PREPARATIONS for round two in the battle over the legality of the Jamaica Public Service’s (JPS’) all-island licence stepped up yesterday with the filing of a counter appeal to JPS’ own filing in the appellate court on Monday.
The counter appeal was filed by former Government Senator Dennis Meadows, Betty-Ann Blaine and Cyrus Rousseau, who were in July successful in having Justice Bryan Sykes strike down the exclusivity aspect of the JPS licence.
A litre of E-10 87 gasolene will sell $107.52 while E-10 90 gasolene will be sold for $109.17.
The price of automotive diesel oil will be increased by $1.11 to sell for $107.29 per litre.
A litre of kerosene oil has been cut by $1.68 and will be sold for $109.85.
A litre of butane has been reduced by $0.57 and will sell for $49.92.
However, the price of propane cooking gas has been reduced by $2.08 and will be sold for $33.56 per litre.
Retailers will add their mark-ups to the announced prices.
It was National Hero Norman Washington Manley who said that the mission of his generation was to achieve political independence. He further said that the mission of the next generation would be to achieve economic independence. But economic independence is clearly a harder task to achieve than political independence. And a main ingredient in the achievement of economic independence is in having independence in electricity.
In the days before the world oil crisis which began in December 1973, independence in electricity was not an issue as oil was cheap. But since that time there has been talk of having alternative sources of energy because of increasingly higher prices. The oil-producing countries then played their underselling game and Jamaica dropped its plans of creating alternative energy because of temporarily cheaper oil prices that sky-rocketed to very higher prices once the alternative energy plans were dropped.
In the 1990s the government of the day decided that our light and power company, the Jamaica Public Service, would be best divested to private people. Government could not manage JPS in such a way that there were not constant power cuts caused by breakdowns of the generators. But private owners are only interested in profit, which is one reason for higher prices. Another reason is the rising prices caused by the US Gulf War. From the 1990s the JPS has been using a certain amount of windmill energy. Then came 9/11 in 2001. The United States of America needed alternative sources of energy to fight their war in the Middle East as the oil available was not enough.
In any case, the available oil was being used by both sides of the war to fuel war planes and whatever else. As a result of all this, oil supplies dwindled and as a consequence oil prices went up. This has brought to the fore once again the argument for greater use of alternative energy, and more important its actual implementation to some extent. It is true that we may be stuck with JPS for many more years as suggested by the headline of Mark Wignall’s column on August 16.
But it does appear that despite all the obstacles listed in Wignall’s column, independence in electricity is slowly but surely coming. Already it is being done by using solar, windmill or a combination of both without going through the red tape, trauma and rigmarole and whatever other delays of attempting to share the grid with JPS. Indeed, solar panels on roofs of houses are becoming very common. Is it the JPS that has gone into solar energy with the street lights on the Highway leading into Portmore, St Catherine, or is it the foreign contractors? Incidentally, JPS also has some hydro-electric power plants and has always had them.
My interest in solar, hydro and windmill is partly out of concern for our political and economic independence and partly subjective. I am an asthmatic and am affected by the smoke from oil generators and also from coal energy – which is being marketed as safe for health due to improved technology, but I am not convinced. I am not really in favour of any source of energy that requires burning for its effectiveness.
And I am aware that in Jamaica, just about everyone has a relative who is asthmatic if they do not themselves suffer from the condition. In other words, “is nuff a wi”.
That aside, both coal and Liquid Natural Gas would be imported, if we went that route. So imported cheap coal as well as cheap LNG would lead to a similar dependence on outside supplies leading to the spending of precious foreign exchange.
I believe that coal and LNG are now cheap because the owners of such commodities are attracting buyers. But both might become expensive if we are put in a position where we cannot do without it because we have nothing else. Indeed, I believe that it is the age-old game of undersell, put the competitor out of business and then jack up the price afterwards.
But to politicians, cheaper electricity translates into more votes at election time. Energy minister Phillip Paulwell promotes cheaper energy, even if it is more hazardous and even if it encourages dependency. But has anyone in the People’s National Party guessed that by the time election comes around the cheap coal and cheap LNG may skyrocket to the point where the voters swing away from the PNP? Or is there a plan by Prime Minister Portia Simpson Miller to call a snap election the minute the electricity prices fall?
Our aim should be to avoid any form of energy that increases dependency and detrimental to health. We should instead be looking towards complete independence in electricity, even if the capital outlay in its initial years is costly, especially with regard to solar energy. And with all the hurdles listed by Mark Wignall, the quicker we move on this the better. To our credit, we have started already.
