A lively debate has emerged in Trinidad & Tobago over the future of its gas-based economy and status as a hydrocarbon exporter in light of its commitments to the energy transition.

The answer, for the administration of Prime Minister Keith Rowley, appears to be balancing that commitment to low-carbon energy with efforts to maximise the value of the nation's remaining oil and gas reserves.

In an opening address to the country’s annual energy conference, held virtually last week, Prime Minister Keith Rowley pledged to combine a commitment to low-carbon energy with the government's responsibility to its people.

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“We will work with stakeholders... on designing solutions for decarbonising natural gas and the greater inclusion of renewables in the local energy mix, but any future inclusion of renewables must be timed to ensure that our citizens are not unduly burdened,” Rowley said.

Trinidad & Tobago has a long history as an oil producer and was a regional pioneer in reaping the economic benefits of its gas resources.

Energy Minister Stuart Young, citing US Department of Energy and International Gas Union data, said significant demand for fossil fuels will guarantee many more years of life for the domestic industry, even as the energy transition gathers pace.

“The increase in energy demand by a growing global population, rising incomes and poverty-alleviation measures cannot be met in the medium term by renewable technologies and energy efficiency alone,” he said.

Young warned that a "redirection" of capital into low-carbon energy markets, combined with the impacts of the Covid-19 pandemic, may have left a shortfall in oil and gas investments that could create a “demand-supply inequity” and push up prices.

“It is crucial that investment in the upstream sector be maintained even during the rapid transition to renewables and other low carbon alternatives.” he said.

Rowley also argued in favour of a role for Trinidad's natural gas in providing cleaner power, not just to coal-dependent Asian markets but to some of its smaller neighbours in the Caribbean.

In the Dominican Republic, for example, the 750 megawatt coal-fired Punta Catalina power plant came online only last year.

Rowley added that revenue streams from gas are also about offering “a supplementary source of funding for some of the very projects that will help us meet our targets.”

Trinidad’s own initiatives include promotion of compressed natural gas in transport and a planned 112MW solar power project, backed by Lightsource bp and Shell.

Feasibility studies for green hydrogen and ammonia production in Trinidad have attracted Inter-American Development Bank funding, and the Energy Ministry is also exploring carbon capture and storage (CCS).

“There is a lot of opportunity here in TT, as the plants in the gas sector can be transformed, with the right investments, to ensure cleaner and lower carbon energy,” Young said.

“There are exciting opportunities in ammonia, methanol and other commodities.”

Young noted that companies such as Shell and BP have included Trindad & Tobago among regions where oil and gas investments are still taking place, despite the moves toward decarbonisation.

He signalled that the administration will work with industry to ensure that more projects are sanctioned, pointing to an additional 11 trillion cubic feet of gas that could be made available.

“The near-term outlook for the demand for oil and gas and petrochemicals is positive," Young said.

"We must bring these resources to market at the earliest opportunity as we prepare for a low-carbon economy.”

Young also promised to revamp the licensing process in Trinidad, with bid rounds for deep-water, onshore and shallow-water plays in the pipeline.

In a follow-on debate, John Murton, the UK government’s envoy for the COP26 talks, argued that market forces will continue to drive down the costs of solar, wind, batteries and zero-emissions vehicles — and may push out fossil fuels quicker than other speakers expected.

“Gas will have a role to play in energy transition, but this role is possibly overestimated,” Murton said, referring to technological advances in grid batteries and electrolysers, and trends such as the use of geographical connectors in the power sector.

Dev Sanyal, executive vice president for gas and low carbon for BP — the company that accounts for more than half of the country's gas production — did not entirely agree.

“The energy transition can only happen with gas at its heart,” Sanyal said, pointing to its ability to replace coal for electricity generation and address intermittency issues with renewables.

Sanyal also referred to “decades” of potential for gas to be used a low-carbon energy when combined with CCS and used as feedstock for blue hydrogen and ammonia.

Young agreed. “We are coming out of an oil and gas economy that has been in place for decades and it won’t just disappear overnight. It is important to look at how best to use amortised assets to get value out of products like ammonia, methanol, while shifting to lower carbon," he said.

"We are willing to listen and to find ways to meet our commitments.”