From The Caribbean Council

A US-Caribbean-Central American Energy Summit held in Washington has set out an extensive programme of US and multilateral support aimed at diversifying the Caribbean’s energy sources. The gradual lessening of the region’s use of hydrocarbons is expected to lead to changes in the present reliance on Venezuela’s concessional PetroCaribe arrangement.

Speaking to Caribbean and Central American leaders during a US-Caribbean-Central American Energy Summit held on May 3 and 4 in Washington, Vice President Biden who chaired the meeting said that the US wanted to see the countries of the Caribbean basin become energy secure “so that more people across the region can start businesses, generate opportunity, attract foreign investment and grow. The more you prosper, the better off my country is, and it opens up new opportunity for shared economic growth.”

Mr Biden said that such an outcome would be in the US’s interest.

The summit, which brought a number of Caribbean and Central American heads of government and energy ministers to Washington, received a report from the US-Caribbean-Central American Energy Security Task Force that President Obama had launched with regional leaders in April 2015 with the objective of advancing energy security, regional energy co-operation, clean energy integration, and donor co-ordination. The meeting was also attended by multilateral development banks, the private sector, and international development partners.

Among those attending were the Prime Minister of Trinidad and Tobago, Dr Keith Rowley; the President of Guyana, David Granger; the Prime Minister of Jamaica, Andrew Holness; the President of Panama, Juan Carlos Varela; the US Secretary of Energy, Ernest Moniz; and the heads of the leading multilateral development institutions that provide funding for the Caribbean and Central America.

Although not an explicit purpose of the summit, the focus of the event was on supporting the region’s energy independence and diversification and indirectly on lessening its reliance on Venezuela’s concessional PetroCaribe oil and development arrangements.

While US officials said that the event was not connected to existing arrangements with Venezuela, the need for rebalancing the region’s energy matrix, the impact of falling oil prices, and changing buying patterns in the region were largely the backdrop to the discussions.

Noting this prior to the summit, Juan Gonzalez, the Deputy Assistant US Secretary of State for Central America and the Caribbean, acknowledged that the year-long decline in oil prices had provided an opportunity for nations to leave the PetroCaribe programme. “The drop in energy prices has really led a lot of countries, particularly Caribbean, to look to the spot market rather than rely on PetroCaribe,” he told the media.

At the summit, regional leaders agreed on the importance of a diverse fuel supply and greater access to cleaner, cost-effective, and reliable energy in order to deliver energy security and economic competitiveness.

In its report, the US-Caribbean Central America (CCA) Energy Task Force report said that while there were similarities in the energy challenges facing all nations in the Caribbean and Central America, there was also great diversity in the opportunities across the region.

Its report noted that ‘a majority of Caribbean countries face crucial choices within the next few years. A large wave of energy infrastructure investment is required to replace aging, inefficient power plants with more modern, efficient alternative energy options, while increasing the available generation capacity’.

It also observed that if the Caribbean had diversified its energy sources, the volume of GDP and foreign exchange spent by the region on energy imports over the last decade when oil prices were high could have otherwise been directed to alleviating poverty, adapting to climate change and sea level rise, and other critical interventions necessary for sustainable development and resilience building.

At the summit, the Task Force presented a report to leaders, recommending actions to advance Caribbean and Central American energy security and integration, clean energy investment, and regional energy cooperation. The leaders agreed on the importance of a diverse fuel supply and greater access to cleaner, cost-effective, and reliable energy to spur energy security and economic competitiveness in the regions.

US initiatives to help move the Caribbean and Central America towards a cleaner and more secure energy future include: the creation of a Caribbean sustainable energy roadmap and strategy to manage regional co-ordination and action on energy security; encouraging the integration of the Central American energy market and power transmission system and its possible integration with Mexico; encouraging competitive tendering for the commercial exploitation of geothermal resources; and support for the legal, regulatory, and policy frameworks necessary for a competitive and dynamic power sector.

The summit also confirmed that US energy support for the Caribbean and Central America included issuing licences for the export of US liquefied natural gas (LNG); encouraging investments in renewable energy; providing a clean energy finance facility to encourage regional clean energy investment; making tourism more green as it is the sector that is the largest energy user in the Caribbean; helping build local capacity to help achieve energy transition goals; and supporting the government of Guyana in strengthening the management of its upstream petroleum sector.

The summit enabled the Caribbean participants in a separate session to discuss with the US security issues and the region’s deep concern about the withdrawal of correspondent banking in the region and de-risking.

Although President Obama had extended an invitation to Cuba to participate in the summit when he visited Havana in March, the Cuban government declined to participate. “We don’t interpret this as something negative,” the US Deputy Assistant US Secretary of State for Central America and the Caribbean said when asked to comment. “The door is always open for Cuba to participate in these conversations.”

This is an extract from the Caribbean Council’s leading weekly editorially independent publication, Caribbean Insight, which provides in depth information on current economic, political and commercial developments in the Caribbean and news on events in Europe and the US that affect the region. Business people, academics, and those with a general interest in the Caribbean find it an invaluable tool for developing and maintaining knowledge and providing an insight into political, economic and commercial events in the region.

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SOURCE: http://www.caribbean-council.org/us-energy-summit-sets-alternatives-petrocaribe/