Full Disclosure
September 21, 2007

Diversified energy production

Is the issue of diversification, relative to energy production, a timely one? How practical is this question in the context of a mini-state like ours? Would we ever be able to afford cheaper sources of energy in Saint Vincent and the Grenadines, or will we see a constant increase indefinitely? These are a few of the questions that one may consider when the issue of diversification of energy production is discussed.{{more}}

Many of our parents and grandparents can attest to the fact that in their day, the main source of energy used for cooking was the traditional charcoal, and dependent on availability, kerosene oil for lighting. Today’s generation can only imagine the insurmountable amounts of smoke that their burning eyes had to endure. The fact of the matter is that the luxury of cooking gas was only a distant reality then, as it was not widely available, or even economical. Experiences such as these make one appreciate the discovery, production and availability of oil, gas and electricity as the major forms of energy.

The islands of the Caribbean region are predominantly energy importers, with the exception of Trinidad and Tobago. The economies of the Caribbean region are generally undiversified, and are heavily dependent either on tourism or bananas. The fragility of a dependence on tourism, and the onslaughts being faced by the banana industry in the past fifteen years are not subjects for discussion here, but the stories are well known. The struggle continues. Our effort to achieve higher levels of economic growth in our region has been hampered by higher global energy prices, especially for oil. The pertinent question, therefore, is whether or not we are capable of diversifying our energy production as a means of better integrating the energy sectors in the region, with the aim of reducing rapidly rising energy prices?

In response, efforts focused on increasing natural gas exports from Trinidad and Tobago to other islands, and Venezuela’s Petrocaribe initiative seemingly are the panacea for the region. On the other hand, recent data reports from the Energy Ministry in Trinidad and Tobago show that their natural gas is on the decline. Trinidad’s reserves are some two trillion cubic feet less than they were in 2000, and while experts are optimistic that gas will be found in the new areas being explored, the present amount in the reserves currently is predicted only to last until 2019. Therefore, the debate about whether or not their reserves are about to run out rages on.

Whilst we are in the midst of a disturbing global energy market and a sustainable energy and climate change revolution, the future of diversifying energy production in the Caribbean region lies in alternative sources of energy. In other parts of the world, for example, the United States, they are already spending over 29 billion dollars on dealing with alternative forms of energy, with an emphasis on the global warming issue.

In an increasing array of energy options, one very important choice lies in biofuels and the revolution in biotechnology, as there is a growing demand in Europe and the US for ethanol and biofuel. Bioenergy is energy derived from renewable sources. Examples include energy from biowaste, ethanol from grains and biodiesel from vegetable or animal oils. The growth of biofuels is proven to favour regions with long growing seasons, tropical climates, high precipitation levels, low labour costs, low land costs, as well as the planning, human resources and technological know how to take advantage of them. Where are we in this sea of uncertainty? Is this a question for the future, to be dealt with by generations to come?

Latin America, led by Brazil, already produces 40% of the world’s biofuels, and is uniquely positioned to take advantage of this growing industry. Guyana is currently producing biofuel from palm and coconut oil, while discussing ethanol production with several potential investors. Jamaica is in partnership with Brazil in ethanol dehydration; Trinidad and Tobago has also entered the dehydration market; the Dominican Republic is actively seeking to convert some facilities for ethanol production; and Haiti, too, is exploring investments in biofuel projects. This is a clear indication that we are conscious of the potential of our region in the diversification of energy production. The smaller islands must for the meantime look with careful eyes.

With 83,000 square miles of land, Guyana has the potential to become the first country in the world to meet half its electricity needs by cogeneration, production of ethanol, and, at the same time, produce sugar for export and use ethanol and biodiesel from home grown produce. Already, Guyana has taken the lead in this regard, replacing diesel with biodiesel in a number of demonstration vehicles now on the roads.

Guyanese President Bharrat Jagdeo has stressed the need to be strategic and not tactical in dealing with energy security and renewable energy. Indeed, if the CARICOM Regional Energy Policy is to succeed, planning cannot be short term, or based on the assumption that the current price of fuel would fall and that the problem would dissipate. Undoubtedly, agro-energy and the production of biofuels is a technologically proven alternative that would enable countries like Guyana to expand and modernise agriculture, offering producers new options with guaranteed market prices without jeopardizing food security.

The statistics show that in 2004, the islands in the Caribbean region consumed a total of approximately 2.6 quadrillion British thermal units of total energy, of which petroleum accounted for 77 percent. This is a strong indication that there is great need to begin a structured diversification of energy production plan. As a region, we must ensure that the choices made are sustainable in terms of their environmental and social impact, recognizing that unprecedented investments and innovation will produce new competitive forces that will require all who would lead to adapt or fall behind. Is diversified energy production really a question for today, or is it for tomorrow?