Despite Risks to Climate, U.S. Backs Oil Boom in Guyana

The Biden Administration is supporting ExxonMobil’s oil exports from the South American nation, ignoring the dangers of global warming caused by fossil fuels.


BY EDWARD HUNT
THE PROGRESSIVE
JULY 8, 2021


Under the Biden Administration, the United States is helping ExxonMobil establish major new oil operations off the coast of Guyana, a small South American nation that is set to become one of the world’s major suppliers of oil.

U.S. diplomats have continued to support the country’s transition to energy production, despite President Biden’s repeated acknowledgments of the dangers of global warming and his campaign pledge to “transition away from the oil industry.”

While President Joe Biden warns about the dangers of global warming and supports global action to reduce emissions from fossil fuels, his administration is undermining his stated goals by shepherding an oil boom in Guyana that has the potential to transform the country into an oil-exporting powerhouse.

The amount of oil in Guyana is “staggering” and “just incredible,” said U.S. Ambassador to Guyana Sarah-Ann Lynch, at a forum in March. “Guyana is on track to become the second or third largest oil producer in the Western Hemisphere over the next twenty to forty years.”

Since 2015, ExxonMobil has made several major oil discoveries off the coast of Guyana. The company claims to have identified an estimated nine billion barrels of recoverable oil, an amount comparable to the proven oil reserves of major regional oil producers such as Brazil and Mexico. ExxonMobil now has six drillships operating off the coast of Guyana.

Once ExxonMobil began oil production in December 2019, it sparked major economic growth in Guyana. In 2020, the nation’s economy grew by nearly fifty percent, even as much of the world faced economic hardship due to the impact of the coronavirus pandemic.

“Despite a crash in global oil prices and economic headwinds brought on by COVID-19, Guyana’s nascent oil production made it the fastest growing economy in the world,” Lynch noted last May.

U.S. diplomats have played a central role in facilitating Guyana’s transformation. They have worked to mitigate several controversies that have threatened to disrupt the country’s shift to oil production, including a border dispute with Venezuela, a controversial contract with ExxonMobil, and a disputed presidential election in 2020.

In September 2020, then-Secretary of State Mike Pompeo visited Guyana, signaling the country’s growing importance to the United States. Pompeo was the first U.S. secretary of state to visit Guyana since its independence from Great Britain in 1966.

“The United States is ready to be your partner of choice as you face big decisions moving forward, especially on energy and future prosperity in your country,” Pompeo told Guyanese President Mohamed Irfaan Ali.

Under the Biden Administration, U.S. diplomats have continued to support the country’s transition to energy production, despite President Biden’s repeated acknowledgments of the dangers of global warming and his campaign pledge to “transition away from the oil industry.”

At the U.S. Embassy in Guyana, Lynch regularly hosts meetings with business leaders interested in capitalizing on the oil boom. The virtual forum she spoke at in March was an oil and gas webinar. In May, she gave a talk on opportunities in the country’s agricultural markets.

“This is a time of unprecedented opportunities,” Lynch said.

Critics say that Guyana is taking a major risk by embracing oil production. The country’s transformation will likely worsen global warming and undermine Guyana’s commitments under the Paris Climate Agreement.

Most Guyanese people live along the country’s coastal plain, making them especially vulnerable to flooding and rising sea levels. Recent severe flooding affected thousands of households, leading President Ali to declare a national disaster.

“Climate change poses a serious threat to Guyana,” USAID official Clinton White acknowledged after the flooding.

Trying to stop the country’s shift toward oil production, two Guyanese citizens are suing the Guyanese government over its decision to move forward with offshore drilling. They argue that the government’s actions threaten the right of the Guyanese people to live in a healthy environment.

Even as Guyana faces threats from climate change, U.S. officials remain focused on transforming the country into a major oil exporter. U.S. diplomats openly support President Ali’s plan to use oil to transform Guyana into the region’s “economic powerhouse.”

Some members of Congress have voiced their support, suggesting that Guyana’s transformation presents geopolitical advantages to the United States. Supporters believe that transforming Guyana into an oil-exporting powerhouse will sideline U.S. regional rivals, especially Venezuela.

“With Guyana’s oil sector growing and potentially providing an alternate to Venezuela’s, the oil and gas sector is critical to their country and could transform it from one of the Caribbean’s poorest countries to its wealthiest,” U.S. Representative Mark Green, Republican of Tennessee, said at a Congressional hearing last month.

Other U.S. officials have been more critical of the U.S. approach, especially as it concerns climate change. They believe the United States should take into account the ways global warming will affect low-lying Caribbean countries such as Guyana.

As U.S. Representative Albio Sires, Democrat of New Jersey, said last month, “The severe flooding that Guyana has faced in recent months is a reminder that climate change is having a devastating impact on our friends in the Caribbean.”