The world has been forced to make a choice be­tween life and liveli­hoods.

Faced with the pan­dem­ic caused by the nov­el coro­n­avirus that has re­suk­t­ed in tens of thou­sands of deaths glob­al­ly, gov­ern­ments all over the world, in­clud­ing T&T, have cre­at­ed great eco­nom­ic hard­ships on their peo­ple as they try to flat­ten the curve and there­fore lim­it the spread of COVID-19; in the process sav­ing lives.

It is a re­al­i­ty that there can be no liveli­hood with­out life and the ac­tions by gov­ern­ments, in­clud­ing the Row­ley ad­min­is­tra­tion are un­der­stand­able and, in some ways, laud­able.

For economies like T&T, the chal­lenge of the COVID-19 threat­ens to hurt much more and con­tin­ues for longer be­cause of the im­pact it is hav­ing on glob­al en­er­gy prices. Faced with an al­ready over-sup­ply sit­u­a­tion and the geo-pol­i­tics of the Saud­is, it is like­ly to keep oil and gas prices low in­to the medi­um term, if not the longer hori­zon.

In some ways COVID-19 has giv­en us an op­por­tu­ni­ty to see the ben­e­fit of some of the gov­ern­ment’s ac­tions pre COVID-19 and al­so its short­com­ings.

For sure Petrotrin—as it was then con­sti­tut­ed—with a lift­ing cost of US$35 a bar­rel and poor mar­gins on its re­fin­ing would have gone bank­rupt un­der these con­di­tions or, at best, forced the gov­ern­ment to guar­an­tee even more debt on be­half of the com­pa­ny.

That the Row­ley ad­min­is­tra­tion had the po­lit­i­cal will to close down the com­pa­ny and con­tin­ue on­ly as an ex­plo­ration and pro­duc­tion en­ti­ty gives it a chance to sur­vive. I sus­pect that post COVID-19 crude prices are like­ly to in­crease to the US$40/$45 a bar­rel as de­mand im­proves and al­lows in the short-term shale pro­duc­ers to sur­vive. But not enough for en­er­gy de­pen­dent economies like T&T.

I al­so think the proxy war can­not be sus­tained by the Saud­is and Rus­sia and good sense must pre­vail which could see prices back to US $55/$65 a bar­rel by 2022/23 as de­mand al­so catch­es up with sup­ply.

The cri­sis has al­lowed the coun­try to see a Prime Min­is­ter who ap­pears more in­vig­o­rat­ed and in charge of things and shows that the gov­ern­ment fi­nal­ly is be­gin­ning to un­der­stand that if it works with the pri­vate sec­tor, rather than their pre­vi­ous po­si­tion that they are in pow­er and they set the pol­i­cy, that there may be ben­e­fits for the coun­try.

I am pleased that the gov­ern­ment lis­tened, to a large mea­sure, what the pri­vate sec­tor had to say in terms of its se­lec­tion of those es­sen­tial busi­ness­es that should re­main open, which gives the coun­try the best chance of keep­ing some as­pects of the econ­o­my go­ing while at the same time pro­tect­ing the pub­lic in­ter­est.

The pri­vate sec­tor has shown the ad­min­is­tra­tion how much it is pre­pared to work in the na­tion’s in­ter­est and the fi­nan­cial in­sti­tu­tions have en­joined the bat­tle to keep peo­ple and com­pa­nies afloat with sig­nif­i­cant as­sis­tance in both re­duc­ing in­ter­est rates and loan de­fer­rals.

The one thing we do not want to see is a marked in­crease in non-per­form­ing loans.

It is the pri­vate sec­tor who will have to lead the econ­o­my in­to a more sus­tain­able and re­silient path and the gov­ern­ment must see that it has a cru­cial role to fa­cil­i­tate this growth and not com­pete with it.

