The curse of energy

The first set of gas is expected to be delivered in 2020 (some 100mmcf/d) and the full amount (some 500mmcf/d) at a later stage. NGC will be acting in the typical onshore mode — buy, markup, sell — only the source of the gas will be Venezuela.

This gas is urgent, is required now, since it appears that the Pt Lisas plants are experiencing a shortfall of some 20-30 percent in gas supply. The fact that the gas does not originate in TT means the Government will not receive any benefit as it did from TT ’s gas, from royalties and production sharing contracts.

It is still to be divulged what the cost of the gas will be to NGC and whether the price to the Pt Lisas investors is still considered “cheap”, the reason why these investors are here in the first place. The Prime Minster says the details will be released after the signing — after the deal is done.

Though the medium to long-term solution is the diversification of the economy, economic development as distinct from economic growth (GDP growth), in the interim we have to do whatever it takes, even if this means maintaining the plantation after the reason for its initial existence is evaporating — local and cheap gas.

It should now be very clear that the exploitation of natural gas via petrochemicals, steel and now LNG was part of the plantation economy and not economic development — a point made long ago by the University of the West Indies’ Dennis Pantin.

We have learnt nothing, we have created nothing (innovating in technology) and hence we cannot move easily into other energy industries that do not depend directly on the availability locally of natural resources from which we now earn rents. Moreso, outside of the energy sector, we have earned patents in energy efficiency, but there is no development system, no innovation system, to even exploit this knowledge.

In the same vein we can all share in the glee of the Minister of Finance that the Organisation of Petroleum Exporting Countries has agreed to cut its production of oil, and prices may again rise.

Let the good times flow!

MARY K KING St Augustine