PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

[Lazie]

The Acting Editor of the The Trinidad Guardian, Anthony Wilson, has responded to a Gleaner editorial of February 25 headlined "Myopic <SPAN class=kLink style="FONT-WEIGHT: 700; COLOR: orange! important; FONT-FAMILY: Arial, Helvetica, sans-serif; POSITION: relative">economic</SPAN> nationalism" in which the Patrick Manning government was chided for reneging on its agreement with the Jamaican government to supply liquefied natural gas (LNG) and The Guardian's support for that decision.

Mr. Wilson's reply is published below.



"We feel that your readers would be able to make more informed judgements on the issue of intra-regional trade if The Gleaner were to quote from the Guardian's February 15 editorial.

"For ease of reference, I have provided the relevant excerpt of The Guardian editorial.

"The editorial speaks for itself and makes it clear whose interest The Gleaner is defending.

"As well, the excerpt hints at the huge amount of revenue that Trinidad is being asked to forego given "conjoined interests" that advocate two sets of natural gas subsidies (for the production of alumina in Jamaica and the production of aluminium in <SPAN class=kLink style="FONT-WEIGHT: 400; COLOR: orange! important; FONT-FAMILY: Arial, Helvetica, sans-serif; POSITION: relative">Trinidad</SPAN>) in favour of a publicly-held U.S. multinational in which neither Trinidad nor Jamaica have a shareholding.

EXCERPT

At the centre of the potential dispute between the two Caricom neighbours is the American aluminium giant Alcoa, which proposes to build an aluminium smelter in Trinidad.

Reports out of Jamaica indicate that Alcoa is proposing to double the capacity of the 1.5 million tonne alumina refinery it now owns 50/50 with the Jamaican Government.

As a result of Jamaica's huge foreign debts, Alcoa is undertaking the refinery upgrade by itself, rather than in partnership with Jamaica, which means that at the end of the project, Alcoa will own about 80 per cent of the equity in the three-million tonne per annum alumina refinery.

Jamaica looked to Trinidad and Tobago (T&amp;T) for LNG because one of the conditions of Alcoa's proposed US$1.6 billion investment in Jamaica was that Kingston should secure a cheap source of energy at a predictable price to operate the alumina refinery. Cheap, predictable energy would make the refinery more globally competitive, it is felt.

Jamaica is insisting that it should not pay the United States market price for the LNG, arguing instead that it should pay the same price that T&amp;T domestic users pay for natural gas, plus liquefaction and transportation.

The Jamaican argument assumes that T&amp;T's domestic users of natural gas all pay the same price, whereas the truth is that the local market for the commodity is segmented according to size.

Additionally, Jamaica's position seems to assume that T&amp;T has control o

[Karl]

RE: PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

If true...the way forward is clear. Negotiate in best interest of T'dad and Tobago and Jamaica.

The expanding in Jamaica and building in T'dadeither makes sense to Alcoa or it does not. If it does make sense to Alcoa, what is the priceat which it 'breaks even' for Alcoa? Knowing that will give Trinidad andJamaica sound grounds to make a decision on whether or not to go forward...as that will allow determination of best deal for the countries.

BTW - Best deal could also mean put the matter aside...for-get-about-it!

[Mosiah]

RE: PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

<DIV>These trinis have us up since 1959 or whenever it was we pulled out of the WI Federation. I am wary and pessimistic about dealings with them because of that. And of course, they can say the same.</DIV><DIV></DIV><DIV>The Venezuelans don't have that guilt to deal with, so...</DIV>

[Lazie]

RE: PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

Suh, after seeing the reasons put forward by the T&amp;T Guardian, you still think it may be that?

This deal was 'agreed' when Portia went to T&amp;T, just after becoming PM. Remember, todate no detail of the deal was made public ... now this.

[Muadib]

RE: PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

The PNP had no choice in the matter. They needed the Petro Caribe money to finance Election programmes.

"If it was another year..."

[Karl]

RE: PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

EDITORIAL - The Guardian missed the point again
published: Tuesday | March 6, 2007


The editors at the Guardian newspaper in Trinidad and Tobago just don't get it - or are pretending not to. So, they cling to a stale and outmoded economic nationalism, seemingly blissful in their ignorance to the shifts in the global economy, or an appreciation of the obligations of countries which choose to join with others to create a single market and a seamless economic space. Their unenlightenment was on display again this past weekend when they stood by what was essentially a piece of jingoism and economic myopia over Port of Spain's failure to fulfil an agreement to supply Kingston with LNG for an energy conversion project here.

That arrangement for 1.1 million tonnes of LNG a year or about five per cent of Trinidad and Tobago's annual production of natural gas, was critical to a US$1.6 billion expansion by Alcoa of its alumina refinery here, in which the Jamaican government is a significant shareholder. Jamaica had insisted that, within the spirit and the laws of the Caricom single market agreement, that it be supplied LNG at the price Trinidadians pay for natural gas, plus the cost of liquefaction and transportation. Both sides agreed to disagree on this point, but the Trinidadian Prime Minister, Patrick Manning, gave a solemn pledge that the gas would be supplied, if not at the domestic rate, at a negotiated price.

Now, the Trinidadians say they have no LNG to supply to Jamaica and don't know when they will. That places the Alcoa project in jeopardy and does potential harm to Jamaica's economic growth and development. It was Port of Spain's failure to be sensitive to this issue for a country with which it enjoys a US$500 million trade surplus about which this newspaper complained.

How did the Guardian respond? First, by ascribing our arguments to the Jamaican government and to accuse Prime Minister Portia Simpson Miller, in the face of a general election, of attempting to divert attention from corruption and criminality in Jamaica and to claim it was the wont of the Jamaican administrations to do such things. The Guardian tried to paint Trinidad as victim. The paper, however, in commending its editorial to the Jamaican public, chose to leave that bit of nastiness out of its excerpt.

But there was an egregious economic fallacy that is worse than the bit of political disingenuity. That is, the paper's attempt to posit a supply of LNG to Jamaica to allow cheaper energy to its national power grid as a specific subsidy to Alcoa, rather than attempt to build greater cost efficiency in the national economy. It is as if the Guardian presumes that when Trinidad and Tobago supplies energy for national economic output, there is a price differentiation between foreign and domestically-ownedfirms. The global environment is hardly permissive to such price discrimination that harks back to a projectionist and socialist past.

But to have landed its putrid venom on the Jamaican government, which, incidentally, has been at the forefront of promoting regional integration - sometimes in the face of domestic hostility - the Guardian relents somewhat by talking about vertical integration of regional production processes.

It seems to assume, however, that this can only happen in the context of an over-arching state, which given the paper's ownership, is quite surprising. But then, glibness was never any substitute for thought.


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[Mosiah]

RE: PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

<DIV>It's clear to me that those trinis are being parochial and petty. </DIV><DIV></DIV><DIV>What's new!</DIV><DIV></DIV><DIV>Wi nuh have Hugo number nuh more?</DIV>

[Shatta]

RE: PUBLIC AFFAIRS: TT Guardian on LNG and The Gleaner

The more things change the more they remain the same.

God bless the child that have his own. Walter Rodney's book "How Europe Underdevelop Africa" should be a required reading in Universities in the caribbean

respect