The days of cheap natural gas are gone, Trinidad’s Minister of Energy and Energy Affairs Carolyn Seepersad-Bachan has said.
The low-cost sources of gas were fast depleting and it will cost more to find and extract new reserves, she said.
Seepersad-Bachan’s statement came in response to an appeal by Methanol Holdings Trinidad Ltd’s (MHTL) CEO Motilal Rampersad for governmental support in keeping MHTL competitive in the downstream energy industry internationally.
Rampersad spoke during the commissioning ceremony of AUM1 Complex at the Point Lisas Industrial Estate. The Jamaican government is relying on Trinidad to supply it with cheap natural gas as it looks to rely more on the commodity. This news will come as yet another set back to its energy policy. Already there are allegations of rampant corruption at its Petroleum Corporation of Jamaica (PCJ) and controversy surrounds the awarding of a contract for a liquified natural gas facility to the former head of the PCJ. Only this week, former President Bill Clinton called on Jamaica to use its natural resources of solar and wind and focus more on renewable energy rather than imports that cost around 10 per cent of GDP.
MHTL, one of the largest producers of methanol in the world, is a subsidiary of the CL Financial empire and is considered one of the most profitable entities in the financially troubled conglomerate. Finance Minister Winston Dookeran recently said MHTL may be divested and listed on the international stock market.
Seepersad-Bachan said while Government “is committed to the expansion of the downstream sector, we need, however, to accept that there is no more cheap gas available”.
She said, “Most of the explored acreage, the available low-cost sources of gas are depleting very quickly and, as a result of that, we are on an exploration drive.”
She said even in the current bid round just closed, Government expected the cost structures to go up and, as a result, production cost would rise.
“In addition to that, as we move further out into deep-water area, you recognise the high capital-intensive, high-risk areas that we’re dealing with and therefore, as result of that, gas prices will not be what [they] used to be.”
She said Government recognised the challenges gas-based projects face in terms of the cost structure and competitiveness and, as a result, Government will partner with the companies to identify creative and innovative strategies to address these challenges.
This, she said, is also why the National Energy Corporation of Trinidad and Tobago Ltd (NEC) has been requested to conduct a study to establish a framework for the execution of energy audits for plants in the Pt Lisas area.
“We want to encourage all of the industries based at Point Lisas to improve on their energy efficiencies because gas prices have been increasing significantly so it is a challenge that is faced by all.”
Last Tuesday’s function was to celebrate the completion of the US$1.7 billion project, the first for ammonia and urea plants that are integrated into a complex capable of producing third-stage downstream products of 60,000 metric tonnes per year of melamine and 1.5 million metric tonnes per year of urea ammonium nitrate solution.
The AUM ammonia plant was started in March 2009 and fully commissioned by June of the same year.
All other plants of the complex have been mechanically completed since March 2010.
The decision to use Liquefied Natural Gas will not only affect the current generation, but also every future one. We are living at a cut-throat pace globally with times of reprieve occurring mainly when global catastrophes happen, like the current recession. In addition, there are several competing forces, including economic (for example, WTO legislation), environmental (for example, carbon credits regulations), nationalistic and regional affecting us
An unspecified amount of liquefied natural gas (LNG) exploded into the atmosphere after the top of a pressure-relief valve flew off during the offloading process at the Petrojam oil refinery in Kingston about 7 a.m. yesterday.
Winston Watson, managing director at Petrojam Limited, the national organisation which imports fuel, said some level of miscommunication took place between individuals on the ship and those ashore.
“One of the receiving vessels overfilled and the top of the valve flew off because of an excessive build-up of pressure. That’s what it’s designed to do when the pressure becomes too much,” he said.
Watson said that though this was an unusual occurrence, he did not feel that it would have any long-lasting environmental impact.
“The thing with LNG is when it enters the atmosphere, it expands, so a little bit of LNG may seem like a lot.”
Watson said one could compare the pressure-relief valves to that of a pressure cooker: as pressure increases, so do the chances the top will blow off in an attempt to relieve the pressure build-up and prevent major explosions.
