Why Some Countries Find It Hard to Move Away From Fossil Fuels

Ribboned shovel in hand, Prime Minister Keith Rowley joined a ceremonial groundbreaking last month to celebrate Trinidad and Tobago’s first large solar farm project expected to generate power for 42,000 homes.

But if anyone thought the project symbolized the twilight of the island nation’s long embrace of fossil fuels, Mr. Rowley set them straight.

“We will continue to extract the hydrocarbons available to us as long as there is an international market,” Mr. Rowley said, as BP and Shell executives looked on. “If we are going to sell the last barrel of oil or the last molecule of gas, so be it.”

Trinidad and Tobago is known for its white sandy beaches, mountainous rainforests and steel pan drums. But its economy depends on oil and natural gas, not tourism.

It is one of the largest producers of fossil fuels in the Western Hemisphere, and more than a century of drilling has left its mark. The major highways on the main island are clogged by traffic and lined with industrial warehouses. Oil is stitched in the culture, a theme in many calypso songs. Even the steel pan drums originated from the lids of used oil barrels.

If Trinidad seems to be zigging and zagging on climate change policy, it is hardly the only one. Saudi Arabia, the United Arab Emirates and the United States are also building large solar farms while exploring for new oil gushers. Developing nations with fossil fuel riches — a group that includes Guyana, Nigeria and Namibia as well as Trinidad — say they cannot easily leapfrog to renewable energy because they lack capital and because their poor rely on cheap power and oil revenues for social programs.

President Biden and European leaders have no easy response. Industrialized countries are still producers and users of fossil fuels and have failed to put up the $100 billion a year they had pledged to a green fund for poor nations starting in 2020.

“The countries in the south are telling the countries in the north, ‘You are the ones who caused the climate issue, so why don’t you move first since you have the capital and technologies to advance renewables?’” said Anthony Paul, a former official in Trinidad’s energy ministry who has consulted with governments and companies in several African countries.

Trinidad has a population of just 1.5 million people, but it has long punched above its weight in energy. As the second largest exporter of liquefied natural gas in the Western Hemisphere after the United States, it has one of the highest per capita incomes in the Caribbean. It is also a leading producer of petrochemicals like ammonia and methanol.

But with its oil and gas fields aging, oil production has fallen to 58,000 barrels a day, from 230,000 barrels a day at its peak in 1978. The country’s only oil refinery was shut four years ago. Gas production has declined 40 percent since 2010, forcing the country to close one of its four export terminals for liquefied natural gas and three of its 18 petrochemical plants.

At the same time, the country is feeling the effects of a changing climate, with wetter rainy seasons and dryer dry seasons reducing farm yields and stormier seas punishing fishermen and flooding coastal roads and homes.

“We’re facing a huge decision, whether to pivot to a new direction,” said Ryun Singh, president of the Trinidad and Tobago Association of Energy Engineers. “If we don’t get it right, we face economic ruin.”

For now, Mr. Rowley’s government wants to double down on fossil fuels by trying to get energy companies to develop new offshore fields.

The oil and gas business “is the basis for our middle class,” said Ainka Granderson, an environmental scientist at the Caribbean Natural Resources Institute, a research organization in San Juan, a city on the main island. “Oil and gas was once the nation’s spine, but it’s now the crutch that props us up.”

That crutch is becoming increasingly rickety.

On a recent April afternoon, a tanker ship arrived at the Atlantic LNG terminal at Point Fortin to pick up a load of deep-chilled gas for Britain. “Trinidad to the rescue,” said a smiling Jean Andre Celestain, the plant’s chief operating officer.

But because the country’s gas production has been declining, the plant fills just one tanker every 66 hours these days, down from one every 48 hours four years ago.

“There is an urgency to get gas supply,” said Ronald Adams, Atlantic LNG’s chief executive.

Oil companies have found some new small fields, but analysts still expect production to decline over the next few years.

