WEBVTT - Guyana Update: Gas to Energy for Guyana, or Problem to Profit for Exxon? 0:00:08.160 --> 0:00:11.680 Welcome back to Drilled. I'm Amy Westerveldt. I know we're 0:00:11.720 --> 0:00:14.600 in the middle of a new season on the criminalization 0:00:14.760 --> 0:00:18.680 of protest that I'm bringing you an update today on 0:00:18.760 --> 0:00:23.599 an earlier season, Light Sweet Crude, our season about the 0:00:23.760 --> 0:00:27.160 creation and expansion of a new oil and gas industry 0:00:27.240 --> 0:00:30.080 in Guyana. When we were working on that season, it 0:00:30.200 --> 0:00:33.200 was very hard to get any information at all about 0:00:33.240 --> 0:00:37.400 what was being called the Gas to Energy project. This 0:00:37.640 --> 0:00:40.720 was a plan to pump excess gas from the oil 0:00:40.800 --> 0:00:45.479 drilling offshore onshore to a facility and then use it 0:00:45.520 --> 0:00:49.520 either for export or for fuel in Guyana. A new 0:00:49.600 --> 0:00:52.760 report has come out from the Institute for Energy and 0:00:52.880 --> 0:00:57.720 Economic Analysis AIFA, and Tomsonzillo, the author of that report, 0:00:57.880 --> 0:01:02.080 spoke to me about what he has found about this project. 0:01:03.680 --> 0:01:06.520 In a nutshell, seems to be a way for Exxon 0:01:06.720 --> 0:01:10.640 to turn what was a problem for them access gas 0:01:10.760 --> 0:01:15.280 that they couldn't flare without being fined into a new 0:01:15.520 --> 0:01:20.680 revenue stream, gas that is technically free for Guyana, but 0:01:20.720 --> 0:01:23.640 that they're spending an awful lot of money. 0:01:23.280 --> 0:01:25.240 Paying Exxon to get to shore. 0:01:25.920 --> 0:01:36.559 And back with more details on that after this quick break. 0:01:49.520 --> 0:01:51.920 Okay, tell me what you looked into here. 0:01:52.200 --> 0:01:55.080 So what we did is we took a look at 0:01:55.120 --> 0:02:02.640 the gas to energy project that's being proposed in Guyana, 0:02:02.800 --> 0:02:07.960 and a couple things came out of the study. Maybe 0:02:08.000 --> 0:02:13.800 the most important one was that the need for the 0:02:13.919 --> 0:02:17.240 project is really questionable. It's kind of a risky bet, 0:02:17.360 --> 0:02:22.200 and that's because the grid system in Guyana really doesn't 0:02:22.280 --> 0:02:27.400 need something of this size three hundred mega posal. As 0:02:27.440 --> 0:02:31.600 we reviewed the documentation and all, what we came up 0:02:31.639 --> 0:02:36.240 with was if they build this, given the current capacity 0:02:36.320 --> 0:02:39.440 that they have and some other new things that they're 0:02:39.480 --> 0:02:43.000 planning to do in addition, that they would wind up 0:02:43.240 --> 0:02:46.160 the best way to talk about oversupply is that the 0:02:46.200 --> 0:02:50.920 reserve margin would be enormous. And the reserve margin is 0:02:50.960 --> 0:02:55.120 effectively whatevery utility has. If you need one hundred megawatch, 0:02:55.160 --> 0:02:57.720 you're going to build one hundred and fifteen, because that's 0:02:57.800 --> 0:03:01.600 basically how the systems work escially, as a professional standard. 0:03:02.080 --> 0:03:05.360 If they build in either scenario, we have a lower 0:03:05.520 --> 0:03:09.880 I case scenario, the reserve margin will be fifty eight 0:03:10.040 --> 0:03:14.280 percent one hundred and ninety six percent for the low load, 0:03:14.400 --> 0:03:16.359 which is if it is a sort of a slower 0:03:17.720 --> 0:03:21.320 economy and then the high load it would be twenty 0:03:21.400 --> 0:03:24.360 four to one hundred and thirty two percent reserve. So 0:03:24.639 --> 0:03:28.200 no matter how you look at it, it's significantly oversupplied. 