Dr Bhoe Tewarie, our Minister of Planning and Development, must have been mildly surprised to find when he called his "Conference on Developing A National Diversification Strategy for Trinidad and Tobago" the week before last, which was meant to steer us gently into non-energy economic activities, that he heard as many proposals for diversification within the energy sector as outside of it.
That did not make his well-attended, day-long pow-wow a non-starter, of course, because some useful ideas for Trinidad and Tobago moving more aggressively into tourism, international financial services, information and communications technology, and some aspects of farming, did emerge but the advocates of milking the energy still further for additional economic activities put their case strongly.
As Gervase Warner, president and chief executive officer (CEO) of the Neal and Massy Group, which itself is now moving boldly into the gas-based industrial sector with its proposed investment in DRI/HBI, melt shop and rolling mill, firmly declared from the floor after energy stalwarts Selwyn Lashley and Andrew Jupiter had presented their respective contributions on energy: "I have heard a lot of talk about diversifying away from the energy sector but there are ways for us to diversify within it. The kind of infrastructure, competence, capability that we have, from industrial estates to port facilities, to the engineering, plant operations and maintenance capabilities, competent companies and professionals, the investment banking we have in Trinidad and Tobago – is all really a starting point for further diversification in the energy sector."
No one can fault him on that and Warner proceeded to outline what this diversification might consist of, which is an extension of the gas-based downstream sector to include new products based on methanol, for instance "where you can go to ethyl glycol and DME, which allows you to create substances that can substitute for propane, substitutes that can create coolants and windscreen wiping fluid that can get you into end products a little faster than melamine".
The Neal and Massy CEO emphasised: "I think there is a really tremendous future to diversify within the energy sector and there is certainly a lot more economic contribution and future than the soothsayers might think."
Warner mentioned melamine because Andrew Jupiter, whose life as president of the National Energy Corporation (NEC), has just been extended for another year at least (Energy and Energy Affairs Minister Kevin Ramnarine was right to conclude that he can't do without him at this time) laid great emphasis on melamine as representing the "fourth generation" of energy development, which links the gas part of the industry with light manufacturing. He called these "integrated energy-based manufacturing industries" and melamine, produced out of the basic building block of ammonia, is ideal in that it feeds into an extensive collection of light industries, including moulding compounds, dinnerware, adhesives, coatings, laminates and plasticisers.
Methanol giant Methanol Holdings Trinidad Ltd (MHTL) is already producing melamine from its AUM 1 complex at Point Lisas and more will become available when it completes its AUM 2 complex in a few years time.
Indeed, spaces have already been sanctioned for about 20 "integrated energy-based manufacturing industries" at the Union industrial estate, Jupiter says. "NEC has agreed to allot 1-2 acre plots to ensure that small entrepreneurs can capitalise on the situation."
Jupiter seems in no doubt that "integrated energy-based manufacturing" will, in future, yield the best bang for every 1 trillion cubic feet (tcf) of gas reserves and support as many as 137 light manufacturing plants.
Of course, neither he, nor Lashley, ruled out other energy-related diversification initiatives. There is also renewable energy, which represents a complete departure from both oil and gas, unlike gas-based downstream investments which are still tied to hydrocarbons, energy efficiency activities and energy services.
All those areas have extensive potential for adding further to national income and job-creation.
Dr Dax Driver, CEO of the Energy Chamber and chairman of the People's Partnership government's Economic Development Board (EDB), was, as you would expect, also a champion of the concept of diversification within the energy sector and, in fact, has included it in the EDB's list of areas with potential for continuing growth.
"The energy sector is a cluster that we are putting a huge emphasis on for diversification," he stressed when he chaired the afternoon session of the conference.
"There are the downstream products linked with the manufacturing sector, there is renewable energy manufacturing, not renewable energy in Trinidad and Tobago because of the low gas prices but manufacturing for export, such as the SiTek project and solar energy park idea, energy efficiency exports – we have some companies that have been excellent at exporting energy services, as well as investment in energy activities outside of Trinidad and Tobago."
Trinidad and Tobago seizing the opportunity to get into the LNG value chairman on a country basis – rather than leaving it all to the international companies – was certainly not overlooked as a diversification initiative (I would have been very unhappy had it been, since I claim the title of most fervent advocate of such a development).
The opportunity in question is the emerging market for small and medium-sized LNG cargoes to those Caribbean and Central American states that are anxious to convert from oil to gas in power generation. NEC's Jupiter confirmed that his corporation had signed an MOU with the Luxembourg-registered firm, Gasfin (not news for readers of this column) and a proposal would be forthcoming soon.
Businessman George Naime, who raised the matter from the floor, described the Gasfin project (for a small LNG train at the Labidco industrial estate at La Brea) as "commendable" but insisted that Atlantic was already in place as a major LNG producer and could be the source of small cargoes in the meantime.
So should Dr Tewarie be downcast because energy sector diversification almost stole the show from his preferred vision of diversification into completely different areas?
Perhaps not. Some useful ideas did emerge and certainly if the passion displayed by the new minister of tourism, the irrepressible Stephen Cadiz, is any guide, then that industry, for one, is very likely to increase its contribution to GDP and employment creation beyond the modest level at which it now stands (sorry, I can't tell you the exact percentage in each case, since the Central Statistical Office (CSO) does not make an effort to disaggregate it from the overall heading of "other services").
David Renwick was awarded the Hummingbird Medal (Gold) in 2008 for the development of energy journalism in Trinidad and Tobago.
