The Jamaica Public Service Company (JPS) revealed details of its plans to reduce the cost of electricity by 32 to 40%, through the building of a new power plant in Old Harbour Bay.
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 –
Governments and good business people will always hire professional consultants to help them make the best decisions possible. Therefore we are not sure how much of an issue the below story is but if LNG is as bad for JA as it seems then why are we still paying consultants? We need to see what data he has uncovered to keep JA on this LNG path which will cost the country close to a US$1billion to implement with no guarantee LNG prices won’t skyrocket like oil. In other words it’s Monday and I am recovering from jazz fest so let’s all rest off and keep waiting for something substantial from the LNG steering committee to bring some light on this situation hopefully before none of us can afford to pay for our own light.
Describing it as “quite a hefty sum”, Opposition Spokesman on Mining and Energy Phillip Paulwell has questioned the terms of reference which led the Government to be paying US$105,000 (or approximately J$8,9250,000) to an overseas consultant for its liquefied natural gas (LNG) project. On Saturday, the Office of the Contractor General, which is the secretariat for the National Contracts Commission, released the list of approved contracts for December 2010, among them being the engagement of Ernest Megginson by the Office of the Cabinet. Megginson has been hired to work on the country’s LNG project and is being paid the US$105,000 for three months’ service. “I would love to get further details on that, especially in light of other shortcomings with the project. That is quite an hefty sum being paid over, so I would love to see what are the terms of reference,” Paulwell told The Gleaner yesterday. However, Christopher Zacca, head of the steering committee that has been set up to lead the project, says there is nothing unusual about the sum being paid to Megginson. “This is comparable to what you would normally pay an overseas consultant,” Zacca said.
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Since Jamaica’s energy mix is over 90% reliant on diesel fuel to provide electricity for the country this should be very troubling. If you think your electric bills are high now Jamaica just wait until oil hits US$100 a barrel this year. Solar for you business now! Since businesses run in the days they can utilize the suns energy. Dont listen to the false reports that solar is not beneficial for Jamaica. Those reports are coming from sources who benefit from high electricity costs. Especially since we at Solar Buzz have secured 4-6% interest rates and up to 15yr terms on overseas commercial green loans. SAVE YOUR BUSINESS NOW BEFORE ITS TOO LATE!!!! Contact us for a free evaluation on our energy management system and solar solution.
Solar for residential will be cheaper when JPS stops blocking the nation from having net billing or net metering. JPS and the govt are not working fast enough to allow Jamaica to save through alternative energy because JPS is greedy and the govt owns 20% of JPS so high prices benefit them both. The government who can help the country solve the energy issue instead of pushing false hopes of LNG, which at best is 5yrs away, will reign supreme. That’s not hard to figure out but instead they push a solution (LNG) that will cost JPS or tax payers US$700 million in upgrades. Why? Take a guess Jamaica. The cost of LNG is not promised and will rise as world demand rises locking us into the a similar oil situation in the future. See the fuel prices in today’s Observers article below and brace yourself for a painful year in electricity costs.
MOTORISTS will pay more at the pump when they fill up tomorrow following the latest ex-refinery prices announced by Petrojam today, among increases for all of its petroleum products.
Kerosene will recorded the largest increase, up $2.69 to $94.02 per litre.
Diesel will increase $1.96 to $91.92 per litre. Meanwhile gasoline 87 and 90 will both rise by 51 cents to $89.82 and $91.48 per litre respectively.
Increasing by the same amount as gasolene, propane (liquid petroleum gas) will cost $37.43. Butane (LPG) will increase by 2 cents to $45.73 per litre.
Marketers will add their respective margins.
Related articles
- As oil nears $100 mark, threat to nascent recovery grows (theglobeandmail.com)
- bill clinton tells jamaica and the caribbean to embrace renewable energy (greenantilles.com)
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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.
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.
