Former Contractor General Greg Christie has accused Audley Shaw, opposition spokesman on finance, of a “disregard and total lack of respect for the rule of law” as well as an “unbridled” willingness to mislead the nation.
Christie was responding yester-day to comments made by Shaw and reported in
The local oil refinery Petrojam, which has served Jamaica for a generation, should be shut down unless negotiations with the new Venezuelan government result in expansion plans, according to Energy Minister Phillip Paulwell.
The plant expansion has been delayed for eight years.
“In relation to Petrojam, this is a project that is well delayed. If Petrojam is not upgraded and expanded, we will have to shut it down. It is as simple as that,” Paulwell said at a press briefing at the Office of the Prime Minister on Thursday in Kingston.
“So we are awaiting the settling in of the new government and we were promised that as soon as that occurs, there will be a very important meeting with the players.”
Petrojam, the company, was incorporated 31 years ago. Government owns 51 per cent of the plant and Venezuela has the remaining 49 per cent since 2006.
Petrojam is projected to earn US$21.2 million net profit for this fiscal year ending April 2014 on US$1.9 billion of revenues. The capital expenditure for the year is projected at US$26.9 million.
THE start date for the modernisation of Jamaica’s oil refinery, Petrojam, appears to have been brought to the front of the queue of Venezuelan expansion projects. Already delayed by five years, the project failed to take off due to the inability of the owners SOMETHING is drastically wrong with this country. We have been informed by the best of our scientific minds that close to half of us are mentally unstable and yet we have never considered that among that 50 per cent may be politicians. We seem to be people who mean well, but somehow don’t want to do well. In the time of the last administration, a lot of noise was made about transforming energy from expensive oil-burning to the interim stage of LNG. It wasn’t exactly earth-shattering, but it indicated that we were on the right track towards making our country more competitive in the region and giving our people a chance to make their lives more meaningful. As the talk of moving to liquid natural gas (LNG) gained momentum, so it seemed did the savvy of those who made up the last JLP administration. First, the Office of the Contractor General pushed its way to the front and the JLP Government wilted as the people rejoiced. As one listened to “the people” it must have seemed that there were many scallywags stalking the halls of JLP party central. An election was later held and the JLP was soundly rejected. Close to one year later, the only sound voice in the present PNP administration seems to be that of PNP minister, Phillip Paulwell. We have all accepted the fact that if we do not configure our energy-producing sector to move away from heavy oil-burning, we will remain in the backwoods forever. That we know. In the last JLP administration, one which made its name through making Jamaicans even more distrustful of politicians than they were before, once the matter of LNG arose, all eyes lit up! Too many people were making too much money, we thought. And even if we did have the full picture in our minds, it must have meant that we the people were being shafted. Or so we imagined. In the end, a weak JLP administration bowed to the dictates of political and public pressure and the entity that had won the concession for introducing LNG to Jamaica, Exmar, and its local connection were scuttled. The PNP rejoiced. With a PNP administration that is close to one year old and is generally suffering from “old-age” in so short a time, there have been a few areas which have attracted my attention, and it seems the attention of the general public, if word at street level still has any credence. I speak, of course, of the energy ministry. First, there have been the efforts in levelling the playing field in the mobile phone market. Somehow that seems to be on the reverse as one big telecoms player has been playing grand games with the public. Second, a convenient and totally indiscriminating public has bought the idea that that particular telecoms entity is deeply in love with them. That said, Minister Paulwell’s strident efforts to bring about a lowering of the energy bill to ALL in this country must be lauded. First, there was the thought among many that the LNG project was going to be government-driven and run by a historically proved inefficient government, especially one dominated by the PNP, an administration that has a history of being anti-business and too socialist-oriented. Second, as the world turns, and especially in Jamaica, corruption was the big bugbear. The present arrangement which takes the LNG supply project totally out of the hands of government, once it had reached the stage of deciding the directions of the energy policy of the country is, to me, the best compromise. It is not the perfect one, the one that I would have preferred – that of reverting to awarding the LNG bid to Exmar and its local