Adding another extracurricular to the checklist, Google is investing in a “mammoth” offshore wind farm along the Atlantic seaboard. The search giant is taking a 37.6 percent equity stake in the project, which will connect 6,000 megawatts of offshore turbines (or roughly 60 percent of the wind energy built in the U.S. last year). The project is called the Atlantic Wind Connection (AWC) and will connect wind turbines across a 350-mile stretch from New Jersey to Virginia. Here’s what we know about the project and why Google is undertaking it:
DOZENS of Seaview Gardens residents, fed up with the high light bills they are receiving from the Jamaica Public Service Company (JPS), took to the streets again this morning to vent their frustration.
The Office of Utilities Regulation (OUR) has invited bids from twenty-eight local and international companies, including the Jamaica Public Service Company Limited (JPS), to supply 480 megawatts of new generating capacity.
This is the largest block of generating capacity ever sought by the OUR and it’s intended to: allow for the displacement of old and inefficient generating plants; provide for growth in demand and improve the efficiency of the overall electricity generation system.
The installation of the new generating capacity is scheduled to be carried out in two phases. The first 360 megawatts is scheduled to be installed by 2014 while the remaining 120 megawatts is to be installed by 2016.
The Request for Proposals (RFPs) seeks to achieve the goals of ensuring that Jamaica improves its energy efficiency in generation, contribute to fuel diversification which will impact energy security and most importantly, positively impact the affordability of electricity. The request coincides with the initiative taken by the Government to introduce natural gas as the fuel of choice for electricity generation and for the mining sector as outlined in the 2009 – 2030 National Energy Policy.
The RFP was issued on September 30, 2010 and bids are to be submitted no later than January 7, 2011 in keeping with the schedule outlined in the bid document.
This Jamaica Gleaner letter to the editor is in response to Lisa Hanna’s letter in which she says Jamaica should look into clean coal and admits clean coal is harmful to environment.
Kindly permit me the privilege of commenting on Ms Lisa Hanna’s letter on the subject of ‘clean coal’ as an energy source for Jamaica.
Ms Hanna, I beg to disagree with you.
No well-informed individual will disagree that coal-fired energy plants are more reliable and cost-effective as an energy source than natural gas. However, the subject of coal energy, per se, is quite complicated. One should be properly apprised of all facets on the subject in order to make a positive viable assessment on the issue.
First, there is a vast technical difference between, ‘clean coal’, and ‘truly clean coal’. Traditional clean coal technology applies to a process that adduces the extraction of certain impure substances from the coal, thus opening the way for the existing carbon and oxygen to react when the coal is burned and subsequent to burning, the ash residue is then filtered out along with some pollutants, such as nitrogen oxide from the emissions. This process only reduces the nuisance of the environmental pollutants causing acid rain and smog.
When the coal mining industry classifies coal as emission-free coal (clean coal), they are referring to the removal of the public nuisance pollutants, and not to the elimination of the greenhouse emissions which causes climate change as specified in the accords in the International Standards agreements, such as the Kyoto Protocol, which puts the onus on mining companies to produce truly refined carbon-free coal, or ‘carbon zero emissions coal’.
Grave political concern
Neither the United States nor China, the two largest producers and consumers of coal, has ratified the Kyoto Protocol agreement, for reasons related to the sensitive political implications on their economies. Partly out of genuine concern and partly in response to strong environmentalist lobbying, the US has given a time frame to their coal industry to comply with the standards of the accord. The US uses 50 per cent and China 80 per cent coal for their total power-based generation.
In order to meet the criteria of the International Accord for truly clean coal, the coal-mining companies would be giving an edge to the other competing energy sources, because of the resulting high cost to be incurred by consumers, if and when the transition is made. This prognosis is foreseen to premise to the possibility of coal being either reduced in importance, or being phased out of the energy market, and in the process creating serious dislocations in the large coal mining labour force. And this is an issue of grave political concern.