FRANKLIN JOHNSTON
The Caribbean LNG bid is unusual. A firm in which the main shareholder is a politically appointed ex-top honcho of the body which has to approve and monitor the deal raises eyebrows in any country. FDI and LNG are good but deals must be vetted as corruption via foreign investment is real. CLNG will invest some US$600m and has reputable partners, but as the file to topple the contractor general is being built we must confront its faceless LNG lobby. Yes, FDI is not taxpayers’ money but things that cost us nothing can harm us! Free Cuban light bulbs choke us; 500 mislaid truckloads of sand ruin beaches, and foreign hotels that flout building laws harm us. We are poor; must we be corrupt too? What must the Office of the Contractor General do when told of a likely corrupt act? Ignore it as it’s not our money? We know BP’s oil deal in Libya, its lobby to free the Lockerbie terrorist who murdered 270 people, and Trafigura gave toxic waste to the Ivory Coast. Corruption and FDI are friends. The LNG lobby say, “Hands off!”, but let’s support the OCG. Energy is a strategic input and we will not be bullied! The ink is not dry and they are emboldened to belittle our OCG! We must proceed with eyes wide open. The LNG lobby protests too much!
Natural Gas (gas) is mainly methane – odourless, colourless, tasteless; we add an odorant so we can smell a leak. If we cap Riverton dump we have a massive supply. Gas was here since forever; gas in nature, ignited by lightning burns for centuries. The Jews’ “burning bush”, the Greeks’ Olympus flame, Chinese bamboo pipelines from 700 BCE tapped earth’s gas leaks. The UK uses gas from the 1700s and fans know tanks near Oval cricket field store gas from Victorian times. US energy comes from oil, coal, gas – in that order – and gas produced in 34 states account for 25 per cent of energy use. The cost to transport gas is horrendous; but now we can turn gas to a liquid (LNG). The same vessel holds 60 times the amount and we turn it back to vapour before use. Gas is cheap, has a good record and US technology is cutting edge. CLNG – a new firm with no track record, ships, technology, power plants or gas fields – is unusual. It is set up just to make money from us and its gas price will be higher than integrated US firms or mature gas providers.
Minister James Robertson has marine heritage, business experience and a future. Hylton’s LNG mantle fits well. Nations make progress building on good ideas of the past – “Paul plants, Appolus waters” power to him! Once gas is embedded in our light and water bills it’s an ATM for CLNG. When some people say, “don’t worry”, be very afraid! CLNG is an offshore firm registered in a tax haven – it is not transparent. It does not trust us with its brand, nor is it in our reach for tax, money laundering or OCG checks. As a new firm doing its first venture in a murder capital, it has cojones, or powerful mentors! Time will tell! I found no D&B reports on its principals. They can control our energy but we must not be “nosy”! This may be the only chance the OCG has to do checks as it has no jurisdiction in the British Virgin Islands. What if all our investors set up in a tax haven?
Minister Robertson hypes cheap gas. This is unwise as the benefit of LNG is choice, not price. There are some 30 LNG import terminals under way in our area. Teeside Gasport in the UK was a first. In 2007 a US firm modified an LNG carrier (total cost US$300m); docked it at Teeside, did re-gasification on board and discharged gas into the grid. The firm now has a fleet of these EBRV ships to serve gasports as far as Europe. Teeside was built in months and used T&T gas. UK electricity firms as Eon, British Gas also sell piped gas to homes and businesses. Why did we choose CLNG and not the cheap, flexible, integrated, proved gas firms of our friend and major trading partner who rescues us in a crisis?
LNG economics is basic. The US uses gas since the1800s. Texas drills wells; the oil goes to refinery, gas to power plants, homes and industry as the state is piped for gas. In 2008 oil prices shot up, gas followed so petrol and electricity costs soared! The result? All industry and the Texas economy collapsed so demand for gas fell. Gas producers could not cover costs so they capped their wells and went fishing. Demand and supply rule! As demand for gas rises so will price; when demand for oil falls oil will be cheap. Robertson is wrong. LNG is not our “preferred energy source”. LNG is good because it gives us choice and more gas firms will give us more choice and better prices!
Cabinet and the nation must consider some other issues:
(1) A gas cartel as in oil will soon exist. Producers will not cap their wells when prices fall and CLNG will not fold. Like OPEC they will fix volume, price and screw us royally!
(2) Open our strategic sectors to multinationals or local firms only; ban new firms formed in tax havens. They make money here but are not subject to all our taxes and scrutiny.
(3) Raw gas is cheap CLNG’s replacement, maintenance, royalty and other costs are not. With this and US$600m capital in our electricity formulae our energy will not be cheap.
(4) Has Cabinet done risk studies, plans, budgets? National security, safety, environment? Coast Guard, marine fire service, law, regulation, no-fly, no-boat zones? The lobby is wrong. CLNG will cost taxpayers millions and we may get none of their taxes!