partners. To me, however, Minister Paulwell has committed his ministry and government to the JPS lowering energy rates by 50 per cent by the year 2015, a time when the people of this country will still have the chance to make a decision on the direction of his government. Let us face it – there is not much that the Portia Simpson Miller administration can feed to the people as pap at this time. It won the 2011 elections on wild and reckless promises and mostly on the fact that it placed the populist PM Simpson Miller out front to play her song-and-dance routine to the people. Since the win, her song has died and her dance has failed to move us, but in the bleachers, the political watchers know that the Opposition JLP has a next-to-impossible chance of regaining all that was lost and given away by the abysmal and indecisive leadership of Bruce Golding. Seaga was dead right! The IMF analysis of economic trends for the next five to 10 years makes for bleak reading. Jamaica has lived most of its post-independence life as a mendicant nation where our prime ministers earn their kudos and clout at the polls for selling to the people their potential for borrowing the most. To a people of low-information voters and aggressive businessmen who are always seeing in such an arrangement an opportunity to make an extra buck, that simply feeds into the idea that government in this country must not be a facilitator as much as it ought to be a feeding tree. The people rely on this, especially whenever a PNP administration is in power, and big businesses know that as much as they hate to do business during a PNP administration, if they want to survive, the ball has to be kicked back and forth. Again, Seaga was right. In an administration filled with too many old socialists, Phillip Paulwell is a leading light in the effort to draw the PNP into the new 21st century. Finance Minister Peter Phillips has long shucked off his socialist leanings as the rigours of the current economic climate present themselves to him in a most unkind light. He has to face the harsh reality of an IMF programme in danger of being derailed by the historical politics of the PNP. The negotiations need the full cooperation of all inputs from the various ministries such as the energy and commerce ministries. We all know that the prime minister is out to lunch, so not much can be expected there more than a tip to the poor waitress, a hug and a kiss. Poor “she”. Keep doing your thing, Minister Paulwell. Who knows, maybe even the most inflexible leader can be brought fully into the 21st century.
SOMETHING is drastically wrong with this country. We have been informed by the best of our scientific minds that close to half of us are mentally unstable and yet we have never considered that among that 50 per cent may be politicians. We seem to be people who mean well, but somehow don’t want to do well. In the time of the last administration, a lot of noise was made about transforming energy from expensive oil-burning to the interim stage of LNG. It wasn’t exactly earth-shattering, but it indicated that we were on the right track towards making our country more competitive in the region and giving our people a chance to make their lives more meaningful. As the talk of moving to liquid natural gas (LNG) gained momentum, so it seemed did the savvy of those who made up the last JLP administration. First, the Office of the Contractor General pushed its way to the front and the JLP Government wilted as the people rejoiced. As one listened to “the people” it must have seemed that there were many scallywags stalking the halls of JLP party central. An election was later held and the JLP was soundly rejected. Close to one year later, the only sound voice in the present PNP administration seems to be that of PNP minister, Phillip Paulwell. We have all accepted the fact that if we do not configure our energy-producing sector to move away from heavy oil-burning, we will remain in the backwoods forever. That we know. In the last JLP administration, one which made its name through making Jamaicans even more distrustful of politicians than they were before, once the matter of LNG arose, all eyes lit up! Too many people were making too much money, we thought. And even if we did have the full picture in our minds, it must have meant that we the people were being shafted. Or so we imagined. In the end, a weak JLP administration bowed to the dictates of political and public pressure and the entity that had won the concession for introducing LNG to Jamaica, Exmar, and its local connection were scuttled. The PNP rejoiced. With a PNP administration that is close to one year old and is generally suffering from “old-age” in so short a time, there have been a few areas which have attracted my attention, and it seems the attention of the general public, if word at street level still has any credence. I speak, of course, of the energy ministry. First, there have been the efforts in levelling the playing field in the mobile phone market. Somehow that seems to be on the reverse as one big telecoms player has been playing grand games with the public. Second, a convenient