[Congressional Record Volume 150, Number 133 (Thursday, November 18, 2004)]
[Extensions of Remarks]
[Pages E2024-E2025]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             CHANGING NATURE OF U.S.-CARIBBEAN RELATIONSHIP

                                 ______
                                 

                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                      Wednesday, November 17, 2004

  Mr. RANGEL. Mr. Speaker, the United States-Caribbean relationship has 
long been characterized as one of dependency. More specifically, the 
Caribbean has historically been portrayed as overly reliant on the 
United States, while having minimal significance to our country beyond 
general geopolitical concerns. Indeed, the widespread damage wrought by 
the recent Caribbean hurricanes has necessitated assistance from the 
U.S. However, a broader look at the current reality points to a highly 
reciprocal relationship, with the Caribbean proving to be an 
increasingly important component of the economic and commercial 
interests of the United States.
  A telling indicator of the evolving U.S.-Caribbean relationship is in 
the area of trade. The Caribbean is now the 13th largest importer to 
the United States and the 8th largest destination for American exports. 
U.S. exports to the Caribbean have helped to sustain nearly 500,000 
U.S. jobs. While the magnitude of Caribbean trade with the U.S. is 
changing, so too is the nature of that trade. The Caribbean is not 
simply a supplier of agricultural products, or an American tourist 
destination. It is now becoming a significant source of U.S. energy 
imports. An October 7th story in the New York Times examined this 
recent ascendancy, with a focus on the island nation of Trinidad and 
Tobago.
  In the last few years, the Caribbean, led by Trinidad and Tobago, has 
positioned itself as significant player in energy trade with the U.S. 
Already an important regional exporter of crude oil, Trinidad is now 
the leading exporter of Liquid Natural Gas (LNG) in the Western 
Hemisphere. After 9-11, the U.S. sought to find energy sources beyond 
the Middle East and Persian Gulf. Additionally, rising gas prices, and 
increasing domestic shortages increased U.S. demand for LNG. Trinidad 
has impressively stepped in to fill that demand. Since 2001, it has 
been the leading exporter of Liquid Natural Gas to the United States, 
accounting for 75 percent of all LNG exports. These exports are 
projected to further increase over the next decade. Additionally, a 
planned LNG pipeline from Trinidad to surrounding Caribbean islands 
will increase the refining capacity of the surrounding region, as well 
as spur the region's ability to engage in related manufacturing.
  Besides Trinidad, other countries in the region have plans to 
increase their energy market presence. At an October 11th address, 
Jamaican Commerce, Science and Technology Minister, Phillip Paulwell, 
stated that three oil and gas systems have been identified in Jamaica 
for the first time. One of the systems has possible reserves of 2.8 
billion barrels of oil (BBO) and 10.6 trillion cubic feet (TCF) of 
natural gas. With its close proximity to the United States, development 
of Jamaican energy resources would be a very beneficial endeavor for 
both nations.
  As can be seen, the importance of the Caribbean to the United States 
has radically evolved over the last several years. This evolution will 
only be strengthened as we move towards greater regional integration 
through agreements like the Free Trade Area of the Americas (FTAA). 
Future U.S.-Caribbean policy must take into account this new and 
mutually beneficial dynamic.

                A Small Island, A Big Exporter of Energy


    TRINIDAD IS SUPPLYING MOST U.S. IMPORTS OF LIQUEFIED NATURAL GAS

                           (By Simon Romero)

       Port of Spain, Trinidad, Oct. 7--Cranes are active here 
     again, working around the clock to erect some of the 
     Caribbean's tallest skyscrapers against a backdrop of 
     colonial-era buildings. Traffic snarls throughout this small 
     island country, with imported luxury cars rubbing up against 
     70's-era gas guzzles left from the last time energy prices 
     soared.
       But it is not only the rising price of crude oil that has 
     produced such excitement and activity in Trinidad, the 
     Caribbean's largest petroleum producer and one of the few 
     islands that is thriving these days. Instead, what is 
     transforming the situation here is another fossil fuel: 
     natural gas.
       Amid a scramble to meet growing international energy 
     demands and to satisfy an American market where the price of 
     gas has risen to about $7 for each thousand cubic feet from 
     just $2 in 1999, Trinidad has emerged as the Western 
     Hemisphere's leading supplier of liquefied natural gas. It 
     has stealthily outpaced rivals, this year accounting for 
     nearly 80 percent of shipments to the United States, up from 
     virtually nothing five years ago.
       Trinidad's leap to the forefront in liquid natural gas--a 
     fast-growing area of the energy industry where companies 
     invest billions to chill the fuel to temperatures around 150 
     degrees below zero and ship it across the seas in 
     supertankers--has ignited rapid growth here. Economic 
     activity increased 13 percent in 2003 and could grow as