0:03:28.440 --> 0:03:33.120 That's unfortunate that they look to build a gas project 0:03:33.240 --> 0:03:35.960 or anything. But that wasn't the only thing that we 0:03:36.080 --> 0:03:40.800 found in that they historically get this wrong. The estimation 0:03:41.160 --> 0:03:46.800 for electricity, and there we basically looked at their past 0:03:46.920 --> 0:03:52.120 practice and they were consistently overestimating the amount of electricity 0:03:52.160 --> 0:03:55.600 they were going to use. That's pretty significant over like 0:03:55.600 --> 0:03:57.680 a ten year period. Would they sort of missed it 0:03:57.720 --> 0:03:58.280 every year? 0:03:58.720 --> 0:04:01.920 And this is this is the government of Guyana, or this. 0:04:01.920 --> 0:04:03.400 Is power and light. 0:04:03.560 --> 0:04:06.520 I'm sorry, okay. 0:04:06.400 --> 0:04:10.040 That's the utility. And then the other problem that we 0:04:10.520 --> 0:04:14.000 that we uncovered is that when they made the announcement, 0:04:14.080 --> 0:04:18.479 they were working with one assumption. They then revised the 0:04:18.520 --> 0:04:21.520 analysis and then very shortly after that and they revised 0:04:21.560 --> 0:04:25.120 it by a significant amount downward. So the stuff that 0:04:25.160 --> 0:04:28.680 we're looking at, which is already you know, an over assumption, 0:04:29.200 --> 0:04:33.600 they had it much higher that justified the gas plant. 0:04:34.000 --> 0:04:37.560 Then they reduced it afterwards, and they didn't reduce any 0:04:37.640 --> 0:04:40.480 sense of that they still needed a three hundred megawatt plant. 0:04:40.560 --> 0:04:45.240 It's kind of like it's a very awkwardly done resource 0:04:45.320 --> 0:04:47.920 plan and they don't have a kind of resource planning 0:04:48.000 --> 0:04:50.039 like we have in the US that you might be 0:04:50.120 --> 0:04:52.920 familiar with. The other problem they have there, and I'm 0:04:52.920 --> 0:04:55.200 going into some length on this because I know they'll 0:04:55.200 --> 0:04:57.600 say I don't know. What I'm talking about is that 0:04:57.600 --> 0:05:01.160 they have about one hundred megawatts actually off the system 0:05:01.200 --> 0:05:06.200 of an entity, mostly industrial and commercial, that are supplying 0:05:06.240 --> 0:05:10.640 their own energy right now because the system is so unreliable. 0:05:11.160 --> 0:05:14.120 They think that's coming back on when they put up 0:05:14.120 --> 0:05:16.880 this new plant, but it probably won't because they're not 0:05:17.000 --> 0:05:20.360 planning for any new system upgrades. 0:05:19.880 --> 0:05:22.400 Transit, right, That's what I was going to ask you about, 0:05:22.520 --> 0:05:25.760 is like, you know, is there any kind of transmission distribution? 0:05:25.880 --> 0:05:28.560 No. The problem is is that they don't have a 0:05:28.600 --> 0:05:31.800 planning process that gives you that comprehensive sense. But we 0:05:31.880 --> 0:05:34.480 went into it and don't see any numbers or any 0:05:34.839 --> 0:05:38.799 you know, thought that they are consistently working to improve 0:05:39.040 --> 0:05:45.280 their reliability. But it's like in the US averages four 0:05:45.360 --> 0:05:50.240 hundred and forty minutes a year of outages. In Guyana, 0:05:50.279 --> 0:05:53.200 it's fifty one hundred minutes, so you get a sense 0:05:53.200 --> 0:05:55.880 of just how unreliable. And it's a it's a major 0:05:55.920 --> 0:05:58.599 item in the newspapers there all the time, and a 0:05:58.680 --> 0:06:02.920 major item people's daily existence. So they have a long 0:06:02.960 --> 0:06:05.120 way to go on that. And it's unlikely that the 0:06:05.160 --> 0:06:07.360 businesses are going to come back in simply because they 0:06:07.360 --> 0:06:10.039 buy a gas plant that they don't particularly need. It 0:06:10.080 --> 0:06:14.160 doesn't improve the system delivery. Right, Those are those are 0:06:14.200 --> 0:06:17.039 the kinds of things we're looking at in terms of necessity. 0:06:17.960 --> 0:06:20.960 Can I ask you, like if this has any impact 0:06:21.040 --> 0:06:23.400 on because I know one of the big promises that 0:06:23.440 --> 0:06:26.279 the government and Exon has made is that like this 0:06:26.400 --> 0:06:30.400 project is going to make electricity cheaper for people in Guyana. 