” the Opposition Leader explained as he read the independent study done by Norconsult on the project.

He also shot down recent arguments by the State Minister, Joseph Harmon who asserted that the Amaila Project was not practical because of lack of finances.

Jagdeo argued that the US$80M from Norway would have served as government’s equity and through a Build Own Operate and Transfer (BOOT) arrangement, the project would have cost the treasury not “a cent of debt”.

In fact, that US$80M is currently in jeopardy following government’s interest in pursuing natural gas.

The Stabroek News had reported that Minister Harmon explained that Norway is against the idea of natural gas as it does not demonstrate the country’s commitment towards clean and renewable energy.

ExxonMobil has also expressed an interest in moving ahead with the natural gas project, noting that if the government does not pursue the idea, then it will just reinject the gas into the oil reservoirs.