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FEATURE ADDRESS BY

THE HONOURABLE CAROLYN SEEPERSAD BACHAN,

MP FOR SAN FERNANDO WEST

MINISTER OF ENERGY AND ENERGY AFFAIRS

AT THE FOURTH NATIONAL ENERGY POLICY CONSULTATION

CROWN POINT, TOBAGO (ROVANEL’S RESORT)

28 FEBRUARY 2011

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Thank you Senator Ramnarine, Chairman of today’s

proceedings and Parliamentary Secretary, Ministry of Energy

and Energy Affairs,

My sister, the Honourable Vernella Alleyne Toppin, the MP for

Tobago East and Minister of Tobago Development

Myrna Thompson, Permanent Secretary

Richard Oliver, Deputy Permanent Secretary

Frank Look Kin, Special Advisor to the Minister

Christopher James, VP of the Tobago Hotel and Tourism

Association

It is with great pleasure that I address you here this morning as

we begin the fourth and final of the National Energy Policy

Consultations which began in January of this year.

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Today’s consultation, as you know, is Tobago’s consultation.

This is your time to speak with us and give us Tobago’s

proposals on how you must now increase your benefit from the

natural resources of our twin-island Republic.

Ladies and Gentlemen, allow me to put these consultations into

context. In our nation, the Energy Sector will remain the most

significant contributor to our economy for the foreseeable

future. It will continue in the short and medium term to form

the majority of the foundation upon which our nation stands.

The Energy Sector contributes 63% of all our foreign exchange

earnings and represents 45% of our Gross Domestic Product.

Ladies and gentlemen, what this means is that in all the foreign

exchange earned by our country in any given year, we earn the

majority of it through energy.

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What this also means is that of the total value of all the goods

and services we produce as a people in any given year, almost

half of it is produced through the production of our natural

resources.

As you know, the Government of the People’s Partnership is

moving into an aggressive economic diversification programme.

This programme will see us developing other sectors of our

economy so that eventually, the foundation of our economy

will be tilted away from an over-reliance on energy, in favour of

a more broad based reliance on a number of different sectors.

However, we recognise that it is the Energy Sector that must

shoulder the cost of this economic diversification programme.

And in order to build an economy that is resilient and more

conducive to spreading the wealth around to many more of our

citizens, we need a strong national energy policy in moving

forward.

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I am sure that you will agree therefore that there can be no

stronger national energy policy as one that is formulated based

on the input of the very people whose needs it will eventually

serve.

In addition, it remains the commitment of the Government of

the People’s Partnership that any policy that is implemented in

the interest of ALL the people, must not be dictated by only a

handful of experts, sitting in closed meetings. The days of an

energy sector shrouded in secrecy, where the management of

our natural resources was the domain of only a few are now

over! And these consultations herald a new period, where you

not only have a say in policy development, but also a stake in

policy implementation.

Having said that, it is very important to note that one of the

hallmarks of the new approach by the Government of the

People’s Partnership is transparency and openness in the

operations of the Energy Sector.

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In addition to ensuring these consultations were brought

together to form the basis of a new direction for Energy, this is

what motivated our approach to once again sign on the

Extractive Industries Transparency Initiative. In taking this

effort forward, you may recall that in December, the Cabinet

approved the formation of the EITI Steering Committee, chaired

by Mr Victor Hart of Tobago.

I am pleased to let you know that with the hard work of the

committee, in eight weeks we had all upstream companies

signing off on the EITI. In fact Mr Hart who is now attending the

5th Global EITI Conference must be complimented for his

commitment and dedication in taking this forward.

I am also pleased to announce that through his efforts, Trinidad

and Tobago was invited to participate in the 5th Global EITI

conference in Paris, France later this week. At this conference,

I have been invited as Minister of Energy and Energy Affairs to

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address participants on our desire to gain membership in this

important global initiative.

While it may surprise some, there have actually been those

against our move to become signatories to the EITI. However,

the Government of the People’s Partnership remains resolute

in moving forward on this.