0:06:30.560 --> 0:06:32.159 Well, the only way it's going to do that, I 0:06:32.200 --> 0:06:33.800 was going to get to that next is that it 0:06:33.920 --> 0:06:38.039 is essentially a system that's unaffordable and not necessarily to 0:06:38.360 --> 0:06:42.720 the rate payer, but to the taxpayer. What they've decided 0:06:42.760 --> 0:06:46.400 to do is there's no rate information in any of this. Incidentally, 0:06:46.440 --> 0:06:49.240 and we're going to be calling for the Commission to 0:06:49.480 --> 0:06:55.159 do their job. But the plan is that they're going 0:06:55.200 --> 0:06:59.280 to provide a fifty percent subsidy for rates after this 0:06:59.400 --> 0:07:04.520 is done, and that'll be obviously an annual disbursement from 0:07:04.640 --> 0:07:09.760 the Guyanese government to GPL to offset the rate that'll 0:07:09.760 --> 0:07:13.560 be out of profit oil future profit oil essentially going 0:07:13.600 --> 0:07:15.880 to get to a shot in a minute which explains this. 0:07:16.480 --> 0:07:21.040 And so the affordability issue may be minimal to the ratepayer, 0:07:21.120 --> 0:07:24.360 but it's going to be a significant burden on the 0:07:24.400 --> 0:07:28.960 budget every year, so you know you have an issue 0:07:29.000 --> 0:07:32.400 there as to whether or not it's affordable for the taxpayer. 0:07:33.840 --> 0:07:36.880 The other thing that, as I said to you, the 0:07:37.000 --> 0:07:42.080 system remains unreliable. And then what they're proposing in terms 0:07:42.080 --> 0:07:46.360 of money being spent in the grid system is when 0:07:46.400 --> 0:07:48.960 you build a gas plant, particularly when you're going to 0:07:49.040 --> 0:07:52.440 borrow to build a gas plant, you are you're going 0:07:52.480 --> 0:07:55.480 to be first of all using foreign labor for the 0:07:55.520 --> 0:07:57.440 most part, because you're going to have all of these 0:07:57.640 --> 0:08:02.000 professional engineers and construction coming in. The money is going 0:08:02.040 --> 0:08:06.120 to come from Exon lending as well as the ExM Bank, 0:08:06.640 --> 0:08:08.040 and so you're going to have a lot of the 0:08:08.120 --> 0:08:11.280 money in paying debt off that's not going to stay 0:08:11.440 --> 0:08:15.240 in the Guyana. And then there may be and I 0:08:15.480 --> 0:08:17.560 we'll get into that in a minute. There may be 0:08:17.760 --> 0:08:20.160 that the government has to pay for the gas. That's 0:08:20.200 --> 0:08:23.880 a contented matter right now. And if they do, then 0:08:23.960 --> 0:08:27.559 the fuel cost, of course gets paid to Exon, which 0:08:27.600 --> 0:08:31.480 is not money in Guyana. When you do solar, you're 0:08:31.520 --> 0:08:34.480 going to be employing, because what we're proposing is a 0:08:34.520 --> 0:08:38.800 solar investment of significant nature. When you do solar, you're 0:08:38.840 --> 0:08:41.240 going to be hiring local people. They're going to be 0:08:41.320 --> 0:08:45.839 building things in the neighborhoods, in the communities, in the 0:08:45.880 --> 0:08:50.199 towns and villages and the rural areas, and people will 0:08:50.240 --> 0:08:53.600 see that construction going on and it will be an 0:08:53.640 --> 0:08:58.200 economic benefit to each family who gets the panels, and 0:08:58.240 --> 0:09:01.600 we're trying to cover everybody, and then that will lower 0:09:01.960 --> 0:09:05.280 utility costs, which allows them, of course, some extra money 0:09:05.280 --> 0:09:08.000 in their pocket. So you have here a series of 0:09:08.080 --> 0:09:14.200 direct benefits to the Guinese people, and frankly, the Guinees 0:09:14.280 --> 0:09:16.880 people haven't seen much benefit at all from this oil 0:09:16.920 --> 0:09:19.680 money yet. They see some construction projects and all, but 0:09:19.800 --> 0:09:24.120 as for specific benefits, there really haven't been any like this. 0:09:24.440 --> 0:09:28.000 You know, Alaska, for instance, gives out cash to every 0:09:28.000 --> 0:09:32.160 citizen in Alaska because of their oil surpluses. Here they're 0:09:32.200 --> 0:09:35.959 doing you know, they're doing more generalized so called benefits. 