Why Some Countries Find It Hard to Move Away From Fossil Fuels

Why Some Countries Find It Hard to Move Away From Fossil Fuels

Shovel in hand, Prime Minister Keith Rowley attended a groundbreaking ceremony last month to celebrate the first major solar farm project in Trinidad and Tobago, which is expected to generate electricity for 42,000 homes.

But if anyone thought the project symbolized the end of the island nation’s long fossil-fuel commitment, Mr. Rowley made it clear.

“We will continue to produce the hydrocarbons that are available to us as long as there is an international market,” Rowley said in front of BP and Shell executives. “If we’re going to sell the last barrel of oil or the last molecule of gas, then so be it.”

Trinidad and Tobago is known for its white sandy beaches, mountainous rainforests and steel pan drums. But its economy depends on oil and natural gas, not tourism.

It is one of the largest fossil fuel producers in the western hemisphere and more than a century of drilling has left its mark. The main highways on the main island are congested with traffic and lined with industrial warehouses. Oil is an integral part of the culture, a theme in many calypso songs. Even the steel ladle barrels were made from the lids of used oil barrels.

Even if Trinidad repeatedly falters in climate protection policy, it is far from the only one. Saudi Arabia, the United Arab Emirates and the United States are also building large solar farms while exploring new oil wells. Fossil-fuel-rich developing countries — Guyana, Nigeria and Namibia, and Trinidad belong to this group — say they can’t easily switch to renewable energy because they lack capital and because their poor depend on cheap electricity and oil revenues for social programs are.

President Biden and European leaders do not have an easy answer. Developed countries are still producers and users of fossil fuels and have failed to provide the $100 billion a year they pledged for a green fund for poor countries starting in 2020.

“The countries in the South are telling the countries in the North, ‘They are the ones who caused the climate problem. So why not act first since you have the capital and technology to advance renewable energy?’” said Anthony Paul. a former official in Trinidad’s Department of Energy who has advised governments and companies in several African countries.

Although Trinidad only has a population of 1.5 million people, it has long had an above-average energy balance. As the second largest exporter of liquefied natural gas in the Western Hemisphere after the United States, the country has one of the highest per capita incomes in the Caribbean. It is also a leading producer of petrochemicals such as ammonia and methanol.

However, as the oil and gas fields age, oil production has fallen from 230,000 barrels per day at its peak in 1978 to 58,000 barrels per day. The country’s only oil refinery closed four years ago. Gas production has fallen 40 percent since 2010, forcing the country to close one of its four liquefied natural gas export terminals and three of its 18 petrochemical plants.

At the same time, the country is feeling the effects of a changing climate: wetter rainy seasons and drier dry seasons reduce agricultural yields, stormier seas punish fishermen and flood coastal roads and homes.

“We face a big decision about whether to take a new direction,” said Ryun Singh, president of the Trinidad and Tobago Association of Energy Engineers. “If we don’t do it right, we face economic ruin.”

For now, Mr Rowley’s government wants to double down on fossil fuel use by trying to get energy companies to develop new offshore fields.

The oil and gas business “is the foundation of our middle class,” said Ainka Granderson, an environmental scientist at the Caribbean Natural Resources Institute, a research organization in San Juan, a city on the main island. “Oil and gas were once the backbone of the nation, but now they are the crutch that sustains us.”

This crutch is getting wobbly.

On an April afternoon, a tanker arrived at the Atlantic LNG terminal at Point Fortin to pick up a load of refrigerated gas bound for the UK. “Trinidad to the rescue,” said Jean Andre Celestain, the plant’s chief operating officer, with a smile.

But because the country’s gas production has declined, the plant now only fills a tanker every 66 hours, down from every 48 hours four years ago.

“The gas supply is urgently needed,” said Ronald Adams, Atlantic LNG’s chief executive officer.

Oil majors have discovered some new small fields, but analysts still expect production to fall in the next few years.

