The International Energy Agency’s (IEA) World Energy Outlook report released last Wednesday will pique the interest of energy industry stakeholders in Trinidad and Tobago (T&T).
The release of the report coincided with the first week of COP30 (Conference of Parties), the most important climate change conference of the year organised by the United Nations.
For climate activists and enthusiasts, the IEA’s report would have been less than encouraging in their bid to phase out fossil fuels. Instead, the IEA forecast the demand for oil and gas could grow until 2050, a spectacular departure from previous predictions that the global energy transition will lead to cleaner forms of energy.
Its 2025 outlook also suggested the supply of Liquified Natural Gas (LNG) could grow to 50 per cent by 2030. The report also appeared to place a dagger in the hopes of limiting temperature rise to 1.5 degrees Celsius saying “it is now out of reach.”
Based in Paris, the energy security watchdog has been forced to operate under differing agendas of the Biden and Trump administrations when it comes to clean energy and the use of fossil fuels.
Ajay Mathur, who served as the second director general of the International Solar Alliance and is a former climate negotiator for India, told the Sunday Business Guardian on the sidelines of COP30, “One of the things that the IEA gets right is the fact as far as long-term trends are concerned—short-term trends are anybody’s guess where they may go—but what they get right is where growth is expected and where declines are expected. They get that correct.”
T&T could have best of both worlds
The IEA predicted that under a current policy scenarios oil demand will hit 113 million barrels per day by 2050. That would be a 13 per cent increase from 2024 consumption. The report also noted that final investment decisions for new LNG projects have increased this year, and as such, operations for roughly 300 billion cubic metres of new annual LNG export capacity will start by 2030. This is mainly due to rising power sector demand fueled by the building of data centres and an upsurge in artificial intelligence.
Acting vice president of research, academic and student affairs at the University of Trinidad and Tobago (UTT), Professor Donnie Boodlal, says this country can benefit from the bright outlook for fossil fuels over the next 25 years.
“We are a producer of hydrocarbons and if hydrocarbons are going to be around longer than previously expected, that spells some positivity for Trinidad so that’s a no-brainer. But on the other hand, our reserves have been declining. Many people say that our industry is mature so that’s why I say we must act quickly. There are certain things that we have not explored extensively yet,” Boodlal told the Sunday Business Guardian.
One of those underexplored provinces Boodlal referenced is the deepwater projects.
“Even though our reserves are declining, there are many aspects of our reserves that are untapped and they’re untapped because it costs more money to produce it. But I’m saying that the future pricing mechanism may be such that there may be a higher price for hydrocarbons, therefore enabling tapping into these untapped reserves. I’m talking about heavy oil and oil being produced by enhanced oil recovery techniques, which Trinidad is no stranger too.”
Boodlal would also like this country to offer regional energy services such as an LNG power grid hub, leveraging skilled port infrastructure and even the regulatory framework that has been developed over the last century.
“We can export energy services in a more meaningful way in addition to actually tapping the direct energy commodity opportunity itself,” he added.
He admits for the country to exploit this increased demand for oil and gas, the aging infrastructure will be a key factor.
However, Boodlal is adamant the country should not abandon its energy transition thrust amidst this latest outlook.
“I think we still need to do the right thing and we need to do that in as clean a way as possible,” he said.
Boodlal has been an advocate for T&T exploring carbon capture and storage (CCS). That is a process by which carbon dioxide ( CO2) from industrial installations is separated before it is released into the atmosphere, then transported to a long-term storage location. He says while the process is seen as expensive, T&T may have a more enabling economic environment for it.
“I believe that we can co-mingle carbon capture and storage with hydrocarbon exploitation during this time and still get the best of both worlds in that we serve the increasing demand for fossil fuel, but it does not manifest intensively in our carbon footprint,” Boodlal said.
He added that there are a few things going for T&T in CCS.
The first is that the country’s CO2 emissions from the ammonia sector are relatively pure. He said the distance to transport the captured CO2 to storage in Trinidad is also less than some of the other countries in the world where it’s being transported thousands of kilometers. Finally, he explained the low cost of electricity in this country will help the financial viability of the project.
The IEA report also pointed out that renewables will grow faster than any major energy source in the next decade. The world is expected to build more renewable energy projects in the next five years than those built in the last 40 years.
Philip Julien, who heads Kenesjay Green Limited—a Caribbean-grown green energy engineering and project development company—was asked if the rising demand for oil and gas could distract this country from its energy transition.
He told the Sunday Business Guardian, “I think it would be a confidence booster for the Government and the country to know that its current bread-and-butter revenue is intact for the foreseeable future and that also allows the country to focus its energies on additional renewable energy investment and generation to help feed the clear and present demand of the captive market that is Pt Lisas.”
Battle over 1.5
The IEA’s report also added to the continuing debate surrounding the 1.5-degree celsius target under the Paris Agreement.
Boodlal agrees that that threshold is effectively out of reach under the current policies globally that each country has submitted with their nationally determined contribution. So, in other words if nothing materially changes the world is on track to surpass that 1.5 by 2050. In fact, the latest projection shows that if we continue along the current trajectory, we’re going to be closer to 2 degrees Celsius by 2050.”
However, lead negotiator for the Alliance of Small Island States at COP30, Anne Rasmussen, insisted in an interview with Guardian Media that that is a narrative being spread, and one she does not subscribe to.
“For us, 1.5 is a legal benchmark,” said Rasmussen, adding “If we overshoot, we continue to advocate for accelerated efforts to bring us back down to that goal. We’re not throwing up our hands and giving up on the 1.5. If you are saying you cannot meet this, this is still our goal. This is still a legal benchmark. This is still a moral obligation. We will continue to advocate to continue to accelerate efforts to bring it back down to the 1.5.”
