The islands of Trinidad & Tobago (T&T) form a small republic just off the Venezuelan Coast at the bottom of the Lesser Antilles, an Island Archipelago arcing north-south through the Caribbean from just below Cuba in the north to the Venezuelan coast to the south. The sea borrowed its name from the Carib tribe. Based out of mainland Venezuela the Carib controlled much of the Antilles until their new enemies from Europe arrived. There are about 100 true Carib left on the islands of T&T. Nowadays the word Carib has the status of a brand name. Mention Carib to the predominantly Black & Indian population of T&T and they’ll think you are referring to the brewery in Port of Spain with the local Guinness franchise. The owners of the Carib brewery are struggling to keep the business open battling their poorly paid and striking employees. The islands are facing beer shortages as the strike progresses. When you can find one a Guinness Export is considered exclusively a man’s drink and is marketed to the majority black population as somewhat of a sexual aid. Often drunk with milk, Carib brewed Guinness Export has 7.5% alcohol by volume.
When you pass through migration checks in Trinidad there are two lines, one for nationals and CARICOM visitors and the other for the rest of us. As the EU expands to the northeast, the US pushes its armies and its currency to the south into El Salvador, Panama and Ecuador, the Caribbean states are not being left behind. CARICOM, their economic community has not yet adopted a common currency, but does ease trade and travel restrictions on people and goods from neighbouring nations.
In many of the other CARICOM nations to the north tourism banking, fishing and agriculture are the major industries. That is not to say that T&T doesn’t produce some of its own food and rum, many goods are locally produced. Tourism too has its place mainly in Tobago and money laundering is an important if somewhat low-key industry. These all pale into insignificance when compared with T&T’s main exports: Oil, Gas and Asphalt. T&T is an energy economy through and through and one feels that it is somewhat living in the glorious past of free and cheap hydro-carbons till death do us part.
The T&T government are making some attempts to diversify their industrial base to create value add further down the production chain. Alcoa is sniffing around trying to set up another massive aluminium smelter in the Caribbean as they close some of their existing plants in the US due to high electricity costs. Aliminium is a simple product to produce if you have a lot of electricity and it is a popular metal with an excellent future. It is also relatively eco-friendly as it is very recyclable While Geologists recognize that most rocks on the surface of our planet contain aluminium the source of choice is bauxite.
The T&T government is ready to take the plunge, signing a memorandum of intent and preparing to sign the deal and build the factory? They believe that their stake in the factory will be profitable and are intent to encourage downstream industries.
No industry comes without its problems and the Aluminium industry has two major problems which is why Alcoa would consider the logistics of another island-based Caribbean plant requiring product shipment over water. Aluminium smelting has twofold problems: energy cost and waste.
T&T is becoming very savvy as regards the first problem, they realize that for the next few decades much of their wealth and trade with the world will be based on their wealth of oil and gas deposits. Alcoa are interested in Trinidad because it has a few decades worth of gas supplies and cheap gas is a rare commodity these days especially in a western English speaking country with a cheap labour force. There are also some bauxite deposits on the island though this is of secondary importance and some local geologists suggest that they are marginal or inappropriate. What interests Alcoa in T&T is a cheap electricity supply.
They are looking for countries with adequate energy supplies at prices they can negotiate up-front and lock in before they invest the hundreds of millions in building their plant. Trinidad offers a gas supply which though tiny in comparison with that of its neighbour Venezuela, is adequate for its current exports and for domestic use for a few decades to come. Current studies suggest that building this Alcoa plant will halve the lifetime of their domestic supply shortening its life by about twenty years.
So there’s the tradeoff Trinidad faces, an opportunity at a cost. Twenty years of productivity of a useful raw material consuming close to half their supplies of another raw material. Burn vast quantities of their precious gas supplies to produce electricity in the vast quantities necessary to produce aluminium ingots for export.
Or is it that simple?
The other part of the equation is the environment and this has not been discussed much here. One would expect an island paradise to consider its environment of primary importance but this does not seem to be the case. The government has been reluctantly discussing the sensitive topic of gas costs but it has not been discussing where an island as small as Trinidad might store the massive quantities of waste that is produced as a by-product of the smelting process. Various environmental effects should be obvious to the T&T people. The extraction and burning of tens of millions of cubic tonnes of their own gas each year to produce electricity is one obvious factor. The by-products of this process: the heat, the CO2 and the other waste products will present an environmental stress. Add to this the transportation of vast quantities of raw materials and end product never mind the construction of the plant itself and the infrastructure that will require and you have quite a challenge. Such costs are normal and should be discussed with the local population before a go-ahead decision is given.
What is not being discussed is the waste products produced by the smelting procedure which are both toxic and voluminous. In the US in the fifties Alcoa’s smelting waste was simply buried in unlined sites and the damage done then is still being paid for by the environment and the US tax-payer. Since then the environmental laws of the US have been toughened to prevent future disasters. But the US has vast deserts for such stuff, where on such a small island as Trinidad, are these lined waste disposal sites going to be placed and who will pay for them? This crucial question needs to be discussed before a decision is made. The government of Trinidad and Tobago owes that to their constituents to bring this crucial issue to the fore before signing the deal.
Maybe there might be more exciting things that they can do with their gas supplies?