The Biden administration is helping a consortium of oil companies led by ExxonMobil take advantage of an ongoing oil boom in Guyana by claiming that related deals will be beneficial to the environment.
Administration officials point to two such deals in particular: an oil company’s purchase of carbon credits to safeguard Guyana’s forests and a project underway to provide Guyana with electricity from offshore natural gas. These deals related to the oil boom, they argue, are enabling the country to protect its environment, even as oil companies continue pumping more and more oil from their offshore oil rigs.
“Guyana will soon be the highest oil-producing country per capita in the world,” Secretary of State Antony Blinken said during a visit to Guyana last week. “But it’s also a leader in forest conservation, demonstrating that it’s possible to prioritize climate mitigation and environmental protection while responsibly using fossil fuel resources.”
Guyana is a low-lying country of about 800,000 people on the northern coast of South America. Once one of the poorest countries in the hemisphere, with an economy based on mining and agriculture, it now has one of the fastest growing economies in the world, spurred by ongoing discoveries of offshore oil.
At the forefront of the oil boom is ExxonMobil, which leads a consortium of energy companies that includes the Hess Corporation and the China National Offshore Oil Corporation. The ExxonMobil-led consortium is quickly transforming Guyana into one of the top oil producers in the world. Its offshore oil production, which began in December 2019, is approaching 400,000 barrels per day (bpd) and is expected to increase to over 1 million bpd by 2027.
“Guyana is experiencing a massive increase in offshore oil production, a trend that is expected to continue,” the House Committee on Ways and Means noted in a press release in March, when a bipartisan delegation of U.S. officials met with Guyanese leaders to discuss the involvement of U.S. companies in the country’s oil boom.
While Guyana stands to share in the profits, it is facing significant climate-related challenges. Critics of the country’s oil boom have spent years warning that the rapid growth in offshore oil production will worsen the effects of climate change and contribute to a climate catastrophe in Guyana.
A major threat to Guyana comes from increased precipitation. In April, heavy rain caused significant flooding in the capital city of Georgetown and several coastal regions, forcing the closure of schools and businesses.
An existential threat is rising sea levels. Approximately 90 percent of the population lives in low-lying coastal areas that depend on aging sea walls to prevent flooding.
“Coastal flooding, exacerbated by climate change, is a serious risk,” the World Bank acknowledges in its country overview of Guyana. The effects of storm surges and rising sea levels, the institution reports, are anticipated to be “among the greatest in the world.”
In remarks at the United Nations last year, President Joe Biden acknowledged the dangers to countries in the Caribbean region when he noted that rising sea levels are potentially “going to put a lot of the Caribbean underwater.”
For the most part, however, U.S. officials have sent mixed messages. When meeting with representatives from across the Caribbean region last week, Blinken insisted that “we’ve been working relentlessly to avoid a climate catastrophe,” only to later defend the operations of U.S. energy companies in Guyana.
During his visit to Guyana, Blinken praised a deal in which the Hess Corporation pledged to purchase $750 million in carbon credits over the next decade as part of a UN program to reduce emissions from deforestation. The deal enabled the oil company to portray itself as a climate-friendly business, despite the fact that its purchase paled in comparison to its earnings in oil production. The company’s first contribution of $75 million was less than 5% of its 2022 earnings of $1.53 billion in Guyana alone.
Blinken also defended a deal in which a consortium of U.S. energy companies are leading a new project to generate electricity from the country’s natural gas. Under the plan, natural gas that is now being flared by the ExxonMobil-led consortium will soon be piped ashore, where two new power plants will convert it to electricity.
“American companies can bring unparalleled expertise, high labor and environmental standards, and transparency to help power Guyana’s dynamic growth, to advance regional energy security, to deliver tangible benefits to all the people of Guyana,” Blinken said.
Many of Blinken’s talking points echoed the position of the U.S. embassy in Guyana, which has spent years greenwashing the oil boom. Embassy officials regularly portray U.S. energy companies as responsible actors that are helping the country develop its energy resources in a sustainable manner that safeguards the environment.
Under the leadership of outgoing U.S. Ambassador Sarah-Ann Lynch, U.S. diplomats have been openly championing the country’s transformation into an oil powerhouse while cynically insisting that the United States is committed to helping the country avert a climate catastrophe. Last year, embassy officials played a central role in forging the deal that enabled Hess to portray itself as a protector of Guyana’s environment.
“We provided experienced climate advisors that helped Guyana secure a historic sale of its forest carbon credits to a private company,” Lynch acknowledged, referring to the deal with Hess.
Nicole Theriot, the Biden administration’s nominee to replace Lynch, has signaled that she will continue these efforts. At her confirmation hearing, she told Senate leaders that she would help make sure that Guyanese leaders “follow very sustainable appropriate ways of developing their oil and gas sector.”
“I think that’s something that U.S. companies bring to the table,” Theriot stated. “U.S. companies provide quality, reliability, and sustainability.”
The Biden administration’s approach has drawn different reactions from Congress. At Theriot’s confirmation hearing, Republican officials criticized the administration for taking the climate into consideration. Democratic officials meanwhile sought a public relations strategy for backing the oil boom while appearing concerned about climate change.
“I think there’s a phasing strategy on this,” U.S. Senator Tim Kaine (D-VA) said, indicating that the Biden administration could claim to be helping developing countries navigate a complex international environment that involves ongoing energy needs and the worsening climate crisis.
“I hope somebody from the State Department or the administration is listening: you still haven’t come to Congress and explained these competing priorities and how you intend to manage them and phase them,” Kaine said.
The more serious problem, however, is that the oil boom in Guyana is worsening the climate crisis. If the world is going to avert the worst effects of climate change, then countries must quickly transition away from fossil fuels, just as the Intergovernmental Panel on Climate Change has advised.
“We have to do more than recognize the climate challenges we face,” President Biden acknowledged in April, when he addressed a forum on energy and climate. “It seems to me we have to recommit ourselves to action while we still have the time.”
Regardless, the Biden administration has shown little interest in changing its approach to Guyana. As the ExxonMobil-led consortium continues increasing oil production, administration officials are sticking to their position that deals related to the oil boom are empowering Guyana to safeguard its environment. What they are doing, in effect, is greenwashing ExxonMobil’s operations in Guyana, where production is contributing to its record profits.