KINGSTON, Jamaica
Oil plunged suddenly Monday afternoon, dropping more than US$4 per barrel at one point in a dramatic end to an otherwise quiet trading day in New York.
Benchmark crude fell $2.38, or 2.4 per cent, to finish at $96.62 on the New York Mercantile Exchange. That’s the biggest percentage decline since July 23. Oil plunged below $95 per barrel during the sell-off.
Traders were unsure of the cause of Monday’s price drop. Some questioned whether an errant trade or another rumour about a release of oil from the Strategic Petroleum Reserve was to blame.
The White House has been considering tapping the Strategic Petroleum Reserve to stem the rising cost of crude and gasolene. A little over a week ago, Reuters reported the Obama administration was considering a release much larger than the 30 million barrels from last year.
Oil rose 2.7 per cent last week after getting a boost from the US Federal Reserve‘s latest plan to boost the US economy. It held to slight gains above $99 for most of Monday.
Brent crude, which is used to price international varieties of oil, fell sharply as well. Brent lost $2.91, or 2.9 per cent, to $113.77 on the ICE Futures Exchange in London.
– AP
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HEART TO HEART
With Betty Ann Blaine
Tuesday, September 18, 2012
Dear Reader,
There is a monopoly mindset that seems to have taken deep root in the psyche of certain individuals and organisations in Jamaica, but perhaps more detrimentally inside the corridors of government.
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DAVIS… a properly regulated monopoly is perhaps the best option for Jamaica |
That monopoly mindset reared its head a few weeks ago when the senior adviser to the prime minister, Dr Carlton Davis, was quoted as saying that a properly regulated monopoly was perhaps the best option for Jamaica – the statement made within the context of the monopoly licence currently held by the light and power company, the Jamaica Public Service Company.
Dr Davis’s statement sent shock waves across the country for more reasons than one. First, it breached acceptable protocols in that it usurped the portfolio of the Minister of Energy Phillip Paulwell, who should have been the person to speak on such matters. Second, Dr Davis’s comment was diametrically opposed to the stated public position of the minister of energy who has been heralding the cause of competition and bemoaning the untenable nature of the current monopoly arrangement with the JPS. Third, Dr Davis’s position as head of the LNG (Liquified Natural Gas) Steering Committee represents a de facto conflict of interest inasmuch as it reflects the very same position of the monopoly provider with a potential interest in the LNG market.
I believe that the question must be asked: “Whose side is Dr Davis on?” In addition, as he is senior adviser to the prime minister, are we to deduce that any advice to Mrs Simpson Miller regarding the JPS would favour the retention of that company’s monopoly status?
My question to Dr Davis is, “Monopoly best” for whom? The senior adviser should be asked to delineate how the JPS monopoly has been “best” for Jamaican consumers.
The litany of complaints against the JPS is as extensive as it is long-standing. From overbilling, back billing, connections, disconnections and reconnections, Jamaican consumers have continually expressed their disgruntlement with the costs and services offered by the light and power company.
In fact, the formation of the consumer advocacy group, CURE (Citizens United to Reduce Electricity), was as a direct response to the insatiable menu of complaints against the JPS, particularly the cries that went up about the new digital meters that have been introduced for the first time in Jamaica.
And householders were not the only complainers. One of the sectors affected most severely by the high cost of electricity is the country’s small and medium-sized businesses. Many have already collapsed and some of those remaining are teetering on the brink of insolvency.
Separate and apart from Jamaica’s particular and precarious energy situation, the notion of perpetuating monopolies is fast becoming a thing of the past, but there are those amongst us who simply don’t get it.
By definition, a monopoly is a market with only one seller – where a business is the only provider of certain goods or services. Anyone who has ever played the popular game, Monopoly, would have a pretty good idea of what a monopoly is. In the board game, one of the goals is to own all of the properties of a particular colour, or in economic terms, to have a monopoly on properties of a particular colour. It is also the case that when a player has a monopoly on a set of properties, the rents on those properties go up. This is also a realistic feature of the game since it’s generally true that monopolies lead to higher prices.
