Why some countries find it difficult to move away from fossil fuels

Shovel in hand, Prime Minister Keith Rowley took part in a ceremonial groundbreaking last month to honor Trinidad and Tobago’s first major solar park project, which is expected to generate power for 42,000 homes.

But if anyone thought the project symbolized the twilight of the island nation’s long embrace of fossil fuels, Mr. Rowley rectified that.

“As long as there is an international market, we will continue to extract the available hydrocarbons,” said Mr. Rowley, as BP and Shell executives looked on. “If we’re going to sell the last barrel of oil or the last molecule of gas, so be it.”

Trinidad and Tobago is known for its white sand beaches, mountainous rainforests and steel pandrums. But the economy depends on oil and natural gas, not tourism.

It is one of the largest fossil fuel producers in the western hemisphere and more than a century of drilling has left its mark. The major highways on the main island are clogged with traffic and lined with industrial warehouses. Oil is ingrained in the culture, a theme in many calypso songs. Even the steel pan drums come from the lids of used oil barrels.

If Trinidad seems to be zigzagging on climate change policy, it’s not alone. Saudi Arabia, the United Arab Emirates and the United States are also building large solar farms as they look for new oil flows. Fossil fuel-rich developing countries — a group that includes Guyana, Nigeria, Namibia and Trinidad — say they can’t easily transition to renewable energy because they lack capital and because their poor depend on cheap power and oil revenues for social programs.

President Biden and European leaders have no easy response. Industrialized nations are still producers and consumers of fossil fuels and have failed to deposit the $100 billion a year from 2020 they pledged to a green fund for poor countries.

“The countries in the south are saying to the countries in the north, ‘You are the ones who caused the climate problem, so why don’t you go first, since you have the capital and the technologies to promote renewable energy?'” said Anthony Paul, a former official of the energy ministry of Trinidad who has consulted with governments and companies in several African countries.

Trinidad has a population of just 1.5 million people, but it has long since punched above its weight in energy. As the second largest exporter of liquefied natural gas in the Western Hemisphere after the United States, it has one of the highest per capita incomes in the Caribbean. It is also a leading producer of petrochemicals such as ammonia and methanol.

But with the aging oil and gas fields, oil production has fallen to 58,000 barrels per day, from 230,000 barrels per day at its peak in 1978. The country’s only oil refinery closed four years ago. Gas production has fallen by 40 percent since 2010, forcing the country to close one of its four liquefied natural gas export terminals and three of its 18 petrochemical plants.

At the same time, the country is feeling the effects of a changing climate, with wetter rainy seasons and drier dry seasons reducing agricultural yields and stormier seas punishing fishermen and flooding coastal roads and homes.

“We are faced with a huge decision, whether to go in a new direction,” said Ryun Singh, president of the Trinidad and Tobago Association of Energy Engineers. “If we don’t get it right, we face economic ruin.”

For now, the government of Mr. Rowley doubling the use of fossil fuels by trying to get energy companies to develop new offshore fields.

The oil and gas business “is the foundation of our middle class,” said Ainka Granderson, an environmental scientist at the Caribbean Natural Resources Institute, a research organization in San Juan, a main island city. “Oil and gas was once the backbone of the nation, but it’s now the crutch that holds us up.”

That stool is getting rickety.

On a recent afternoon in April, a tanker arrived at the Atlantic LNG terminal at Point Fortin to pick up a cargo of refrigerated gas for Britain. “Trinidad is coming to the rescue,” said a smiling Jean Andre Celestain, the plant’s chief operating officer.

But because gas production in the country is declining, the plant now fills only one tanker every 66 hours, compared to one every 48 hours four years ago.

“There is an urgency to get gas,” said Ronald Adams, CEO of Atlantic LNG.

Oil companies have found some new small fields, but analysts still expect production to decline in the coming years.