A further downside is the fact that established accessible coal reserves world-wide, at the current rate of consumption, will be depleted in just over 200 years, which period will definitely be lowered should China pursue its plans to export a significant portion of its coal production. This single fact makes it imprudent, or less than feasible, to make an investment in coal for energy purposes at this time.
Alternative energy solar-oriented institutions, such as Suntech and Kyocera, solar power, wind energy entities, such as Suzion, Siemens and General Electric; natural gas firms, such as British Petroleum, Chevron and Anadarko, Hydroelectric energy engineering and Hydrogen research entities, are aggressively posturing their environmentally friendly status; and may eventually succeed in removing coal from being the major energy source – a position it has maintained since the industrial revolution.
The use of coal energy necessitates storage stockpiling, which is done by creating open storage facilities, or by the construction of special silos; both methods present a range of hazardous challenges, including spontaneous combustion, carbon monoxide and other undesirable gas emissions, dust nuisance, respiratory health issues, etc. All of which require the use of expensive equipment to contain, supported by constant monitoring.
The cost of transporting natural gas is prohibitive. To convey it by sea requires the condensing of the gas to a liquid form (LNG) before it is encapsulated in cryptogenic tanks, fitted in special vessels prepared for that purpose. Over land it requires special pipe lines to convey it to high pressure storage tanks. The major challenge here is illegal siphoning and sabotage either at the wharf or along the pipe run.
Russia has the largest proven reserves of natural gas while Qatar has the largest gas field. Pockets of natural gas are being discovered on a regular basis in several regions of the world. It is also available from sources such as bogs, swamps, and shale, as well as in oil wells, and coal mines; which reasons makes it extremely difficult to arrive at any accurate data as the duration of the availability of natural gas from established reliable sources. At the current rate of consumption, natural gas is expected to last 150 years.
Although natural gas is being touted by the industry as being the fuel of the 21st century, scientists have warned of the imprudence of taking such a pronouncement seriously, as only approximately three per cent of natural gas is being used in the world’s total power generation at this time; and should this rise, the available natural gas would be seriously depleted. Advanced plans are in place to replace the use of fossil energy generation with alternative renewable sources by the year 2030. At present, however, there is no available substitute for aviation fuel, which must await the perfection of hydrogen fuel technology; the energy fuel of the future.
The most viable suggestions for Jamaica at this time is to engage the use of a combination of hydroelectric and wind-powered energy generation, coupled with using solar power for street lighting, investing in an autoclaving facility, which converts the waste disposal available from our garbage dump sites, and sewage-disposal systems to fuel.
In the United Kingdom, just such a facility is being constructed at an estimated cost of US$70 million, which is destined to be the largest of its kind in the world. This technology not only provides an efficient solution to the waste disposal problems, it converts waste to energy. All waste goes into the system, without any need for any form of separation into various categories. The possibility of building such a plant in Jamaica with the support of interested Caribbean Community partners, should be fully explored.
(d) Independence from imported fuels reduced to 80 per cent of the sum currently expended to purchase fossil fuels, as well as giving a competitive edge to exporters. Lowering the cost of public transportation and energy used for industrial and domestic consumption, etc.
(e) An investment of a sum less than two-thirds of the proposed cost of the United Kingdom’s plant could supply our energy needs and recouped the sum invested in a relatively short time.
I am, etc.,
Allow me space in your publication to respond to a letter in which Member of Parliament Lisa Hanna defends her thesis on ‘clean coal‘ as a possible energy source on which to build our economic future.
I’m quite in agreement on the points made in her first two paragraphs, but must violently disagree on her postulation about Jamaica’s economic future being built on cheap energy source, and that source being clean coal. Her view about the stability of coal price is myopic.
May I remind her about our cheap bauxite in the 1970s, how it became expensive when we thought that all and sundry were benefiting – except us, the primary producer. All commodities are subject to market manipulation, politically or otherwise.