The general agreement is that monopolies are bad for consumers. Under a monopoly, the producer is assured of his profits and his inducement to introduce innovations is unlikely. He is not under any competitive urge to introduce changes or increase output. According to one economist, “The monopolist functions from a position of privilege. He works from behind a protective shell. If capitalism stands for constant changes which provide vitality to the capitalist system, monopoly cannot sustain it.”
In 1997, New Yorkers, faced with mounting increases in their electricity bills, moved to dismantle the monopoly held by the light and power company, Con Edison. The plan split Con Edison into three companies. “One will own power plants and compete on the wholesale level with other generators. A second will be a power retailer, buying power from wholesalers and competing with other retailers for customers’ business. The third will maintain monopoly ownership of the wires that link customers to the state’s power grid and will charge competing retailers for the use of the “network”. Although it was not a perfect plan, one official described it as “a floor we can build on”. Consumers in New York experienced an immediate 10 per cent cut in electricity rates as a result of the dismantling of the monopoly.
Here at home, dismantling the monopoly mindset appears to be a critical pre-requisite, but one that appears to be inevitable.
With love,
bab2609@yahoo.com
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A Nissan Leaf electric car being charged. – Contributed
SEATTLE (AP):
If you believe Bob Lutz, one of the auto industry’s best-known executives, come mid-century we’ll all be driving around in lightweight electric cars that can go hundreds of miles between charges.
Electric-car technology is improving rapidly, he said, while internal-combustion engines are as good as they’re ever going to get.
Lutz, developer of the Chevy Volt, was at Seattle Centre, USA, on Friday for a conference called ‘Beyond Oil’ – an event that showcases green and high-tech transportation advances. Sponsored by local think-tank Cascadia Centre, the city of Seattle, VIA Motors and others, the conference drew transportation execs, state officials and electric-car enthusiasts.
They showed off or peered inside an assortment of energy-efficient vehicles on display – everything from plug-in Nissan Leafs to an aerodynamic Viking X car built by students at Western Washington University and something called a Firefly, for use by parking enforcers and security patrols.
For now, electric cars remain a niche market, with price being a huge factor – typically US$35,000 to US$40,000 for a basic passenger car.
Lutz guessed that unless electric cars can be priced as cheaply as gasolene-powered cars, only about five per cent of the public will pay extra for green cars. For now, he said, the most cost-effective use for electric motors is in trucks and delivery fleets that burn lots of gas.
He’s a board member at VIA Motors, which showed off a white van brought from Utah. Like a Volt, it runs all-electric during a normal workday, with gasolene as backup power for trips longer than 40 miles.
VIA plans to deliver 2,000 of the vehicles to government and business fleets around the country next year.
More mainstream
Still, plug-in cars have become more mainstream since 2006, when scientists and amateur mechanics at the Beyond Oil conference here spent time explaining how to retrofit a hybrid Prius so it could be plugged into a regular household power socket. Since then, Nissan, Chevrolet, Toyota, Ford and Mitsubishi have all developed plug-in models.
The next big advance? The experts say it will be automobile bodies made of lightweight carbon fibre that will help cars run on less energy, much like the Boeing Dreamliner.
That, in turn, will enable cars to be propelled by smaller batteries and powertrains, according to Amory Lovins, chief scientist of the Rocky Mountain Institute, which does research into efficient technologies.
A carbon-built auto industry is already getting under way, Lovins said, noting that carbon fiber made in Moses Lake is being sent to BMW in Germany, and a company called Fiberforge is negotiating with US automakers about how to build carbon-fibre vehicles.
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Cost Analysis of the 4 most popular pool pumps in the Jamaican market.
This analysis hopes to provide the readers with a better understanding of the costs associated with the purchase of varying pool pumps. This study takes into account the approximate initial cost of each pump along with the installation expenses and electrical costs associated with the operation of the pump over a five (5) year period.
