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Solar energy is one of the best forms of renewable energy for T&T.

The election of US President Joe Biden, that country’s return to the Paris Climate Accord, and the appointment of a special envoy on climate change are all signs that the United States is ready to lead the global fight to reduce carbon emission and to reverse the negative impact of climate change.

These actions potentially have significant implications for the fossil fuels industry, which science has largely blamed for global warming.

Since taking office Biden has already taken several steps to deal with the challenge of climate change. He has suspended new oil and gas leases on US federal land and has promised to confront the issue through diplomatic, conservation and other initiatives.

In three executive orders, Biden directed his Department of the Interior to identify steps to double offshore wind production by 2030 and to employ Americans on climate-focused public-works projects.

He also set a goal for delivering 40 per cent of the benefits of all federal spending on climate initiatives to poor and minority communities.

These are challenging decisions as it is well known that the US is the second largest producer of crude oil in the world, it is the king of shale oil and gas and has upended global energy markets, leading to the now accepted term of longer forever, relating to the relatively low global oil and gas prices.

Biden framed the climate change as a matter of national security for the US and directed all major government departments to take action aimed at curbing greenhouse-gas emissions and the country’s decades-long reliance on oil.

“In my view, we’ve already waited too long to deal with this climate crisis. We can’t wait any longer. We see it with our own eyes, we feel it, we know it in our bones and it’s time to act,” Biden said.

If Biden’s strategy is successful then it will lead to an increase in the use of renewable energy with natural gas being the bridge between our renewable future and fossil fuel.

What it will also do is reduce, over time, the demand for crude oil and eventually natural gas. This is sure to then significantly lower the value of these commodities as they become less and less important to our daily lives.

The timeline that most people are looking at for the transition to renewable energy is 2050. This transition has already begun and while for some 2050 may seem a long time from now, just consider someone who is today entering university will be in their late 40s then. For the child who entered secondary school this year, that person would be still in their early 40s. In other words, 2050 is not far off and unless we take action now as a country we are imperilling the future of the very children we claim to care for.

For T&T the challenge is two-fold, the first is how do we transform an economy that is not only reliant on the energy sector but which goes hard at ensuring we reap all the rewards from the very energy sector that we are walking away from? The second is how do we build a new economy that is not reliant on the forex and earnings from the energy sector?

If this sounds counter-intuitive let me explain a little about what I feel T&T’s strategy should be. We have to fix the challenges in the energy sector. We have to do all we can to find, develop, produce, and earn maximum revenue from the energy sector. This means eight years without a bid-round is a sign of the government falling down on the job and failing the children who are at school.

It means the Ostrich-like approach of Energy Minster Franklin Khan of trying to deny that the challenges facing the Point Lisas Industrial Estate suggesting they are based solely on low global commodity prices and not on the unit-cost of producing ammonia and methanol in T&T has to be done away with. Minister Khan must know that a company’s goal is to produce a product or service that it can sell at a profit. If the cost of producing that product is higher than that of your competitors and there is no differentiation, then what would be your value proposition?

So yes Minister Khan the uncompetitive cost of natural gas in T&T is a major factor in the recent closure of plants and the crisis looming at the estate.

We must fix the energy sector including Heritage Petroleum living up to its potential and going after the oil we all suspect it has in its licensed areas. It must look at expanding lease operatorship and partner with smaller producers in areas it deems uneconomic. It must learn from the success of Touchstone, where it has deployed technology and made new discoveries, and Heritage must do it as quickly as possible.

I am aware these are not easy asks but there must be a sense of urgency and the additional revenue that we may yet get from the sector must be used to do three things, the first is to save at least 50 per cent of any additional revenue in the Heritage side of the Heritage and Stabilisation Fund. The second thing that has to be done is 25 per cent of the revenue must be spent on preparing the economy of the future, that may mean investments in education, training, research and infrastructure. The other 25 per cent must be spent in seeking to take all of us as a country into a developed country space.

It is not impossible. It will require focus, and innovation and a commitment to fairness and value for money. But we must keep our minds firmly rooted in the reality that this money we are getting, it is not going to continue for a long period and the economy cannot rely on it forever.

The country must also look at how we maximise the invested resources in the energy sector and utilise it into the future energy mix.

On Tuesday we heard from Phillip Julien, the son of Prof Kenneth Julien, as he outlined the plans of NewGen Energy to make green petrochemicals.

Speaking at the recently concluded Energy Chamber’s renewable energy conference, Julien noted that T&T has an established and integrated hydrogen market that is supplied exclusively by the steam methane reforming of natural gas. He said the NewGen project is centred on the development of what it believes will be the world’s first industrial-scale Carbon Neutral/Green Hydrogen Production facility, which will produce energy-efficient & green hydrogen for the petrochemical sector, via the process of water electrolysis.

“For the electrolytic process, the intention is to source renewable electricity generated by the pending Lightsource bp/Shell solar facility, as well as electricity generated through thermal heat recovery at existing power plants to generate carbon-neutral electricity.

“The electricity will create additional, valuable, and in-demand, hydrogen feedstock for the Point Lisas Estate, from the carbon-free source, of water. In addition, there are a number of other tangible benefits that this project enables. One that stands out, in particular, is the project’s creation of a new revenue stream to T&TEC from NewGen,” Julien said.

This is the kind of forward-thinking that is necessary.

Julien, like his father before him, is seeking to make this country a leader not just in petrochemicals but the way they are produced.

The conference also heard from a number of speakers including the president of bpTT and the managing director of Proman, all who talked about the reduced cost of producing renewables and while it meant a challenge for T&T they felt we can meet those challenges head-on.

We have no choice in this matter. If we fail to act and act now to transform this economy, as day follows night we risk disaster for ourselves and the children of the country. We risk moving too late and losing the competitive advantage we now have.

The manufacturing sector has shown that it can lead the way in transforming itself, but that is mainly in food and beverage which so far has been protected by Caricom tariffs and also require significant imports to be viable. This means using forex generated by the very energy sector.

The climate change challenge must be a call to action for us in T&T. It must be about reducing emissions while we build out a new economy.