PORT OF SPAIN, Trinidad, CMC – At the Trinidad and Tobago Energy Conference in January 2023, one of the critical sentiments coming out of all of the discussions was that while we were on the right pathways to secure the future of the sector, we needed to be moving faster.
This was a sentiment we heard not just from industry leaders but also from senior government leaders, especially the Minister of Energy, Stuart Young. We have chosen the theme of the 2024 conference to reflect that sentiment: “Accelerating Action.”
But saying we want to move faster and moving faster are two different things. Despite Minister Young’s best assurances and his palpable commitment, his desire to complete the 2021 deepwater bid round and the blocks awarded quickly has yet to come to pass some seven months later. This also means the anticipated 2023 shallow water bid round has yet to be launched.
We need to understand why things take so long to be implemented, try to address those bottlenecks, and get things flowing systematically.
From my position, I see four significant things that we need to address:
- Fixing the business-as-usual mindset that protects the status quo.
- Breaking siloed decision-making in the public service.
- Ruthlessly streamlining the approvals process.
- Making sure that the key regulatory agencies can hire the brightest and best and access the required skills.
Understanding business-as-usual won’t work.
One of the critical issues that we face is that most citizens. Many leaders in society do not understand the crisis we are facing. Sure, it is a slow-burning crisis – unlike crime or the pandemic – but it is a crisis for the country.
Trinidad & Tobago’s economy is based on the production and processing of natural gas, and our gas production has fallen by a third in the past decade. If we do not make changes, it will continue to fall.
We can substitute some of the natural gas feedstock going to our petrochemical industries with green hydrogen, but that will need massive injections of capital into producing green electrons (most likely from wind power).
Suppose we cannot secure new investment for upstream production of green electrons, gas, or oil and further investment in decarbonizing our downstream plants. In that case, our economy will contract hugely, and the standard of living for Trinidad & Tobago’s entire population will plummet. Yet when I read Vision 2030, the country’s overall policy framework, I see no mention of this issue.
In 2013, the Energy Chamber brought the ex-President of Colombia, Álvaro Uribe, to Trinidad to talk at the Energy Conference about the decisions that he had taken to transform Colombia.
We followed this up with a mission from the key architects of the very successful 2003 reform of the Colombia energy sector (that resulted in them doubling oil production in the years following the reforms).
One of the things that the team from Colombia made clear was that they had faced a national crisis that the entire population could identify with and that this drove the consensus that things had to change.
In Trinidad & Tobago, by contrast, only the energy industry insiders saw that we had a crisis on our hands with the fall in investment in upstream gas exploration and production. The rest of the country was happy with the status quo. Our intervention to bring in the team from Colombia could have made a real impact on decision-making.
A lot has stayed the same for a decade despite the global push to net zero and the continued slide in our oil and gas production. The response by the population to the Regulated Industries Commission (RIC) electricity rate review process is clear evidence that people are not willing to confront the reality of our situation.
Until there is broad acceptance that we face a crisis, the temptation will be to follow a “business-as-usual” model, which means the usual slow progress, bottlenecks, and procrastination.
We need to get all leaders across society to accept and communicate consistently that it cannot be business as usual and that we need significant reforms that will upset the status quo.
Suppose we accept that we are not in a business-as-usual mode. In that case, we might rethink how we conduct bid rounds, for example, or subsidize electricity produced from natural gas.
Breaking the silos
The second major problem is that we have siloed decision-making in the public sector. This was apparent to me in the long and frequently delayed process of getting the first major grid-scale renewable energy project (with investments from BP and Shell) underway.
We must make sure that we streamline the decision-making and approval processes if we are, for example, going to get into the massive investments in renewable energy needed to make the green hydrogen plans a reality.
At the moment, we have different Ministries and different agencies pulling in different directions. I am seeing the same with the vital fiscal reform process. This has to stop; we need all Ministries and agencies pulling in the same direction.
Dealing with the devil in the details and streamlining approval processes
The third major problem I see is that the approval processes need to be designed for speed.
In 2019, we thoroughly reviewed the approval process for major new upstream gas projects. We documented at least thirty-three major approvals required from eight different Ministries or statutory agencies to get from a bid round to first gas.
Most of these took place in series rather than working in parallel. Shockingly, in 2023, most of the decisions still have to be taken using paper files and relying on the physical signatures of the decision-makers. We have heard of cases where critical decisions cannot be accepted because a hardcopy file has gone missing.
Fixing this issue needs detailed, busy work and a commitment to streamline and ruthlessly cut out processes and decisions that do not add value to the overall approval process.
Fixing the people’s issues
Doing this work requires time and effort commitment from already stretched public servants, which brings me to the fourth and final issue that must be addressed: the capacity within the Ministry of Energy and other critical agencies.
In 2017, there was a decision to allow the Ministry of Energy to recruit technical staff into public service positions rather than having the Service Commission run the recruitment exercise. This has been shelved after legal challenges from the PSA.
The Ministry of Energy has had to rely on the same system used by the rest of the public service of hiring contract staff on fixed-term contracts to fill skill gaps. This approach to trying to fix the human resource issues in the public service has been around for decades, and there is no evidence that it has been effective.
The Trinidad & Tobago Ministry of Energy has had access to some of the best and brightest young minds not just in T&T but in the entire world through the returning national scholar’s program, championed by the former Minister Franklin Khan.
A new round of the program has recently been launched. Unfortunately, this has not had the desired impact to modernize and make the Ministry more efficient.
One of the essential elements of the reforms in Colombia 20 years ago was to create a separate hydrocarbon agency (the ANH) that could set its employment terms and conditions and model its processes and procedures on the best practices of the international oil and gas companies.
This is the organization that oversees bid rounds, licensing, and the regulation of the industry. It may be time for something similar in Trinidad & Tobago. Whatever the details of how we proceed, we must ensure that the Ministry and other regulatory agencies have the required skill sets.
Accelerating the pace at which fundamental decisions are taken is vital to the success of the Trinidad & Tobago energy sector. The energy sector in T&T does potentially have a long and vibrant future ahead, but this will only be realized if decisions are taken. Some of these decisions are likely to be unpopular with sections of the population, but it is nevertheless essential that they are born.
We have no time to waste, and collectively, Trinidad & Tobago will have to find a way to implement changes faster.
*Dr. Thackwray “Dax” Driver is the President and chief executive officer of Trinidad and Tobago Energy Chamber. The article is reproduced from the Energy Chamber’s website.
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