UPDATED: 9:20am June 5th – See "Cement" Below
How Will Trinidad's Natural Gas Shortage Impact Barbados?
The LA Times is reporting growing resistence to the establishment of a $7.4 billion US dollar investment program that would see T & T's southwest become even more industrialised. In particular, a plan for a $1.5 billion US dollar aluminum smelter is drawing heavy reaction from all over the islands.
The article also reveals increasing concern that natural gas reserves in Trinidad – Tobago are not strong enough to support such an expanded industrial base.
But the real key is found in the last line of the article…
"At the current rate of extraction, (Trinidad-Tobago's) proven energy reserves were expected to be exhausted in about 20 years, a recent study by the International Monetary Fund found."
LA Times article here.
Two observations come to mind…
1/ This highlights that for small countries like Barbados and Trinidad-Tobago, a resource-based industrial economy is foolish in the long run.
Increasing populations and industrial activities are eating up resources faster than anyone dreamed of. Twenty years is a blink of an eye – and with it's natural gas reserves depleted, what will Trinidad then do?
2/ Many of Barbados' plans for the future rely upon continued natural gas from Trinidad-Tobago – delivered at a reasonable price.
Even our much-hailed plans for producing ethanol from sugar cane rely heavilly upon T-T natural gas. (Which is one of the big reasons that sugar cane ethanol produces only modest energy gains. It takes a whole lot of energy to make ethanol, and some even see a negative equation with a net energy loss – but more on that later)
When Trinidad-Tobago's natural gas reserves are halfway depleted – say in 10 years – what will happen to Barbados if we continue to rely heavily on this supply when planning?
Twenty years is a blink of an eye – and all of us on Barbados had better remember that each and every morning.
UPDATED: Ten Year Fuel Deal Expires – Causes Cement Cost to Increase
We no sooner get finished posting the article about T-T's natural gas reserves, when we see an article in today's The Nation News.
Ten years ago, the Arawak Cement Plant in Barbados struck a deal with Venezuela to supply fuel for the cement plant at $200 per tonne. Now, the deal is finishing and the plant will have to revert to Bunker C fuel at $600 per tonne.
Everybody is crying the blues – but the contract was for 10 years at a certain price, and the ten years is over.
Now Venezeula wants to please China so much that Barbados will be cut off – as all sales of this fuel will go to China.
As we said: Twenty years is the blink of an eye.