During his tenure as prime minister, the late Pierre Trudeau realized that Canada, despite its vast oil and natural gas resources was in danger of falling under the control of the major multinational oil companies. To prevent this he created the government oil company PetroCan.
Today The Bahamas and its Caricom sister states are pursuing a similar strategy. Venezuela and Trinidad itself the Caribbeanﾴs largest oil producer, have joined forces to create PetroCaribe, an agency to ensure that regional governments reduce their dependency on foreign oil companies.
Minister of Trade and Industry, Leslie Miller has been leading the charge in his battle with the oil companies to reduce the cost of gasoline at the pump.
Venezuelaﾴs president Hugo Chavez has pushed for the increased ties between Venezuela, the worldﾴs fifth largest oil producer and OPEC member, and its Caribbean neighbours. Mr. Chavezﾴs stand has made him unpopular both in Washington and with the Venezuelan ruling class.
Like Minister Miller he believes that the ordinary people should be protected from economic abuse.
BBC reporter Greg Palast, writing about the failed business-led coup against Mr. Chavez last October, said that Mr. Chavez had incurred the wrath of the oil industry by doubling the royalty taxes paid by ExxonMobil and other oil operators from just under 16 percent to 30 percent.
Mr. Chavez has used the increased revenue to improve the lives of Venezuelaﾴs poor by providing them with adequate housing and proper diets.
Similarly, Minister Miller, who has vowed to cut back prices at the punmps for Bahamian consumers, is not particularly popular with sectors of the oil industry.
In an article written for the Nassau Institute, Larry Smith quotes an ﾓindependent fuel retailerﾒ who dismisses the Minister efforts. ﾓEven if we get discounts prices will inevitably rise, so instead of trying to make cheap political points by presenting himself as the ﾑenergy saviourﾴ of the country perhaps Mr. Miller should earn his pay by getting together the best minds (including the very groups he seeks to castigate) to formulate a national energy policy that will increase our use of renewable energy sources.ﾒ
The oil distributors, Esso, Texaco and Shell appear more diplomatic. According to Mr. Smith, the distributors wonﾴt mind leaving the procuring of the product to the government as long as they can continue to distribute the product.
ﾓOur position is that if the government can get product at below market rates and can assure quality and reliability of supply then we will work with them. But there are serious implications to this that require careful evaluation and consultation. It is not something to be rushed into emotionallyﾒ one senior oil industry executive told Tough Call.
Despite the US economic arrangements, it is often overlooked that it is the US government that is most ardent in its protection of US oil supplies ﾖ as it is in defence of the entire US economy ﾖ and the fact that as the home of the worldﾴs leading oil companies, it is not necessary for the US government to own an energy corporation or any other company actively involved in the marketplace.
PetroCaribe is assisting Bahamian and Caribbean governments through state energy companies to co-ordinate their oil and gas production policies and to set up mechanisms to ensure energy supplies at competitive prices.
The move by The Bahamas and Caricom countries, with the assistance of Venezuela, mirrors the pan-Caribbean movement in other areas, notably insurance and banking, where Sagicor and Butterfield Bank of Bermuda are consolidating their positions in the region through acquisitions and branching into Europe or as the late poet Louise Bennett termed it ﾓcolonization in reverseﾒ.
In the absence of strong regional oil companies, both consumers and governments are left up to the mercies, not of market forces, but of the non-regional oil companies.
The PetroCaribe initiative attempts to do for The Bahamas and the region what the US oil companies do for the US economy and the US consumer.
C. E. Huggins, The Bahama Journal