0:09:36.480 --> 0:09:40.319 So those economic issues are also very important. So we 0:09:40.360 --> 0:09:45.760 summarize it as being unnecessary, unaffordable, unreliable and uneconomic. And 0:09:46.280 --> 0:09:51.280 so we propose a solar plan, which would be probably cheaper. 0:09:51.320 --> 0:09:53.800 We're looking to get for the first part of this 0:09:53.880 --> 0:09:58.720 one hundred percent of the residents in Guyana with solar panels. 0:09:59.160 --> 0:10:02.040 I think that can be done probably by twenty forty. 0:10:02.240 --> 0:10:04.880 We find it to be probably around the same course, 0:10:04.960 --> 0:10:09.760 but probably cheaper. Obviously it's a more predictable energy supply. 0:10:10.120 --> 0:10:12.960 If you do it with batteries, which we're building into 0:10:13.000 --> 0:10:16.240 the system, you could probably have twenty four to seven service. Again, 0:10:16.440 --> 0:10:20.800 direct benefits with low electricity bills and the greater likelihood 0:10:20.840 --> 0:10:25.920 of employment and greater likelihood of activity and local stores 0:10:25.960 --> 0:10:28.680 and what have you when you do the when you 0:10:28.720 --> 0:10:29.880 do a solar investment. 0:10:29.960 --> 0:10:32.640 I wanted to ask you one thing about the press 0:10:32.679 --> 0:10:35.160 release before we get into the chart, which is this 0:10:35.559 --> 0:10:38.280 line that says Exonmobile would profit the most from the 0:10:38.360 --> 0:10:39.120 gast entergy. 0:10:39.280 --> 0:10:45.120 Well, yeah's talk about So what you see in the 0:10:45.240 --> 0:10:49.880 left hand side of the chart is financial lender. Exon 0:10:49.960 --> 0:10:54.600 will be one of the lenders. They will be lending 0:10:54.960 --> 0:10:58.880 the money to Guyana, I believe for the pipeline, although 0:10:58.880 --> 0:11:02.600 this is unspecified, but Exon has acknowledged that this. They 0:11:02.640 --> 0:11:04.880 will be making an investment and it will have to 0:11:04.920 --> 0:11:07.520 be paid back. That's about the sum of it that 0:11:07.600 --> 0:11:11.199 I can see. Then they are going to build the pipeline, 0:11:11.360 --> 0:11:15.960 second source of profit for them. Then what we have 0:11:16.160 --> 0:11:20.760 here is two other things that aren't necessarily on the chart, 0:11:20.800 --> 0:11:22.920 but I want to give you the idea. There is 0:11:22.960 --> 0:11:27.199 a contention. Jack Deo, the vice president, has said that 0:11:27.240 --> 0:11:30.960 the gas is free and that they will not be 0:11:31.120 --> 0:11:35.160 charged for it. Right so, and if you read the 0:11:35.240 --> 0:11:38.400 contract then we go into some length in the report 0:11:38.480 --> 0:11:42.080 on this. If you read the contract, there's specific way 0:11:42.120 --> 0:11:46.000 in which Guyana would get free gas, and no matter 0:11:46.040 --> 0:11:48.600 how we look at it, that would be a very 0:11:48.679 --> 0:11:53.000 limited amount, if any. And what Exxon is saying is 0:11:53.040 --> 0:11:55.880 that they are going to be winding up selling the 0:11:56.000 --> 0:11:59.880 gas to Guyana and they will also be producing so 0:12:00.080 --> 0:12:02.000 plus gas. And I don't know how that's going to 0:12:02.040 --> 0:12:05.079 be settled because there's no no public plan put out, 0:12:05.120 --> 0:12:08.920 no contracts put out, So there's a disagreement. You know, 0:12:08.960 --> 0:12:12.880 Guyana seems to be saying it's free and Exon says no, no, no, 0:12:12.880 --> 0:12:16.880 we're selling it to Guyana. So where if you assume 0:12:17.200 --> 0:12:20.120 that they pay for the gas, then you're going to 0:12:20.240 --> 0:12:23.599 have and that dotted line that says debt bail out 0:12:23.880 --> 0:12:26.360 you should probably put in there. And I'm thinking of 0:12:26.440 --> 0:12:29.000 doing this when I at least the report debt bailout 0:12:29.000 --> 0:12:33.080 and potential gas sale. Each of them are likely, but 0:12:33.320 --> 0:12:37.280 they're not certain. And we're trying to separate those things 0:12:37.320 --> 0:12:39.520 through that that you when you settle, when you look 0:12:39.520 --> 0:12:42.120 at risk, you sort of look at the levels of it. Right, 0:12:42.640 --> 0:12:46.400 So this looks like Exceon would benefit if there was 0:12:46.440 --> 0:12:50.120 a gas sale. That would be three forms of profit. 