Jagdeo warns of rising oil prices without renewable energy

Last Updated on Friday, 12 August 2016, 15:16 by Denis Chabrol

Opposition Leader, Bharrat Jagdeo on Friday urged that contingency measures, including the construction of the Amaila Falls hydro-power plant, be used to cushion the impact of gradually rising world oil prices.

“We are enjoying a period of relative calm and basically good prices but these are going to turn against us again,” he told a luncheon organised by the Guyana Manufacturing and Services Association (GMSA).

“Prices are going to climb back in the future for fossil fuel…We have no plan and we are not even making short-term investment plans,” said Jagdeo, a Russian-trained economist and former Finance Minister.

The David Granger-led administration’s Green Energy policy focuses on sourcing solar, wind and hydro electricity.

Latest figures show that Brent crude, the international benchmark used to set prices in the North Sea, at US$46.60 per barrel. Already, Guyanese were in June 2016 asked to pay more for kerosene, gasoline and diesel because of the rise in global oil prices.

The International Energy Agency (IEA) says there will be a slowdown in the demand for oil next year, at 1.2 billion barrels per day down from 1.4 billion barrels per day.

Guyanese were in June 2016 asked to pay more for gasoline, diesel and kerosene after reaching a price of more than US$52 per barrel.  After falling 14.5 percent in July due to a combination of factors, the price shot up on Thursday by five percent after Saudia Arabia signaled that it would cut production.

Jagdeo said his concern that oil prices would skyrocket again in the future were real, but Guyana has so far failed to invest in renewable energy sources- mainly hydropower such as the Amaila Falls Hydropower project. “We will be caught flat-footed with shortages because we don’t have adequate power in the system and the cost will be horrendous to consumers and the public and that’s why we have to factor in the international trends,” he said.

The former President appealed to the APNU+AFC coalition administration to make decisions today to source renewable energy. Jagdeo is not in favour of massive investments in solar and wind energy because of the chances of prolonged cloud cover and less wind. Instead, he favours hydropower which he said is subjected to serious drought once every three or five years.

Norway is currently spearheading a review of the Amaila Falls Hydropower project to ascertain whether it is feasible, against the background of the APNU+AFC coalition-led administration that to pursue the project based on the model by the then People’s Progressive Party Civic (PPPC) administration would be criminal.