and totally indiscriminating public has bought the idea that that particular telecoms entity is deeply in love with them. That said, Minister Paulwell’s strident efforts to bring about a lowering of the energy bill to ALL in this country must be lauded. First, there was the thought among many that the LNG project was going to be government-driven and run by a historically proved inefficient government, especially one dominated by the PNP, an administration that has a history of being anti-business and too socialist-oriented. Second, as the world turns, and especially in Jamaica, corruption was the big bugbear. The present arrangement which takes the LNG supply project totally out of the hands of government, once it had reached the stage of deciding the directions of the energy policy of the country is, to me, the best compromise. It is not the perfect one, the one that I would have preferred – that of reverting to awarding the LNG bid to Exmar and its local partners. To me, however, Minister Paulwell has committed his ministry and government to the JPS lowering energy rates by 50 per cent by the year 2015, a time when the people of this country will still have the chance to make a decision on the direction of his government. Let us face it – there is not much that the Portia Simpson Miller administration can feed to the people as pap at this time. It won the 2011 elections on wild and reckless promises and mostly on the fact that it placed the populist PM Simpson Miller out front to play her song-and-dance routine to the people. Since the win, her song has died and her dance has failed to move us, but in the bleachers, the political watchers know that the Opposition JLP has a next-to-impossible chance of regaining all that was lost and given away by the abysmal and indecisive leadership of Bruce Golding. Seaga was dead right! The IMF analysis of economic trends for the next five to 10 years makes for bleak reading. Jamaica has lived most of its post-independence life as a mendicant nation where our prime ministers earn their kudos and clout at the polls for selling to the people their potential for borrowing the most. To a people of low-information voters and aggressive businessmen who are always seeing in such an arrangement an opportunity to make an extra buck, that simply feeds into the idea that government in this country must not be a facilitator as much as it ought to be a feeding tree. The people rely on this, especially whenever a PNP administration is in power, and big businesses know that as much as they hate to do business during a PNP administration, if they want to survive, the ball has to be kicked back and forth. Again, Seaga was right. In an administration filled with too many old socialists, Phillip Paulwell is a leading light in the effort to draw the PNP into the new 21st century. Finance Minister Peter Phillips has long shucked off his socialist leanings as the rigours of the current economic climate present themselves to him in a most unkind light. He has to face the harsh reality of an IMF programme in danger of being derailed by the historical politics of the PNP. The negotiations need the full cooperation of all inputs from the various ministries such as the energy and commerce ministries. We all know that the prime minister is out to lunch, so not much can be expected there more than a tip to the poor waitress, a hug and a kiss. Poor “she”. Keep doing your thing, Minister Paulwell. Who knows, maybe even the most inflexible leader can be brought fully into the 21st century.
Lower light bills not coming anytime soon Arthur Hall, Senior News Editor The Sunday Gleaner has now confirmed that the Portia Simpson Miller-led administration will announce plans to abandon its long-stated intention to introduce liquefied natural gas (LNG). After years of planning and millions of dollars in expenditure, the Simpson Miller administration has decided that it just cannot afford the cost of setting up the infrastructure and other requirements for the introduction of LNG. Energy Minister Phillip Paulwell is scheduled to make that announcement early next month, but government sources say a new plan could be announced at that time as Paulwell continues his desperate push to reduce electricity bills. “I can say that the numbers are not adding up,” a government source told The Sunday Gleaner late last week. “As you would have suspected, we knew this was a likely outcome for some time now and had begun to support the offtakers (electricity and alumina producers) to rev up plans ‘B’ and ‘C’, and they are so doing,” added the source who asked that his name be withheld. It is expected that plans ‘B’ and ‘C’ would see the Jamaica Public Service Company (JPS) being allowed to establish the LNG infrastructure and source the gas for the multibillion-dollar plant it plans to construct in Old Harbour, St Catherine. The JPS would also sell LNG to the alumina producers which have long argued that the high price of electricity in Jamaica makes production uncompetitive. “We have long told the Government that the introduction of LNG should be private sector-driven, but the People’s National