jamaica Archives - Page 10 of 79

Jamaica To Do Its Share Of Climate-Change Mitigation

January 28, 2016 Webmaster

Jamaica is to reduce greenhouse gas emissions by the equivalent of 1.1 million metric tonnes of carbon dioxide per year by 2030, as part of its global commitment to take climate-change mitigation action.

To bring this about, the island – as reflected in its nine-page Intended Nationally Determined Contributions (INDCs) document to the United Nations Framework Convention on Climate Change – has undertaken to implement energy policies that ensure the island:

– uses energy wisely and aggressively to pursue opportunities for conservation and efficiency;

– has a modernised and expanded energy infrastructure that enhances energy generation capacity and ensures that energy supplies are safely, reliably and affordably transported to homes, communities and the productive sectors on a sustainable basis; and

– achieves its energy resource potential through the development of renewable energy sources by increasing their share in its primary energy mix of 20 per cent by 2030.

Such policies are also to ensure that government agencies and ministries are a model/leader in energy conservation and environmental stewardship, and that the island has a well-defined and established governance, institutional, legal, and regulatory framework.

Fully implemented energy polices need, too, to ensure that private industry embraces “efficiency and ecological stewardship to advance international competitiveness and to move towards a green economy”, the document said.

The Gleaner

Alternative Energy Climate Change Crude Oil Electricity Energy Saving Government News Oil

Government Moves Full Throttle On Climate Change Policy

January 28, 2016 Webmaster

With the ink now dry on Jamaica’s Climate Change Policy Framework and Action Plan, the island’s Climate Change Division (CCD) is to drive the realisation of its goals.

“We never did have a launch of the policy framework per se, but Minister (of Water, Land, Environment and Climate Change Robert Pickersgill) did speak to [its completion]. The Climate Change Division will now drive the implementation,” Colonel Oral Khan, the ministry’s chief technical director, told The Gleaner.

Khan added that the publication of the policy was expedited last September, following the inclusion of comments from public consultations done, final approval from Cabinet and some three years of work.

“Some of the priorities highlighted include the mainstreaming of climate change in policy and development planning frameworks, and we have started that process,” noted CCD head Albert Daley.

According to Daley, “There is a 2015 to 2018 framework which highlights the priority actions to be done and who is to do them, timelines, and so on.

“We have been working closely with the Planning Institute of Jamaica to ensure climate-change concerns are reflected in the actions for the various sectors,” he noted.

WORK IN PROGRESS

As things stand, there are a number of adaptation and mitigation sector plans on which work has been ongoing.

The policy was made possible through the Government of Jamaica/European Union/United Nations Development Programme Climate Change Adaptation and Disaster Risk Reduction project, funded by the EU under the Global Climate Change Alliance.

In addition to facilitating and coordinating the national response to the impacts of climate change and promoting low-carbon development, the 36-page policy is to:

– mobilise climate financing for adaptation and mitigation initiatives; and

– improve communication at all levels on climate-change impacts and also adaptation- and mitigation-related opportunities so that decision makers and the general public will be better informed.

This is while mainstreaming climate-change considerations and supporting those institutions, including research entities that would enable that process.

The Gleaner

Biodiesel Crude Oil Electricity Government News Oil

Jamaica Stands To Lose If World Bank’s Oil Price Prediction Holds

January 27, 2016 Webmaster

While Jamaica has spent US$20 million (about J$2.3 billion) to hedge against the risk of a sharp increase in oil prices, the World Bank has lowered its forecast for crude oil to US$37 a barrel from US$51 a barrel in its October 2015 predictions.

The bank, in its latest commodity markets outlook, said that oil prices fell by 47 per cent in 2015 and are predicted to decline, on an annual average, by another 27 per cent this year.

If the World Bank’s prediction prevails, it would mean that Jamaica would take a hit, given that its hedging contract, with a strike price averaging US$66.74 per barrel, started in June 2015 and is set to expire in about September this year.

Lower oil prices, as well as the ongoing economic adjustment under Jamaica’s economic support programme with the International Monetary Fund (IMF), have been attributed to the macroeconomic stability which the fund’s executive board reported last month has continued to strengthen.