The gov­ern­ment must lead the sec­tor, not by try­ing to crowd it out, but by mak­ing it eas­i­er to do le­git­i­mate busi­ness . Gov­ern­ment must en­sure the reg­u­la­to­ry frame­work is invit­ing to in­vest­ment but at the same time pro­tects con­sumers and the pub­lic in­ter­est.

The gov­ern­ment must work with the pri­vate sec­tor to en­sure that we have an ex­change rate that is sus­tain­able, com­pet­i­tive and is a true re­flec­tion of the val­ue of the TT dol­lar against oth­er ma­jor cur­ren­cies.

The COVID-19 cri­sis has shown us that if forced to act, or forced to col­lab­o­rate, the Gov­ern­ment can do it and I hope that the lethar­gy of the past four and a half years does not re­turn post COVID-19.

One of the chal­lenges that we will have to fix post COVID-19 is the en­er­gy sec­tor. The sec­tor has served us well and sus­tained the coun­try’s econ­o­my for decades.

Fix­ing the chal­lenges of the sec­tor is not in any­way a sug­ges­tion that the ur­gent di­ver­si­fi­ca­tion need­ed, can­not be achieved and ought not to be a ma­jor fo­cus of gov­ern­ment. But there is still life in the en­er­gy sec­tor and T&T needs to make the best above the ground de­ci­sions so that it is sus­tain­able and re­silient.

The gov­ern­ment has to find a so­lu­tion to the on­go­ing nat­ur­al gas chal­lenges fac­ing the coun­try. It is true there are some projects like those Shell re­cent­ly an­nounced that will in­crease gas pro­duc­tion. But it is not a short term so­lu­tion and will take an­oth­er three years.

With that in mind the down­stream sec­tor which has been suf­fer­ing from nat­ur­al gas cur­tail­ment for al­most a decade and now high­er gas prices in T&T can­not con­tin­ue to op­er­ate in the present cir­cum­stances.

At the end of the day those petro­chem­i­cal com­pa­nies have to com­pete with sim­i­lar op­er­a­tions in the Unit­ed States that are en­joy­ing cheap shale gas .

Is there then a pos­si­bil­i­ty of T&T ben­e­fit­ing from low shale prices and should we see low shale prices in the US as the death of T&T’s petro­chem­i­cal sec­tor or an op­por­tu­ni­ty?

Ja­maica has for some time be­come an im­porter of nat­ur­al gas for its pow­er gen­er­a­tion and alu­mi­na in­dus­tries. Is it pos­si­ble to land nat­ur­al gas here at a price low­er than the close to US$4 that the NGC is de­mand­ing per mmb­tu for its gas?

It oth­er words, can we as a coun­try meet the 500 mil­lion stan­dard cu­bic feet of nat­ur­al gas short­fall by al­low­ing the pri­vate sec­tor to im­port the gas and use it in their plants, low­ing their per unit cost, en­sur­ing they have all the gas to com­pete and at a price that is low­er than what they can get from our lo­cal pro­duc­ers?

Per­haps it will al­so al­low At­lantic LNG to get all the gas it needs and even open the door to fur­ther ex­pan­sion down­stream or the re­turn of some plants that may be moth­balled.

The time has come for the coun­try to se­ri­ous­ly study and con­sid­er if there is a pos­si­bil­i­ty of us­ing the low prices for nat­ur­al gas in the US as an op­por­tu­ni­ty to strength­en our lo­cal petro­chem­i­cal sec­tor.

The num­bers will have to be run and it can­not be a sit­u­a­tion where the NGC sees it as an op­por­tu­ni­ty to charge such a large toll for use of its pipeline that the price be­comes un­work­able.

I al­so do not think the NGC should be the one im­port­ing the gas be­cause that will re­turn us to the same po­si­tion we are in with a lack or trans­paren­cy, with a com­pa­ny that en­joys a mo­nop­oly po­si­tion and com­petes with its own cus­tomers.

COVID-19 has al­ready taught us a lot of lessons, let’s hope one thing we learn is the need for the pri­vate sec­tor to tru­ly be the en­gine of eco­nom­ic growth.