Guyana’s Climate Conflict and Why We Should Be Paying Attention
Over the past five years, the discovery of oil in Guyana has set it up to become a rapidly expanding region in South America. Available revenues in the country are projected to reach $5 billion by 2025. However, the circumstances around this discovery are mired in difficulty.
April of this year saw a historic moment as the “price” of oil. A highly variable metric, the price of oil dropped below zero for the first time in history as fuel demand in particular plummeted worldwide.
Guyana’s oil has come at the time of a global awakening regarding the urgency for environmental revolution. As one of the poorest countries in the world, Guyana will keenly feel the impact of climate change. In particular, rising sea levels will prove severe for Guyana’s majority coastal population. According to UN climate reports, around 90% of Guyanese citizens will be impacted by flooding. The climate emergency is already making itself seen in several parts of the country. Crumbling flood defences are proving ill-equipped to prevent regions from Mahaicony, an important producer of food for the region, has been plagued by salt water floods overcoming crumbling flood defences and ruining crops.
The oil boom that Guyana is on the verge of experiencing has provided a lifeline to allow repairs to this coastal region to take place. Before a pandemic swept across the globe, factories on the Wales Sugar Estate just outside Georgetown were closing at rapid rates. COVID-19 has hit the Guyanese economy hard, as the non-oil industry has shrunk by 49.5% in the first half of 2020.
However, these are worrying signs that Guyana will see oil overtake other industries and could become an economic crutch for the country, a pattern that has recurred in several other newly discovered oil-producing regions. There is some hope that these issues are being pre-empted by some in Guyana’s new government. Vice-president Jagdeo has already warned against the Guyanese diaspora returning to the country to fill public sector positions, to curtail a public sector drain that has scuppered other new oil economies.
As the Guyanese government juggles these new demands, the sudden burst of activity in the country has already put aspects of its infrastructure under strain. The infrastructure Guyana possesses is not currently capable of coping with high traffic coming to its ports. Trinidad and Tobago’s port, which shares proximity to Guyana, is currently assisting them in oil production as the Georgetown port does not currently have the appropriate depth to hold oil transportation vessels.
T&T proves an interesting point of comparison regarding Guyana’s nascent oil boom. The Caribbean country experienced its own economic explosion in the 1970s thanks to the discovery of the fossil fuel off its shores. President Eric Williams welcomed the discovery with open arms, symbolically lowering the oil company’s banner from Point Lisas to replace it with the country’s own red-and-black flag.
However, the statesman’s full embrace of the oil industry was not a promise of any particular form of reward. From 1970 to 1979, Trinidad saw an increase in oil exports earned of $891.3 million dollars and very little development to show for its boom. Jobs withered, and corruption blossomed within the country.
There is a considerable worry of something similar happening in Guyana — corruption siphoning this sudden injection of wealth to a select few in the country. An inquiry by Global Witness has already raised questions over negotiations between Exxon oil and Guyanese government officials. They reported on the grooming of politicians by oil executives in Texas, wining and dining them before pushing a contract over the table that proved concerning in terms of the power it afforded the intruding oil company.
Equally, previous environmental action from politicians in Guyana does not promise strong safeguarding. Yves Engler has reported on an incident in 1995 which saw over 1.2 billion litres of toxic waste from a Quebec-owned gold mine enter the Essequibo River. A cover-up resulted in Canadian High Commissioner Louis Gignac enacting a choke-hold on the region, forcing a limited investigation to be abandoned and forcing non-disclosure signatures from local fishermen.
Already we see slithers of evidence that there has been weak negotiating on the part of the government regarding the revenues from oil and environmental process. Waived environmental orders early last year on fibre optic connectivity projects could suggest weak challenges to Exxon.
This is evident in one of the largest environmental contests in regarding oil in Guyana so far. Dr. Troy Thomas and legal council recently won a landmark lawsuit against Exxon. The expiry date of Exxon’s environmental permit would originally expire in 2040, allowing Exxon over twenty years with limited scrutiny. It has been reduced to 5 years from the signing of their original contract. This means that the environmental legitimacy of the project must be examined and renewed again in 2022.
The attorney of the case, when speaking on his victory in court spoke of what the battle against environmental collapse means to the Guyanese people, spoke on the precarious position that Guyana is in:
‘Successive governments have given away Guyana’s oil. We must not allow them to destroy Guyana’s rich marine resources as well. Guyana has strong environmental laws to protect the nation against dangerous oil and gas…It is clear that the people cannot rely on the government or the so-called conservation organisations to protect Guyana’s rich biodiversity. Our future depends on individuals who are willing and patriotic enough to step forward as Dr. Thomas has done.’
All of this is without concentrating on the geopolitical situation with Venezuela. That border dispute has set alight a series of other geopolitical conflicts in the region, regarding Brazil in particular, that are pretty fascinating to look at. We will come back to this on a future post.
Exxon has made it clear that oil production in Guyana is vital in their projections for the next few decades. Indeed, even as large oil companies offer concessions to climate movements, the truth is that all their plans involve enormous expansion over the next few decades. As tech companies cosy up to oil companies, demonstrated by Exxon recently partnering with Microsoft in what they described as ‘the industry’s largest [contract] in cloud computing,’ their influence looks set to increase even against mounting pressure from the world at large.
However, 2020 has thrown all predictions by fuel companies into disarray. Climate action is mounting, and renewable energy has accelerated in energy production much faster than predicted. And Guyana demonstrates that the Caribbean will once again be the battleground upon which the most defining conflict of a century will be fought.
