When the UN’s International Court of Justice (ICJ) ruled last month that nations failing to curb fossil fuels could be liable for compensation and restitution, Guyana took notice.
The fossil fuels and climate debate has been a dominant one in the small South American country since US energy giant ExxonMobil struck oil off its coast a decade ago. Back then, Guyana was considered a climate champion due to its conservation of lush Amazon forests and strong environmental protection laws, but ExxonMobil’s discovery set the country on a very different path.
While the Guyanese government argues that oil extraction and environmental protection can coexist and it has a right as a developing nation to utilise its resources, critics believe that, amid a worsening global climate crisis, Guyana is backing the wrong horse.
Add to that what is widely recognised as a poorly negotiated contract with ExxonMobil and its partners, Guyana’s vulnerability to rising sea levels, and rapid inflation, and you have a complex landscape that threatens the country’s stability and future prosperity.
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Still, the oil has been flowing since 2019 at a rate unprecedented in the industry. “When the fifth project comes online next year, we’ll reach a million barrels a day in just over 10 years,” says Alistair Routledge, president of ExxonMobil Guyana. “For most other basins, it takes 50 years.”
This speed of extraction concerns environmentalists, who have lobbied the government to hold ExxonMobil to unlimited liability in the event of an oil spill (ExxonMobil has posted a $2 billion guarantee while it appeals a court ruling on the issue) – a political football still being kicked around in advance of the country’s general elections in September.
All this makes the recent ICJ opinion stating that countries are legally liable for the actions of the private sector all the more relevant.
While Routledge says ExxonMobil is “committed to delivering what society is looking for and ensuring we’re doing that in a way that protects the environment”, many take assurances such as these as empty promises.
Melinda Janki, a Guyanese international lawyer who was instrumental in persuading her government to include the right to a healthy environment as a fundamental constitutional right in the early 2000s, says that renewables out-competing fossil fuels shows the oil industry has no future.
That is, Janki says, despite IMF figures showing governments subsidised fossil fuels to the tune of $7 trillion in 2022 alone. “Remove those subsidies and the oil industry will collapse. The Guyanese government is living in the past, and Guyana will be left with a mess to clean up.”
Mike McCormack, a representative of the Guyana Extractive Industries Transparency Initiative, echoes that view, dismissing the notion that Guyana has a right to use its oil to catch up with the rest of the world.
“The problem is the way you are trying to catch up is the same reason you’re behind now,” he says. “Exploitation from colonial countries got us in this mess.”
McCormack believes the oil should stay in the ground, but if it is to be extracted, he says revenues should be used more progressively, for example by helping Caribbean countries mitigate risk of climate-related disasters.
“Instead, we’re doing nothing,” he says. “We don’t even stop the flaring properly. We have no sense of restraint. Exxon wants it quicker and quicker because they can see the writing on the wall.”
For Prof Ivelaw Griffith, author of new book Oil and Climate Change in Guyana’s Wet Neighborhood, the Guyana predicament is “a living paradox” – a nation pursuing the promise of oil while living the potential peril of climate change.
Speaking to The Irish Times, Griffith expresses concern about how the country’s gamble on oil might play out for the average Guyanese person and the ethnic division it could cause. He also believes planning for a new capital must begin due to Georgetown’s exposure to coastal flooding.
However, he says you cannot talk about the oil and climate debate in Guyana without addressing the Essequibo question – the region, which makes up 74 per cent of Guyana, that neighbouring Venezuela lays claim to.
“If you lose that to Venezuela, it undermines all the work you did for the oil to develop the country,” he says. “Most of Essequibo is Amazonian forest, which produces the carbon sink that captures all that bad stuff produced by fossil fuels. So, the complexity goes beyond oil, it extends to the climate change dynamics.”
The Essequibo controversy, which Griffith describes as the albatross around Guyana’s neck, is expected to be addressed by the ICJ sometime before 2027, when it will rule on the legitimacy of the existing borders.
Guyana, with a population of about 835,000, might not be on Ireland’s radar, but there’s undoubtedly interest for Ireland in all of this.
Not only because of the global impact of fossil fuel production, but also because, according to a report from Trócaire and ActionAid Ireland, €31 billion in fossil fuel investments flows through the country. And the company receiving the most investment from asset managers based in Ireland? ExxonMobil.
There’s a lot at stake for Guyana – and the world. And while the ICJ opinion is not legally binding, it will carry weight as more and more climate-related decisions are made in the courts rather than in national parliaments.
Guyanase will hope their country doesn’t become a compensation use case for the future.
This reporting was supported by the Simon Cumbers Media Fund
Voices of Guyana, an accompanying exhibition of photographs by Joseph O’Connor, runs at Blanchardstown Library until August 15th.
