feature address by the honourable carolyn … · 2014-02-02 · 1 feature address by the honourable...
TRANSCRIPT
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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.