The country’s gross domestic product fell by 20 percent from 2015 to 2021 due to falling revenues from energy exports. The rise in oil and gas prices following the Russian invasion of Ukraine and a new gas discovery by Shell have led to a modest recovery over the past year.

But that’s not enough to stem the decline in energy production and revenue, energy experts say.

To make up the deficit, the country is trying to reduce domestic natural gas consumption so that more can be exported. That is the main purpose of the solar farms that BP and Shell are building in Trinidad. To reduce domestic gas demand, energy regulators are proposing to increase electricity tariffs for residents and businesses. This proposal met with strong political opposition.

“If you’re an oil and gas country, you’re always behind on renewable energy because people are taking advantage of the cheaper electricity rates that come with fossil fuels,” said David Alexander, a professor of petroleum engineering at the University of Trinidad Tobago.

dr Alexander and another professor are leading efforts to map a “Carbon Capture Atlas” of depleted oil and gas fields that can be used to store the carbon captured from Trinidadian petrochemical plants to help the country recover most or all to offset its greenhouse gas emissions.

There are other plans to move Trinidad and Tobago away from gas and oil. Some entrepreneurs said the country should become a major exporter of renewable energy products such as hydrogen, fertilizers and clean marine fuel.

A local energy company, Kenesjay Green, is working to produce hydrogen at the Point Lisas petrochemical complex. The company plans to use renewable energy and waste heat from power plants to split hydrogen from water. “Trinidad is in a unique position to dramatically advance the energy transition,” said Philip Julien, Chairman of Kenesjay. “There is huge potential and there is still a lot to do.”

Kenesjay is working with Yara Trinidad, an ammonia producer, to reduce its greenhouse gas emissions by replacing gas with water in its production process. Yara Trinidad hopes it can eventually reopen one of the three ammonia plants it has shut down due to lack of gas supplies.

Although the government supports these efforts, its focus remains on natural gas. “Gas is going to be around for decades, right?” said Stuart Young, Trinidad and Tobago’s energy minister, in an interview.

To increase gas production and exports, the country is pinning its hopes on new offshore fields. One of these, the Manatee field next to the sea border with Venezuela, is being developed by Shell.

Just past the sea border there is a medium sized shallow water area called Dragon. Trinidad and Venezuela have been negotiating the production and export of Dragon gas for five years. Shell would operate the field and a pipeline could connect the field to Trinidad and Tobago’s export terminals in three to four years.

But first, Trinidad must reach an agreement with the Biden and Venezuelan governments that would allow Trinidad to export natural gas from Venezuela’s Dragon field without violating US sanctions.

The Biden government granted the Trinidadian government a two-year license to do business with Venezuela in January, but only on the condition that President Nicolás Maduro’s government received no cash payments. Trinidad and Tobago has offered to pay for the gas to buy food and medicine, but Mr Maduro has turned down that offer.

Another potential project is the Calypso field off the coast of the island of Tobago, which could be the country’s first deep-sea gas field.

Woodside Energy, an Australian company, is developing Calypso with BP. But Calypso’s geology is complicated. The field consists of unconnected gas bubbles, meaning multiple wells would be required, making drilling more expensive.

“We’re working through the concepts and trying to figure out how to get something that works for everyone,” said Meg O’Neill, Woodside’s chief executive officer.

Analysts said Trinidad must act quickly or it risks losing gas customers to other exporters like the United States and Qatar, which are building newer and more efficient liquefied natural gas terminals.

That could be a big challenge, and even some Trinidadians who have worked in the oil and gas industry for a long time fear there is little that can be done to stem the decline of their industry.

Ronnie Beharry worked in various field positions before becoming manager of a gas field operated by Touchstone Exploration. He only has a high school diploma but can afford to send his eldest daughter to college.

“I tell them to look at other options because we’ve started to go green,” he said, referring to his three children. “I don’t know where the journey is going. Sometimes I think the country has a backup plan, sometimes not.”