So You’re from The Land of Oil and Music. Or are you?
Trinbagonians know a few things about the energy industry, our island’s sugar daddy. We know that oil comes out of the ground somewhere “dong Sowt”, and that something happens at that refinery in Pointe-a-Pierre that causes us to maco the fire that’s always burning, when we drive past on the highway.
Whether we’ve thought about it or not, we know that “the industry” has had an impact on our culture and identity; Winston “Spree” Simon made our national instrument out of something used to transport and store oil, and Machel Montano and David Rudder sang that now famous hook – “this is the land of, the land of oil and music”. But how much do we really know about the cornerstone of our economy? First things first, Trinidad was the land of oil and music. Now we’re the land of natural gas and music. Oil production peaked in Trinidad in 1977, and, since the late 90s, gas has been king. This transition was not automatic, and took many billions of Yankee dollars in investment, and a whole lot of political will to make it happen.
The grossly oversimplified version goes something like this: a handful of energy visionaries figured that they could make use of the gas buried under the seabed offshore Mayaro by freezing it to a liquid and putting it on ships bound for established markets in North America and Europe. The company Atlantic LNG (LNG standing for liquefied natural gas) was set up in Point Fortin, sponsored largely by a few large multinationals, to make the refrigeration process possible.
So far, it has been a massive success. Nokia 5120s and Motorola Startacs started falling from the sky, Toyota Corollas and Nissan Primeras flowed from the Bamboo, and people danced all the way to TGIF and our 40 KFCs. One way to explain this amazing growth is the fact that we added the first fridge in 1999, the second in 2002, the third in 2003, and the last (and maybe final) in 2006. In LNG, we were what economists describe as a “first mover”. Even though we didn’t have the world’s largest deposits of natural gas, we were able to put things in place to allow us to get these four LNG plants off the ground, ahead of any one else this side of the Atlantic, and our location close to the US made us a supplier of choice.
Even before LNG, we were able to become a major player in ammonia and methanol, following decades of investments made at Point Lisas,
again by large multinational companies and through state companies like the National Gas Company of Trinidad and Tobago Limited (NGC) driven initially by the South Chamber (an industry group).
The reason we chose LNG, methanol and ammonia is simple. Quite frankly, there weren’t that many other options. With a population of 1.3 million people, there was only so much gas we could use locally; we needed to find ways to export it and generate income. Unlike oil, gas in its natural form cannot be exported easily, and must be converted into a product, which can be shipped.
Being a big exporter – as we are – has its benefits, the most obvious being cash money. Some people make money by being directly or indirectly employed by the industry, but all of us benefit in some way from the revenue the Government earns, taxing oil and gas companies.
In fact, this year the Government expects more than 30% of its revenue to come from taxing oil and gas companies. From these companies, in the last ten years, the Government took in more than $115 billion, the equivalent of about $90,000 per person. It paid for GATE (and other education programmes), CDAP (and other health programmes), the blimp (and other crime busting machines), CEPEP (and other social programmes), and our skyline (and other shite) – more or less in that order.
Ying yang, thank you ma’am; there is a dark side to everything, naturally. The trifecta of world-scale LNG, methanol and the other plants at Point Lisas Industrial Estate means that, relative to our land and population size, we emit world-scale pollution. Carbon dioxide, a greenhouse gas, is produced when we burn stuff and we emit a lot of it because it is a waste product from all of our plants. As a result, Trinidad has an unenviable position on the list of top ten emitters of greenhouse gases per person. Climate change is a big deal these days, and since carbon dioxide is a major contributor, we too are a big deal.
Most industries come with some good and some bad. We (as in James and Ryan) would argue that oil and more recently gas revenues have done more good than bad in this country, and it is largely because of this that we enjoy the wealth that has come to define the modern trinisapien. Per person, we earn more than all but two of our neighbours in Latin America and the Caribbean. And even though Barbados has and the Bahamas will officially become “first world” countries before we do, I think we should thank our lucky, geological stars that we have what we have. Or had what we had.
Indeed, it won’t last forever. You learnt that in Common Entrance; oil and gas are non-renewable resources. One day, we will exhaust our precious money-maker. That day is not defined by Ryder Scott, and no one knows the time or hour. Hallelujah. Instead, it depends on how well we manage what’s left, and how we develop alternative sources. The goal of this country should therefore be to sell our product for the highest possible price, extract the maximum value until it runs out, and be ready for when it does.
Image credit: seekingalpha.com
Written with Ryan Chaitram.
About Ryan Chaitram: Ryan is an oil and gas professional by day and the perpetual student and dreamer at night. He began writing and blogging as a way to gather his many thoughts while living in Scotland, and while he does not consider himself to be a journalist that doesn’t stop him from expressing his point of view. He has reconnected with his love for music and film and his audiovisual work can be found at vimeo.com/user3003028 and at youtube.com/user/itchywow. He recently established The Love Tree Foundation to catalogue and promote the history and heritage of Trinidad and Tobago, and is working on some video projects, which, with some luck, he believes can find their way into the T&T Film Festival. You can follow him on twitter @ryanchaitram and on tumblr @ ryanchaitram.tumblr.com