[[Page E2025]]

     much again this year. The economy has expanded for 10 
     consecutive years on Trinidad and Tobago, a twin-island 
     nation of 1.3 million with an area nearly the size of 
     Delaware.
       Trinidad's gas resources has fueled a web of chemical 
     factories, including nine ammonia plants, and iron and steel 
     complex, and two of the largest methanol plants in the world. 
     The conglomeration of factories, largely in Point Lisas, an 
     industrial site and port south of the capital, Port of Spain, 
     exports most of its production to the United States.
       ``We've become a highly industrialized nation, something 
     that was a pipe dream a few years ago,'' said Anthony Bryan, 
     former director of the Institute of International Relations 
     at the University of the West Indies on Trinidad.
       But some experts here worry that the natural gas boom is 
     taking on the same character as the oil-fueled growth burst 
     of the 1970's, which was followed by a ruinous decade-long 
     bust culminating in a violent coup attempt in 1990 by 
     Muslim militants.
       ``There's the `here-we-go-again' phenomenon,'' said Ronald 
     Ramkissoon, chief economist at Republic Bank of Trinidad and 
     Tobago, the country's largest financial institution. ``If 
     we're not wise enough to hive away some of the excess money 
     we're getting from this boom, then we stand the risk of 
     getting hit again.''
       Weighing over everything are fears about what will happen 
     when the energy bounty runs out. Although Trinidad is envied 
     by other energy producers, it has just 0.5 percent of the 
     world's proven gas reserves, far less than big producers like 
     Qatar and Russia. Unless big new discoveries are made, the 
     Inter-American Development Bank says, Trinidad's existing 
     reserves guarantee only 20 years of gas and oil production at 
     current extraction rates.
       For now, though, economic opportunities in Trinidad are 
     luring people and money from elsewhere in the hemisphere. A 
     growing number of Spanish-speaking immigrants from Venezuela 
     and Colombia have moved here recently to fill service jobs in 
     restaurants and other work shunned by Trinidadians. 
     Continental Airlines began flying this summer to Port of 
     Spain directly from Houston, ferrying, energy executives 
     eager to cash in on the bonanza.
       Trinidad owes much of its current good fortune to a plan 
     conceived a decade ago by BP and BG, two of Britain's largest 
     energy companies, together with Repsol of Spain and the 
     National Gas Company of Trinidad and Tobago, to build the 
     first of four large liquid natural gas plants. That strategy 
     transformed BG, formerly British Gas, into the largest 
     corporate supplier of L.N.G. to the United States. By 1999, 
     the venture was, ready to start exporting gas.
       Trinidad quickly leapt ahead of Venezuela, where domestic 
     political quarreling stalled ambitions to exploit ample 
     natural gas reserves.
       ``I'm reluctant to talk about Venezuela because they're the 
     sleeping giant next door,'' said Frank Look Kin, president of 
     the state-controlled National Gas Company. ``You could say 
     we're doing O.K. with what we've got.''
       The importance of natural gas in Trinidad's economy 
     eclipsed that of oil in recent years, with gas output now 
     worth about $4.8 billion a year compared with $1.4 billion 
     for oil, according to the Inter-American Development Bank.
       The Bush administration has responded by showering 
     attention on Trinidad, amid concern over a prospective 
     shortage of the fuel, which is used to generate electricity, 
     run industrial processes and heat homes and offices.
       President Bush surprised Prime Minister Patrick Manning 
     last December when he came to Washington to meet Condoleezza 
     Rice, Mr. Bush's national security adviser. Instead of 
     limiting the visit to her, the White House granted Mr. 
     Manning an impromptu meeting with Mr. Bush to discuss ways of 
     increasing Trinidad's role in resolving problems in other 
     Caribbean countries like Haiti.
       Seeking to further strengthen ties, Spencer Abraham, the 
     energy secretary, declared in a visit here in April that 