Those factors have also been credited for the inflation and the current account deficit falling to historical low levels.

In the report released yesterday, the World Bank said the lower forecast for crude oil reflects a number of supply-and-demand factors.

These include sooner-than-anticipated resumption of exports by the Islamic Republic of Iran, greater resilience in United States production due to cost cuts and efficiency gains, a mild winter in the Northern Hemisphere, and weak growth prospects in major emerging market economies, according to the World Bank’s latest quarterly report.

However, from their current lows, a gradual recovery in oil prices is expected over the course of the year, for several reasons.

“First, the sharp oil price drop in early 2016 does not appear fully warranted by fundamental drivers of oil demand and supply, and is likely to partly reverse,” the report said.

“Second, high-cost oil producers are expected to sustain persistent losses and increasingly make production cuts that are likely to outweigh any additional capacity coming to the market. Third, demand is expected to strengthen somewhat with a modest pick-up in global growth,” it added.

The anticipated oil price recovery is forecast to be smaller than the rebounds that followed sharp drops in 2008, 1998, and 1986.

PROSPECT

“Low prices for oil and commodities are likely to be with us for some time,” said John Baffes, senior economist and lead author of the commodities markets outlook. “While we see some prospect for commodity prices to rise slightly over the next two years, significant downside risks remain.”

In the IMF report submitted to the board for the 10th review in December, the Jamaican authorities also observed that despite increased surrendering requirements since the beginning of last year and reduced foreign exchange demand from public enterprises, given lower oil prices, there has not been any trend increase in the central bank’s net foreign exchange purchases. “Indeed, net purchases were negative in September and October 2015,” it added.

When Jamaica purchased hedging contracts from Citibank NA, covering six million barrels of oil imports over a 15-month period, expectations last year were that crude prices may climb back to US$75-US$80 per barrel on the world market.

However, prices have since fallen to just over US$30 a barrel.

The transaction was the Jamaican Government’s first oil-hedging arrangement, resulting from a policy decision to manage the country’s exposure to a predicted spike in oil prices from lows of about US$40 per barrel reached earlier in 2015.

The fall in world prices since 2014 has boosted Jamaica’s balance-of-payments position due to a lowering of the oil import bill – crude imports total nine million barrels per year – even as it threw tax revenue collections off-target due to lower special consumption tax receipts from the state refinery Petrojam.

Jamaica imports about nine million barrels of crude oil per year.

A new Energy Stabilisation and Energy Efficiency Enhancement Fund (ESEF) has been introduced to, among other things, finance the purchase of the hedging instruments.

Legislation and regulations governing the use of the ESEF are expected to be adopted by February this year, ahead of the parliamentary debate for the fiscal year 2016/17 Budget.

The Gleaner

Alternative Energy Crude Oil JPS LNG News Oil

JPS, New Fortress Pursuing Separate Parts Of LNG Project

January 25, 2016 Webmaster

The oil-fired JPS power plant in Old Harbour Bay, St Catherine is to be replaced with a gas-fired plant.

The announcement of an agreement between Jamaica Public Service Company (JPS) and a Chinese firm is expected this week for the construction of the new energy plant at Old Harbour.

JPS and American company New Fortress Energy are executing separate projects at Old Harbour – the Jamaican utility company is building a new 190 MW plant, while Fortress is financing and developing the gas infrastructure to supply the plant with LNG.

Together, the projects are estimated at around US$500 million.

JPS said it will have no ownership in the gas infrastructure project nor contribute to the cost of developing it, but will solely be a client of New Fortress, which will build its pipeline to connect to the JPS plant. The same arrangement applies to the gas infrastructure under development by New Fortress in Montego Bay, which will feed gas to JPS’ Bogue plant.

The utility company said previously that the 190 MW combined cycle plant at Old Harbour is expect to cost close to US$300 million.

The name of the Chinese contractor will be disclosed only after the deal to develop the plant is finalised, JPS said. The utilitycompany had previously chosen Abengoa to develop the plant only to be embarrassed when the Spanish firm filed for bankruptcy protection in its home country just days later.

