Turks and Caicos Islands

Figure 4.2.5: Crude oil prices 1869-2009
49
(Source: Williams, 2010).
The IEA anticipates that even under its New Policies Scenario, which favours energy efficiency and
renewable energies, energy demand will be 36% higher in 2035 than in 2008, with fossil fuels continuing to
dominate demand (IEA, 2010). At the same time there is reason to believe that ‘peak oil’, i.e. the maximum
capacity to produce oil, may be passed in the near future. The UK Energy Research Centre, for instance,
concludes in a review of studies that a global peak in oil production is likely before 2030, with a significant
risk of a peak before 2020 (UKERC, 2009). Note that while there are options to develop alternative fuels,
considerable uncertainties are associated with these options, for instance with regard to costs, safety,
biodiversity loss, or competition with food production (e.g. Harvey and Pilgrim, 2011). Rising costs for
conventional fuels will therefore become increasingly relevant, particularly for transport, the sector most
dependent on fossil fuels with the least options to substitute energy sources. Within the transport sector,
aviation will be most affected due to limited options to use alternative fuels, which have to meet specific
demands regarding safety and energy density (cf. Nygren et al., 2009; Upham et al., 2009). Likewise, while
there are huge unconventional oil resources, including natural gas, heavy oil and tar sands, oil shales and
coal, there are long lead times in development, necessitating significant investments. The development of
these oil sources is also likely to lead to considerably greater environmental impacts than the development
of conventional oil resources (IEA, 2009).
Fuel costs are even higher in the Turks and Caicos Islands for three main reasons. The first is the lack of
deep water ports meaning that small volumes must be shipped by small barges more frequently, thereby
increasing transport costs, than if a large ship could offload into a large storage facility. The second is the
size of the business, especially TCU, which has struggled to secure competitive bids for supply of fuel. The
final reason is the inability to use cheaper fuels, such as heavy fuel oil, given the size of the plants used to
generate the electricity. Initiatives being undertaken to address the issue of storage are presented in
Section 5.2.2. Regional initiatives for increased energy integration such as the planned East Caribbean Gas
Pipeline from Trinidad and Tobago, and undersea transmission cables for electricity generated with
geothermal sources such as Dominica‘s are too far from the Turks and Caicos to be of benefit.