Energy Insecurity in the Western Hemisphere: A Complex Web of Dependencies

Strategic Insights -

The recent meeting of energy ministers in Trinidad and Tobago highlighted the energy insecurity plaguing the Western Hemisphere. Secretary of Energy Spencer Abraham estimated that the US will source 25% of its gas from outside North America in just two decades. Caribbean islands struggle to fund their high oil import bills, while Venezuela, with the largest crude reserves in the hemisphere, faces challenges in funding its ambitious natural gas and heavy crude plans.

Key Takeaways:

  • The US is likely to rely on external sources for 25% of its gas in the next two decades, according to Secretary of Energy Spencer Abraham.
  • Caribbean islands' budgets are dominated by high oil import bills, with Trinidad and Tobago being the biggest supplier of US liquefied natural gas (LNG) imports.
  • Venezuela, with the largest crude reserves in the Western Hemisphere, struggles to fund its ambitious natural gas and heavy crude plans.
  • The meeting of energy ministers in Trinidad and Tobago resulted in an agreement to work together on energy technology, with a focus on overcoming the "impediments to major private investments that are necessary to achieve energy security".
  • Private sector company BP produced 51% of Trinidad's oil and 67% of its gas, but few private sector participants from outside Trinidad attended the conference.
  • Venezuelan Energy Minister Rafael Ramirez proposed that Caribbean state oil companies unite to buy Venezuelan crude and refine it through Trinidad's Petrotrin refinery.
  • Trinidad's Petrotrin refinery is considering a crude processing arrangement with Venezuela, which would cut Trinidad's crude import bill and allow Venezuela to export heavy crudes and preserve market share for product exports.

Statistics:

  • 25%: The estimated proportion of US gas that will come from outside North America in two decades, according to Secretary of Energy Spencer Abraham.
  • 700 million cubic feet per day: The current gas imports from the US from Mexico, which is in deficit and seeking new gas supplies.
  • $88 million: The cost of higher wages that Trinidad's government and private plant developers are discussing for the construction workers at the fourth LNG train, which ended a ten-week strike just before the conference began.
  • 10,000 barrels per day: The amount of discounted crude that Guyana's Prime Minister Samuel Hinds requested from Venezuela.
  • 150,000 b/d: The capacity of Trinidad's Petrotrin refinery, which is considering a crude processing arrangement with Venezuela.

Sources:

  • "Energy ministers meet in Trinidad" by Lucy Hornby, with quotes from Secretary of Energy Spencer Abraham, Caribbean island importers, and other officials.