This article appears in the February 17, 2023 issue of Executive Intelligence Review.
Come Hell or High Water, We Are Going To Develop Our Energy Projects
Ugandan attorney Elison Karuhanga is a trained oil and gas lawyer with the firm Kampala Associated Advocates. He is a member of the Uganda Chamber of Mines and Petroleum.
Uganda is an African country, as you know. It’s a land-locked country that discovered 6.5 billion barrels of oil. The oil in Uganda is 1.5 billion barrels of it so far recoverable; that’s just in 40% of the area. The country has resolved that it will have a crude oil export pipeline and a refinery, and it will also have commercialized liquefied petroleum gas. So, this project reached a final investment decision which was made by the investors—Total Energies and CNOC, the Chinese National Oil Company. The project is on cost. The construction of the refinery is going to happen with other investors, but the construction of the East African Crude Oil Pipeline (EACOP) has commenced, and the development of the oil fields that are codenamed Tilenga and Kingfisher.
This project is in the middle of an interesting period in human history. We are alive in Uganda, more than anywhere else, to the realities of climate change. We understand more than most the dangers of climate change. In 1995, Uganda inserted in its constitution a fundamental human right to a clean and healthy environment. Uganda has no problem with the concept of a clean and healthy environment, but that does not mean it is an environment where we must conserve poverty. We have come to the realization that the biggest threat facing our people is not the threat that our grandchildren will face, serious though that threat may be, but it is also, along with that threat, the threat that we face today.
In Africa and in Uganda, we are concerned about many things. We are concerned about the climate; we are concerned about the ethics of climate change today; but we are also concerned and deeply concerned about the effects of poverty today. There is an argument that we need to see a change in the oil price; that we need to see a phase-out of fossil fuels. And this argument seems to suggest—and you can correct me if I am wrong—that the solution is that we phase out fossils. How do we phase out fossils? We stop any new investments in oil and gas. Once we stop new investments in oil and gas, we make oil and gas as expensive as possible. And once oil and gas are very expensive, the world will be forced to transition to renewables, once the fossils have been completely out-priced by all methods available to human ingenuity.
That all sounds very nice when you think about it as an activist, or when you think about it from a European capital—when you think about it from a rich, developed country. But what does that mean when broken down in real terms? That means that the higher the price of fuel, we have now learned, that the high oil price does not hurt oil companies. The year 2022 saw a rise in oil prices and record profits for oil giants. The only people who pay for this transition will be poor people. And in this side of the world—in Africa and Uganda—we have paid enough. We have sacrificed enough; we have been guinea pigs for way too long. We cannot continue paying for these transitions. We cannot, on our end, continue to transition from darkness to deeper darkness in a night already devoid of stars, to quote one great American.
The fact is simple; the fact is irrefutable. The fact is that we must preserve the environment and defeat poverty. We must not allow this transition to happen on the backs of the poorest people in the world. We must not allow this to be a transition that says no new oil projects; which means that Norway continues to produce 2 million barrels of oil; which means that Saudi Arabia continues to produce 10 million barrels of oil; which means the United States continues to consume 20 million barrels of oil. But it means countries like Uganda and Mozambique cannot start producing. That transition that favors incumbents, the transition that favors the rich, the idea that the poorer people of the world should bear the brunt of energy poverty and should pay for this transition, is totally unacceptable. This is not just true in Africa or Uganda. Across the world, working people—even in rich industrialized nations—it is the people on lower incomes who are going to be forced to pay under a theory of increasing the price of oil.
The fact is simple: For as long as the alternatives are not available, we must look to fossil fuels to power our world. In Africa, we are tired of not being powered. So, in Uganda we have this idea: Come hell or high water, that we are going to develop our energy projects. That we are going to do it in a responsible and efficient manner. It is one of the lowest carbon-emitting projects in the world. It is being conducted in the most responsible manner imaginable. It is not perfect, but every day we strive to make it better. It is not a solution to all our challenges; it does not present a magic bullet. It does not present the ultimate solution to all our economic challenges. But it represents a step, and a start; and we need steps, and we need starts.
Those who are living in the comfort of wonderful palaces, those who are living in the comfort of heated swimming pools and wonderful houses; those who are flying on private jets to moralize and lecture us, we are happy to receive their ideas. But frankly, at this time and on this occasion, we are not willing to follow through with them. We have listened far too long. We have had a copious supply of people telling us to follow the lead of the West and of people who are transitioning. But now I think it’s becoming ridiculous for us to start taking lectures about our 200,000 barrels of oil from people who are consuming 20 million barrels of oil. For us to start paying for this transition when we contribute 0.003% to global greenhouse gas emissions.
So I can say that Uganda’s oil project represents a significant opportunity for our country to be energy independent. And anybody who thinks that we are not going to take advantage of this opportunity—to fulfill some ego somewhere, or to worship at the altar of their religion, a religion whose priests are carrying a dagger in their cloaks and stabbing it in the back—that person is terribly, terribly mistaken. At this time, in this period, and at this moment, I am of the humble opinion that Uganda has no choice and no option but to march along with its project to build its pipeline to Tanzania, finance its refinery, and to start its journey to energy independence.