JPS is also in final negotiations with General Electric (GE) as the primary equipment supplier for the Old Harbour plant.

“JPS is currently finalising the agreements with both GE and the ‘EPC’ contractor and coordinating the start of this new generation facility with the completion of an associated LNG facility that will be built to provide gas. These two projects will total over US$500 million and begin operation in early 2018 with full commercial operation by the middle of 2018,” said JPS via email.

EPC is a categorisation, which stands for ‘engineering, procurement and construction’ contractor.

The plant’s advance GE turbines will utilise cleaner burning natural gas, replacing the heavy fuel oil currently used at Old Harbour, and will be able to integrate increased solar, wind and hydro resources as Jamaica moves towards producing more electricity from renewable resources.

“GE will provide four turbines – three gas turbines and one steam turbine the three heat recovery steam generators, the four electrical generators and the major controls,” said JPS.

Once the new Old Harbour plant is built, the current structure will be dismantled, and the property will resort to brownfield status, according to JPS spokeswoman Winsome Callum.

New Fortress is negotiating separately with the Electricity Sector Enterprise Team regarding its gas project, Callum said.

JPS has spent some US$4 million so far in preparing for the upgrade over the past 24 months.

The Gleaner

Alternative Energy Climate Change Electricity Energy Saving News Solar Energy

Window Tinting, Solar Panels Cut NCB Energy Bill 20%

January 18, 2016 Webmaster

NCB Group headquarters, The Atrium, at Trafalgar Road, New Kingston. The banking group’s energy initatives have cuts its electricity bill by 20 per cent across its network.

National Commercial Bank Jamaica (NCB) has cut its energy consumption by 20 per cent over the past four years and is projecting half-billion dollars of new savings over the next four.

By tinting its windows, changing its light and air-conditioning units, and installing some solar photovoltaic (PV) systems, the bank hopes to cut its electricity bill by another eight per cent in 2016.

If it achieves its latest goal, NCB would spend $140 million less on energy this year than it would if it had not implemented any of the energy-saving initiatives that started in 2011.

Back then, the financial institution forked out over $600 million to keep the lights on. Air conditioning accounted for more than 60 per cent of the energy use while lighting accounted for another 20 per cent, so it was decided that light-emitting diode (LED) lights would be installed across its locations, while high efficiency air-condition units and solar systems have been put in place at select sites, such as NCB’s head office on Trafalgar Road.

Reflective tinting on windows, roof insulation, and automated light controls have also helped protect the bank’s buildings from heat infiltration and have enhanced the energy-saving process.

This year, NCB plans to “continue implementing projects to install high-efficiency air-conditioning systems at relevant locations and increase the use of LED and PV panels,” according to the latest annual report.

So far, it has spent $500 million to implement various energy-reduction initiatives.

“We have an energy portfolio that is continuously being assessed, and our expenditure is guided by our environmental policy and, therefore, is subject to variations,” said NCB in reply to Sunday Business queries.

With the energy-saving expenditure, the banking group has so far avoided some $300 million in energy cost over the past four years, and expects to save another $500 million over the next four, based on current energy rates.

NCB can also boast a positive contribution to the environment. By reducing its energy consumption by 2.7 million kilowatt-hours – which is equivalent to the electricity used by 1,350 homes in Jamaica – it has reduced its footprint by approximately 1,800 metric tonnes of carbon dioxide annually. That’s the equivalent of the emissions given off by a plane making 25 round trips to and from New York, or by 100 cars driving from Kingston to Mandeville and back every day for a year.

Alternative Energy Biodiesel Climate Change Crude Oil Electricity Government News Oil

Government Oil Hedge Underwater

January 15, 2016 Webmaster

Gov’t oil hedge underwater

In June 2015, the Government of Jamaica booked a hedge transaction to buy six million barrels of oil for delivery 15 months later at a strike price of US$66.74.

The mechanism used in this kind of transaction is called a ‘call option’, which gives the purchaser of the option the right, but not the obligation, to purchase the asset at a specified price the ‘strike price’ within a specified time. A month later, it bought another 15-month futures contract for two million barrels of oil and the average strike price of the two contacts is US$66.53.