On October 6th, 2010, in Washington DC, the Revenue Watch

Institute, in collaboration with the Transparency Institute,

officially launched the Revenue Watch Index which assesses

and compares published revenue, contract terms and other

core information by Governments. Out of 41 countries,

Trinidad and Tobago ranked 15 and is seen, according to this

report, as having ‘Partial Revenue Transparency’.

The RWI in its report stated that openness in Energy is now the

most significant counter to the growing levels of high level

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corruption and a deep mistrust for Governments that manage

and oversee the extraction of natural resources.

Ladies and gentlemen, there is an old way of thinking as

regards transparency and openness in Energy.

A myth of the past is that it affects confidentiality and many

investors would have been hesitant about information on

revenues and resources being publicly available. With this

myth, one would have assumed therefore that transparency

would have directly, negatively, impacted global

competitiveness.

What RWI and the Transparency Institute have found, however,

is that it is actually the other way around now. Many investors

express deeper confidence when they are entering into

agreements with nations with open and transparent systems.

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One of the main reasons is that transparency in the host nation

actually makes reporting in the investor’s home countries much

easier and far less costly.

In addition, transparent and open decision making removes the

doubts that would surround subjective decision making and

uncertainty. This points therefore to the fact that transparency

and openness actually serve to boost trust, confidence, global

competitiveness and a far more efficient operation of Energy

Sectors globally. I look forward to your discussion today on

EITI.

Also pleased to announce that the Petroleum Pricing

Committee will be established shortly. This Committee is a

legal requirement and will advise the Minister of Finance in

situations where the sale of crude oil, natural gas, petroleum

products and petrochemicals between affiliated parties cannot

be considered as an arms-length transaction. And I look

forward today to discussions on this committee.

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Ladies and gentlemen, in recognising the need for a full

national energy policy, developed on the basis of consultation

with you, we also appreciated that as a Government, we

needed to ensure urgent needs of energy were not left

unattended.

On taking office, there were critical situations which required

immediate action if we were to secure our nation’s energy

supply and also ensure that our global confidence ratings were

increased. We also needed to work quickly to regain a

competitive edge in the global marketplace and quick action

was taken on a number of fronts.

On taking office, the Government of the People’s Partnership

found that there had been little or no activity in the upstream

sector for a number of years. For an energy producing nation,

no activity in the upstream, where exploration and extraction

of our resources takes place, meant that no work was being

done to secure our energy reserves and supply.

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In addition to no upstream activity, the energy service sector

that depends on work from the upstream producers suffered,

having in some cases to cut staff and some even had to exit

Trinidad and Tobago in search of opportunities in other

countries.

Therefore, one of my first engagements as Minister of Energy

and Energy Affairs was to transform the system of fiscal

incentives that would create interest in exploring for oil and gas

in our shallow and deep marine acreage.

This is how the Government was able to close two successful

bid rounds between September of 2010 and February of 2011.

These bid rounds, where the Government offers sections of our

oil and gas acreage for bids locally and internationally, were

actually able to bring back some of the investors we lost and

attract new ones, in order to breathe life into the upstream

sector.

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I say this so that I am able to underline today’s consultations by

telling you that through decisive action by the Government of

the People’s Partnership, we can feel more confident now in

our nation’s energy supply and indeed our reserves position.

And to bring it down to brass tacks, having made the right

moves to secure our supply of natural resources, it is up to you

to tell us how to utilise it, FOR YOUR BENEFIT!

Here in Tobago, Tourism remains crucial to your economic well-

being. For Tobago, Tourism is the oil and gas of your survival

…the only difference is that Tourism can be considered

renewable. Having said that, the Government is abundantly

clear on the challenges you face and is actively engaged in

finding solutions.

In the context of Energy, one way of attracting all levels of

Tourism traffic back to Tobago will be through the development

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of Tobago as a truly green destination. In fact the Government

of the People’s Partnership has taken steps to ensure that in

the pursuit of renewable energy, Tobago can benefit

substantially.

One undertaking will be national engagement through pilot

projects involving community centres, schools and Government

housing programme as well as the development of the Home

Energy Self Sufficiency (HESS) programme.

These incentives to promote Renewable Energy and Energy

Efficiency were included in the Finance Act No. 13 of 2010 and

came into effect on January 1, 2011.