Fear of reduced gasolene supplies sent wholesale prices up US7.7 cents, or 2.4 per cent to US$3.155 per gallon Monday. The average retail price for a gallon of gasolene in the United States (US) rose to US$3.75 on Monday, and it could pass US$3.80 by Labour Day weekend, says Tom Kloza, chief oil analyst at the Oil Price Information Service.
Oil fell Monday because Gulf Coast refineries won’t be using as much in the next few days and damage to key oil and gas operations in the Gulf of Mexico seemed less likely as the storm’s winds aren’t expected to be as strong as some had feared.
Refineries should also escape damage. But refinery owners often shut down operations in advance of a storm. These facilities consume enormous amounts of electric power and generate steam to cook crude oil into gasolene, diesel, jet fuel and heating oil. If a refinery loses power suddenly, operators can’t properly clear the partially cooked oil out of pipes, and restarting the refinery can take several days or even weeks.
If refineries instead conduct what is known as an orderly shutdown, they can restart as soon as the power supply is assured again. The Gulf refineries will likely stay off line for about three days.
SEVERAL REFINERIES CLOSED
About one million barrels per day of refining capacity is expected to be shut down, roughly half of the refining capacity in the potential path of the storm. The US consumes about 19 million barrels of oil products per day.
Marathon Petroleum Corp said it is shutting down its Garyville, Louisiana, refinery. The refinery has the capacity to refine 490,000 barrels of oil per day, making it the third largest refinery in the US. Phillips 66 is closing its 247,000 barrel per day refinery in Belle Chasse, Louisiana. Chevron Corp is keeping its 330,000-barrel per day Pascagoula, Mississippi, plant running as of Monday afternoon.
THE Jamaica Public Service Company (JPS) is reporting an increase in the discovery of sophisticated meter bypass devices used in the illegal abstraction of electricity.
This while the company continues to carry out regular investigations to clamp down on the activity.
Just last week, investigations in separate locations, including the Corporate Area and St Catherine, led to the discovery of sophisticated bypass devices hidden in various parts of houses, including ceilings and kitchen enclosures, the utility said.
Meanwhile, teams from the utility who were operating in sections of Waterhouse, St Andrew, last Thursday, discovered 17 irregularities and removed 84
“We are facing an unprecedented financial challenge,” he told Auto. “At this point, there are four stations in the Corporate Area that are already closed. These are the Total service stations in Harbour View, Half-Way-Tree, shortwood, and Red Hills.”
“I intend to seek audience with the management of the French-owned Total Jamaica to see how we can best resolve the issue,” he said.
When contacted, Paula Duncan, HR manager for Total Jamaica, said she could not comment as the company’s managing director, Dr Michael Faulkner, was off the island.
However, the JGRA president said he has been advised that another two service stations in St Catherine and one in Manchester were on the verge of closure, but refused to name the brands.
Heaven, who met with retailers at the JGRA’s Constant Spring Road headquarters on Wednesday, attributed the current downturn in the gasolene retail business to high operational costs, shrinkage due to temperature changes, reduced gross income (low margins and reduced throughput) and increased bank and credit card charges.
The JGRA president said a raft of new measures would have to be implemented.
“We’ll be moving away from full service to self service. We’ll will have discussions with the unions to see how best we can transition,” he said. “While we [the dealers] develop other income streams, we can divert our employees into other areas of activities rather than dislocate them.”
Heaven said dealers would discontinue accepting Master Cards and Visa Cards at service stations as the bank charges are sometimes greater than the profits made.
“Only the NCB Key Card and debit cards will be accepted,” he said.
Heaven said he would also be seeking a meeting with Dr Peter Phillips, minister of finance, planning and the public service, as well as Anthony Hylton, minister of industry, investment and commerce, regarding an amendment to the Weights and Measurement Regulation.
The JGRA comprises 160 members and celebrated its 61st anniversary in April, 2012.
NEW YORK – Oil prices dropped Friday amid renewed talk about the release of strategic reserves and as traders kept an eye on a tropical storm that could disrupt offshore operations in the Gulf of Mexico.
In London, Brent North Sea crude for delivery in October dived US$1.42 to settle at US$113.59 a barrel.
Rich Ilczyszyn, an analyst at iiTrader, said that New York market sentiment was tense throughout the session and in the last half-hour traders shuffled their portfolios before the weekend.
Weighing on the market was a report by the Petroleum Economist that Western consumer countries could release strategic oil stocks as soon as early September in response to soaring oil prices, citing “several sources.”
“The loss of supplies from sanctions-hit Iran will be used to justify the move, which could unleash as much or more oil as last year’s 60 million barrel stock releases,” the London-based industry journal said on its website.