We paid about $30 million to Citibank for the privilege of placing this bet on oil prices going higher than our strike price in 15 months.

When these contracts to buy crude oil were booked, prices on the world market was trading at about US$63 a barrel and had rebounded from about US$45 in January 2015. The government placed a bet based on its belief that crude oil prices would continue to rise well above the $66.53 strike price. If that were to happen and oil prices were to increase to, say, US$80-US$90 per barrel, the Government would be in the delightful position of having to pay only about US$66.53 per barrel for oil that would be trading at the much higher spot price on the international commodity market. The Government of Jamaica, senior executives at the Bank of Jamaica, and members of the oversight and technical committees created by the Government to manage the hedges, all seem to have bought into the belief that oil prices would climb higher than US$67 before the expiry date of the options.

The oversight committee is comprised of the financial secretary, Devon Rowe; the governor of the Bank of Jamaica, Brian Wynter; the managing director of the Development Bank of Jamaica, Milverton Reynolds; the managing director the Petroleum Corporation of Jamaica, Winston Watson; and Dr Vincent Lawrence. Mr Watson is known to have experience in oil trading and markets. Only Michael Hewett, an executive at Petrojam, was named as a member of the technical committee.

Wrong direction

One has to believe that the intention of the members of the government-appointed committees and all of those involved in the hedge transaction was a good one to try and protect Jamaica against that time in the 15-month period when oil prices might spike above US$67. While there is still considerable time to the maturity of the call options, right now the bet is not looking good and the best projections are for oil prices to fall even lower than the below-US$30 they traded at this week.

This week, three important financial institutions released projections indicating that oil prices could fall to US$10-US$20 per barrel and stay there for sometime. Goldman Sachs’ projection was at US$20, Morgan Stanley’s was US$20 and Standard Chartered, a bank with strong roots and connections in the Middle East and Asia, projected US$10 a barrel oil.

In the futures trading business, which is where these call options reside, when an option is bought with the expectation that the price of the commodity will increase but the opposite occurs, the option is said to be ‘underwater’. Given that these options were booked with the expectation for oil price to rise above US$66, and they are now heading in the direction of US$20, Jamaica’s call options on oil are seriously underwater.

A better alternative

In November 2014, a public official asked me about hedging because someone had written him an email to encourage Jamaica to hedge oil transactions on the upside, based on a scenario the email writer concocted about the state of affairs in the international oil industry. The public official was aware that I had traded oil futures for many years and had lived in the Middle East for more than two decades. I share below an excerpt from my reply:

“The recommendation needs study because taking a position means the Government and Jamaica will be guessing the direction of the movement of the price of this commodity. The writer makes it sound like making money on these bets (options) is a sure thing. It is not.

“There is always a risk. Suppose we bet on a certain price increase in a specific time frame, which we would have to if we are going to hedge, and prices instead of rising to, say, US$70/bbl from US$50 falls to US$35/bbl during our hedge horizon, we would suffer an important loss depending on the size of the contract. This is what apparently happened to that forward position Jamaica took on that futures contract on aluminium with the Russians and/or Glencore, the debilitating result of which you are very familiar.

“When oil went to US$9/bbl in the 1990s, if you had dared to tell anyone about the US$147 per barrel price which occurred in July 2008 they would have declared you mad. It’s a commodity; any card can play. On review, if the writer sees the prices as going one way, down, and OPEC is ‘dead’, why hedge? Do nothing, stay addicted to imported oil and go for the lovely ride to low-oil-price nirvana.

“The better alternative is to wean ourselves off the 98 per cent dependence on petroleum-based fossil fuels for our energy supplies. We really need to develop and use renewable energy from many sources, including bagasse, garbage, wind, water and solar.”

Aubyn Hill is CEO of Corporate Strategies Ltd and chairman of the Economic Advisory Council of the leader of the opposition.

The Gleaner

Biodiesel Crude Oil Electricity Government LNG News Oil

Local Oil And Gas Exploration Enters Second Phase

January 14, 2016 Webmaster

Yang Xiaorui (left) shows Phillip Paulwell, minister of science, technology, energy and mining, an area of the oil and gas exploration vessel that docked at the Port of Kingston yesterday.