0:12:50.760 --> 0:12:55.320 The fourth form of profit. They currently are in court 0:12:55.840 --> 0:13:00.680 still on the permit case on the flaring, and the 0:13:01.040 --> 0:13:06.600 essence of that case is Exon had permit requirements to 0:13:06.800 --> 0:13:09.840 do zero flaring. They failed to meet that. They've been 0:13:10.280 --> 0:13:14.400 fined already, but we have it in court. And what 0:13:14.440 --> 0:13:17.000 this does is it gets rid of that problem for 0:13:17.080 --> 0:13:19.760 Exon because there's not going to be flaring anymore. They're 0:13:19.800 --> 0:13:23.240 flaring because they're burning excess gas. If they're going to 0:13:23.240 --> 0:13:26.680 be moving the gas into Guyana, then the flaring problem 0:13:27.000 --> 0:13:29.520 is no longer an issue and is no longer any 0:13:29.559 --> 0:13:34.760 costs associated with attempts to comply with that permit term, 0:13:35.240 --> 0:13:38.640 and so they benefit that way. So we see at 0:13:38.720 --> 0:13:43.200 least four forms of profit for Exon, and we're not 0:13:43.360 --> 0:13:49.040 seeing a whole lot of gain obviously for the taxpayers ratepayers, 0:13:49.080 --> 0:13:51.200 because what will happen is they're going to have to 0:13:51.240 --> 0:13:53.560 pay it back, and the way the government has said 0:13:53.600 --> 0:13:56.760 they want to pay it back is with power subsidies. 0:13:56.800 --> 0:13:59.040 Now that would be and that's the line that goes 0:13:59.080 --> 0:14:02.560 from the Guinese government up to over by the rate pays. 0:14:02.640 --> 0:14:05.320 That's a subsidy that would be annually, and we don't 0:14:05.400 --> 0:14:10.080 know they say fifty percent that potential subsidy. And then 0:14:10.440 --> 0:14:15.040 the Utility Commission has warned GPL the inn of Power 0:14:15.200 --> 0:14:19.320 Life that they're borrowing too much. We agree. And the 0:14:19.640 --> 0:14:22.840 likelihood when they start adding on the debt that we're 0:14:22.880 --> 0:14:27.480 thinking about for this particular project, you're looking at a 0:14:27.600 --> 0:14:32.600 very serious financial situation, and the likelihood, again it's a 0:14:32.720 --> 0:14:36.000 risk matter, there is a likelihood of a need for 0:14:36.080 --> 0:14:38.520 a debt bailout of some kind, in which case that 0:14:38.560 --> 0:14:42.120 would benefit Excell again because they would get paid immediately 0:14:42.240 --> 0:14:45.480 and in advance for the money that they've lent to 0:14:45.560 --> 0:14:49.440 the project. So we're looking at that and saying, well, 0:14:49.480 --> 0:14:51.880 this is sort of another way they get it coming 0:14:51.960 --> 0:14:55.040 and going. But the government is going to have a 0:14:55.160 --> 0:14:58.960 problem having to stand behind this deal because if you 0:14:59.080 --> 0:15:02.880 over build on your power and you're unlikely to use 0:15:03.000 --> 0:15:06.320 the facility at one hundred percent or ninety five percent 0:15:06.360 --> 0:15:09.760 capacity because you're going to have other things, other assets 0:15:09.800 --> 0:15:12.400 that you're going to be using. So as we look 0:15:12.440 --> 0:15:14.120 at it, we say, well, how are they going to 0:15:14.480 --> 0:15:17.520 you know, how's this going to work? And the answer is, 0:15:17.560 --> 0:15:20.320 you know, they may wind up with a stranded asset 0:15:20.400 --> 0:15:23.320 where they're not able to really use it beyond the 0:15:23.400 --> 0:15:27.760 sixty percent sixty five percent capacity. And so we're saying 0:15:27.760 --> 0:15:33.360 to ourselves, well, you know that's another problem for that's 0:15:33.600 --> 0:15:36.400 you know, power subsidy, because that that'll be more that'll 0:15:36.400 --> 0:15:39.360 make it more expensive if they run it less. So 0:15:39.760 --> 0:15:43.120 you have a real set up here for a high 0:15:43.200 --> 0:15:47.920 risk venture that is likely to you know, be a problem. 