Stopping new fossil fuel asset development will monopolise sector for oil giants, says Guyana vice-president

The vice-president of Guyana, Bharrat Jagdeo, says that the call by the International Energy Agency (IEA) to stop developing new oil, gas and coal fields will create an unfair monopoly for already developed oil-producing countries and ruin the economies of new oil-producing nations.

The IEA has spent four decades working to secure oil supplies for industrialised nations.

The organisation’s new call has been motivated by demands for the world to take drastic measures to attain net-zero global carbon emissions by 2050, or risk a dangerous rise in global temperatures. In order to achieve this, the IAE says, fossil fuel production must stop now.

Fossil fuels

It is estimated that fossil fuels will still provide 60% of the world’s energy by 2040. However, the pattern of use will change, moving away from coal and towards gas, and be increasingly concentrated in industry.

At present, over 80% of the world’s energy is produced by burning coal, oil and gas.

Fossil fuels release billions of tonnes of carbon dioxide and are the biggest driver of climate change.

Petroleum, coal, natural gas and Orimulsion are the four fossil fuel types. They differ in their physical, chemical and other essential properties but the critical feature of fossil fuels is that they are not “green”, or environment-friendly.

When fossil fuels are burned, they release vast quantities of carbon dioxide, a greenhouse gas. Greenhouse gases in the air trap heat in the atmosphere, causing global warming. The global average surface temperature has increased by a little over 1˚ Celsius since 1880, the peak of the first Industrial Revolution.

“Locked-in” monopoly

Speaking at the opening session of bilateral talks with Vice-President Mahamudu Bawumia at Jubilee House today (15 October 2021) as he began a three-day working visit to Ghana, Vice-President Jagdeo argued, on behalf of Guyana, that because the world will still depend on fossil fuels for some time to come, it will be completely unfair to ask emerging oil-producing countries to halt development of their newly discovered fossil fuel assets altogether.

“The call of the IEA and the IPCC [Intergovernmental Panel on Climate Change], that we must not do any exploration in the fossil-fuel industry nor develop any assets – my point is, if we do that in the face of continuing demand for fossil fuel, what we will be effectively doing is locking in a monopoly, a $4 trillion sector, for the countries that have developed oil and gas sectors, who really do not need to spent much more on developing or exploration of more assets,” Vice-President Jagdeo said.

“If demand is growing and the renewables are not coming in at the pace to keep up with the demand, you are going to need fossil fuel for a while to come in spite of what we say.

“We support the carbon price, we support a decarbonised future, but don’t tell us not to develop these resources,” the Guyanese leader said.

Whose transition?

Dr Mahamudu Bawumia, siding with his counterpart from Guyana, declared that Ghana very much supports the net-zero target that has been set as a global objective to slow down the rate at which the world’s climate is changing.

However, he noted, the world is going to need fossil fuels over the next two decades and any recommendation for new oil-producing countries to stop new asset development will cripple the economies of developing countries.

“Net-zero is something that we all are very interested in and very supportive of, and so we want to have that as a goal down the road,” said Dr Bawumia. “But if you lock in, and nobody has to produce, then you have restricted supply in the face of increasing demand.

“There is only one way for price, which is up, and that will cripple our economies.

“We have to look at how we transition. That transition is not going to be overnight. There is going to be a demand maybe over the next 25 to 30 years. That is the reality,” Dr Bawumia declared.

Working visit

During his three-day working visit to Ghana (15–17 October), the vice-president of Guyana will take part in a technical meeting between members of his delegation and their Ghanaian counterparts at the Petroleum Commission on Saturday (16 October).

Later that day, he will visit the Kwame Nkrumah Mausoleum, where he will lay a wreath, plant a tree and tour the site.

On Sunday 17 October, Vice-President Jagdeo will visit a road construction site at Amasaman in Accra, and a real-estate company and insurance firm, both also in Accra.

Before leaving Ghana, he will hold a meeting with representatives of the private sector in Ghana, engage with the press and confer with the management of an oil and gas company based in Labone.

Wilberforce Asare

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