| IMAGINE
if you would, government revenues leaping from the $13.8 billion realised
in the year 2000, to somewhere in the vicinity of $20 billion a year in
the next three-to-five years. That is not wishful thinking on the part of
greedy politicians. It is a realistic evaluation of what lies ahead for
Trinidad and Tobago, based on recent proven oil and gas finds that will
see both commodities double in production within the time frame. It also
sounds too good to be true. But it's worrisome for Kerston Coombs, a
pioneer in this country's industrialisation thrust, who fears that we
could end up frittering away the vast sums of money coming our way and
remain a "wannabe" developed country.
Coombs is an engineer who started out in 1964 with the first major
downstream plant in the energy sector, Federation Chemicals (also called
Grace Plant, now owned by Hydro-Agri). Almost 20 years later, when the
Point Lisas Industrial Estate began expanding following the first oil boom
(1973-1980), he moved to the National Energy Corporation, which was headed
by the PNM government's industrialisation czar, Professor Kenneth Julien.
He was among those who oversaw the construction of the country's first
methanol and urea plants. He then joined Clico in 1989 and served as that
company's point man as it moved to become the first local private sector
company to invest in heavy industry - the result being the Caribbean
Methanol Company.
Sitting in his office at Synchem Limited, a Point Lisas based supplier
of industrial chemicals, of which he is chairman, Coombs told Business
Express he had no doubt that a boom in the energy sector was on the way. "That
major oil find by BHP Billiton off the North-East coast is expected to
yield 100,000 barrels of crude a day (bpd), which will almost double our
oil production. This after a decline in production that saw production
fall from around 140,000 bpd to just over 100,000. The BHP find also
includes an estimated 2.5 trillion cubic feet of gas. These discoveries
alone, and bear in mind there are dozens of other firms exploring for oil
and gas both on land and off-shore Trinidad and Tobago, are likely to
double government's revenues from oil and gas," he said.
"Realistically, therefore, we could expect government's revenues
to reach anywhere close to $20 billion a year in another three to five
years. That's a huge sum for a small country like ours, but what bothers
me is what we'll do with it." Coombs added with a cynical smile
on his face, "Are the politicians going to outdo each other by
promising to raise old age pension to $2,000 a month? Will they fall over
each other by simply giving each national a sum of money, as some crazy
people suggest? Will the corrupt be the ones to benefit from this massive
windfall?"
He explained that the country's energy sector currently utilises around
1.5 billion cubic feet (bcf) of gas a day. "That's with all the
methanol, urea and Atlantic LNG's Train I plants on stream. Soon, we'll
have the biggest methanol plant in the world coming on stream - Atlas. It
will produce 5,000 tonnes of methanol a day, twice times what the
company's other plant, Titan, currently produces. CL Financial is about to
begin construction of another similar plant, which it has under
construction, in addition to other plants the company. And Atlantic's
Trains II and III are also underway. The demand for gas will double when
all these plants come on stream. And since government collects its
royalties at the well-heads, you'll understand the kind of increased
revenues we are talking about."
Coombs said even if oil and gas prices drop at any point, that is
hardly likely to affect this country negatively to any large extent.
"You see, gas contracts with firms involved in methanol or urea or
aluminum are long term arrangements. These are billion-dollar investments,
so companies do not commit themselves to such projects unless they have
long-term markets for the end products. They won't get financing under
other circumstances. The result is they must also have long-term contracts
for the supply of gas, which is where the National Gas Company (NGC) rakes
in money. In other words, with all these plants being either on stream or
under construction, the government is assured of generous revenues from
oil and gas for at least another 20 years."
However, the St Vincent born energy expert said his concerns, as a
citizen and a businessman (he is also a past president of the Trinidad
Chamber of Commerce), are how we go about utilising the money. "The
reason I'm speaking out is I believe we who know the energy sector well
have been almost secretive about what's happening there. And I think
that's wrong. The population must also know what revenues are coming from
what is their patrimony, how much money the government is getting, and how
they are spending it. People tend to be cynical about 'oil booms' because
they have seen them come and go, and their lot has not changed much. Which
is why it is so important to educate people in oil and gas and the energy
sector generally. It should start in the nation's schools, but should not
exclude adults. I'm happy to see we have people writing on matters
pertaining to it in the Express and Guardian. If the people know what's
happening, then they are less likely to allow governments to get away with
wasting what is really the wealth of the nation."
The affable pioneer in the sector believes that previous oil booms
should have put this country in a much better position than any of its
Caribbean neighbours. "But I walk the streets of Kingstown in St
Vincent and I don't have to watch out for holes through which I can fall
and injure myself. In Port of Spain or San Fernando I need to watch where
I put my foot! There should no open, sewer-like drains anywhere in this
country, least of all in the main cities and towns. I think just about
seven per cent of the population enjoys tertiary education: Singapore is
aiming for 100 per cent! Our schools are the entire education system needs
to be overhauled to meet the demands of this new order and to cope with
the opportunities that are sure to come our way."
He said that in the case of the BHP Billiton discovery, that company
now has to have a wide range of equipment in place to extract the oil from
beneath the sea and ready it for shipping or refining. "Almost
everything they need will be made in the USA! Why, after so many years in
petroleum, do we not have the expertise to build platforms and provide
much of the equipment required for such operations? The answer lies in our
whole focus in education....we need to change that."
Coombs agreed with much of what Harvard Professor Jeffrey Sachs said at
a symposium last week. Sachs pointed out that "rich Trinidad and
Tobago" spends between four and 4.5 per cent of its GNP on education,
whereas Barbados spends about seven per cent. And expenditure in health
stands at 2.5 per cent, well below the five-to-six per cent that's the
norm in developing countries. "Look at what our education system
is producing, more dropouts than graduates. Our health system is still in
the Dark Ages. Why? If we were to utilise part of the revenues we shall be
getting over the next 10 years in upgrading our infrastructure, we
shouldn't have to worry much about the state of Caroni or similar failed
enterprises. All the people employed in such companies could be absorbed
in a massive programme to upgrade all our roads, drains, schools, health
facilities and so on."
He spoke with passion, too, about making our beaches more
"presentable", and about initiating a reforestation programme.
"No one seems to care about these areas which are important to the
future of the country. We also ignore the arts and culture, two potential
revenue earners of the future. We have people here who are very
talented...we should allocate money to promote and uplift the arts and
culture."
Coombs, who heads the Chamber's committee on matters pertaining to
energy, spoke glowingly about the future of ethylene. "Besides the
prospect of an aluminum smelter plant, there is much scope in producing
ethylene. We shall have sufficient feedstock for such a plant after
Atlantic's Trains II and III come on stream. From ethylene, we can go
downstream to polyethylene and plastics. Manufacturers of plastic bags and
other plastic products will then not have to source their raw material
from abroad. These are the prospects for this country-if we manage our
revenues wisely. But a key to it is for the average citizen to be aware of
what happening in the sector, what kind of money is coming into
government's coffers. We can blow it, as we have done before, to an
extent. Or we can make it work for us and for future generations. If we
do, I can see the day when we shall have to implement strict immigration
policies, since people from abroad will flock to a prosperous, well
managed Trinidad and Tobago
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