Former Economic Development Advisory Board chairman Dr Terrence Farrell has likened T&T’s oil industry to the old Nokia and Blackberry phones that were popular back in the 2000s that have now gone off the shelves.
“Nokia is dead as a phone company,” Farrell said at the Lloyd Best Institute of the West Indies’ public forum on Petrotrin at the San Fernando City Hall yesterday.
He told those gathered that products and industries die because technological and economic progress changes economies and that Government should now focus on investing in renewable energy.
One of T&T’s lead economist, Farrell irked members of the Oilfields Workers’ Trade Union (OWTU) who were present at the forum.
They accused him of ignoring the role of Petrotrin to the fortunes of T&T, as he went against the grain of the other panellists.
In contrast to Farrell, fellow economist Gregory Mc Guire suggested that a new and efficient refinery be built while geologist Dr Krishna Persad advised that Petrotrin should ignore exploration so that it could tap into proven oil reserves that would increase production for the Pointe-a-Pierre refinery.
But Farrell relied on the laws of economics to drive his presentation and a forecast that stated that the high-cost producers like T&T will be out of the crude oil business by 2030. By 2050, it is predicted that gas may be a high-cost production, he noted.
“The stone age didn’t end because of a lack of stones and change of hands, the oil age is not going to end because of a lack of oil. There is going to be plenty of oil and natural gas in the ground when the planet has stopped using fossil fuels to generate energy. What will happen? We don’t know…” Farrell explained.
“Solar, wind, tidal are coming. The Chinese are investing in renewable energy. The Chinese have taken an old coal field, turned it into a lake and put solar panels on top of the lake to generate solar energy. The cost of solar energy is coming down rapidly.”
He said a renewable energy thrust would present opportunities for the retrenched Petrotrin workers to create businesses.
However, the trade union movement continues to urge the Government to seek alternatives to shutting down the refinery and dismissing the entire Petrotrin workforce.
But Farrell said investing in industries for the purpose of saving jobs was not about economics and had to do with the political economy.
For employees, a job is something that allows them to feed their families and pays bills, but Farrell said it must produce value.
He said politicians need to understand this, recalling that since the 1960’s the sugar industry was in a terminal state yet governments kept Caroni (1975) Ltd open for 30 years. The cost of doing that began to pile up and it became inevitable that the company could not survive, he noted.
He said since the 1970’s T&T’s political economy has led to it becoming a rentier state where Government took taxes from the energy sector to upkeep the public sector.
He said the Government was the largest employer in the country but described State enterprises as a “bed of corruption.”
Under the People’s Partnership, he said the National Gas Company engaged in many things that it had no business in, wasting its resources.
Those resources, if they had been used for proper investment, could have enhanced T&T’s economy, Farrell said.
He said for a country with vast resources, there was too much poverty and low productivity.
“We do have an opportunity now to grasp and pursue renewables and energy efficiency in this country.
“Let us step back and focus on that industry and see what can we do for Trinidad and Tobago to bring and to introduce renewables, introduce solar energy, to use tidal power, to use wind power to generate our electricity, to convert our transportation system,” he said.