0:15:48.280 --> 0:15:51.160 And what happens then is a lot of the oil 0:15:51.240 --> 0:15:54.360 profits then have to go back into something that they 0:15:54.360 --> 0:15:58.080 don't need in the first place. Right whereas if you 0:15:58.160 --> 0:16:02.040 take the oil profits and the gain these government and 0:16:02.080 --> 0:16:06.280 you invest that and you provide solar panels to families, 0:16:06.840 --> 0:16:09.640 you have a correct benefit. You don't have the borrowing. 0:16:10.440 --> 0:16:14.200 You know, you have a local economic activity, you have 0:16:14.360 --> 0:16:18.640 lower costs over time, you don't have to worry about 0:16:19.040 --> 0:16:22.040 GPL turning the lights on and off. You know, you 0:16:22.120 --> 0:16:25.840 have definitely a better improvement here that's more efficient and 0:16:26.840 --> 0:16:32.120 stable financially for Guyana. It's money that they can invest 0:16:32.440 --> 0:16:35.680 in Guyana and it stays in Guyana, so instead of 0:16:35.720 --> 0:16:38.280 the two billion or whatever it is. That's another thing 0:16:38.320 --> 0:16:40.280 that's a problem that we point down the report. There's 0:16:40.280 --> 0:16:42.440 really no clear estimate of what it's going to cost. 0:16:42.440 --> 0:16:44.080 Some are saying two billion. 0:16:43.800 --> 0:16:48.680 And right. I know that Keana, our reporter in Guyana, 0:16:48.720 --> 0:16:51.040 was saying it like they've been asking over and over 0:16:51.400 --> 0:16:54.760 for some kind of transparency around the cost of this 0:16:54.840 --> 0:16:57.840 project and it's just not coming, not coming. 0:16:58.040 --> 0:17:00.600 It's there's a lot of things in that hear that 0:17:01.120 --> 0:17:05.760 lack transparency. I mean, that's our ongoing problem. So what 0:17:05.840 --> 0:17:07.840 we were able to do here, I think, and if 0:17:07.880 --> 0:17:10.080 you look at it from that angle, is we kind 0:17:10.080 --> 0:17:15.919 of piece together a really poor disclosure system on the 0:17:16.240 --> 0:17:21.119 utility system and an even worse disclosure system on the 0:17:21.320 --> 0:17:26.960 capital part of the pipeline, and then that weak disclosure 0:17:27.040 --> 0:17:29.000 of the utility makes it very hard to do a 0:17:29.080 --> 0:17:32.960 solar power analysis, although we did our best with some 0:17:33.280 --> 0:17:36.280 I level numbers, and we are starting to see other 0:17:37.280 --> 0:17:40.720 places invest heavily in solar and so we have a 0:17:40.720 --> 0:17:43.520 little feel for what a system of this size would 0:17:43.520 --> 0:17:47.679 actually cost. And you know, we're just seeing it in 0:17:47.720 --> 0:17:49.919 a very sort of different light. And we think that 0:17:49.960 --> 0:17:52.960 if they also, if they do this gas project the 0:17:53.000 --> 0:17:55.120 way they're talking about, given what they have, they don't 0:17:55.160 --> 0:17:58.199 need to solar then and so it's going to be 0:17:58.640 --> 0:18:03.200 unlikely that people are going to be you know, using 0:18:03.240 --> 0:18:06.760 it in any great numbers, you know, particularly you're going 0:18:06.840 --> 0:18:09.280 to have a subsidy in there, so the rates will 0:18:09.320 --> 0:18:12.119 be you know, might be reasonable to the households, but 0:18:12.200 --> 0:18:16.480 the government and will have a lot of problems. So 0:18:16.800 --> 0:18:19.600 that's really kind of what we're looking at. And we see, 0:18:19.800 --> 0:18:21.440 as I said, you know, we don't see a whole 0:18:21.440 --> 0:18:23.400 lot of benefit for the public, but we do see 0:18:23.680 --> 0:18:28.959 very clear articulated benefits for Excellon and it seems to 0:18:29.000 --> 0:18:30.600 be at a recurring theme. 