Energy
and the competitiveness of the Caribbean
By
Energy Correspondent
Trinidad Express
Port
Spain
Petroleumworld.com
09 24 06
The
recently concluded conference "Energy and the
Competitiveness of the Caribbean" hosted in
part by Caribbean-Central American Action (CCAA)
and the Government of Trinidad and Tobago, brought
out numerous issues which surround the Caribbean
energy problem. Attendance of several high-profile
Government officials underscored the importance
of the energy issue to the governments of the region
and their commitment to finding a solution to the
attendant problems which beset their economies.
Significantly, the absence of Petrocaribe discussion
on the agenda raised questions about possible alternative
motives behind the conference.
The
conference was lead off by Minister of Energy and
Energy Industries Dr Lenny Saith, who announced
the setting up, by Caricom, of a Caribbean Renewable
Energy Fund to provide financing for renewable energy
projects. The objective of the Fund is to support
the furtherance of the Caribbean Renewable Energy
development programme which was started in 1998.
The Minister also asserted the urgent need for a
Regional Energy Policy saying that one already had
been in the works and was due to be presented at
the next Caricom Heads of Government Meeting.
The
two issues addressed by the Minister were the main
themes coming out of the meeting specifically that
the Caribbean needed:
1.
To find alternatives in order to reduce its dependence
on oil since we could not wait for the price of
oil to come down.
2.
To harmonise energy policy particularly in the context
of the CSME.
The region depends on oil for over 90 per cent of
its energy needs. The consensus among participants
at the forum was that we are living in an age where
the high price of oil is a reality and was not likely
to change in the near future. Oil demand growth
continues to outstrip supply. Unlike the previous
period of oil spikes in the 1973's and 1979-80,
it is not supply cuts that are the source of today's
tight market situation. Rather, it is rapidly expanding
economic growth in economies such as China and India,
that is driving their demand for energy. Karen Harbert
of the United States Department of Energy (US DOE)
stated that EIA nationwide studies found that there
is no price gouging in the system and the realities
were that oil companies in fact were reluctant to
see prices reach so high as to make renewable energy
become more economically viable. A dearth of refinery
capacity in the region also was cited as a reason
for shortages. According to Kenneth Allum of Petrotrin,
"there is no demand for crude oil but for its
products" and so the refining stage of the
energy value chain is just as important as the extraction
phase.
An
ExxonMobil representative, told of the benefits
of market based pricing of petroleum products. While
this would redound to the benefit of companies who
long have felt the negative impacts of governments
meddling in the price controls, it is inevitably,
always to the detriment of vulnerable groups in
society for whom transportation and many other costs
rise once the fuel prices are increased. It is significant
though, that the OECS has moved in the direction
of instituted a full pass-through mechanism for
the pricing of petroleum products, thus allowing
fuel price increases to be passed on directly to
consumers.
In
light of all the projections of a continuing high
oil prices, the renewable energy basket is becoming
increasingly attractive. However, as Anthony Paul
pointed out, a lot of critical research needs to
be done before the region can move forward. This
was one of the major reasons given by the STCIC
representative for Caricom to adopt a common energy
policy.
Harmonisation
of energy policy is necessary if the economies are
to present a
united
front to the rest of the trading nations, as well
as to have any chance of benefiting from economies
of scale. Given what has transpired with Petrocaribe,
it is evident that at this time, harmonisation of
energy policy is not on the agenda of some Caricom
nations.
There
is no single solution to the problem of high oil
prices, multiple changes must occur in order to
keep economies viable in the face of ever-increasing
prices. At the end of the first day, it was clear
that new energy supplies, new sources of energy
and new ways of conserving energy were all part
of the solution matrix to be pursued by the region.
Feedback:
energyczaartt@yahoo.com
Trinidad
Express
Wednesday, September 20th 2006
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©2006 Trinidad Express. All Rights Reserved.