Because of declining energy export earnings, the nation’s gross domestic product dropped by 20 percent from 2015 to 2021. The jump in oil and gas prices after Russia’s invasion of Ukraine and a new gas discovery by Shell have led to a small rebound over the past year.

But that is not enough to stem the decline in energy production and revenues, energy experts say.

In an effort to compensate for the shortfall, the country is seeking to reduce domestic use of natural gas so more can be exported. That is the main mission of the solar farms being built on Trinidad by BP and Shell. To drive down domestic demand for gas, energy regulators are proposing to raise electricity rates for residents and businesses. That proposal faces stiff political opposition.

“When you are an oil-and-gas-producing nation, you are always behind in renewables because people enjoy the cheaper rates of electricity that come with fossil fuels,” said David Alexander, a professor of petroleum engineering at the University of Trinidad and Tobago.

Dr. Alexander and another professor are leading an effort to map a “carbon-capture atlas” of depleted oil and gas fields that can be used to store carbon captured from Trinidadian petrochemical plants to help the country offset most or all of its greenhouse gas emissions.

There are other plans to try to turn Trinidad and Tobago away from gas and oil. Some entrepreneurs said the country should become a major exporter of products made from renewable energy like hydrogen, fertilizers and clean shipping fuel.

A homegrown energy company, Kenesjay Green, is working to produce hydrogen in the Point Lisas petrochemical complex. The company plans to use renewable energy and waste heat from power plants to split hydrogen from water. “Trinidad is uniquely poised to take off in the energy transition dramatically,” said Philip Julien, chairman of Kenesjay. “There’s huge potential and a lot of work to be done.”

Kenesjay is working with Yara Trinidad, an ammonia producer, to reduce its greenhouse gas emissions by replacing gas with water in its production process. Yara Trinidad hopes that it can eventually reopen one of the three ammonia plants it mothballed because of a lack of gas supplies.

Although the government supports these efforts, its focus remains on natural gas. “Gas is going to be around for decades, all right?” Stuart Young, Trinidad and Tobago’s energy minister, said in an interview.

To increase gas production and exports, the country is pinning its hopes on new offshore fields. One, the Manatee field adjacent to the maritime border with Venezuela, is being developed by Shell.

Just over the maritime border, there is a medium-size shallow-water field called Dragon. Trinidad and Venezuela have been negotiating for five years about how to produce and export the Dragon gas. Shell would operate the field, and a pipeline could connect the field to Trinidad and Tobago’s export terminals in three to four years.

But first, Trinidad must reach a deal with the Biden administration and the Venezuelan government that would allow Trinidad to export natural gas from the Dragon field in Venezuela without violating U.S. sanctions.

The Biden administration granted a two-year license to the Trinidadian government to do business with Venezuela in January, but only if the government of President Nicolás Maduro of Venezuela did not receive cash payments. Trinidad and Tobago has offered to pay for the gas in food and medicine, but Mr. Maduro has rejected that offer.

Another potential prospect is the Calypso field, off the coast of the island of Tobago, which could be the nation’s first deepwater gas field.

Woodside Energy, an Australian company, is developing Calypso with BP. But Calypso’s geology is complicated. The field is made up of unconnected pockets of gas, meaning that multiple wells would be needed, making drilling more expensive.

“We’re working through the concepts and trying to figure out how do we get something that will work for everybody,” said Meg O’Neill, chief executive of Woodside.

Analysts said Trinidad needed to move fast or risk losing gas customers to other exporters, like the United States and Qatar, that are building newer and more efficient liquefied natural gas terminals.

That might be a tall order, and even some Trinidadians who have long worked in oil and gas worry that little can be done to halt their industry’s decline.

Ronnie Beharry worked in various field positions before becoming a manager at a gas field operated by Touchstone Exploration. He has only a high school education but can afford to send his eldest daughter to college.

“I tell them to look at other options because we’ve started to go green,” he said, referring to his three children. “I don’t know where things are headed. Sometimes I think the country has a backup plan, and sometimes I don’t.”

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