Party administration before it lost the 2007 general election was adamant that it should be state-controlled and the Bruce Golding-led Jamaica Labour Party government followed that path,” said a source in the energy sector last week. “If this was a private sector-led drive, EXMAR would have started construction in 2009 and, by this year or early next year, the country would have LNG and lower electricity bills,” added the source who asked not to be named. Last year, The Gleaner first reported that a November 2010 report by a World Bank-recommended team of consultants suggested that the Government put on hold its plan to introduce LNG. uncertainty with project At the time, the consultants stated that there was ambiguity and uncertainties surrounding several aspects of the project which could make it a financial disaster for the Government. According to the consultants, a focused economic and financial feasibility study should be completed quickly before a final design specification for the Floating Storage and Regasification Unit and pipeline system. The consultants also warned that the Government could be exposed to great financial risk for future gas purchase. But then Energy Minister James Robertson and members of the LNG Steering Team scoffed at the consultants’ report as they responded to the queries. “That (consultants’) assessment report raised several valid questions of the project, for which comprehensive answers were provided,” Robertson told The Gleaner at the time. THE GENERAL election has been won, state power now rests with the People’s National Party (PNP), and Phillip Paulwell no longer appears to be excited about ensuring We have all be watching the government’s LNG plan crumble faster than the Jamaican roads but today’s news regarding Promigas is significant. Promigas is who the government named as the savior of Jamaica’s energy problems by making them the preferred bidder for an LNG project here. But AEI the parent electricity company of Jamaica Private Power is selling its majority stake in Promigas “to reorganise the company around a smaller business focused on power generation.” Hmmm, sounds like they have figured out that the US$1billion it will take to even get Jamaica on the LNG track might be a risky idea. Or maybe ‘smaller business focused on power generation’ means its going with the rest of the world and looking ways to produce cheap green energy through solar etc. Really all that has happened is that thankfully the details of this entire racket have come to light and for once hopefully the Jamaican people will not be sold out for a cash grab. Anyway the most recent 3 strikes for LNG are below but as we know there are many more. Its Wednesday so I will see you at the Jamaica Contender tonight taking my mind off the price of oil (pssst $100 a barrel and Jamaica uses an energy mix of of over 90% diesel fuel. Fuel comes from oile but don’t tell anyone cuz government keeping that science a secret). Strike 1 – Government is yet to receive commitments from potential off-takers of LNG, including JPS and the island’s alumina refineries that they will use the fuel. (fast ball) Strike 2 – Removal of the LNG project from the control of energy minister, James Robertson, transferring it to Office of the Prime Minister under Zacca’s guidance. (breaking ball into Robertson’s nuts) Strike 3 – The Government’s plan to introduce liquefied natural gas (LNG) has been engulfed in even more controversy in the wake of a damning November 2010 report by a World Bank-recommended team of consultants. While the consultants acknowledged that LNG was the right choice for the nation over coal, they have suggested to the Bruce Golding administration that it should put its plan on hold until the middle of this year while the Office of Utilities Regulation (OUR) presents a new regulatory framework. However, the local LNG team is adamant that it is on the correct course and the energy ministry yesterday argued that while some of the changes recommended by the consultants should be implemented, others are to be discarded as they were not sufficiently informed and did not capture all the information gained by the local officials. With the LNG project now being driven from the Office of the Prime Minister, the team from the energy ministry has sought to convince Golding that it has so far been heading in the right direction. “That (consultants) assessment report raised several valid questions of the project, for which comprehensive answers were provided,” Energy Minister James Robertson said in a release yesterday. “Further yet; audits, operational reports and reviews from respected local and international consultants on a sustained basis, inclusive of taking on board the opinions of our independent development partners, continue to be undertaken,” Robertson added. The energy minister did not release the report of the consultants but The Gleaner has obtained an extensive response provided by the local LNG team, which operated out of the Petroleum Corporation of Jamaica and the energy ministry. While dealing extensively with many of the concerns raised by the consultants, the local team