     Trinidad was ``a very effective example of how a country with 
     natural gas resources can enter the international 
     marketplace.''
       Much noticed here as well was a meeting over the summer 
     between Mr. Manning and Henry A. Kissinger, the former 
     secretary of state. Mr. Kissinger's visit to Trinidad aroused 
     speculation that he might have lobbied the government on 
     behalf of Freeport McMoRan Energy, a New Orleans company that 
     allied itself this year with Trinidad to build a terminal for 
     receiving L.N.G. off Louisiana's coast. Mr. Kissinger is a 
     director emeritus of a mining concern controlled by Freeport 
     McMoRan Energy's parent company.
       In responding to questions from local reporters, Mr. 
     Kissinger and Mr. Manning denied that the purpose of their 
     meeting was related to negotiations with the Louisiana 
     company.
       Trinidad's aim to cement its position as the leading 
     supplier to the United States fits into its ambition to help 
     guide the policies of large gas-exporting nations. It has 
     held talks with Algeria and Indonesia to interest them in 
     joining the Louisiana terminal venture. And next year, 
     Trinidad is seeking a more active role in the Gas Exporting 
     Countries Forum, a group of more than a dozen nations that 
     also includes Qatar, Iran and Nigeria.
       Trinidad, a former British colony that gained independence 
     in 1962, views trade as another priority, with Port of Spain 
     competing against several American cities, including Miami 
     and Atlanta, to be selected as administrative headquarters 
     for the planned Free Trade Area of the Americas.
       The government, meanwhile, intends to invest about $700 
     million to build a pipeline that would transport gas to seven 
     islands in the eastern Caribbean, including Barbados and 
     Martinique. Trinidadian officials hope to persuade Venezuela 
     to prepare its own gas for export to the United States from 
     Trinidad plants.
       Despite all the activity concern persists over the energy 
     industry's influence as memories linger of the painful 
     adjustment Trinidad faced in the 1980's after oil prices 
     plummeted. But that has not prevented natural gas from 
     ascending to the heights of the economy after oil production 
     reached a peak in 1978.
       As in many developing countries that are rich in resources, 
     there is a perception that the wealth generated from 
     Trinidad's oil and gas is not widely shared, creating big 
     problems for a nation whose population is largely divided 
     between people of African and Indian descent.
       Unemployment remains stubbornly high, at around 10 percent. 
     Crime is also a prominent concern, underlined by a spate of 
     kidnappings of wealthy Trinidadians in the last two years. A 
     pressing issue Trinidad faces is how to wriggle more 
     royalties out of the multinational energy producers active in 
     its territory.
       ``The issue of who gets what and how from our gas and oil 
     needs to be revisited,'' said Winston Dookeran, a member of 
     Parliament and former central bank president.
       [In the budget released on Oct. 8, the government laid out 
     a plan to channel substantial energy revenue to social 
     programs and public security. Included are an increase in old 
     age pensions of more than 10 percent, lower taxes on brown 
     sugar and funds to hire 744 police officers.]
       Despite a gross domestic product of about $8,000 a person, 
     about a fifth of the population still lives in poverty. On 
     average, Trinidadians are richer than most Caribbean 
     islanders though still poorer than people in nearby Barbados 
     and the Bahamas, where tourism revenue has improved living 
     standards.
       Translating its gas reserves into lasting wealth, of 
     course, depends largely on the growth of the liquid natural 
     gas industry in the United States, where more than 30 
     projects are in planning phases to import the fuel from 
     countries around the world.
       ``The boom,'' Mr. Dookeran, the former, central banker, 
     said, ``is aligning our interests with those of the U.S. like 
     never before.''

                          ____________________