Why choose an Inverter Pool Pump?
Solar Buzz Variable Speed Inverter pool pumps are enjoying rapidly increasing popularity in the swimming pool industry in Jamaica. These pumps offer many benefits over traditional pool pumps since they regulate the speed of the electric motor. This is done by the pump controlling the amount of power delivered to the motor
Oil rose for a second day on the back of the Federal Reserve‘s aggressive plan to boost the US economy. More gains are expected, but that might not translate into a spike in prices at the gas station.
After earlier topping US$100 for the first time since May, benchmark oil was up 72 cents to US$99.03 per barrel in midday trading in New York.
Analysts say the Fed’s plan to keep interest rates at extraordinarily low rates into 2015 gives investors the incentive to put their money into riskier assets like stocks and commodities. The expectation that the Fed’s moves will help the economy should also boost oil prices because demand for energy should pick up.
But the higher oil and other commodities rise, the greater the chance they’ll curtail consumer spending in an economy where unemployment is stuck above 8 per cent. That’s why analysts think the gains should be limited.
“Higher commodity prices are going to put a dent in spending as they give consumers pause when they’re spending more at the (grocery) store or the gas pump,” said Andrew Lipow of Lipow Oil Associates in Houston.
An increase in the price of oil usually means a rise in pump prices. But fundamentals favor a decline in the price of gasoline, said Tom Kloza, chief oil analyst at Oil Price Information Service. The end of summer driving season means less demand for gas. And refiners are about to switch to making winter blends, which are cheaper than summer blends formulated to cut down on pollutants.
Kloza thinks gas might rise a penny or two from its current average of US$3.87 per gallon, but should decline during the period between late September and Thanksgiving. He sees gasoline falling to between US$3.50 and US$3.75 per gallon in October.
The wild card for oil is the unfolding unrest in the oil-rich Middle East. Protesters angry over an anti-Muslim film ridiculing the Prophet Muhammad began assaulting a string of US embassies in the region four days ago.
Brent crude, which is used to price a number of international types of oil, rose 74 cents to US$116.62 in London. Kloza said an escalation in the Middle East situation could push Brent up as high as US$125 per barrel and the US benchmark as high as US$120. That would limit the decline in gasoline prices, he said.
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Customers of the Jamaica Public Service Company are to see a double digit increase in the cost for electricity this month.
The higher charge comes on the back of higher oil prices and the sliding dollar.
http://rjrnewsonline.com/business/double-digit-increase-in-the-cost-of-electricity-in-september
JAMAICA is blessed to be refreshed and cooled all year by winds mostly coming in from the Caribbean Sea. Yet we make virtually no use of the potential for wind generated energy.
Today, Jamaica gets 95 per cent of its energy from imported oil and 0.1 per cent from wind. Wind-generated energy accounts for less than charcoal and fuel-wood, which account respectively for 0.6 per cent and 1.9 per cent. Solar energy our most abundant and inexhaustible energy source provides mostly hot water in some hotels, hospitals and private homes. Solar energy helps in a small way to save on electricity and imported oil.
This is almost exactly where the country was when the first oil crisis of the early 1970s tripled the bill for imported oil in a one-year period, terminating the economic growth of the 1960s and igniting the implosion of the Jamaican economy from which it has never recovered.
The need to finance the oil import bill which kept escalating with each rapacious increase by the merciless oil producers is the root cause of our external debt. Given the dependence on oil and the cost to the economy it was reasonable to expect all the Governments since the mid 1970s to make reducing dependence on oil a priority.
If diversification from oil to alternative energy sources was a priority, nothing meaningful has been done about it. We contend that the objective of developing alternative energy sources has never been seriously and consistently pursued. The explanation for this manifest failure lies in the willingness for self-delusion by means of hoped-for panaceas.
