Opinion
- Editorial- Commentary
Energy
Correspondent:T &T
elections and energy
It is common knowledge that the energy sector
dominates the national economy and will continue
to do so for sometime to come. It follows, therefore
the parties' proposals for the management of the
economy and more particularly the energy sector-
the proverbial goose that lays the golden eggs-
should be high on their respective agendas. In
addition, the positions taken on a number of pre-election
energy issues by the parties and/or by persons
who have since been named as candidates have heighten
my curiosity about what the manifestos are likely
to say about the energy sector.
The history of the how changes in Government impacts
the energy sector is an interesting one. Over the
period 1975 to 1986, the PNM government pumped
over US$3 billion in debt and equity funding investments
in the ammonia, urea, methanol and steel industries,
in a deliberate policy of state-led resource based
industrialization.
The advent of the NAR in 1986, saw a marked reduction
in the state's role in the energy sector. The NAR
government scaled down the National Energy Corporation
which was responsible for leading the thrust in
energy based industrialisation. It de-linked the
methanol and urea companies from the NEC, and established
them as independent state owned companies. While
the NAR demonstrated an urgency to withdraw from
downstream investments, there was a deepening of
the role of state enterprises upstream. Only one
new major downstream investment took place between
1986 and 1991. That was the Phoenix Park Gas Processors
plant, in which the state held 51 per cent equity
stake which was carried by the plant operator Conoco.
On the other hand, the NAR made some important
initiatives upstream. Perhaps none was more significant
than the Trintomar joint venture between Trintoc,
Trintopec and NGC, to develop the Pelican field.
This venture was to prove highly successful until
an unfortunate accident caused a rapid decline
of the field's productivity. The NAR term of government
also saw the introduction of farm-out and lease
operatorship programmes to get some productivity
out of marginal fields in Trintoc's large land
acreage. It is difficult to discern, however, whether
the reduction of state participation in downstream
expansion represented a shift in policy or was
simply due to a lack of funds and IMF conditionality.
The return of the PNM in 1991 saw a re-invigoration
of the active state in the downstream sector. On
this occasion, however, the private sector played
a much more significant role. The rapid expansion
of energy sector activities since 1992 has been
characterized by the selective investment of the
state through the NGC/NEC, the use of competitive
gas pricing formula to attract investors, prominent
participation of the private sector in particular
locally owned CL Financial, and the advent of LNG.
The rise and fall of the UNC in 1995 and the return
of the PNM in 2001 have made no discernible difference
in policies. Expansion of the sector continued
seamlessly through successive administrations.
At the time of writing none of the three parties
contesting the elections had released their manifesto.
While we anxiously await this all important document,
what can we glean from their platform rhetoric
and posturing about their likely course of action
in the energy sector? There are perhaps four major
issues to be addressed. These are:
(i) The pace of expansion, particularly in light
of the findings of the Ryder Scott report which
opposition forces have interpreted to be a situation
of crisis.
(ii) The choice of industry, particularly in light
of the protests against aluminum and iron and steel
complexes.
(iii) The future of the state enterprises: NGC/NEC
Petrotrin and NP.
(iv) Local content and participation.
The PNM is of course very clear. The process of
energy based industrialisation will continue with
a focus in diversification and downstreaming with
a purpose. The list of approved projects includes
polypropylene, ethylene, aluminum smelter and downstream
industries, steel, melamine and even more LNG in
Train X. The PNM's La Brea candidate Fitzroy Jeffery
is the most vociferous pro-smelter lobbyist and
made his position known to the electorate at the
PNM's Point Fortin meeting. At the same time, the
PNM promises to pay more attention to non-energy
diversification and has targeted education and
seven potential growth sectors.
In contrast, the UNC has in its ranks as the candidate
for Point Fortin, Fitzroy Beech, perhaps the best
known name among anti-smelter protestors. It also
has Ramesh Lawrence Maharaj who had threatened
to represent the people of Cedros in their fight
against the smelter. We can only assume that the
UNC party is now firmly anti-smelter. However,
that would represent a full 360 degree turnaround
from the UNC position during its term of government.
At a lavish function to mark the signing of an
MOU between the Government and Norsk Hydro for
an aluminum smelter in 1998, Basdeo Panday boasted
that his Government was able to achieve in three
years, what the PNM could not do in 30. Only time
will tell how Beech would reconcile his own position
with that of the rest of the UNC party. Contradictions
between words and actions and between periods have
become the norm with Panday. One hopes that Beech
would not be surprised if the UNC manifesto endorses
aluminum as one of the preferred energy sector
growth poles.
The COP platform has called for the publication
of the Ryder Scott report. While not taking positions
for or against the smelter and other projects,
Winston Dookeran has so far promised greater public
consultation in the industrialisation process but
has not addressed any of the four issues raised
above. Hopefully, the party's manifesto will shed
some light on what is so far a highly nebulous
position.
The energy sector is far too important to be ignored
by political parties in the campaign. Changes in
the sector can have a fundamental impact on the
lives of people today and in the future. The pertinent
question that arises therefore is what is the economic
strategy for managing the transition of the economy
to the post-gas era? Too far in the future some
may say, the parties' horizon is five years. A
serious country going to vote in an election as
critical as this one cannot afford to have these
questions unanswered.
Energy
Correspondent is
one of the most writers of The Trinidad Express.
energyczartt@yahoo.com. Petroleumworld not necessarily
share these views.
Editor's
Note: This article was first publish in Trinidad
Express, Friday, October 19th 2007. Petroleumworld
reprint this article in the interest
of our readers.
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10/21/07
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