International oil and gas explorers are once again in Jamaican waters with the blessing of the National Environment and Planning Agency (NEPA) and promises to the local fishing community.

This time, the explorers are venturing on a data-collection exercise.

The first exploration company in 10 years to re-energise the search for oil offshore, the United Kingdom-based Tullow Oil has brought the gamut of data-capturing equipment for the second phase of its venture.

“This is a major deal for Jamaica’s oil-and-gas exploration,” asserted Phillip Paulwell, minister of science, technology, energy and mining, during a tour of the vessel, BGP Challenger, yesterday at the Kingston Port.

Paulwell, who was accompanied on the tour by State Minister Julian Robinson, said: “For them to start this work, they had to get approval from NEPA, and they have signed an important agreement with our fisherfolk in the event of any matter for full compensation.”

In November 2014, the Petroleum Corporation of Jamaica (PCJ) signed a production-sharing agreement with Tullow Oil (Jamaica) for oil and gas exploration in Jamaica’s offshore areas.

“We first started (explorations) in the 1980s when the then Government of Jamaica was responsible for funding,” said Paulwell.

He asserted that it has gained momentum with the private sector coming on board with Tullow Oil signing an agreement.

Paulwell told The Gleaner that US$70 million was committed to the project.

“They have so far spent US$10 million, and this exercise will cost them another US$4 million to acquire additional data.”

He added: “Although we are convinced that we have oil and gas in and around Jamaica, we really have to pinpoint the location before drilling can take place.”

He continued: “They have demonstrated a firm commitment, in spite of the fact that the price of oil has plummeted.”

The minister noted that when the agreement was signed 15 months ago, the price of oil was well over US$100 a barrel.

“Today, it is about US$30, but they are still committed, and not only them, since we signed the agreement, others have approached PCJ.”

NEGOTIATIONS ONGOING

Paulwell disclosed that negotiations are ongoing with another major firm.

“Shortly, we are going to sign another agreement,” he said.

“It means that there is a high level of ‘prospectivity’ and there is tremendous confidence in what we have done so far,” he added.

John McKenna, external affairs manager of the London-based Tullow Oil, who has been involved in the project since its onset, said the second phase related to the imaging of the seabed.

“This is the second part, which is the two-dimensional seismic expedition programme.”

He noted that it involves the acquiring of more than 3,000 kilometres of additional data.

“We are focusing initially on the eastern part of the offshore where very little data has been acquired in the past.”

The Gleaner

Crude Oil Government News Oil

Energy And Mining Minister Welcomes Further Oil And Gas Exploration In Jamaica

January 13, 2016 Webmaster

Speaking during an oil and gas exploration tour of the vessel BGP Challenger, at the Kingston Harbour yesterday, Phillip Paulwell said this is an indication of the confidence being shown that Jamaica has gas or oil in its territory.

Minister of Science, Technology, Energy and Mining, Phillip Paulwell has welcomed the second phase of an exploration programme being undertaken by Tullow Oil out of the United Kingdom.

In November 2014, the Government of Jamaica through the Petroleum Corporation of Jamaica (PCJ) signed a production Sharing Agreement with Tullow Jamaica Limited for water and gas exploration in the island’s offshore areas.

Under the agreement, Tullow has been undertaking seismic surveys in the waters off Jamaica’s south coast.

For next three weeks, Tullow will be engaged in a comprehensive data collection exercise.

Speaking during an oil and gas exploration tour of the vessel BGP Challenger, at the Kingston Harbour yesterday, Paulwell said this is an indication of the confidence being shown that Jamaica has gas or oil in its territory.

The Gleaner

Electricity Energy Saving Government News

Gov’t Saves $80m In Light Bill

January 11, 2016 Webmaster

In this 2013 photo, Minister of Science, Technology, Energy and Mining Phillip Paulwell (left) and Roy Lafayette, chief executive officer at Geddes Refrigeration Limited, signs a US$2.65-million contract with Geddes Refrigeration Limited for the design, supply and retrofitting of efficient air-conditioning solutions in four State entities.

