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| In plants like the one inset
at left, vast quantities of natural gas are
converted to petro-chemicals eagerly consumed
in the United States and world markets. |
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| Trinidad and Tobago’s
Caribbean natural beauty co-exists in this environment
providing a tourist haven. |
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| Right down at sea level,
“The Maximum” provides internet and
other telecommunication services in the beautiful
and remote village of Charlotteville, located
at the northern tip of Tobago. |
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| In Trinidad processing plants,
like the one pictured above, natural gas is
converted into ammonia and easily shipped as
a valuable commodity. |
Moving, in a decade or so, from being a largely
poor, working class population to becoming a first-world
economy, characterized by a dominant middle class,
social protection for the remaining underclass and
unlimited freedom for the rest, might seem too ambitious
for a Caribbean country with a population of 1.3
million. But ever since the oil industry took off
early in the 20th century, the dynamic nation of
Trinidad and Tobago has had a secret weapon.
In our own time the government, in close partnership
with domestic and international energy companies,
is gushing forward on full pipelines turning deep
and lasting oil and gas reserves into the source of
wealth expected to make the country fully-developed
in the shortest possible time but no later than 2020.
As dramatically outlined by Prime Minister Patrick
Manning, “Trinidad and Tobago will be a society
of creative thinkers, innovators and entrepreneurs
engaged in a process of lifelong learning. All citizens
will be given equal opportunity for personal growth,
self-expression and active participation in their
own development. We will be a society that will
look after our elderly and our less fortunate. In
the society of 2020, poverty and unemployment will
have been significantly reduced to minimal levels,
if not eliminated altogether.”
Natural-gas resource seems virtually
unlimited.
For the past hundred years, oil discovered on land
and in the waters around Trinidad has produced much
of the country’s wealth. It is a true shock for
a first-time visitor to head off to what is expected
to be an island paradise and instead to discover a
major industrial country pumping away on a Caribbean
island. The oil fields required services and industrial
support and those enterprises sprung up all over Trinidad.
The oil cornucopia continues to produce. A few weeks
ago, on March 13, the Australian firm, BHP Billiton,
announced that it was moving forward to exploit a
massive find in Trinidad waters that would deliver
the massive quantity of 200,000 barrels of oil per
day within two years. The company estimated this,
and higher, levels of production would continue for
at least twenty years.
But returns to the public treasury from natural gas
are already so great that Trinidad’s economy
has become transformed away from oil to gas as the
dominant source of national finance. The country develops
royalty or taxing agreements with firms invited in
to work on extraction of these resources. At least
30 percent of the national treasury comes from oil
and gas, with estimates ranging as high as 40 percent.
The origins of this wealth has dramatic geological
explanations. The island of Trinidad itself was once
part of the South American continent. As the millions
of years passed during which the island broke off
into the Atlantic Ocean a vast Gulf was formed between
the island and the mainland. Into this water drained
sand and silt from the huge Orinoco River delta. Over
millions more years hydrocarbons were formed resulting
in the nearly unimaginable fields of petroleum storehouses
beneath the sea. The fortunate beneficiaries of this
resource were the populations of Venezuela and Trinidad,
among the world’s great producers of energy resources.
For much of the last century the natural gas that
often came spewing up with the oil was treated as
a nuisance and burned off, as there was no pipeline
and no destination for the gas. Beginning in the mid-seventies,
Trinidad made the far-sighted determination to “monetize”
this gas. At first it was a simple matter of running
a pipeline from the oil fields and using the natural
gas to power electrical generators for heating and
cooling. But since 1975, when the state-owned National
Gas Company came into existence, the focus has been
on converting the natural gas to other forms of petrochemicals,
primarily ammonia and methanol. These chemicals are
required in the manufacture of fertilizers and can
be shipped to such plants in the U.S. and elsewhere.
In recent years the main source of energy income
for Trinidad has become the liquefaction of natural
gas so that it can be shipped by tanker for ultimate
consumer and industrial use. There seems to be no
end to the natural gas reserves owned by the country
and certainly enough for maximum monetization over
the next quarter of a century. In addition to the
income there is the very large amount of direct
foreign investment. At least $4.5 billion have been
infused into plant and equipment in this island
nation by outside companies over the past 15 years,
with much more to come in this decade.
