At a news con­fer­ence on Tues­day, Prime Min­is­ter Stu­art Young said the de­ci­sion of the US De­part­ment of Trea­sury to re­voke T&T’s spe­cif­ic li­cences to un­der­take the de­vel­op­ment of the Drag­on and Cocuina-Man­akin gas fields “does not come nec­es­sar­i­ly as a sur­prise, see­ing how volatile things are, not on­ly with re­spect to the pol­i­cy with Venezuela, but what we are see­ing with the ap­pli­ca­tion of tar­iffs.”

Mr Young told the tele­vised news con­fer­ence that the Gov­ern­ment that he leads is go­ing to make an ap­pli­ca­tion to the US Gov­ern­ment to see if the re­vo­ca­tion of the li­cences can be amend­ed. He al­so said he has reached out to Mauri­cio Claver-Carone, the US spe­cial en­voy to Latin Amer­i­ca, and that a re­quest was put in to US Sec­re­tary of State, Mar­co Ru­bio, for a tele­phone call.

“Based on the per­son­al con­ver­sa­tions and dis­cus­sions that I have man­aged to have with the two gen­tle­men, as well as some oth­ers that we are pur­su­ing, I ex­pect that we will be giv­en an au­di­ence. I ex­pect that we will be giv­en the op­por­tu­ni­ty to make our case.

“To be hon­est, I am not sur­prised by the out­come be­cause they did ex­plain to me the US pol­i­cy and what they were try­ing to achieve with re­spect to Venezuela. But the words that they would not harm Trinidad and To­ba­go, I have no rea­son to doubt it what­so­ev­er, re­main in play,” said the prime min­is­ter.

He al­so said that the re­vo­ca­tion of the US li­cences for the de­vel­op­ment of the Drag­on and Cocuina-Man­akin gas fields was not the first hur­dle that T&T has ex­pe­ri­enced in at­tempt­ing to get ac­cess to a near-bor­der nat­ur­al gas field (Drag­on) and the cross-bor­der Cocuina-Man­akin gas field.

“By now you will know that I will con­tin­ue to pur­sue this. We will con­tin­ue to fight for the abil­i­ty and the op­por­tu­ni­ty to keep our en­er­gy sec­tor whole, and the fu­ture of Trinidad and To­ba­go and the Cari­com re­gion, in the man­ner that we have be­come ac­cus­tomed to.”

Main­tain stan­dard of liv­ing?

In my view, this last point by the T&T Prime Min­is­ter about fight­ing to keep the coun­try’s en­er­gy sec­tor whole and look­ing to en­sure that the fu­ture of T&T’s pop­u­la­tion is “in the man­ner that we have be­come ac­cus­tomed to,” is the most im­por­tant thing he said on Tues­day.

T&T’s laser fo­cus on get­ting ac­cess to the nat­ur­al gas from, and in part­ner­ship with, Venezuela is all about main­tain­ing the stan­dard of liv­ing “that we have be­come ac­cus­tomed to.”

That is be­cause when the tech­nocrats in the Min­istry of En­er­gy look at the pro­jec­tions for nat­ur­al gas sup­ply the next three years, I imag­ine that they do not see much im­prove­ment from the cur­rent gas sup­ply, with­out ac­cess to the Venezue­lan near-bor­der and cross-bor­der nat­ur­al gas. The tech­nocrats may have even done some sce­nario plan­ning that en­vis­ages a de­cline in nat­ur­al gas pro­duc­tion from cur­rent lev­els, with­out ac­cess to the Venezue­lan near-bor­der and cross-bor­der nat­ur­al gas.

In its con­sol­i­dat­ed month­ly bul­letin for the pe­ri­od Jan­u­ary to De­cem­ber 2024, the Min­is­ter of En­er­gy states that T&T’s av­er­age nat­ur­al gas pro­duc­tion for 2024 was 2.53 bil­lion cu­bic feet per day.

With nat­ur­al gas from Drag­on field, there was an ex­pec­ta­tion that av­er­age nat­ur­al gas pro­duc­tion would have in­creased to over over 3 bil­lion cu­bic feet per day.

The fun­da­men­tal dri­ver of the cur­rent ad­min­is­tra­tion’s fo­cussed at­tempt to get nat­ur­al gas from Venezuela is the at­tempt to re­verse the nat­ur­al de­cline in nat­ur­al gas out­put that T&T, as a ma­ture en­er­gy province, has been ex­pe­ri­enc­ing. This is par­tic­u­lar­ly im­por­tant be­cause the coun­try has, over the last 30 years, es­tab­lished a broad foot­print of LNG and petro­chem­i­cal plants, which can­not ex­pand if their feed­stock, nat­ur­al gas, is in short sup­ply.

In his af­fi­davit filed on June 3, 2024, in re­la­tion to the le­gal mat­ter of the es­tab­lish­ment of the T&T Rev­enue Au­thor­i­ty, for­mer Min­is­ter of Fi­nance, Colm Im­bert stat­ed:

“The in­ter­na­tion­al price for oil and gas is not ex­pect­ed to in­crease sig­nif­i­cant­ly in the near fu­ture. Fur­ther, Trinidad and To­ba­go is a ma­ture en­er­gy province, hav­ing pro­duced oil for over 100 years, and is chal­lenged by nat­ur­al de­clines in oil and gas pro­duc­tion.

