At the T&T Energy Conference in January 2023 one of the key sentiments coming out of all of the discussions was that while we were on the right pathways to secure the future of the sector we simply needed to be moving faster. This was a sentiment we heard not just from industry leaders but also from senior government leaders, especially the Minister of Energy, Stuart Young.
We have chosen the theme of the 2024 conference to reflect that sentiment: “Accelerating Action”.
But saying we want to move faster and actually moving faster are two different things. Despite Minister Young’s best assurances and his palpable commitment, his desire to get the 2021 deepwater bid round completed and the blocks awarded quickly has still not come to pass some seven months later. This also means that the anticipated 2023 shallow water bid round has not yet been launched.
We need to get to the bottom of why things take so long to be implemented and try to systematically address those bottlenecks and get things flowing. From my position, I see four major things that we need to address; firstly, fixing the business-as-usual mind-set that protects the status quo; secondly breaking siloed decision making in the public service; thirdly ruthlessly streamlining the approvals process; and finally making sure that the key regulatory agencies can hire the brightest and best and access the skills that are required.
Understanding business-as-usual won’t work.
One of the key issues that we face is that most citizens. including many leaders in society, just do not understand the crisis that we are facing. Sure, it is a slow burning crisis – unlike crime or the pandemic – but nevertheless it is a crisis for the country. Trinidad & Tobago’s economy is based on the production and processing of natural gas and our gas production has fallen by a third in the past decade. If we do not make changes it will continue to fall. We can substitute some of the natural gas feedstock going to our petrochemical industries with green hydrogen, but that will itself need massive injections of capital into the production of green electrons (most likely from wind power).
If we are unable to secure new investment for upstream production of green electrons, gas or oil and new investment in decarbonising our downstream plants, our economy is going to contract hugely and the standard of living for Trinidad & Tobago’s entire population is going to plummet. Yet when I read Vision 2030, the country’s overall policy framework, I see no mention of this issue.
In 2013 the Energy Chamber brought the ex-President of Colombia, Álvaro Uribe, to Trinidad to talk at the Energy Conference about the decisions that he had taken to transform Colombia. We followed this up with a mission from the key architects of the very successful 2003 reform of the Colombia energy sector (that resulted in them doubling oil production in the years following the reforms). One of the things that the team from Colombia made clear was that they had faced a national crisis which the entire population could identify with and that this drove the consensus that things had to change.
In Trinidad & Tobago, by contrast, it was only the energy industry insiders who were seeing that we had a crisis on our hands with the fall in investment in upstream gas exploration and production. The rest of the country were happy with the status quo. Our intervention to bring in the team from Colombia failed to make any real impact on decision-making.
A decade on and not much has changed, despite the global push to net zero and the continued slide in our oil and gas production. The response by the population to the Regulated Industries Commission (RIC) electricity rate review process is clear evidence that people are not willing to confront the reality of our situation. Until there is wide acceptance that we face a crisis, the temptation will be to follow a “business-as-usual” model which means the usual slow progress, bottle necks and procrastination.
We need to get all leaders across society to accept and communicate consistently that it cannot be business-as-usual and that we need significant reforms which will upset the status quo.
If we accept that we are not in a business-as-usual mode, then it might mean we rethink how we conduct bid rounds, for example, or how we subsidise electricity produced from natural gas.
Breaking the silos
The second major problem that we face is that we have siloed decision making in the public sector. This was very apparent to me in the very long and frequently delayed process to get the first major grid scale renewable energy project (with investments from bp and Shell) underway.
We simply must make sure that we streamline the decision-making and approval processes, if we are, for example, going to get in the massive investments in renewable energy that will be needed to make the green hydrogen plans a reality. At the moment, we seen to have different Ministries and different agencies pulling in different directions. I am seeing the same with the vital fiscal reform process. This has to stop; we need all Ministries and agencies pulling in the same direction.
Dealing with the devil in the details and streamlining approval processes
The third major problem that I see is that the approval processes themselves are not designed for speed. In 2019 we conducted a thorough review of the approval process for major new upstream gas projects and documented no less that thirty-three major approvals that were required from eight different Ministries or statutory agencies to get from a bid round to first gas. Most of these took place in series rather than working in parallel. And, shockingly, in 2023 most of the decisions have still to be taken using paper files and relying on physical signatures of the decision makers. We have heard of cases where important decisions cannot be taken because a hardcopy file has gone missing. Fixing this issue needs detailed, busy work and a commitment to stream-line and ruthlessly cut out processes and decisions that do not add value to the overall approval process.
Fixing the people issues
Doing this work requires a time and effort commitment from already stretched public servants; which brings me to the fourth and final issue that I think must be address; the capacity within the Ministry of Energy and other critical agencies.
In 2017, there was a decision to allow the Ministry of Energy to directly recruit technical staff into public service positions, rather than having the Service Commission run the recruitment exercise. It seems that this has been shelved, after legal challenges from the PSA. The Ministry of Energy has had to rely on the same system used by the rest of the public service of hiring contract staff on fixed term contracts to fill skill gaps. This approach to trying to fix the human resource issues in the public service has been around for decades and I do not think that there is any evidence that it has been effective.
The Trinidad & Tobago Ministry of Energy has had access to some of the best and brightest young minds not just in T&T but in the entire world, though the returning national scholars programme; a programme championed by the former Minister Franklin Khan. A new round of the programme has recently been launched. Unfortunately, this does not seem to have had the desired impact to modernise and make the Ministry more efficient.
One of the most important elements of the reforms in Colombia twenty years ago was to create a separate hydrocarbon agency (the ANH) that could set its own employment terms and condition and model its processes and procedures on the best practices of the international oil and gas companies. This is the organisation that oversees bid rounds, licensing and the regulation of the industry. Perhaps it is time for something similar in Trinidad & Tobago. Whatever the details are of how we proceed, it is vital that we ensure that the Ministry and other regulatory agencies have the skill sets that they require.
Accelerating the pace at which fundamental decisions are taken is vital to the success of the Trinidad & Tobago energy sector. The energy sector in T&T does potentially have a long and vibrant future ahead, but this will only be realised if decisions are taken. Some of these decisions are likely to be unpopular with sections of the population, but it is nevertheless essential that they are taken.
We have no time to waste and collectively Trinidad & Tobago is going to have to find a way to implement changes faster.