An Independent Nation
World War II had a major impact on the country. In
1941 huge tracts of land, for two military installations,
were leased to the Americans to base the U.S. Caribbean
fleet. This brought along relatively high wages, advanced
technology and improved roads. Universal suffrage
followed the war and by 1956 a political party, the
People’s National Movement (PNM), was formed
under the leadership of Oxford-educated historian
Dr. Eric Williams. He was to become the founder of
independent Trinidad and Tobago when, after a period
of “federation” with other Caribbean islands,
British colonial rule ended and Independence was granted
in 1962.
Just as the world was entering the oil crisis
of 1974, spectacular new oil discoveries were found
in Trinidadian waters and suddenly the country was
floating in vast sums of money. Until the late 70’s
all of the oil in Trinidad was discovered, extracted,
refined and shipped by foreign multinational companies,
particularly Shell and Amoco. One of the lasting
legacies of the Williams government was the purchase
of these big operations, including a large refinery,
by the national government of Trinidad. That the
outlook was dim in the world oil markets made the
companies ready to sell. Out of this purchase came
a national petroleum marketing company (NP—the
only company from which to buy gasoline in Trinidad
and Tobago) and a large multi-faceted refining company
(Petrotrin--a significant employer and the government’s
vehicle for other petroleum ventures). One veteran
energy executive recently said, “It was important
that we bought those assets from the American multi-nationals
because it gave us the confidence to run these large
scale operations on our own. If that was not under
our belt I doubt we would have the courage to announce
that we would become a fully developed nation.”
Political Prologue
Oil prices fell in the early 1980s causing a recession,
along with unemployment and inflation. After founding
Prime Minister Eric Williams died in office in 1981,
the nation’s finance minister took over, but
the population was dissatisfied and by 1986 the country’s
first non-PNM Prime Minister was seated in the form
of President A.N.R. Robinson who served for five years.
He was succeeded by Prime Minister Patrick Manning
who began his first term of office in 1991, stabilizing
the economy. Manning was followed by Basdeo Panday
of the United National Congress (UNC), the first Indo-Trinidadian
prime minister.
Trinidad is proud of its racial mixture and integration.
In the 19th century, 500,000 descendants of East Indian
indentured servants were brought to work the cane
fields after the African slaves were freed in 1834.
The Indian immigrants share Trinidad with a half-million
descendants of these Africans. Because the East Indians
tend to predominate in the southern half of the island,
site of most of the old cane plantations, and there
is a large majority of African immigrant descendants
in Port of Spain and the northern part of the island,
the voting tends to be geographic. Thus, Trinidad’s
parliament is fairly evenly divided (90 percent of
Tobago’s 45,000 citizens are of African origin).
Panday had been the leader of the sugar workers’
union and was chosen prime minister in a close vote.
While in power the UNC built many schools and also
focused on crime-fighting and the growing drug trade,
although there were also widespread charges of corruption.
For example, Panday was questioned about failing to
declare a London bank account to his own government’s
ethics commission. Mr. Panday has said that he intends
to leave politics. “I want to write. I believe
that history is not written by historians but by the
actors of history.” But in the spring of 2003
the former prime minister was playing an active role
as leader of the opposition in Trinidad and Tobago’s
parliament.
In December, 2001 Patrick Manning was returned to
office for a second term as prime minister, but parliament
was stalemated at 18-18 votes between the PNM and
the UNC, and could not function. The deadlock went
on for nearly a year, broken in another election,
on October 7, 2002. Here the People’s National
Movement won a narrow but clear majority, with 51
percent of the popular vote and 20 out of 36 parliamentary
seats. With steel bands and waving flags, Mr. Manning’s
mainly Afro-Caribbean supporters danced until early
morning. The country’s business community breathed
a sigh of relief that this election produced a framework
for political, economic and business decision-making. |
