Preparing for an uncertain energy future

Trinidad and Tobago

As the global energy scene faces constant change from political and environmental pressures, planning for growth has become a challenge for industry players. Mark Loquan, then-president of The National Gas Company of Trinidad and Tobago Limited (NGC), discusses the company’s flexible and diversified approach to navigating an ever-shifting market.

The reliability of weather forecasts is a topic we often discuss. While technology has improved forecast accuracy over the years, we still get caught in unexpected downpours or prepare for rains that never come. The reason is that weather is a chaotic system, wherein the smallest changes in initial, formative conditions – such as temperature, wind and humidity – can dramatically alter the anticipated outcome. It is therefore notoriously difficult to predict with certainty what the weather will look like beyond a narrow window.
It can be said that there is similar difficulty in trying to forecast the future of energy, as there are many unpredictable forces acting upon the energy landscape, shaping demand and supply. The biggest one is of course climate change – erratic, extreme and unexpected weather events push energy demand up and down, and prices follow suit. Climate action is affecting the market in equal measure, as energy companies face regulatory headwinds, carbon taxing and border adjustment mechanisms, and sociocultural pressure to make their businesses more sustainable. Meanwhile, technology is constantly shifting the baseline and the goalpost, changing expectations, introducing new possibilities and complexities.
Then there are political factors. The UK recently voted in a new political party and prime minister, France’s election saw unexpected upsets, India renewed its government for another term and the USA will take to the polls later this year. Political agendas can diverge sharply from regime to regime, as can their energy policies and positions. When regime changes occur in global superpowers with clout in energy markets, the uncertainties multiply.
Further complicating matters is the overriding factor of human need. In dire circumstances, survival will trump all else, even if it means breaking promises and commitments and detouring from established paths. We saw how the energy crisis triggered by the Russian invasion of Ukraine forced some European nations to reopen coal plants, temporarily shelving clean energy plans to meet immediate fuel needs.
Taken together, what this all means is that our energy future is not set in stone, even though we are generally agreed on our direction of travel. As we saw during the Covid-19 pandemic, our world and our priorities can change overnight. This can make planning for the energy future a challenge.

NGC’s APPROACH: In this context, we at The National Gas Company of Trinidad and Tobago Limited have recognised the paramountcy of flexibility in our business – we understand that having a diverse portfolio that gives us room to pivot is crucial for long-term success and sustainability. Accordingly, our approach to growth over the past few years has been a considered and encompassing one. Since 2016, we have transformed from a primarily gas-forward business into a company with a more holistic focus on low-carbon energy development.
To be clear, we have not diluted our attention to natural gas. We see a role for this fuel in most future scenarios, as it satisfies all criteria of the energy trilemma: it is readily available and thus supports energy security, it is an affordable option and it is the cleanest fossil fuel.
In addition to looking at ways to secure and increase gas supply for the domestic market, NGC has set its sights on becoming a global player in the LNG space. We now have an increased stake in the domestic LNG business following the commercial restructuring of Atlantic, and we are exploring how we can make small-scale LNG projects a reality for the Caribbean region. In addition, the wider NGC Group of Companies today has a physical presence in gas markets outside Trinidad and Tobago thanks to three natural gas liquids (NGL) asset acquisitions in the USA.
At the same time, alongside continued gas development – and in response to climate action imperatives and market movements – we have also begun to focus on clean energy projects and investments. We appreciate that the current trajectory of energy markets puts renewable and low-carbon fuels in the ascendant for the foreseeable future. This means that if we are to remain relevant in our business and well positioned to retain energy market share, we need to diversify.
At the outset, the responsibility for exploring and investing in clean energy was jointly held by different subsidiaries within our Group. In 2023, we decided to create an entirely new entity to manage this arm of our business: NGC Green Company Limited. This subsidiary is now overseeing a portfolio covering clean energy and low-carbon fuels, energy efficiency, sustainable transportation and associated research and development.
That said, all companies within our Group continue to pursue their own decarbonisation initiatives, to reduce the carbon intensity of our products and services, so we can stay competitive in a greening market. This includes focusing on methane mitigation; asset integrity management; carbon offset projects such as reforestation programmes; and a suite of public education initiatives around responsible use of energy, sustainability and climate adaptation.
Our goal is to build an energy company that is versatile and resilient enough to withstand the turbulence of an ever-changing energy landscape. We aim to build a business that is capable of reconciling corporate profitability and corporate social responsibility – in all its dimensions – because in today’s market, they go hand in hand. Ultimately, we are working to build an energy company that will continue to serve our country and customers well into the future.
Importantly, we recognise that such a future is not a prefabricated reality that is waiting for us – we are creating it with every decision we take today, every plan we activate, every project we seed. This means it is also in our power to change the future – for better or worse. Like the weather, our energy future can look radically different from what we initially forecast based on choices made or roads not taken. It is therefore vital that we constantly assess where we are and where we are headed, and take steps to ensure we stay at the forefront of energy, come what may.

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