What Suriname’s Oil Discovery Means for the Future of Clean Energy
As many countries move towards renewable and green energy, Suriname has turned away from environmental policies and set its sights on developing its oil industry. With a population of 600,000 people, the small South American country has maintained a positive environmental reputation; however, the discovery of oil could jeopardize its position.
Suriname is situated in a critical environmental location, with almost all of its land covered in the Amazon Rainforest. Due to the rainforest’s significance in stabilizing climate, the domestic environmental policies of Suriname have international implications. Policies largely reflect a concern of conserving natural resources – the country has maintained 93% of its share of the Amazon Rainforest. Due to preservation efforts, Suriname is one of three countries that remain carbon negative in a world concerned with carbon neutrality. However, the discovery of 10 billion barrels of oil and gas reserves off its coast could complicate its environmental status.4
The discovery of oil in 2020 began a long process of seeking foreign investment to create an oil infrastructure. While the country cannot currently access the oil, enough infrastructure will be in place to begin the exportation process by 2026. Major players such as the United States and China have shown significant interest in investing in Suriname's growing industry. The United States has maintained large economic and diplomatic ties with Suriname, but both the United States’ involvement in Suriname and the burgeoning relationship between China and Suriname could be cause for concern. Suriname is one of many South American countries that have joined China’s Belt and Road Initiative. China’s poor environmental track record raises questions about environmental shortcuts for maximum profits in a region that is pivotal for a habitable climate.
Suriname is different from other oil-producing countries as the country will be producing much cheaper oil than its competitors. The price to produce oil in Suriname is cheap enough to keep demand high for its oil as international demand wanes with concerns about climate change. This being the case, government of Suriname could still earn $10 - $15 billion through its state-owned oil company over the next twenty years, which has huge repercussions on its economy. With Suriname defaulting three times since 2020, the new oil industry is integral to alleviating its financial troubles.
Suriname demonstrates what the future of the oil industry may look like in an green world. The countries that will continue to profit off of oil and challenge clean energy initiatives are those that have the cheapest price tag, little regulation, and opportunities for foreign investment control. As Suriname begins to access oil off of its shores, it will become an important model of oil production in the green era. Environmentalists, politicians, economists, and concerned citizens should turn their attention to Suriname to assess the future of the oil industry which demonstrates the opportunistic policies that will define the new age of energy for many smaller countries.