I was recently looking for a way to pass the time while awaiting a flight at the airport in the Bahamas when I picked up a few magazines. The first was the April 30th edition of Fortune Magazine where the headline was “The United States of Natural Gas – How the new 100-year supply of shale gas is reviving the American economy”.
As the title suggest, it discusses not just the renewed surge in deepwater production in the Gulf but also the boom in domestic natural-gas supplies, which has come mostly from hard-to-reach shale formations tapped by the controversial fracking process. The bottom line is that the US is now a net exporter of finished petroleum products. Something not seen since 1949. To help meet this demand, the oil giants (minus BP who is apparently being squeezed out for obvious reasons) are building and expanding Gulf Coast refineries. The region is seeing major investment for the first time in four decades.
Some analysts believe that this boom could again make the US a major player in the world energy market. Cheap domestic energy is of course good news for manufacturers and is being described as a ‘viagra that’s turning the US back into an industrial power’. It is indeed ironic that just a few years back, conventional wisdom was that the US was running out of gas. Now some are saying it is becoming the ‘Saudi Arabia of natural gas’.
The only downside I imagine would be the environmental impact. Already there are documentaries about flammable water and people getting sick allegedly through the controversial fracking process. Furthermore, less attention may be paid to alternative or clean energy sources like wind and solar power. Coming back to us, there should be concern on the part of gas exporters like Trinidad for example. Once upon a time, the North East coast of the US was somewhat dependent on Trinidad gas for its energy needs. Now with the abundant natural gas flowing from the Marcellus Shale formation, which runs through New York, Pennsylvania and Ohio, the North East US is perhaps no longer as dependent on imported energy. This gas formation alone has already created an estimated 60 000 jobs , with another 200 000 possible by 2015.
Some commentators are often critical of the present administration’s response to the evolving energy market. I am among those whose real concern is about how Trinidad is preparing for a possible future where the revenue derived from energy exports is much less than the past. Some say that Trinidad is not doing enough. I agreed with this view more after my recent visit to the Bahamas.
A recent blog by a well-known radio personality referenced the Bahamas as an exemplar for other nations in the Caribbean region. Had I not seen it for myself I do not think I would have believed it. Firstly, I was amazed at the size of the nation. Depending on who you speak with, the Bahamas has between 700 and 3000 islands and cays. Yet despite this vast number, the group of islands is under a single administration. Although it is not without its own issues, it still stands in stark contrast to other multiple-island nations where central governance appears to be a real problem and we frequently hear periodic threats by the tiniest islands to go it alone. Perhaps those interested in constitutional reform would find value in examining the decentralised governance structure in the Bahamas.
Secondly, the physical infrastructure at least on New Providence, Paradise Island and Exuma is impressive – particularly its roads and bridges. Apparently when faced with the global economic challenges of 2008, the government’s response was to strengthen infrastructure to make their islands even more attractive to investors.
This leads me to my third observation. The government appears to be very clear about the type of investment they seek to attract. They are specifically looking for high end boutique hotels in the ‘Family islands’ – that is the smaller inhabited islands that make up this nation.
The Bahamas appears, at least on the surface, to be very clear about who they are, what they have to offer and are clearly adept at attracting inward investment. They have milked their proximity to the US mainland for everything that it is worth and now enjoy a standard of living that would be the envy of most of the other Caribbean nations.
As Trinidad prepares for a possible post energy reality, it has to only look at its neighbours. We have much to learn from each other. My name is Derren Joseph and I love the Caribbean region. Despite its challenges, I continue to have the audacity of hope that we will enjoy a brighter tomorrow. Read more on derrenjoseph.blogspot.com