Due to falling revenues from energy exports, the country’s gross domestic product fell by 20 percent between 2015 and 2021. Rising oil and gas prices following the Russian invasion of Ukraine and a new gas discovery by Shell led to a small revival.

But that’s not enough to halt the decline in energy production and revenues, energy experts say.

In an effort to make up for the shortfall, the country is trying to reduce its domestic use of natural gas so that more can be exported. That is the main mission of the solar parks that BP and Shell are building in Trinidad. To curb domestic demand for gas, energy regulators are proposing to raise electricity rates for residents and businesses. The proposal has met strong political opposition.

“If you’re an oil and gas producing country, you’re always behind on renewable energy because people enjoy the cheaper electricity rates that come with fossil fuels,” said David Alexander, a professor of petroleum engineering at the University of Trinidad and Tobago. Tobago.

Dr. Alexander and another professor are leading an effort to map a “carbon-capture atlas” of depleted oil and gas fields that could be used to store carbon captured from Trinidadian petrochemical plants to help the country offset most or all greenhouse gas emissions. .

There are other plans to try to keep Trinidad and Tobago off gas and oil. Some entrepreneurs said the country should become a major exporter of products made from renewable energy such as hydrogen, fertilizers and clean marine fuel.

A homegrown energy company, Kenesjay Green, is working to produce hydrogen at the Point Lisas petrochemical complex. The company plans to use renewable energy and waste heat from power plants to split hydrogen from water. “Trinidad is poised like no other to take a huge leap forward in the energy transition,” said Philip Julien, chairman of Kenesjay. “There is huge potential and a lot of work still to be done.”

Kenesjay is working with Yara Trinidad, an ammonia producer, to reduce greenhouse gas emissions by replacing gas with water in the production process. Yara Trinidad hopes it can eventually reopen one of three ammonia plants it has mothballed for lack of gas.

Although the government supports these efforts, the focus remains on natural gas. “Gas will be around for decades, okay?” Stuart Young, the energy minister of Trinidad and Tobago, said in an interview.

To increase gas production and export, the country is pinning its hopes on new offshore fields. One of these, the Manatee field adjacent to the maritime border with Venezuela, is being developed by Shell.

Just across the sea line is a medium sized shallow water field called Dragon. Trinidad and Venezuela have been negotiating the production and export of Dragon gas for five years. Shell would operate the field and a pipeline could connect the field to Trinidad and Tobago’s export terminals within three to four years.

But first, Trinidad must strike a deal with the Biden administration and the Venezuelan government that will allow Trinidad to export natural gas from Venezuela’s Dragon field without violating US sanctions.

The Biden administration in January granted a two-year license to the government of Trinidad to do business with Venezuela, but only if the government of Venezuela’s President Nicolás Maduro did not receive cash payments. Trinidad and Tobago have offered to pay for the gas in food and medicine, but Mr. Maduro has rejected that offer.

Another potential prospect is the Calypso field, off the coast of the island of Tobago, which could be the country’s first deep-water gas field.

Woodside Energy, an Australian company, is developing Calypso with BP. But the geology of Calypso is complicated. The field consists of disconnected pockets of gas, which means multiple wells are required, making drilling more expensive.

“We’re fleshing out the concepts and trying to figure out how to get something that works for everyone,” said Meg O’Neill, CEO of Woodside.

Analysts said Trinidad had to act quickly or risk losing gas customers to other exporters, such as the United States and Qatar, which are building newer and more efficient liquefied natural gas terminals.

That may be a tall order, and even some Trinidadians who have long worked in the oil and gas sector worry that little can be done to halt the decline of their industry.

Ronnie Beharry worked in a variety of field roles before becoming a manager at a gas field operated by Touchstone Exploration. He only has a high school education, but can afford to send his eldest daughter to college.

“I tell them to look at other options because we’ve started using green,” he said, referring to his three children. “I don’t know where it’s going. Sometimes I think the country has a back-up plan, and sometimes it doesn’t.”