Ex­ec­u­tive Di­rec­tor of the Caribbean Cen­tre for Re­new­able En­er­gy and En­er­gy Ef­fi­cien­cy (CCREEE), Dr Mo­ham­mad Nagdee, has said the po­ten­tial re­open­ing of the Pointe-a-Pierre re­fin­ery could prove ben­e­fi­cial for T&T.

Nagdee made the com­ments in a wide-rang­ing in­ter­view with the Busi­ness Guardian, in which he al­so said it is too ear­ly to fore­cast what could emerge from talks be­tween Shell and the Venezue­lan gov­ern­ment to de­vel­op four large ar­eas near this coun­try’s wa­ters.

Talk of a restart of the re­fin­ery has sparked ex­cite­ment and hope in south Trinidad, ac­cord­ing to a Guardian Me­dia re­port last month.

The Petrotrin re­fin­ery was closed in 2018 amid cost over­runs and mis­man­age­ment. How­ev­er, giv­en the cur­rent glob­al en­er­gy cli­mate, Nagdee be­lieves the re­fin­ery could po­ten­tial­ly bring ben­e­fits to the coun­try.

“I have read that there are open dis­cus­sions to be able to utilise or be­ing able to cap­i­talise on the oil fields in Venezuela, and I be­lieve that is ben­e­fi­cial. His­tor­i­cal­ly, we do know that T&T has ben­e­fit­ed sig­nif­i­cant­ly from oil ex­plo­ration, and as a re­sult of that, this is no dif­fer­ent. It does trick­le down sig­nif­i­cant­ly and quick­ly to­wards the abil­i­ty to pro­vide jobs and be­ing able to show a mea­sure of sta­bil­i­ty at the high­est lev­els eco­nom­i­cal­ly and to be able to pro­vide that sup­port to peo­ple. I do see the pos­si­bil­i­ty of it be­ing ex­treme­ly ben­e­fi­cial to T&T and be­ing able to fa­cil­i­tate the restart of the oil re­fin­ery,” he ex­plained.

How­ev­er, Nagdee hopes the gov­ern­ment will lever­age the fos­sil fu­el in­dus­try to dri­ve the re­new­able en­er­gy tran­si­tion.

“It means that you have more oil and gas to be able to ex­port, which means that this ob­vi­ous­ly leads to­wards earn­ing for­eign ex­change. It is a win-win sit­u­a­tion, but I would rec­om­mend that you utilise the oil and gas prof­its to be able to dri­ve the en­er­gy tran­si­tion. I think that ap­proach may be the most for­mi­da­ble ap­proach for a coun­try like Trinidad,” he ex­plained.

Who ben­e­fits from Shell, Venezuela talks?

As the gov­ern­ment aligns it­self with the chang­ing dy­nam­ics of the oil and gas in­dus­try, Nagdee has been fo­cused on en­er­gy se­cu­ri­ty and en­er­gy sov­er­eign­ty for the Caribbean.

At the start of April, it was re­port­ed that Shell had been in ad­vanced talks with the Venezue­lan gov­ern­ment to de­vel­op four large ar­eas near this coun­try.

Giv­en its prox­im­i­ty to the Caribbean and its his­to­ry of en­er­gy part­ner­ships with sev­er­al is­lands, Nagdee was asked whether this could open up op­por­tu­ni­ties in the push for re­gion­al en­er­gy se­cu­ri­ty.

How­ev­er, he was scep­ti­cal at this stage.

In­stead, he stat­ed, “I think it has to do with who’s buy­ing and who’s it be­ing sold to. If it is for re­gion­al pro­duc­tion and it’s for re­gion­al sale, I do be­lieve that it can ben­e­fit the Caribbean. But again, it’s just too soon to be able to tell what those agree­ments ide­al­ly look like, and that lev­el of un­cer­tain­ty al­so rais­es con­cern across the re­gion for us to be able to iden­ti­fy, be­cause let’s be frank, there is a mea­sure of in­sta­bil­i­ty at the mo­ment. With­out a clear way for­ward, I think that it is just to be able to sit and wait to see who ben­e­fits at the end of what oc­curs in this cir­cum­stance. I think it’s just a volatile area at the mo­ment in which we’re look­ing for some form of set­tle­ment to iden­ti­fy what the agree­ments look like and who will be pri­ori­tised.”

Oil shock strains Caribbean bud­gets

Nev­er­the­less, Nagdee has con­tin­ued his push for the Caribbean to sig­nif­i­cant­ly ex­pand the share of re­new­able en­er­gy in its en­er­gy mix and re­duce re­liance on oil and gas im­ports.

Sev­er­al geopo­lit­i­cal shocks, par­tic­u­lar­ly ten­sions in Iran, are send­ing shock­waves through glob­al en­er­gy mar­kets.

He said the im­pact has not been grad­ual but rather im­me­di­ate for Caribbean economies.

“For what is hap­pen­ing in Iran, there are those coun­tries who re­ly on the oil that’s been pro­duced in that part of the world where they’re now hav­ing to have a se­ri­ous con­ver­sa­tion on ra­tioning, and if they have suf­fi­cient oil to be able to ac­tu­al­ly sus­tain the na­tion­al re­quire­ments. On this side of the world, our con­ver­sa­tions are on af­ford­abil­i­ty.

Our oil comes from a dif­fer­ent part of the world that is not nec­es­sar­i­ly di­rect­ly im­pact­ed by the con­flict but as you can imag­ine, be­cause of the glob­al mar­kets that we do see, it’s al­so hav­ing an im­pact on us. It im­pacts the bot­tom line of a coun­try,” Nagdee fur­ther stat­ed.

