A STUDY on the feasibility of ethanol production by the United Nations Economic Commission on Latin America and the Caribbean (UN-ECLAC) has revealed that Guyana has a comparative advantage in the production of the renewable fuel, which has now attracted worldwide attention.
The report of the study was launched yesterday at the Cheddi Jagan Research Centre in Georgetown and officially handed to Prime Minister Samuel Hinds, who has responsibility for the energy sector, by Director of the Regional Sub-Office of ECLAC, Guyanese-born Mr. Neil Pierre.
The report says that given existing conditions in Guyana, the production of sugar cane ethanol to replace imported gasoline is attractive when molasses is used as the raw material.
It adds: “Direct production of ethanol from cane juice, which results in lower sugar output, would be dependent on current prices, which may or may not be favourable to ethanol. The molasses supply in Guyana is highly favourable for ethanol bio-fuel production; just 38% of the available supply of exhausted molasses would suffice to produce 11.5 million litres of ethanol, the amount needed for a 10% ethanol-gasoline blend in the country’s entire gasoline consumption.”
Mr. Manuel Coviello, who along with Luiz Augsto Horta, prepared the ECLAC report, explained that 10% of ethanol can be used in any gasoline engine without any major modification.
He also observed that producing ethanol from molasses is both attractive and competitive and excellent conditions exist here for the use of bio-fuels which would stimulate new jobs, bring economic benefits and would be more environmentally friendly, alluding to the high proportion of the national Gross Domestic Product of 29% which is used to purchase fossil fuels.
An investment of some US$6.5M will be needed to kick start ethanol production in Guyana, Coviello reported.
Pierre said that in the face of declining oil reserves, it is now questionable whether there will be enough to sustain development in the underdeveloped south, stressing that for centuries fossil fuels have been used to propel industrial development in the rich north which has resulted in environmental pollution and global warming.
In such a scenario, he said it is becoming increasingly necessary to move towards the development of renewable sources of energy.
According to Pierre, production of ethanol from sugar cane is most cost effective and the use of it will create employment and reduce carbon emissions.
He also pledged ECLAC’s willingness and commitment towards providing further technical assistance to help formulate a policy on the production and consumption of bio-fuels and to do a detailed study into the feasibility of commercial production.
Mr. Hinds said several issues which are both inter-connected and distinct at the same will have to be pondered upon before embarking on further steps in the production of ethanol.
He indicated that there is a market for energy crops and the use of land for food production/energy purposes and possible conversion of forest lands into growing energy crops.
Implications for the European Union (EU) agricultural programme would have to be considered and whether it will be practicable in Guyana to institute laws to mandate a specific proportion of ethanol to be blended with gasoline as has been one in some countries, the Prime Minister said.
He said too that about one third of the molasses produced here is no longer on long term supply contract and could be diverted to ethanol production.
Agriculture Minister Robert Persaud said bio-fuel production provides a platform agricultural and economic diversification and a stimulant for investment.
So far there have been four serious investment proposals on ethanol production and a fifth is on its way, Persaud noted.
However, he cautioned that before getting into such a venture it will be necessary to look at the experience of other countries and compare that with the peculiarities of Guyana so as to “get it right.”
The minister stressed that lands under cultivation of food crops will not be diverted towards the production of ethanol.
Virgin lands, he said, will be used for this purpose and one such plot in the Canje basin in Berbice has been identified as a possible location.
He announced too that the Inter-American Development Bank (IDB) and the Inter-American Institute for Agricultural Cooperation (IICA) will be hosting a forum in Guyana on bio-fuels in August this year.
Chief Executive Officer of the Guyana Energy Agency (GEA), Mr. Joseph O’Lall observed that the main problem affecting the energy sector is its almost total dependence on fossil fuels as a source of energy.
He noted that escalating oil prices are putting an economic strain on Guyana and depleting foreign exchange reserves as well.
He revealed that in 1995 fuel costs were 16% of GDP; 17% in 1996; 28% in 2004; and jumped to 38% in 2005.
Such a situation necessitates the search for alternative sources of energy, O’Lall said, noting that Guyana has a huge potential in renewable sources of energy such as hydropower, wind, and solar.
A new policy on renewable sources of energy is being formulated as one which was produced in 1994 has become outdated, he said.
He also indicated that investment in renewable sources of energy is most welcome.
O’Lall noted too that a small but significant start has been made in this area with the production of bio-diesel from coconut and palm oil, which was spearheaded by the Director of the Institute of Applied Sciences and Technology, Dr. Suresh Narine whom he commended for such a fine initiative.
Advisor to the President on Science, Technology and the Environment, Mr. Navin Chandarpal noted that the issue of bio-fuel production has generated a lot of discussion globally and an interesting debate is ongoing on whether to use land for food or energy production.