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EDITORIAL - Caution, Mr Hylton

Published:Monday | July 23, 2012 | 12:00 AM

We have noted the statement by the industry, investment and commerce minister, Anthony Hylton, that his Trinidadian counterpart, Vasant Bharath, pledged to resolve the issue of Port-of-Spain's supply of liquefied natural gas (LNG) to Jamaica.

Were it our call, this newspaper would have advised Mr Hylton to keep quiet on the matter until there was something specific and tangible to report other than a highly parsed communiqué that promises nothing, but could raise optimism that may not be realised in the short term.

The danger, in that event, would be to further fuel the ongoing debate over whether Trinidad and Tobago provides energy subsidies to its manufacturers, to the detriment of their Jamaican counterparts, without getting to the core of a complex issue. That would serve little good.

T&T's broken promise

The background to this matter is Trinidad and Tobago's early 2000s decision to deliver LNG to Jamaica at what Port-of-Spain said would be preferential prices. A planned expansion and modernisation of the Jamalco alumina refinery was predicated on that deal.

Ultimately, Port-of-Spain pulled out of the arrangement, saying existing market commitments, and the failure of a new offshore gas train to come on stream, made it impossible to supply Jamaica up to 1.5 million tonnes of the gas per year.

A significant factor in Trinidad and Tobago's initial supply and price undertaking was that it was a political decision by the then Prime Minister Patrick Manning, a concession to Jamaica and his close colleague P.J. Patterson, in the face of Kingston's arguments over how energy as a strategic resource should be treated in a single market such as CARICOM's.

Kingston's position, articulated then by Mr Hylton, and resisted by Trinidadian technocrats, was that energy-surplus Trinidad and Tobago could not price its gas cheaper at home than it did elsewhere in the regional 'home' market - except for adding the cost of liquefaction and transport.

Trinidadian technocrats held that the LNG - having been cooled and liquefied - was a different product than gas and should, therefore, be differently priced. Further, there was no protocol on energy as a strategic resource in the Revised Treaty of Chaguaramas.

Regional implications

These are matters that are unlikely to be easily resolved by talks between Mr Hylton and Mr Bharath, or Mr Bharath's consultations with his colleagues at home - except if Kamla Persad-Bissessar, as Mr Manning did, takes a political decision to ease trade tensions with Jamaica.

New gas finds could possibly dispose the Trinidadians towards such a position. But that would have to be balanced against the political realities Mrs Persad-Bissessar faces at home and plans for a gas-pipeline project to deliver natural gas from Trinidad to Barbados, Guadeloupe, Martinique and St Lucia.

But a bilateral deal between Jamaica and Trinidad and Tobago, while perhaps solving Kingston's immediate LNG supply problem, allowing it to move ahead with its fuel-conversion programme, won't deal with the more fundamental issue of the treatment of energy in a single market. That will require either negotiating specific language in the Revised Treaty of Chaguaramas or getting a decision from the Caribbean Court of Justice, in its role as arbiter of the treaty.

But maybe Mr Bharath has more clout than we credit him with.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.