He al­so not­ed that a sig­nif­i­cant share of Caribbean coun­tries’ im­port ex­pen­di­ture—of­ten as high as 80 to 90 per cent—is tied to the im­por­ta­tion of fos­sil fu­els. He added, “With these sig­nif­i­cant hikes, it means that you’re go­ing to be look­ing at ad­di­tion­al in­vest­ments across the hun­dreds of mil­lions of U.S. dol­lars that were not nec­es­sar­i­ly bud­get­ed for. These are re­sources and fi­nances that would have tra­di­tion­al­ly been used for oth­er ar­eas for the com­mon good of a coun­try.”

Nagdee said he be­lieves there is a gen­uine at­tempt at co­or­di­na­tion among Caribbean coun­tries when it comes to en­er­gy-re­lat­ed mat­ters, but gaps re­main, he point­ed out.

“If I re­call, the Treaty of Ch­aguara­mas does not ex­plic­it­ly list en­er­gy as a crit­i­cal pil­lar, and as a re­sult of that, we do need to be able to fo­cus our ef­forts on treat­ing en­er­gy as trade, and I think that it leads to an im­ple­men­ta­tion gap, be­cause what is hap­pen­ing is that ef­fec­tive­ly the con­ver­sa­tion of en­er­gy con­tin­ues to be na­tion­al­ly fo­cused and not nec­es­sar­i­ly re­gion­al­ly fo­cused. It is ab­solute­ly a re­quire­ment to have a re­gion­al fo­cus on the en­er­gy chal­lenges that we are fac­ing,” he said.

Nagdee then stressed that ad­vanc­ing a re­gion­al frame­work for co­op­er­a­tion—one that lever­ages the strengths of both oil-pro­duc­ing and non-oil-pro­duc­ing coun­tries—is crit­i­cal to build­ing re­silience and es­tab­lish­ing a strate­gic buffer against ex­ter­nal shocks.

The web of tran­si­tion and re­al­i­ty

De­spite broad con­sen­sus across the re­gion about the need to tran­si­tion away from fos­sil fu­els, progress has not oc­curred at the pace Nagdee had hoped.

The Caribbean re­mains caught be­tween fluc­tu­at­ing glob­al en­er­gy prices and the high cost of tran­si­tion­ing away from oil and gas.

Some of these pres­sures, he said, are ex­ter­nal, while oth­ers are do­mes­tic.

Nagdee ex­plained that the small size of Caribbean mar­kets works against them, not­ing that man­u­fac­tur­ers in the Glob­al North pro­duce tech­nol­o­gy at sig­nif­i­cant scale, in the range of megawatts and gi­gawatts.

“When ef­fec­tive­ly 30 and 40 megawatts are con­sid­ered large for us, ef­fec­tive­ly they’re very small. When a man­u­fac­tur­er and in­dus­try take us se­ri­ous­ly, we then have to usu­al­ly pay an ad­di­tion­al cost sim­ply be­cause the vol­ume is low­er,” he added.

Nagdee al­so said many of the re­gion’s na­tion­al grids are out­dat­ed and re­quire sig­nif­i­cant up­grades to ac­com­mo­date re­new­able en­er­gy. He al­so point­ed to “frag­ment­ed reg­u­la­tions.” He fur­ther ex­plained, “In many cas­es we’re do­ing while learn­ing, while the poli­cies and reg­u­la­to­ry re­quire­ments are be­ing fa­cil­i­tat­ed at the same time that the projects are be­ing im­ple­ment­ed. That is a chal­lenge as well.”

He said lim­it­ed in­sti­tu­tion­al ca­pac­i­ty is a ma­jor con­cern, along­side fis­cal con­straints and the cost of cap­i­tal. He al­so point­ed to age­ing in­fra­struc­ture and the re­gion’s vul­ner­a­bil­i­ty to nat­ur­al dis­as­ters.

“All com­bined, and you ef­fec­tive­ly get a sys­tem where even when it’s tech­ni­cal­ly vi­able, re­new­able projects can strug­gle to reach bank­a­bil­i­ty.”

For these rea­sons, a re­new­able en­er­gy push has con­tin­ued to elude the Caribbean.

Nagdee said on­ly 12 per cent of the Caribbean has tran­si­tioned over the last decade. He not­ed that this is not nec­es­sar­i­ly a neg­a­tive re­flec­tion of progress, but rather a stark re­al­i­ty of what is re­quired for re­new­able en­er­gy to be­come an every­day re­al­i­ty in the re­gion.

He sees the up­com­ing First Con­fer­ence on Tran­si­tion­ing Away from Fos­sil Fu­els this month in Colom­bia as an op­por­tu­ni­ty for the Caribbean to shape the rules of a glob­al tran­si­tion be­fore they are de­signed ex­ter­nal­ly.

“I think that hav­ing our in­put is ex­treme­ly im­por­tant at the con­fer­ence. Fun­da­men­tal­ly, I do be­lieve that a suc­cess­ful con­fer­ence will re­flect that there is a core agree­ment and a uni­fied voice mov­ing for­ward, but it would al­so be in­dica­tive to iden­ti­fy the fi­nanc­ing, be­cause the tran­si­tion ac­tu­al­ly costs a sig­nif­i­cant num­ber of re­sources fi­nan­cial­ly,” Nagdee added.