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The lesser evil
December 10, 2000
By Denis Solomon
ALL governments of this country have been bad in many ways. The UNC (no one thinks of it as a coalition any more) is no different in kind from the PNM or the NAR. But it is far, far more extreme in its iniquity, and far, far cruder in the display of it.
Last March the UNC Government signed Heads of Agreement with a consortium of energy companies led by British Petroleum for the construction of Trains 2 and 3 of the expansion of the Liquid Natural Gas (LNG) project. In February, the Sustainable Economic Development Unit of the UWI Economics Department organised a symposium on natural gas policy, with particular reference to the impending agreement.
The UWI symposium was the latest in a series of discussions from which it emerged that there was considerable national concern as to how the agreement could be crafted to ensure maximum benefit to the country, and, in general, how our energy reserves should best be used. Needless to say, the forum in which there was least discussion of this crucial national concern was the national Parliament.
Following the February symposium Dennis Pantin, its principal organiser, published a two-part article in the Express summarising these concerns. This was followed by a series of detailed articles on energy policy by Lloyd Best.
The appearance of Pantin’s February articles was perhaps partly the result of a phone call from me urging him to make public the results of the symposium as quickly as possible. One of the arguments I used was that the question of the LNG agreement provided a good opportunity to acknowledge that the Government was tackling a complex issue that would have been difficult for any government anywhere. The articles would therefore further the national debate without any of the acrimony that has followed almost everything the Press has written about Government actions, much more through the fault of the Government than of the press.
But the one aspect of the LNG negotiations that could not be treated sympathetically was their secrecy. Despite the concern expressed in all sectors, in March the government quietly signed Heads of Agreement with BP, and last Thursday the formal project agreement for Trains 2 and 3 were signed. Of the terms of the agreement the country has been told practically nothing beyond press-release fluff.
We are told the tax revenue that will accrue from the deal ($30 billion over 20 years), the number of jobs it will provide at the construction stage (3000) and the proportion of locally-acquired inputs (25 per cent). We are also told that with natural gas prices high, the tax revenue could be twice the estimated figure.
What we are not told are the real terms on which the Government has disposed of nine million tonnes per year of a non-renewable component of the national patrimony. What trade-offs have been made between short, medium and long-term benefits and disadvantages?
What balance has been decided on between tax revenues over the next decade, which will depend on the world price of raw natural gas, and the potential value added of downstream industries such as methanol, urea and ammonia?
Has the agreement addressed the concerns of the T&T Natural Gas Company about the imbalance between the gradually increasing price of its purchases of gas and the fluctuating price of its sales to Point Lisas firms?
Does the agreement require BP and the other investors to prove up the natural gas reserves to the level to be used in Trains 2 and 3, to be sure that the increased production of the two trains does not deplete our known reserves over the life of the agreement? Or are we opening ourselves to blackmail later as the government begins to panic over the diminution of proven reserves?
Does the deal include an agreement for the capture of ethylene for use in the manufacture of plastics and other downstream products?
So much for what we do not know about the agreement. What we do know about the government’s energy policy is that it involves no known strategy to balance the benefits to the present generation in terms of income, with the benefits to future generations in terms of wise investment of that income. Such a strategy could only come, as Pantin wrote, from “a representative Parliament serviced by hearings involving expert witnesses as well as community interests”.
The worst part is that the signing of the agreement on the very eve of the General Election was, in Dennis Pantin’s words, a conspiracy with British Petroleum to “stage an effective coup against the electorate” by putting one of the most fertile sources of revenue outside the control of Parliament.
The UNC is not the first government to make an important deal with foreign interests in the dying moments of its term of office, thereby tying the hands of its successors for the sake of a partisan propaganda coup. Prime Minister Panday criticised the PNM government for its hasty deal with Severn Trent in 1995. The earlier natural gas deal with Amoco, signed by the PNM in 1970, was renewed for 20 years in 1991, in the final weeks of the NAR’s mandate.
To undertake a policy commitment of overwhelming national importance just before an election is an infringement of one of the unwritten principles of parliamentary democracy. Not only should there be bi- or multi-partisan participation in the process (that is what Parliament and Parliamentary committees are for) but if the process has not been brought to fruition by the end of the government’s term, the incoming government should not be faced with a hasty fait accompli.
None of our governments has recognised that principle. In what way, then, was the UNC government’s iniquity more crudely demonstrated in its signing of the LNG agreement last Thursday? Not in the fact that it tied the hands of the incoming government, but in the degree to which it gloried in doing so.
In the way in which the Prime Minister used the signing ceremony itself as a party political platform. Mr Manning, he said, had promised to review all agreements signed by the present government if he was returned to office. “And he will review them” said the Prime Minister “IF he is returned to office. But he will not be returned to office”.
With these words the Prime Minister not only abused his position as the chief representative of the whole nation, in order to make a partisan attack on a political opponent, before an audience of foreigners. He also made those foreigners his accomplices by dragging them into local party politics. He thereby justified Dennis Pantin’s description of the agreement as a “conspiracy” against the nation. He also put me, a fervent supporter of “none of the above”, in the distressing position of hoping that the PNM wins the election.
Copyright © Denis Solomon