In addition to incentives offered to promote renewable energy

and also energy efficiency, we have made complete solar water

heaters, PV systems and wind turbines zero rated for VAT

purposes.

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In bringing down the costs of these systems, Hotels, Guest

Houses and of course individual homes in Tobago can benefit

through greener alternatives for power generation, as well as

reduced operational and domestic power costs.

Regarding legislative changes, a team led by the Ministry of

Public Utilities and including the Ministry of Energy and Energy

Affairs, T&TEC, and the Regulated Industries Commission (RIC)

was brought together.

This team has been collaborating on amendments to legislation

that are necessary for the incorporation of RE technology for

domestic and commercial use. The main issues being dealt

with relate to licensing/regulation and in particular grid inter-

connection, open access, net metering and feed-in tariffs

which will impact both domestic and commercial users.

My Ministry is also holding meetings with the Ministry of

Community Development on a proposal for introducing RE

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technologies in community centres on a pilot basis. The

proposal includes photovoltaic (PV) lighting, emergency power

use, and possibly solar air-conditioning units.

A request for proposals for hiring of a contractor is currently

under review. Collaboration continues with the Ministry of

Community Development and the Green Fund coordinator on

this proposal and I want to tell you that one of the Community

Centres in this pilot programme is carded for Tobago.

Further, the series of initiatives that will form part of the

foundation for growth and development of the country’s

Renewable Energy resources will include a wind resource

assessment study.

I can also tell you that the Government is supporting a study to

look at the introduction of wind technology in Trinidad and in

Tobago. Already we have had discussions with our friends in

Jamaica who have experience in this area. And now we want to

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hear from you as we believe that wind technology can be part

of the energy mix in certain communities in Trinidad and

Tobago.

We also believe strongly that there is a need for public

education, particularly as it relates to energy conservation and

we will seek to raise awareness of the need for energy

efficiency and conservation. As such, action has also been

taken on these fronts.

On the side of domestic fuels, you would be aware that I have

been working to reduce our reliance on diesel and gasoline in

the transport sector by encouraging a shift to the cleaner

burning compressed natural gas (CNG).

In the 2010/2011 budget, a number of incentives were

announced in order to significantly reduce the costs of

conversions, thereby encouraging citizens to make the switch.

Simultaneously, we will be putting in the necessary

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infrastructure to ensure that supply is expanded and upon

making the conversion, access to CNG fuel is easy and efficient.

A CNG Task Force appointed late last year is currently working

on the development of the CNG thrust and when implemented

we expect that in a five year period we can move 100,000

vehicles from off gasoline and diesel to CNG. This will make a

major improvement in our environment and reduce

significantly carbon emissions.

As a demonstration of the economics of using CNG, ladies and

gentlemen, let us assume that as a car-owner, you travel on a

daily basis from Charlotteville to Scarborough. This is

approximately 35 km. We assume fuel efficiency of 7.8 km per

litre of gasoline and considering the current traffic congestion

and the many hills and valleys, the annual cost of fuel (super

gasoline) would be $6,000.

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Using Natural Gas at the proposed price of $0.25, this annual

cost would be $2,500. On this basis with the net cost of

retrofitting the vehicle of $7500, the payout time would be just

26 months, a little over 2 years. However, after the payout for

the conversion, the fuel cost will less than a third of the current

fuel cost.

And as we are on the issue of the supply of fuels, ladies and

gentlemen, I want to tell you that before I arrived here today, I

engaged a number of Tobago stakeholders in my attempt to

understand your needs, as well as the challenges you face.

In my discussions I came to understand that in Tobago right

now, there are fewer service stations than there were 20 years

ago. And today, there are at least 10 times more motor

vehicles on Tobago roads. Further, I understand that following

an accident with a PTSC bus, you have lost Warner’s Gas Station

on Milford Road.

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Some of you may recall that during the period 1995 to 2001,

when I was Chairman of the National Petroleum Marketing

Company the Quik Shoppe concept was first introduced to

Tobago. My understanding is that today, over 10 years since

demitting Chairmanship, the minimum quota established for

Tobago was never attained.

