THE story, “Oil company traps Ghana in long-term deal to take more gas than it needs: Int’l Watchdog warns Guyana to take heed” does a disservice to Guyanese by fundamentally misrepresenting the findings of a new study from the respected Institute of the Americas, and choosing to ignore the forest for the trees.
Overall, the Institute of the Americas study, Guyana’s Gas to Power Potential makes a thorough, well researched and resounding case for why gas-to-power would be among the most transformative steps Guyana could take this decade. It notes that gas will be absolutely critical to meeting the government’s ambitious target of cutting power costs in half and could decisively end Guyana’s historic problems with costly unreliable electricity.
We have suffered for decades from the highest energy costs in the Caribbean, and the power grid is one of the dirtiest in terms of emissions. We rely on unreliable, expensive and polluting heavy fuel oil imported from abroad. Finally, we have another option.
Despite the headlines, the study points out that in Ghana, gas-to-power provided electricity for 1.6 million new households, decreased oil imports by 12 million barrels a year, and reduced carbon emissions by 1.6 million metric tons.
The study’s only caveat was that countries need to be careful with estimating power needs, or it can be a costly mistake. Ghana made the mistake of signing a deal to pay for any gas it didn’t use. That deal has cost that government millions, but it is a particularly unique circumstance. At the time, the country was facing a major power shortfall, due to dwindling hydroelectric reservoirs, and the threat of Nigeria cutting off supplies, so it overestimated the amount of gas it needed, and bought too much for the future.
Guyana faces neither problem, and there has been no hint that the country would have any reason to sign this kind of agreement, making it puzzling that news stories have chosen to focus on an important but ultimately peripheral caveat instead of the true findings of this study.
Reading the stories about this, you might think that this cautionary tale was the focus of the study. But the LoA joined a broad group of other international organisations that resoundingly support investing in Guyana’s future by building gas to power. It does readers a disservice to imply that a respected group found otherwise.