Gulf of Mexico operators were bracing as Tropical Storm Isaac headed toward Haiti and was on track to threaten oil and gas offshore operations.
BP said it was evacuating its Thunder Horse platform, the world’s largest offshore production and drilling facility.
“With forecasts indicating the storm could develop into a hurricane and enter the eastern side of the Gulf in coming days, we are taking additional steps to respond,” the British oil giant said.
Shell said it was preparing for evacuations of non-essential personnel from platforms and had suspended some drilling operations but that no production had been impacted.
At the risk of revocation of poetic license, allow the liberty to suggest that Shakespeare’s Hamlet, faced with Jamaica’s high energy charges, would have voiced his soliloquy thus:
“To conserve, or to produce: that is the question:
Whether ’tis more arduous on the pocket to suffer
The slings and arrows of outrageous energy bills,
Or to produce from the abundance of sun and wind,
And, by such deed, oppose the tide of oil importation?”
A simple example will explain. If your energy consumption was 500KWh (kilo-Watt Hours) per month (equal to about 42 barrels of oil over five years) and a cost of about $220,000 annually and if, somehow, you had access to a facility of up to $1.5 million to resolve this, what are your options?
A renewable energy system (RE) – solar panels and/or wind turbine using the full $1.5 million could be installed. Or, for about $450,000, the solution could be energy conservation measures (EC) such as changing out bulbs to LEDs, tinting windows, photo cell switches, insulating the roof, use of inverter technology for fridges air-conditioners and practicing stringent energy management etc. If the strictest EC measures are adopted up to 175KWh per month may be saved and so, after expenditure on EC, there would still be an annual electricity bill of about $145,000 for 325KWh (27 barrels of oil over five years) saving $75,000 annually. This is a best case (or wishful thinking) scenario which assumes flat or stable oil prices over the next five years
At the end of EC however, your electricity bill may only be reduced by 35 per cent and so, when you take the inflation in energy charges into account, you may have saved some oil but you could be back to square one financially!
Conservation may not therefore be the answer and so consideration must be given to another option to answer the question “to produce or to conserve”? As it is in so many instances in life, the answer is in the grey area – neither EC nor RE but a combination of both.
If, after EC, consumption is reduced from 500KWh to 325KWh then install a 325KWh RE system and use a portion of the annual savings to carry out the EC measures – a combined approach. An achievable target could be to reduce consumption by an average of about 44KWh annually over five years after commissioning your RE system. Nothing would be done to attract expenditure until the end of the first year after accumulating the savings in electricity bills and the expensive EC measures would be accomplished over years two to five.
After one year the consumption would be reduced from 500KWh to 455KWh. After two years consumption is reduced from 455KWh to 410 KWh while production remains at 325KWh. At the end of five years consumption equals production. At the end of year one, savings is about $140,000 and this increases annually until the end of the fifth year when the electricity bill becomes zero and $220,000 is saved that year and afterwards. In five years the energy rates would have increased and the savings would be more in dollars and cents. Oil used by this combined approach would be about 7 barrels compared to about 27 barrels if only EC were employed but after 5 years of RE plus EC no oil would be used at all!
Excellent from the economic viewpoint but the financial reality is that, the combined approach demands repayment for the $1,500,000 capital cost of the RE system. At the most concessionary rate over 10 years this would be near $192,000/year. Therefore, for the first three to four years (depending on how much energy cost increases), the monthly repayment for the RE system plus energy charges from the electricity provider would significantly exceed the original electricity charge. This reason is that after five years the savings in electricity bills would be about $900,000 of which about one-half would have been expended in EC measures leaving only $450,000 to pay the $960,000 finance charges. But this does not mean that RE is not financially feasible!
Now, if EC only were employed the expenditure would only be about $450,000 which, under the above conditions would attract a finance charge of under $60,000 annually against saving $75,000 each year. Financially feasible but there is still the question of the continued use of oil.
This is a classic case for government intervention – brilliant economic gains (including oil savings and carbon credits) but significant negative financial consequences if attempted under conventional banking practices. The solution is a combination of creative, out-of-the-box initiatives including bulk purchases by the Government and loans with a two to three year moratorium ideally from the petrocaribe fund which appears to have been set up for just such a situation.
And so, back to the revised Hamlet, who, in his time, only appeared to have bigger problems because he was not faced with Jamaica’s high energy charges. Be not be inspired by what he was talking to himself about however, as a means to escape expensive energy regimen.
“Thus independence does make heroes of us all;
And thus the self-generation revolution
Is strengthened with creative thought,
And enterprises of great pith and moment
Will flourish throughout the land
And doff the yolk of fossil oppressors.
Be all their sins remember’d.”
Robert Evans is a practicing engineer.