did not comment on fears about the financial viability of Exmar Consortium, which has already been selected for a lead role in the project. Parallel moves a must However, the local team was strident as it dismissed the consul-tants’ call for the project to be placed on hold. The local team argued that the development of a regulatory framework and the implementation of final rules must be done in parallel with the ongoing efforts to identify the offtakers, develop the commercial framework and land LNG. The team also scoffed at the claims by the consultants that there was ambiguity and uncertainties surrounding several aspects of the project which could make it a financial disaster for the Government. According to the consultants, a focused economic and financial feasibility study must be completed quickly before a final design specification for the Floating Storage and Regasification Unit and pipeline system. But the local team argued that the pipeline would be fully regulated by the OUR while the other areas are being addressed. The local team was most dismissive of the consultants’ claim that the Government could be exposed to great financial risk for future gas purchase. This the consultants linked to the failure of the Government to obtain a letter of intent to purchase from the bauxite company Jamalco and its inability to obtain a purchase commitment from the Jamaica Public Service Company. “This statement is incorrect. The Government of Jamaica will have no financial responsibility for gas purchases,” stated the local LNG team in a retort. According to the local team, while it remains optimistic that Jamalco will participate in phase one of the LNG project, even without Jamalco, the threshold volume would be sufficient to support the venture. Christopher Zacca, the head of the government team leading the LNG project, has so far refused to comment on the individual concerns raised by the consultants. Government departments and institutions accounted for up to $11 billion, or approximately $880 million monthly, in electricity costs last year – nearly 15 per cent of the total amount of electricity consumed annually in Jamaica. Prime Minister Bruce Golding and Energy and Mining Minister James Robertson, who disclosed this information during a workshop staged last Thursday at the Knutsford Court Hotel in New Kingston, cited government agencies and departments, as well as public schools and hospitals, among the primary consumers. Oil accounts for nearly 40 per cent of the country’s total import bill. Golding said Jamaica, which has one of the world’s highest energy-intensive ratings, was also one of the most inefficient users of electricity. “We use 20,000 BTUs (British thermal units) to produce one US dollar of output of value. The global average is less than quarter of that. “We waste energy, and Jamaica’s economic future cannot be secured unless we address this problem in a fundamental way,” the prime minister lamented. Golding said the Government, through the energy and mining ministry, had developed four significant platforms – the national energy, national renewable energy, national energy from waste as well as the energy conservation and efficiency policies – to address the issue. However, the prime minister acknowledged that Jamaica experienced several challenges to fulfilling some objectives in the national energy policy, which called for increasing the mix of renewable energy sources. “Right now, we’re somewhere near five per cent, and the policy requires we get up to 10 per cent by 2015 and 20 per cent by 2030. That’s ambitious and particularly challenging,” Golding admitted. He said the challenges were even more pronounced when analysis examined Scandinavian countries, which were environmentally conscious and advanced in their use of renewable energy sources, albeit paying more for it. “Renewable energy is not always cheaper energy, but they are prepared to pay more in order to get energy that is clean, green and sustainable. Our consumers can’t be asked to bear that burden, and that’s part of our problem,” Golding said. Conservation important The prime minister added that while any search for alternative energy sources also had to be cheaper – in order for them to be viable – conservation was important to sustainable energy management. Golding accused Jamaicans of being price-insensitive when it came to energy conservation, citing motorists’ refusal to change fuel-consumption patterns during 2008 when oil prices rose as high as US$148 per barrel. The Government’s 10 per cent GCT charge on the electricity bills of persons consuming more than 200 kilowatt-hours monthly in order to make up revenue shortfall had little effect on consumption patterns. “The information I have from the JPS (Jamaica Public Service Company – the monopoly electricity provider) is that they haven’t even blinked. They pay the 10 per cent and consume the same amount of electricity,” said Golding.
PAULWELL… leading light to draw the PNP into new 21st century
PAULWELL… leading light to draw the PNP into new 21st century
Prime Minister Portia Simpson Miller and Energy Minister Phillip Paulwell.-file
