Prof Kenneth Julien, known as Trinidad and Tobago's energy czar, believes the country's life-blood–its energy industry–is in "crisis".
"From what I see we have three major crises in the energy sector, two of which we have no control over and one in which we do have control but we need to find solutions," said Julien.
Julien, who now lends his expertise to several African nations discovering natural resource wealth, agreed to be interviewed exclusively by the Express on Saturday at his Kenesjay office in Arouca, following reports of human resource migration from the Ministry of Energy.
The country needs to arm itself for the possibility that one of its export markets–the US– will soon be exporting LNG, he said.
"I am relatively certain that players in the LNG market–BP, BG, Repsol–are developing their own strategy on how to protect themselves against what is taking place in the US," he remarked.
The first crisis, he said, was the dramatic drop in natural gas prices–from an average of US$4-$5 in 2011 to hovering around US$2 in 2012-–which does not augur well for T&T's energy-dependent economy.
"In all our economics for LNG, which accounts for half of our natural gas production and is also a major source of revenue for this country, we tend to do very well when the prices are closer to US$4. We will be affected whether we like it or not," he observed.
Secondly, he pointed out that in terms of natural gas reserves T&T does not even rank in the top 15 countries in the world.
"I think it's said repeatedly but no one really takes it on. We really have little gas reserves--0.25 per cent–of total gas reserves in the world," he said.
Julien explained that reserves need to be contextualised in the global scale. How does T&T's 20 trillion cubic feet (tcf) compare to Qatar's 800 tcf or Venezuela's 200 tcf or Malaysia's 80 tcf?
"We are dropping in prices. We are really low in what we have and therefore we are threatened by these countries that either now have tremendous amounts of gas or new gas is being discovered. We are no longer in a monopoly position by any means," he said.
The irony, he said, was that T&T had pioneered LNG long before Qatar yet T&T's LNG shipments average 18 million metric tonnes a year compared to Qatar's 77 million metric tonnes.
"These are countries which are shipping LNG which tomorrow could kill us," he said.
The third crisis, in Julien's perspective, is curtailment of natural gas to existing producers in the Point Lisas Industrial Estate.
"I am told that there is substantial curtailment of natural gas to existing users of natural gas. I am not sure what the problems are; it's not because we don't have reserves. There must be other commercial factors that I am unaware of," he said.
This curtailment, he said, impacts on T&T's other business–iron, steel, methanol and ammonia–because it affects their productive capacity. But he warned that there are also "danger signs" facing these industries.
The first worrying sign, was a decision by international methanal company, Methanex, to relocate its underutilised Cabo Negro complex from Chile to the United States and not T&T. Methanex's chief executive Bruce Aitken had said the reason was the region's low natural gas prices.
"One would have thought they'd move it to Trinidad because they're here already and we have the infrastructure," he pointed out.
Julien also pointed out that Methanex was now seeking to acquire BP's stake in the Atlas plant, which is co-owned by Methanex. But his main concern has been the loss of "talented" and "experienced" people from the sector.
T&T's nationals, he said, were being sought out in Africa, to lend their expertise to help them establish their energy industries.
"Regardless of your natural resources, at the end of the day what assists in your development is people who have the drive and power to make these things happen," he said.He likened the energy sector to a relay race in which this country had completed two legs--the first one being led by Dr Eric Williams and the other by Patrick Manning.
"The first leg was the start and in the second leg we were ahead of the race. I think we're being overtaken and therefore the third leg is the biggest challenge. That third leg, if anything, you'll need brighter, energetic, fresh minds looking at the situation and deciding what can be done about it," he said.
He said the situation needs to be looked at without politics or party. He pointed out that when the NAR came into power, they sought to change the emphasis on the energy sector and only realised in the last year that they'd made a mistake.
His concern is that the country's exploration development has lagged.
"There are people who could probably run what is the most difficult leg of the crisis. I say that they are disappearing," he said.
He observed that if this country had 20 years yet of reserves, then human resources well trained can make the best out of that.
Drawing a comparison with T&T's energy industry and Venezuela, Julien pointed out that while Venezuela bore ten times more reserves that T&T, they've not been able to attract the major industries that T&T has attracted.
"It comes right down to people. We in T&T have been very lucky and I say this in all sincerity. In my view, we have two major things going for us–our geography and our people. People here have talent and they are creative and are prepared to take risks. The entire energy sector--both the upstream and the downstream--is being run by nationals," he said.