Feature: TT cautioned against oil-dependency
Raymond Edwards
BBC Caribbean, Port of Spain, Trinidad and Tobago
Trinidad and Tobago's major energy players are looking at the future of the industry at a conference in Port of Spain.
Current oil prices linger at around 100 dollars a barrel, and for economies like Trinidad's, where there is a heavy dependence on this sector, there is concern about just how sustainable the industry is.
Although oil and gas prices are high the world over, there are concerns in the country’s energy sector about the proposed 'downstream industries' that are being pushed by the government.
Many of these industries, like aluminum smelting, require natural gas to fuel their processes.
There is unease, however, about whether the country has enough gas to supply these plants, fulfil their export commitments, and supply the domestic market as well.
One of the companies which attempts to predict the levels of energy resources available in Trinidad and Tobago, is US-based petroleum consultants, Ryder Scott.
One of its reports last year, led several local business people to call on the government to slow its expansion drive in the energy sector.
The company's senior international vice president, Herman Acuna, told BBC Caribbean that oil and gas prices will remain high.
He also said economies like Trinidad and Tobago's should use these energy booms to diversify.
“Oil and gas can be a catalyst for a strong economy, but oil and gas is also a catalyst for the diversification of your economy.”
Using the United Arab Emirates as an example, Mr Acuna referred to the fact that less than 50% of Dubai’s and Abu Dhabi’s GDP is related to oil and gas:
“Yet when we think about those economies, we think they are oil and gas economies.”
“The truth of the matter is they are shifting and diversifying – using the wealth that was initially, perhaps, generated by the industry.”
Ryder-Scott is expected to start the next audit of Trinidad and Tobago's energy reserves next week.
Despite Mr. Acuna's optimism about the expansion of the economy, some experts, like Central Bank Governor Ewart Williams, are concerned about the so-called ‘Dutch disease’.
That's an economic term that explains the relationship between the exploitation of a country's natural resources and the decline of its manufacturing sector.
Mr Williams told the annual petroleum conference that the country's dependence on oil and gas, coupled with rising inflation, is a worrying trend.
“The Central Bank needs to tighten monetary policy, to make sure that inflationary expectations do not become embedded.”
“We don’t want a situation where people continue to expect inflation to continue to rise – and that’s one of the things we are trying to deal with.”
The Energy Minister, Conrad Enil, says, in light of these economic concerns, there will be no new primary petrochemical production, unless it is in support of a downstream