The first panacea was that there is oil and/or gas in the offshore waters of Jamaica. This figment of optimistic geologists has made the rounds several times. Next panacea was coal, which is plentiful and relatively cheap from many sources across the world. This has been mooted ad nauseam with a different proposed supplier each time ranging from Colombia to China. The latest miracle solution is LNG which members of the Portia Simpson Miller Administration seem disagree on in their public statements.
While we are waiting to get to the long Promised Land, Jamaica must move aggressively on two alternative sources of energy which are local and inexhaustible. These are solar and wind; with the former as a means of saving on imported oil and the latter as a means of reducing dependence on oil and reducing the cost of generating electricity. No one disagrees that lower electricity costs would be good for consumers, producers and exporters.
To date, Jamaica has developed only one of several coastal sites suitable for wind-generated energy. This successful Wigton Windfarm is a wholly-owned subsidiary of the Petroleum Corporation of Jamaica located in Manchester, a parish with two other suitable but undeveloped sites.
We suggested that the Members of Parliament give up generating hot air in Gordon House and take a trip in a single bus (avoid 63 SUVs making the trip), tour the Wigton Windfarm and learn what the cool breeze of the Caribbean can do. If they understand the benefits of wind we will, hopefully, have less hot air on energy, less energy devoted to ventilating and more energy put into implementation.
Jamaica is a land with limited wood and water, but it is a land of unlimited wind and sun. The cool breeze and the warm sun are not just there for tourists.
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Petroleum Company of Jamaica (Petcom) has entered into a dealership arrangement with the family of the late Lloyd ‘LG’ Brown to operate a service station at the intersection of Dunrobin and Constant Spring roads in St Andrew.
It’s part of the state-owned gasoline retailer’s strategy to procure a greater share of the overall petroleum retail market of which it now controls only 12 per cent. Petcom increases its service station chain to 29 with the deal.
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Acquisition of the former LG Service Station puts Petcom in a position to profit at one of the major intersections in St Andrew (Photo: Naphtali Junior) |
“Petcom is currently on a drive to expand our service station network and therefore we have been actively looking for strategic locations, particularly in the Corporate Area,” said the company’s general manager, Courtney Lawes.
“Our new location, Petcom Dunrobin, is not only a popular service station but it has the additional advantage of being situated in a high-traffic area,” said Lawes.
Government figures show that three major multinational oil companies
ATTORNEY-AT-LAW Hugh Wildman on Tuesday urged the Government to use its 19 per cent share in the Jamaica Public Service (JPS) to acquire the electricity grid from the light and power company in an effort to accommodate energy providers who would want to enter the market.
Wildman, the attorney for the group of persons who had the Supreme Court struck down the exclusivity aspect of the JPS’s 20-year all-island licence, said that the grid should be in State control in order for Jamaica to benefit from affordable energy.
“Persons are expressing an interest in providing energy. What the Government needs to do now is use its 19 per cent share to acquire the grid from the JPS to allow other players to come on board,” said Wildman, who was speaking at the Kiwanis weekly luncheon at the Wyndham Hotel in New Kingston.
Wildman said that there are new players out there with better technology that would benefit consumers.
“Without cheaper energy Jamaica is going nowhere but down. Jamaica deserves better,” Wildman said.
The way was made clear for other players to enter the energy market when Justice Bryan Sykes on July 30 struck down the exclusivity aspect of JPS’s licence, issued by the energy minister in 2001. At the same time though, Sykes said that the all-island aspect of the licence was valid.
JPS has since appealed the ruling. So too have Dennis Meadows, Betty Ann Blaine and Cyrus Rousseau, the group of people who have brought the action against the JPS.
The claimants are asking the Court of Appeal to declare the licence invalid. The claimants are set to argue that only one licence was issued to the JPS and that it cannot be divided to make one part valid and another part invalid, as was done by the Supreme Court. The claimants are contending that the Electric Lighting Act prevents an entity from providing electricity across the entire island.
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