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.