Seeds of Wisdom RV and Economics Updates Wednesday Afternoon 2-11-26
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How Trump Could Turn Puerto Rico into the Singapore of the Caribbean
Energy reform, governance shifts, and trade law constraints shape the island’s economic future
Overview
Puerto Rico’s high electricity costs are not primarily driven by fuel scarcity — they are driven by policy structure. Despite the United States being the world’s largest LNG exporter, Puerto Rico has faced barriers to sourcing domestic liquefied natural gas due to Financial Oversight Board decisions and longstanding federal shipping laws.
Following leadership changes under President Donald Trump, approval for U.S. LNG sourcing moved forward. However, the Jones Act continues to require U.S.-flagged vessels for domestic maritime shipping, creating costly detours and inflating energy prices.
The broader question is whether structural reform could reposition Puerto Rico as a low-tax, energy-efficient financial and trade hub — the “Singapore of the Caribbean.”
Key Developments
1. LNG Access Approved — Structural Constraints Remain
Puerto Rico had previously been blocked from directly sourcing U.S. LNG under Financial Oversight Board decisions tied to fiscal restructuring under PROMESA. After board reshaping, U.S. LNG sourcing received approval.
However, the Jones Act mandates that goods shipped between U.S. ports must travel on U.S.-built, U.S.-flagged, and U.S.-crewed vessels. Because there are limited LNG carriers meeting those requirements, Puerto Rico often faces higher logistical costs.
2. Policy-Driven Power Inflation
The United States exports significant LNG globally, yet Puerto Rico may pay more for energy due to routing inefficiencies and regulatory layers. Higher electricity prices:
Raise manufacturing and operating costs
Reduce investment competitiveness
Suppress capital inflows
Constrain long-term growth
The issue is not supply — it is governance architecture.
3. Governance as an Economic Lever
Puerto Rico’s Financial Oversight and Management Board, established under PROMESA, has broad authority over fiscal and infrastructure decisions. Leadership direction and federal alignment influence:
Energy procurement strategy
Utility restructuring
Infrastructure investment
Public-private energy projects
Reform in governance mechanisms could accelerate modernization and reduce price distortion.
4. Strategic Repositioning Potential
If energy costs are reduced and regulatory friction eased, Puerto Rico could leverage:
Strategic geographic location between North and South America
U.S. legal framework and dollar backing
Tax incentives for business and capital migration
LNG-based power stabilization
These elements could position the island as a financial, logistics, and digital commerce hub in the Caribbean basin.
Why It Matters
Energy pricing is foundational to economic stability. When law overrides efficient market access, price signals distort capital allocation.
Lower-cost, reliable energy:
Strengthens manufacturing competitiveness
Encourages foreign direct investment
Stabilizes fiscal projections
Enhances currency-backed confidence
Conversely, structurally inflated costs suppress growth even when resources are abundant.
Why It Matters to Currency Holders
For currency holders and global reset observers:
Energy reform strengthens dollar-backed territories
Governance alignment influences regional trade flows
Shipping law constraints illustrate how statutory frameworks shape economic velocity
Infrastructure modernization impacts capital migration trends
Puerto Rico’s trajectory could influence broader discussions about U.S. territorial economic restructuring and trade law modernization.
Implications for the Global Reset
Primary Pillar: Finance
Energy efficiency directly impacts fiscal balance, capital efficiency, and long-term debt sustainability.
Secondary Pillars: Law · Governance · Trade & Infrastructure
This is fundamentally a systems issue. Legal structures — not supply shortages — determine pricing outcomes. Reforming statutory constraints could unlock growth without requiring new resource discovery.
The larger lesson extends beyond Puerto Rico: governance architecture can either amplify abundance or restrict it.
If structural reforms align with market access, Puerto Rico could transition from constrained territory to regional economic catalyst.
This is not an energy shortage — it is a governance design question with financial consequences.
Seeds of Wisdom Team
Newshounds News™ Exclusive
Sources
U.S. Maritime Administration — “Jones Act Overview”
https://www.maritime.dot.gov/ports/jones-actU.S. Energy Information Administration (EIA) — “Natural Gas Data & LNG Exports”
https://www.eia.gov/naturalgas/New Fortress Energy — “LNG Operations & Puerto Rico Projects”
https://www.newfortressenergy.com/Puerto Rico Financial Oversight and Management Board (PROMESA) — Official Site
https://oversightboard.pr.gov/
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