“In fact, oil pro­duc­tion in this coun­try is half of what it was 15 years ago, and gas pro­duc­tion is 35 per cent less than what it was 10 years ago. Such pro­duc­tion is not ex­pect­ed to im­prove un­til 2027, when it is ex­pect­ed that gas from Venezuela should be­come avail­able to the coun­try.

“Ac­cord­ing­ly, the next three years will be very chal­leng­ing for the coun­try from a rev­enue per­spec­tive. In fact, un­less ad­di­tion­al tax rev­enue can be col­lect­ed through the

im­prove­ments in tax ad­min­is­tra­tion that will come with a ful­ly op­er­a­tional Rev­enue Au­thor­i­ty, the Gov­ern­ment will soon be faced with very dif­fi­cult choic­es in terms of main­tain­ing the cur­rent lev­els of sub­si­dies, grants, free ser­vices and so­cial pro­grammes.”

What Mr Im­bert was stat­ing here is that with­out the nat­ur­al gas from Venezuela, T&T will “soon be faced with very dif­fi­cult choic­es in terms of main­tain­ing the cur­rent lev­els of sub­si­dies, grants, free ser­vices and so­cial pro­grammes.”

And it seems quite easy to in­fer from what Mr Im­bert stat­ed, on oath in June 2024 that, with­out the nat­ur­al gas from Venezuela, the trans­fers and sub­si­dies the pop­u­la­tion of T&T takes for grant­ed now—such as low-cost wa­ter and elec­tric­i­ty, “free” health­care and ed­u­ca­tion and a boun­ti­ful amount of grants of all kinds—will sim­ply not be af­ford­able.

Oth­er con­se­quences

With­out Venezuela’s nat­ur­al gas, there­fore, the abil­i­ty of any ad­min­is­tra­tion to main­tain the stan­dard of liv­ing “that we have be­come ac­cus­tomed to” be­comes very chal­leng­ing.

1) With­out Venezue­lan nat­ur­al gas by 2027, whichev­er po­lit­i­cal par­ty wins the April 28 gen­er­al elec­tion will be forced to im­ple­ment the “very dif­fi­cult choic­es,” Mr Im­bert en­vis­aged be­cause of the de­cline in rev­enue from the coun­try’s en­er­gy re­sources;

2) In ad­di­tion to the fis­cal is­sue out­lined above, T&T will al­so have an exarcer­baed for­eign ex­change prob­lem, as less en­er­gy rev­enue will mean less for­eign ex­change, all things be­ing equal;

3) As not­ed last week, in the com­men­tary head­lined ‘Can T&T af­ford Kam­la’s promis­es?’ a high­er fis­cal deficit means more bor­row­ing. With T&T’s to­tal bor­row­ing equalling about 73 per cent of the coun­try’s GDP, there is not much “fis­cal space” to con­tin­ue bor­row­ing to en­sure that the pop­u­la­tion main­tains the stan­dard of liv­ing to which they have be­come ac­cus­tomed to;

4) T&T’s rainy day sav­ings, al­so known as the Her­itage and Sta­bil­i­sa­tion Fund is like­ly to be fur­ther de­plet­ed;

5) The sit­u­a­tion in 2027, with­out gas from Venezuela, may re­sult in fur­ther moth­balling of plants on the Point Lisas In­dus­tri­al Es­tate.

In a news re­lease on Tues­day, the En­er­gy Cham­ber made the fol­low­ing com­ment:

“...There are sig­nif­i­cant op­por­tu­ni­ties to de­vel­op nat­ur­al gas fields with­in Trinidad & To­ba­go’s ex­clu­sive eco­nom­ic zone and these must al­so be pur­sued ac­tive­ly and ur­gent­ly. There are a num­ber of fields, in­clud­ing Men­to, Co­conut, Gin­ger, and Man­a­tee, that are cur­rent­ly be­ing de­vel­oped and oth­ers, in­clud­ing Ca­lyp­so, Black­jack and Onyx where com­pa­nies are work­ing to­wards tak­ing a fi­nal in­vest­ment de­ci­sion. All of these op­por­tu­ni­ties should be pur­sued to help main­tain and in­crease Trinidad & To­ba­go’s up­stream gas pro­duc­tion.”

Prime Min­is­ter Young must in­form the pop­u­la­tion about the timeta­bles for the ex­pect­ed fi­nal in­vest­ment de­ci­sions for the Ca­lyp­so, Black­jack, and Onyx gas fields (the last two I had nev­er heard of) and how much gas those three fields are ex­pect­ed to add to T&T’s gas ma­trix by 2027.

Will he tell us and can he suc­ceed in get­ing the Amer­i­cans to change their po­si­tion on Drag­on and Cocuina-Man­akin?