Here is my solution for building our economy, by marrying two renewable resources, our people and renewable energy, we will create a symbiosis which has perpetuity. Consider the vehicle you love, the great value lies in the head of those who manufactured it, so will the solution to solve our energy needs. For it is the value that is added to any resource that gives value, by developing our human resource to harness the abundant energy which bathe our beloved island daily we will have a dependable source of energy, and can even be net exporters of energy-harvesting equipment.
No good foundation
MP Hanna points to the competitiveness of economies having cheaper energy source, but here are the calculations. For solar energy, the most expensive at present price using a life of about 40 years, the cost is US 13 cents per kilowatt-hour and set to go down as the industry matures.
She said coal-based power supplies 40 per cent of the world’s electricity and this is set to go up with China’s ever increasing wealth and its desire to improve the lot of its citizens. Coal, whether clean or not, is set to see greater demand and, hence, price movement. That’s not a good foundation on which to base a country’s future, when we have a source of energy that is in our hands, for a better way to build one’s future.
We are all concerned about the global state of the world environment; research indicates that global warming is due, in part, to the use of fossil fuel. A shift to renewable energy will lead to a reduction of our carbon footprint. Over time, this could be brought near to zero.
This approach will render the development of resources in the constituency she now represents feasible, but further arguments can be made about the country as a whole. The natural scientists, business persons, civil engineers, manufacturers, artisans and even casual labourers will be beneficiaries of this policy approach. This is development.
In the final paragraphs of the letter, the issue of liquefied natural gas (LNG) was discussed. Again, as with her discussion on coal, the decision to embrace LNG as the fuel of choice is wrong. Proponents of both fuel miss the key issue. It is the human resource that should be at the centre of policy.
Both sets of proponents see the Jamaican people as objects to be exploited while a bone is thrown their way. I can show a policy path that can lead us into wealth, creativity and, finally, a proud people which have the capacity to solve our problems. My friends say there is a dinosaurian tendency among the young politicians, by association, and they are about to redo the failure of the last 48 years. We can point them the way to a better future.
I am, etc.,
Atlantic Solar Corporation
10 Chisholm Avenue
see Lisa Hanna article below
Member of Parliament (MP) for South East St Ann, Lisa Hanna, is suggesting that, using the clean coal technology to safeguard the environment, a coal power plant located in St Ann could generate enough power to satisfy demands on Jamaica’s north coast.
“Right now Jamaica is producing energy at US$0.30 per kilowatt hour whereas countries which are competitive are producing at five cents,” Hanna told The Gleaner. “And you are not going to have persons running to do business in Jamaica if the energy costs are eating up their profit, which is also what is happening.”
The St Ann MP said she wanted efforts to be made to export limestone and bring in coal.
“If you look at a constituency like South East St Ann or South West St Ann, if you put a clean coal power plant up there you can power the entire north coast with it,” she argued. “That is something that I would like to realise.”
Energy and Mining Minister James Robertson has stated that Government’s LNG project was expected to save Jamaica US$1.2 billion in energy cost.
However, according to Hanna, the cost would still be high as Jamaica would have to import the LNG.
“That is going to be an expensive venture and clean coal technology is technology that is being used in different places of the world quite successfully,” Hanna said. “And there are places that have the coal and need limestone and the ships could export (limestone) and import the coal at the same time.”
In the United States, the cost of a megawatt of electricity produced by coal runs between $20 and $30, while a megawatt of energy produced from natural gas ranges between $45 and $60.
Hanna’s comments reflect a concern expressed by Jamaicans who over the years have been calling for alternate sources of energy in order to reduce Jamaica’s dependency on oil. Solar, wind and hydropower sources have been suggested as viable alternatives.
The National Housing Trust (NHT) has taken a step in this direction by introducing a loan programme to assist home owners install solar powered water heaters in their homes.
Research shows that approximately 40 per cent of the world’s energy was derived from oil, while 23 per cent was derived from coal.
Experts estimate that, by 2025, 80 per cent of the world’s oil reserves would have been used. Coal reserves, on the contrary, are capable of lasting 1,000 years.
One drawback of the use of coal however, is that its negative impact on the environment is greater than oil and natural gas