GEORGETOWN, Guyana — Basjit Mahabir won't let me in.
I'm trying to convince Mahabir to open the padlocked gate of Finca Wales, where he guards the ramshackle remains of a factory surrounded by miles of fallow sugarcane fields. The cultivation and milling of sugar on this plantation about 15 kilometers from GeorgetownGuyana's capital, was completed seven years ago, and parts of the complex have been sold for scrap.
I give you arguments. “I lived here when I was a kid,” I say. “My father ran the field laboratory.” Mahabir is kind, but firm. I'm not going to enter.
The ruins are the vestiges of a sugar industry that, after enriching British colonizers for centuries, was the measure of the nation's wealth when it achieved independence.
The farm is now slated to be part of Guyana's latest boom, an oil rush that is reshaping the country's future. This nation of 800,000 inhabitants is at the forefront of a global paradox: even as the world promises to abandon fossil fuelsdeveloping countries have many short-term incentives to engage further with them.
Before oil, outsiders mainly came to Guyana in search of ecotourismattracted by the tropical forests covering 87 percent of its territory. In 2009, the effort to combat global warming turned this into a new kind of currency when Guyana sold carbon credits totaling $250 million, essentially promising to keep that carbon stored in trees.
Six years later, Exxon Mobil discovered a trove of oil under the coastal waters of Guyana. Soon, the company and its consortium partners, Hess and the China National Offshore Petroleum Corporation, began drilling at an unusual speed. Oil, now burned primarily in Europe, is enabling more global emissions—and producing colossal wealth.
The find is expected to become Exxon Mobil's biggest source of income by the end of the decade. The deal that made this possible – and that gave Exxon Mobil most of the profits – has been the cause of public outcry and a lawsuit, with an apparent consensus that Guyana lost out. But the deal has so far generated 3.5 billion dollars for the country, more money than he has ever seen, much more than he made from tree conservation. Enough to chart a new destiny.
The Government has decided to pursue that destiny by investing even more in fossil fuels. Most of the oil revenues available in its treasury will go to the construction of roads and other infrastructure, in particular a 245 kilometer pipeline to bring natural gas ashore to generate electricity.
The pipeline will run through the Wales Estate and carry the gas to a proposed power plant and a second plant that will use the byproducts to potentially produce cooking gas and fertilizer. The project will cost more than 2 billion dollars. The hope is that with an abundant and predictable supply of cheap energy, the Country can develop economically.
At the same time, climate change is hitting Guyana's coasts; Much of Georgetown is expected to be underwater by 2030.
Countries like Guyana are caught in a gathering storm, where the consequences of fossil fuel extraction clash with the incentives to do so.
For centuries, foreign powers set the conditions for this piece of South America in the Atlantic Ocean. The British, who first took possession in 1796, treated the colony like a large sugar factory.
The Country freed itself from its imperial shackles 57 years ago, but true democracy took longer. It was not until the early 1990s that Guyana held free elections. The institutions of democracy began to emerge, such as an independent judiciary. And the legislature passed a series of strong environmental laws.
Now that Exxon Mobil has arrived to extract a new resource, some activists see those protections as threatened. They criticize the fossil fuel giant, with global revenues 10 times Guyana's gross domestic product, as a new kind of colonizer and have sued its government to pressure it to enforce its laws.
Vickram Bharrat, Minister of Natural Resources, defended government oversight of oil and gas. “There is no evidence of bias toward any multinational corporation,” he said. In a statement, Exxon Mobil said its work on the natural gas project “will help provide reliable, low-emission gas-powered electricity to Guyana's consumers.”
The world is at a critical juncture and Guyana is at the crossroads. The discovery of oil in Guyana has raised questions of enormous importance. How can rich countries be held accountable for their promises to abandon fossil fuels? Can the institutions of a fragile democracy keep big corporations in check? And what kind of future does Guyana promise its citizens by betting on basic materials that much of the world promises to make obsolete?
Independence came to Guyana in 1966, but the American and British governments brought to power Guyana's first leader, Forbes Burnham, a black lawyer who was considered more docile than Cheddi Jagan, a radical son of Indian plantation workers, who was seen as as a Marxist danger. But Burnham became dictatorial and, in a twist of geopolitical fate, socialist.
In the 1970s, Burnham took control of the Country's resources, nationalizing sugar production and bauxite mining. Like other former colonies, Guyana wanted to break with imperialism both economically and politically.
Burnham's death in 1985 triggered events that began to change the Country. Jagan, by then already an old man, was elected President. Soon, a younger generation of his party took power and embraced capitalism.
Private companies could again bid for Guyana's vast resources. Then came evidence of the dangers of uncontrolled mining. In 1995, a dam at a Canadian-owned gold mine collapsed. The 1.5 billion liters of cyanide-laden waste it had retained contaminated two major rivers.
Tragedy led to action. The following year, the Government approved its first environmental protection law. Seven years later, the right to a healthy environment was added to the Constitution.
For a moment, Guyana's natural capital—the vast rainforests that make it one of the few countries that is a net carbon sink—was among its most prized assets.. Bharrat Jagdeo, then President, sold the carbon stored in his forests to Norway to offset pollution caused by that country's own oil production in 2009. Indigenous groups received $20 million to develop their villages and obtain titles to their lands. ancestral lands.
And then Exxon Mobil found oil.
The vision of a green Guyana now competes with its rapidly growing status as one of the world's largest new sources of crude oil. Jagdeo, who is now Vice President of Guyana but still dictates much of government policy, is an ardent supporter of the Wales project.
David Boyd, UN special rapporteur on human rights and the environment, describes the country as a front line of litigation to fight climate change. It includes the first constitutional climate change case in the region, brought by an indigenous tour guide and a university professor.
In February, Liz Deane-Hughes, whose father founded one of Georgetown's most respected law firms, virtually joined other activists at a hearing before the Inter-American Commission on Human Rights, arguing that oil companies have compromised environmental governance in Guyana. These activists filed lawsuits against the oil companies.
Simone Mangal-Joly, a specialist in environment and international development, said the Government has failed in its oversight duties. As part of her doctoral research at University College London, she discovered that the Guyana Environmental Protection Agency had waived environmental studies for all facilities that treat toxic waste or store radioactive materials produced by offshore oil production. .
And in January, the APA waived an environmental assessment for the proposed plant in Wales because Exxon Mobil, although not building the plant, had conducted one for the pipeline.
The APA defended the decision. “It is good and common practice” to rely on existing environmental assessments “even when performed by other project developers,” an agency spokesperson wrote.
Mangal-Joly said the power plant is located on an aquifer that supplies drinking water to most of the Country. “Our water table is shallow,” he said. “We are plundering a resource much more valuable than oil.”
The dispensation infuriated Deane-Hughes. And the independence of the board that listens to citizens' concerns seemed like a farce. His president, Mahender Sharma, heads Guyana's energy agency, and his wife heads the new government company created to run the power plant. At a board hearing, Deane-Hughes cited the mandate against conflicts of interest in the Environmental Protection Act and called on Sharma to recuse himself. Six weeks later, the board made a decision: It allowed the power company to keep its environmental permit without making an impact statement.
For Melinda Janki, the lawyer handling most of the activists' lawsuits, the question is whether Exxon Mobil can do whatever it wants. “Even though it is a huge oil company, it still has to obey the law. The rule of law is the rule of law,” she said.
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