“The definition of insanity is doing the same thing over and over again and expecting different results.” We are all familiar with this quote, and yet too often we think it doesn’t apply to us. In the context of the climate emergency and the need to stop greenhouse gas emissions, the definition of insanity is doing the same thing over and over again and striving for the same results.
Perpetuating this kind of insanity seems to dominate the menu for next week’s annual Energy Conference at the Hyatt Regency in Port-of-Spain, when T&T’s oil and gas industry convenes with senior politicians to discuss a way forward. The theme of this year’s event is, “Leveraging the industry’s strengths for the energy transition.” The conference’s agenda suggests its main course will be serving up more of the same, with few fresh ideas for meaningful transition.
Make no mistake, more of the same isn’t simply storing up future problems. The country already suffers from increased ambient temperature and extreme weather. Erosion linked to rising sea levels and storm surges is evident at popular destinations such as Las Cuevas and Blanchisseuse, on Trinidad’s northern coast. Similarly Tobago’s Pigeon Point, arguably the jewel in the Republic’s tourist crown, is facing serious erosion. And we all know about the floods.
The government’s 2018 Vulnerability and Capacity Assessment (VCA) report called for urgent and comprehensive adaptation and mitigation measures. It warned that failure to act immediately would have disastrous consequences for national food and water supply, fisheries stock, physical infrastructure, cities, oil and gas and industrial assets to name but a few.
Just a few months ago, in her foreword to the first Biennial Update Report to the UN Framework Convention on Climate Change, Hon. Camille Robinson-Regis (then Planning and Development Minister) acknowledged the country’s challenges. She wrote that climate change has the potential to undermine T&T’s “priority sustainable development objectives such as poverty eradication, a healthy environment, health care and leaving no one behind.”
Next week presents an opportunity to change course. Held by the Energy Chamber for more than 30 years, the Energy Conference started out as a petroleum conference and in essence remains such. Whilst energy transition is billed as the focus, the Energy Chamber convenes a separate Sustainable Energy Conference, focussing on renewables, energy efficiency and decarbonisation in the Caribbean region. This separation of events speaks volumes.
Ensuring that the energy industry’s objectives are aligned with the government’s stated societal objectives is much harder than using fashionable thematic language for conferences. According to its own promotional literature, next week’s conference is organised “by the energy industry for the energy industry.” This is concerning, because this is essentially the old petroleum industry which has no incentive to change its core function of exploiting oil and gas reserves. Insofar as decarbonisation is covered, there is a risk it will amount to little more than ‘greenwashing’, with the industry marking its own homework using inadequate investor-led environmental, social and governance (ESG) metrics.
But we write this to offer another solution, not confront the oil and gas industry. Next week’s attendees are a critical part of the solution of how we transition to decarbonised energy supply. Over many decades T&T has been a leader in delivering oil, natural gas and petrochemicals. Today it is stuck between a rock and a hard place with the inherent conflict of producing core products whose usage have the potential to be dirty and destructive.
On the one hand we have the sector that provides growth, jobs and the tax base, on the other those net zero ambitions. Something must give.
Let’s acknowledge that the industry is operating in an economic framework that is not built for adaptation– that is not the industry’s fault. The real energy transition we need cannot be left to the industry alone to figure out.
We should look to technologies that have emerged over the last decade and that are in development today. If we adopt a more holistic market-facing framework in how we think about transition, mitigation and assets, we can start to thread the eye of this needle. The fundamental challenge is how to transition to low/ zero emissions and clean systems while generating profits, maintaining job, and tax base levels.
As is the case with any complex problem, there are complex solutions. The superficial band-aid that is renewable energy has an uphill battle on addressing the climate crisis. The necessary solution is every bit socio-political as it is technological. It requires fundamental mindset shift.
Firstly, communities need to transition out of commodity dependency. Oil and gas may seem like easy revenue, but the long-term value and sustainability is questionable. Don’t forget, this is a global market that T&T has no control over, but rather is swept up by the waves of its volatility.
According to GlobalData’s latest report, natural gas production in T&T is expected to grow by an average of two per cent in the next three years and reach over 3,400 million cubic feet per day (mmcfd). However, in 2024, production will start declining at a rate of three per cent to a value of 3,200 mmcfd in 2025, assuming no new projects are introduced to compensate.
Instead of remaining trapped, we should nurture emerging technologies around high-tech manufacturing and brands. Localised manufacturing, not dependent on global supply chains, lifts up local economies.
Commodity reliant countries have the opportunity to use innovative clean tech to create localised and decentralised manufacturing and tourism corridors, shifting it from commodities to a larger value-added export economy. This would give T&T not only greater control of its destiny, but the prospect of a more prosperous future which could be sustained over the longer term.
Rather than fully decommissioning (at great cost) off-shore rigs and platforms at the end of their life-cycle, these assets can be transitioned into high-tech off-shore manufacturing centres. Technology already exists to develop aquaponic food production systems, for example, that would transform offshore sites into localised food centres. This could help address the decline in food security—a growing problem in the Caribbean—and halt the trend of declining food self-sufficiency… something the current commodity trap is failing to do.
Offshore facilities can also be transitioned into producing carbon neutral hydrogen-based fuels. When combined with decentralised micro-manufacturing, the clean system becomes circular, yielding 100 per cent clean products and better economies.
The opportunity costs of not focusing on these techno-economic opportunities will leave us stuck squarely in the climate and commodity traps. But guided and enabled by government policy to diversify and strengthen the economy, T&T can be a global beacon in transitioning commodity-dependent regions into clean, self-dependent, and thriving economies.
Nobody pretends that the path towards meaningful energy transition is not fraught with challenge, both for energy companies and society at large. Whilst the formal agenda for next week has been set, it is not too late to steer discussion towards new thinking.
The energy industry has a unique opportunity to use its extensive expertise, knowledge and skills to become a global leader in delivering clean energy… and avoid the insanity of striving for more of the same.