The Jamaican Government has so far realised savings of $80 million over the past two years under an energy efficiency programme which has been implemented in 40 public-sector facilities.

Dubbed the Energy Efficiency and Conservation Programme (EECP), its general objective is to enhance Jamaica’s energy efficiency and energy conservation. Minister of Science, Technology, Energy and Mining Phillip Paulwell said that the State is now contemplating an expansion.

“We intend to take it much further, we are expanding it,” Paulwell said.

Among the methods employed to boost energy efficiency thus far is the use of film to reflect sunlight from windows, the painting of roofs with white paint to improve cooling, and the changing of lighting fixtures.

The Government has had to pay annual costs of almost $13 billion for electricity used by its entities, and the aim is to reduce the figure by $2 billion with the introduction of several key strategic energy-saving interventions.

The measures were recommended following an audit of the energy use by the public sector, with the overall objective to cut public-sector energy consumption by 30 per cent in 2017.

“The money is being absolutely well spent. I am very proud of this project,” Paulwell said.

This year, the Government is spending $379.8 million on the conservation programme, which is funded by a loan, up from the $310 million spent last year.

A total of $748.8 million is being spent on energy conservation and efficiency programmes this year, up from $599 million last year.

The targets set for this fiscal year include executing two contracts to replace inefficient air-conditioning systems in 11 state institutions at a cost of $254.9 million, and commencing the replacement of inefficient lighting in several public institutions ($77.3 million).

The Jamaica Information Service, which is among the entities that benefited from the programme, is reporting savings of 17.5 per cent per annum on its energy bill.

The Gleaner

Climate Change Government News

Sean Paul Among Reggae Acts To Get Behind Climate Change Messaging

January 4, 2016 Webmaster

Jamaican Grammy Award-winning artiste Sean Paul attends a press conference at the COP21, United Nations Climate Change Conference, in Le Bourget, north of Paris, France, last month.

After lending his talents to the song Love Song to the Earth, Grammy-winning artiste Sean Paul is looking to do more in the effort against climate change.

Addressing a press conference at the recently concluded international climate talks held in Paris, Sean Paul signalled a commitment to gathering and sharing information on the troubling phenomena.

“I was driven here in an electric car and I was inquiring a lot about the car – how much it takes to take care of it and how much it cost [to purchase]. And it was just crazy to me that people go and shop in stores, and in one day they could actually buy that car, which would help reduce a lot of carbon emissions,” said Sean Paul, who was in Paris to perform.

Greenhouse gas (GHG) emissions, including carbon dioxide – primarily the result of human actions, including coal burning and petrol use over the last 100-plus years – fuel global warming, which contributes to the climate impacts currently being experienced in small-island developing states like those of the Caribbean. Such impacts include sea-level rise and an increase in sea-surface temperatures, which stand to jeopardise coastal lives and livelihoods.

FRESH IDEAS

“Just being here is great for fresh ideas that I can bring back to my country. Me being here, seeing that car, having driven in the car, asking the questions and then going back to Jamaica to inquire how I can get cars like that there … .” added Sean Paul, who collaborated with Natasha Bedingfield, Paul McCartney, and others on Love Song to the Earth.

He also indicated that he was prepared to make adjustments in his own lifestyle.

“The less that I can put out in terms of garbage, and so on,” Sean Paul told the media, in reference to materials that are harmful to the environment.

And he is not alone in his resolve to promote information sharing and change in the effort to combat climate change. He is joined by other Caribbean acts, including another Jamaican, Aaron Silk, and Adrian ‘The Doc’ Martinez of Belize.

Both men were themselves in Paris performing under the ‘1.5 to Stay Alive’ campaign run by Panos Caribbean in collaboration with other key regional actors, notably the Caribbean Community Climate Change Centre, the Caribbean Development Bank, the Regional Council of Martinique, the Organisation of Eastern Caribbean States, and the St Lucia Ministry of Sustainable Development.

The Gleaner

1 … 8 9 10 11 12 … 79