0:18:32.920 --> 0:18:36.440 Yeah, I would imagine that that the renewables thing would 0:18:36.560 --> 0:18:40.280 would also have a like a workforce training component too, right, 0:18:40.359 --> 0:18:43.240 that there would be some kind of local training and 0:18:43.359 --> 0:18:45.119 jobs and all that stuff as well. 0:18:46.040 --> 0:18:49.120 Where we've where I've seen them try to do these 0:18:49.240 --> 0:18:55.679 mass renewable stuff, renewable projects. That is what happens. I 0:18:55.720 --> 0:18:58.400 live in Upstate New York, and a number of years 0:18:58.440 --> 0:19:03.640 ago the state government put place a program for solar 0:19:03.680 --> 0:19:09.600 installations and energy efficiency for houses, and the local contractors, 0:19:09.800 --> 0:19:11.600 many of them, took a risk in doing it, and 0:19:11.640 --> 0:19:13.560 one of the things they did was they put together 0:19:13.600 --> 0:19:18.120 a little group schools and that training center was put 0:19:18.160 --> 0:19:21.720 together by the merchants, by the contractors. So I think 0:19:21.720 --> 0:19:24.120 you are pretty confident that if you did that in Guyana, 0:19:24.160 --> 0:19:27.199 you would have some form of training that would go on, 0:19:28.840 --> 0:19:31.040 and you know, and all the work is done locally. 0:19:31.080 --> 0:19:33.000 If you're looking at it, you know, if this is 0:19:33.040 --> 0:19:35.720 a ten or fifteen year undertaking, if you do that, 0:19:36.480 --> 0:19:39.000 you might even get some kind of production, if not 0:19:39.080 --> 0:19:42.720 in Guyana, at least you know, in closer proximity than 0:19:42.880 --> 0:19:47.760 in the US mainland or China. Nevertheless, the parts and 0:19:47.800 --> 0:19:52.000 what have you are all serviceable locally, so you have 0:19:52.000 --> 0:19:55.320 a real you have a local economic benefit here that 0:19:55.400 --> 0:19:58.520 does not compare with what happens when you put in 0:19:58.600 --> 0:20:00.040 a gas plant. 0:20:00.600 --> 0:20:03.640 Wasn't one of the things that jackdo promised about this 0:20:04.440 --> 0:20:07.560 partnership with Exxon was that basically the oil money was 0:20:07.600 --> 0:20:09.879 going to fund climate adaptation. 0:20:11.080 --> 0:20:14.720 Yeah, you know, in terms of the oil profits, there's 0:20:14.720 --> 0:20:21.879 non observable or publicly available capital plan that is laying 0:20:21.920 --> 0:20:24.040 out how they're going to do this. It looks to 0:20:24.080 --> 0:20:28.480 me like they have it the money. They're highly liquid, 0:20:28.840 --> 0:20:31.960 as in it's just sitting in an account and it's 0:20:32.080 --> 0:20:34.600 like in the billions now, which is another question that 0:20:34.680 --> 0:20:37.040 you and I some day should talk about. And then 0:20:37.080 --> 0:20:40.760 they're able to use that in any given budget year 0:20:40.960 --> 0:20:43.119 for whatever amount of money they want to pull out 0:20:43.200 --> 0:20:46.239 of it, you know, and they've been doing that, you know, 0:20:46.320 --> 0:20:50.200 since twenty nineteen. So you don't have a plan as 0:20:50.200 --> 0:20:52.280 to how the money is going to be used. And 0:20:52.359 --> 0:20:56.679 so I don't see any evidence of adaptation plans. You know, 0:20:56.720 --> 0:20:59.240 we see roads. I guess you could argue that it 0:20:59.680 --> 0:21:03.720 fast they get off of the game if there's climate events, 0:21:03.800 --> 0:21:08.040 and it's not. It's not an articulated use of the money. 0:21:08.400 --> 0:21:10.639 It seems to be more of a budget matter, and 0:21:10.720 --> 0:21:15.000 it's used as oil revenue for the annual budget, and 0:21:14.600 --> 0:21:19.160 it's enhancing those expenditures pretty handsomely in the last couple 0:21:19.240 --> 0:21:19.720 of years. 0:21:20.119 --> 0:21:25.840 Mm hmmm hm. Is there any concern that, I mean, 0:21:25.880 --> 0:21:28.240 I know what we've seen in other places in the 0:21:28.280 --> 0:21:31.399 world when there is excess gas that's not being used 0:21:31.480 --> 0:21:37.120 for energy, that the next step is building petrochemical facilities. 0:21:37.720 --> 0:21:40.840 So is there a sense that that might happen here? 0:21:41.440 --> 0:21:44.840 Well, you know, you hear little things as to what, 0:21:45.119 --> 0:21:48.800 you know, what might be next in terms of new building. 