As it stands, the service stations that serve the needs of Tobago

are:

Crown Point – 1

Scarborough – 2

Roxborough – 1

Carnbie – 1

Charlotteville – 1

Plymouth – 1

Further, I understand that between L’Anse Fourmie and

Scarborough, not a single service station exists. Not a single

service station for approximately 30 miles of road! And

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between Roxborough and Scarborough, 22 miles, not a single

service station!

A total of 7 service stations to meet the needs of an island that

is attempting to develop and expand are woefully inadequate.

My understanding also is that while the Cove Power Plant was

brought into operation there has been no increase in storage

capacity in spite of this power plant’s reliance on diesel fuel.

This means that many vehicles in Tobago which require diesel

fuel frequently experience a lack of supply because of the need

to keep this Power Plant running.

Let me therefore give you my assurance that following these

consultations, and based on suggestions that emerge today, I

will be meeting with the new Board of Directors, headed by the

new Chairman, Neil Gosine of NPMC so that this situation can

be addressed in the shortest possible time. Tobago deserves

much better, and Tobago will receive much better!

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I know also that the people of Tobago have been asking about

the natural gas that was found in your waters. The questions

have been centred on how this gas will be used for Tobago’s

particular developmental benefit. Here too, I want to assure

you that under my watch as Energy and Energy Affairs Minister,

Tobago will finally receive equity in the distribution of our

energy wealth.

Having said that, I would also want to propose a different

conversation for Tobago! While you are rightly interested in

the benefits that will accrue to Tobago from finds in your

waters, let’s expand this discussion into how Tobago is gearing

up to command its share.

What are the needs in training so that you can produce the

engineers, the project specialists, the rig operators and so on?

What are your needs in developing energy services so that you

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can link into the energy sector and provide essential services to

exploration companies?

What are your needs in terms of transport, infrastructure,

financing and so on that would strengthen your position in

rising to the opportunities that are in the offing in the new

energy/manufacturing linked sector?

Let’s focus our discussions on these issues so that as we move

forward, Tobago can firmly take hold of the opportunities that

will be delivered by the Government of the People’s

Partnership.

Ladies and gentlemen, on the issue of the supply of natural

gas to Tobago, I want to assure you that for the first time in

your island’s history natural gas will be made available via a

12 inch diameter line being run by the NGC to the Cove

Industrial Estate.

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The line will have a maximum capacity of 120 million standard

cubic feet per day, with the initial demand being10 mmsfc/d.

This would allow the Power Generation plant at the estate to

stop running on diesel and switch to natural gas again

contributing to green Tobago.

Having giving this brief summary of some of the major issues I

have come to understand, I now want to turn to this

consultation process and our approach in formulating and

developing a National Energy Policy that is more effective and

targeted.

Citizens and all stakeholders have been asked to contribute

their written submissions to the National Energy Policy

Secretariat no later than March 15th. This, of course, is in

addition to the submissions made verbally through the

consultation process.

Following these submissions, an internal technical team

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comprising technocrats from the Ministry of Energy and Energy

Affairs will engage a process of evaluation and will deliver a

Green Paper by April 30th. This exercise will be co-ordinated by

a consultant with hands on experience in both the local and

international energy sector.

With the publication of the Green Paper, the public will be

invited to review the document and submit its feedback to the

Secretariat by the 30th of May 2011.

I can assure you that these consultations will not be allowed to

amount to simply a talk shop, where the ideas, concerns and

comments made here will not be placed on the shelf and

forgotten.

These consultations are in fact part of the Government of the

People’s Partnership delivering on its promises through a

collaborative government and policy formation.

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As I close therefore, I ask you to make full use of today’s

proceedings. There are issues which you have been waiting to

discuss publicly for quite some time; today is your day. There

are ideas you have been waiting to put forward and proposals

you have been waiting to make! The time is now.

And as we engage in these discussions, let us not allow

ourselves to be distracted by the peripheral issues. Tobago is

an equal part of our partnership and the responsibility now falls

to you to ensure that what we take away today will positively

impact the development of Tobago for you and for generations

that will follow.

Ladies and gentlemen, I thank you.