Guyana Energy and Environment Facts

Natural resources, energy and environment

In recent years, large quantities of oil and natural gas have been found off the coast of Guyana and the first commercial oil was pumped up in December 2019. Guyana is also rich in gold, bauxite, diamonds and other minerals. Mining causes serious environmental problems.

It has long been assumed that there could be oil and natural gas both on land and in the waters off Guyana. Exploration was hindered by the border conflicts with Surinam and Venezuela (see Foreign Policy and Defense). But in 2008, several foreign oil companies launched offshore test drilling in offshore areas that the United Nations Court of Appeal awarded to Guyana. The first news of large deposits came in May 2015 and thereafter a number of oil and natural gas sources were found. A consortium led by energy giant Exxon Mobil handles the extraction.

  • COUNTRYAAH: Major exports by Guyana with a full list of the top products exported by the country. Includes trade value in U.S. dollars and the percentage for each product category.

At the beginning of 2020, oil exports from Guyana began, which is expected to be a significant oil exporter. The oil is drastically changing the economic conditions in the country (see Current policy).

Gold has already been an important export commodity. In the 1990s, gold mining increased, multiplied and after liberalizing the market, Canadian mining companies invested in large-scale production at the Omai mine. The quarry was the largest in South America, but in 2005 it was considered empty and the mine was closed. It has later changed ownership and reopened.

In 2015 and 2016 another Canadian-owned mine and an Australian-owned mine were opened – together they accounted for just over a third of the gold mining.

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Inland, thousands of gold miners also work on their own with sink boilers and other simple tools, and small and medium-sized companies have taken over most of the gold extraction. Before oil sales started, gold accounted for almost half of Guyana’s export earnings.

It has also brightened for the bauxite industry, where development was long weak after nationalization in the 1970s and 1980s. A Russian and a Chinese company account for most of the mining of bauxite, a rock from which aluminum is extracted. Guyana’s bauxite is of high quality, but production and transportation are expensive due to the inaccessibility of the mines.

Diamond mining has declined during the 2000s as gold finds have attracted companies more. A Canadian company plans to mine manganese and in 2012 a large deposit of uranium was found.

The mining industry accounts for around one fifth of the country’s GDP, but incomes often vary greatly from year to year, due to fluctuations in world market prices.

Mining and especially gold mining cause environmental problems. Mercury is often used to distinguish gold in washing, and mercury is now measured in the blood of indigenous people in gold-rich areas. In the gold mine in Omai, an environmental disaster occurred in 1995, when more than two million cubic meters of cyanide flowed into the Essequibo River. Guyana has long been criticized for not monitoring how the mining industry affects the environment

Hundreds of tree species grow in the Guyanese rainforests, many of which are commercially valuable. It was not until the 1990s that timber began to be cut on a larger scale, in collaboration with companies from China, Malaysia and Indonesia. However, the authorities said they were keen to control the felling and establish local industries that can export timber in refined condition. Increased awareness of the value of the inland wilderness has also been expressed in ecotourism since the 1990s. The Guyanese rainforest is very rich and, among other things, there are up to 50 species of reptiles and amphibian animals that have never been found anywhere else.

Since the turn of the millennium, the state has paid more attention to the environmental threats. In 2006, then-President Bharrat Jagdeo launched a proposal that almost all of Guyana’s rainforest area should be placed under international surveillance in exchange for economic development assistance. An agreement with Norway in 2009 marked a step in this direction (see Foreign Policy and Defense).

Despite the many rivers, which could be utilized for a huge expansion of hydropower, only a small part of the electrical energy comes from hydropower. The high waterfalls are usually far from roads and inhabited areas. A major project in collaboration with other Chinese stakeholders was in the starting pits when the World Bank withdrew funding in 2011, after which everything was shrunk. Guyana therefore imports oil to extract electricity. This makes electricity production expensive, which is exacerbated by old-fashioned equipment and large wastage due to both an inadequate distribution system and theft.

FACTS – ENERGY AND ENVIRONMENT

Energy use per person

671 kilos of oil equivalent (2007)

Carbon dioxide emissions in total

2,010,000 tonnes (2014)

Carbon dioxide emissions per inhabitant

2.6 tonnes (2014)

The share of energy from renewable sources

25.3 percent (2015)

Guyana Energy and Environment Facts

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