0:21:49.280 --> 0:21:52.679 Let's tossed around that there's going to be opportunities for 0:21:53.520 --> 0:21:59.600 additional industrial activity, and nothing's been articulated yet, but that 0:21:59.760 --> 0:22:03.640 seems used to be a very you know, logical possibility. 0:22:03.760 --> 0:22:08.560 The pet CAEM markets. I guess if they started now 0:22:09.440 --> 0:22:12.240 and they're going to build six or seven years from now, 0:22:12.680 --> 0:22:16.120 there's a potential that there would be some market. Right now, 0:22:16.119 --> 0:22:21.200 all the markets in single use plastics are over oversupplied, 0:22:21.960 --> 0:22:25.159 and that's going to be likely till pretty much twenty 0:22:25.200 --> 0:22:28.560 twenty nine, and then I hope, you know, hopefully we 0:22:28.680 --> 0:22:33.840 have some broader intervention into the economy so that it's 0:22:33.880 --> 0:22:37.480 more sternly regulated in that natural gas is not the 0:22:37.520 --> 0:22:41.320 only go to for the petrochemical business. You might, you know, 0:22:41.359 --> 0:22:44.080 there's a lot of emphasis in Europe, for instance, on 0:22:44.960 --> 0:22:50.800 moving fossil fuels out of petrochemicals and looking to replace 0:22:50.880 --> 0:22:55.520 it with biofuels and other kind of recyclables and what 0:22:55.680 --> 0:23:00.600 have you. There should be some ability to curb demand 0:23:00.760 --> 0:23:03.679 for gas, you know, in six or seven years, and 0:23:03.760 --> 0:23:06.439 so you may not have the kind of demand the 0:23:06.600 --> 0:23:10.160 model that we're currently using. So that's a very very 0:23:10.240 --> 0:23:13.840 risky proposition to think that this gas will be deployed 0:23:13.840 --> 0:23:17.119 and it will be significant. I think maybe we're saying 0:23:17.840 --> 0:23:23.000 fifty to sixty percent of the gas would be used 0:23:23.000 --> 0:23:26.240 by this plant that maximum, and we're probably not going 0:23:26.280 --> 0:23:28.480 to be at maximum, and then the rest of the 0:23:28.560 --> 0:23:30.720 guess they have to figure out what to do with 0:23:30.760 --> 0:23:33.600 it now. Currently I guess it could be sold into 0:23:33.680 --> 0:23:36.760 the market. The way I read it, the current contract 0:23:36.920 --> 0:23:40.720 might actually be applying, which case, you know, Gayana once 0:23:40.760 --> 0:23:43.399 again gets short change. But if there's going to be 0:23:43.480 --> 0:23:47.359 a new contract for the sale of that gas, that 0:23:47.480 --> 0:23:52.720 will be another potential revenue stream for Guyana. What you get. 0:23:52.840 --> 0:23:54.800 You know, well, I forgot if you're going to do this, 0:23:54.960 --> 0:23:58.479 and I don't advocate it, they'd be better off if 0:23:58.480 --> 0:24:01.639 they're going to sell gas to little and use the 0:24:01.760 --> 0:24:06.879 profits for a longer term, more stable component to their economy, 0:24:06.880 --> 0:24:10.160 which is solar. I don't think anybody would disagree with that. 0:24:10.240 --> 0:24:14.360 If you're looking at building the economics for the future, it. 0:24:14.359 --> 0:24:20.520 Sounds like this project is more about Exxon dealing with 0:24:20.560 --> 0:24:25.480 a gas problem than Guyana looking for a way to 0:24:26.320 --> 0:24:30.919 fix its its electricity. 0:24:31.000 --> 0:24:33.600 Yeah. Yeah, I think in terms of what the choices 0:24:33.640 --> 0:24:39.000 are the choices for the electricity system, I mean, they're 0:24:39.040 --> 0:24:42.000 claiming there's going to be a massive increase in the 0:24:42.040 --> 0:24:46.159 amount of electricity used in Guyana, and we just can't 0:24:46.200 --> 0:24:49.960 see that. We're not seeing any particular need for this, 0:24:50.320 --> 0:24:52.119 And I mean, so that's kind of how we're just 0:24:52.200 --> 0:24:53.240 looking at the whole thing. 0:24:54.160 --> 0:24:57.119 Are they basing that on like the idea that you know, 0:24:57.160 --> 0:24:59.040