(5) T&T will give its nation a bigger “bly” to cancel Jamaican export gains from LNG. For JMA it’s a zero sum game! T&T has the sources; it’s their game; they will always win!
(6) Ban politicians, family and political appointees from going into business or jobs in their area of service during and for five years after leaving office. Let’s block this corrupt path!
(7) For US$150m local investors can develop “Mobay Gasport” – as Teeside – and use the US firm’s EBRV fleet. The west would be energy sufficient, can backstop the JPS and accept Trinidad’s gas offer! We have many oil marketing firms as Shell, Esso; let’s have many for gas too! By 2016 local gas and oil prices will converge. A MoBay gasport will ensure convergence at a lower price than a monopolist CLNG would wish. Let’s protect ourselves! You read it here first in 2010! Stay conscious, my friend!
The Minister of Health’s plan for a book to track health status of children is good. But in 2010 a chip embedded in an all-weather ID card, read, coded at clinics, is the shot!
Dr Franklin Johnston is an international project manager with Teape-Johnston Consultants currently on assignment in the UK.
franklinjohnston@hotmail.com
Following the most recent announcements and pronouncements about Liquefied Natural Gas (LNG) has been an interesting experience for me. A “game changer” is how it is being positioned. Changing the game for whom and when? There is much talk about the significant savings to come from the LNG project. Some US$1.2 billion savings in energy costs is how the argument is being presented.
Question – over what period will these savings be realised and by whom? Government proposes to spend $1b of taxpayers’ money in the project. In what ways and over what time will this investment be recouped? Where is JPSCo in all this cheap talk?
Environmental benefits
Soon after I had resigned as permanent secretary in the Ministry of Energy and Mining, I engaged in a conversation regarding LNG. Having expressed concern in the manner it was beginning to be positioned to Jamaicans, with focus entirely on pricing, I opined that a better strategy was to spell out its environmental advantages. I was concerned that based on everything I had learnt about LNG, by the time it became available to the householders of Jamaica, light bills would perhaps not actually be reduced to the extent they were led to believe would happen.
The person with whom I was talking declared that environmental matters were of little interest to most people and that anyone not in support of LNG was a traitor to Jamaica. Despite my clarification that I was not opposed to LNG per se, but rather to the tack being taken in selling it to Jamaicans she continued to “huff ‘n puff”. Her friends seemed to have fed her the “sweet drink”. She seemed to have willingly drunk it and thereafter appointed herself “missionary spreading the gospel of LNG”.
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PAULWELL… questions the ability to deliver LNG to Jamaicans at the cost benefits being promoted.
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Paulwell is right!
Former Minister of Energy, Phillip Paulwell, has voiced some of the concerns I have regarding LNG. He questions the ability to deliver this product to Jamaicans at the cost benefits being promoted by the government. He highlights the significant infrastructural work required to deliver gas to households. Say what you may about Paulwell, the man has a brain which he uses and has been making some valid interventions.
The process and quite likely progress of delivering LNG to householders and the business community will in all probability cost much more than the U$600 million plus the price of gas that is being fed to Jamaicans. The timeline of 2012 for its implementation is likely to be a pipe dream. Wake up, we are already half-way though 2010! Skilfully, we are told that this deadline is contingent on the project remaining “on track”. Yet we have no idea if the 2012 timeline was based on fast-track, that is, with most optimistic projections, which all of us who run businesses know is tantamount to the “road to hell paved with good intentions”.
Paulwell questions the extent to which the bauxite sector, a key stakeholder in supporting the LNG initiative, is “on board”, meaning not just word-of -mouth support but a signed commitment. He also knowledgably alludes to LNG prices within the context of global oil economics. The price of LNG, though cheaper than oil, does track that of oil. When oil prices climb, so does the price of LNG. Similar to discoveries of natural gas with new technologies able to explore and exploit it are discoveries of oil reserves with new technologies to go “where no one has gone before”.
One does not get the impression that Paulwell is arguing against LNG but rather that the country be given further and better particulars regarding the project. That is also my position. Beyond party politics there must be deeper commitment to Jamaica. Some time ago a politician seemed aghast and mildly amused when I told him that my first and foremost duty was to my country, not to any minister or to any politician or party. He thought I was joking. Based on my subsequent action, he learnt that I was quite serious.
Sweet talk
Politicians need to know that service to country means more than “roundin’ up dem mouth, believing dem talking nice and soundin’ bright”. Based on the numerous snickers and in some cases outright laughter I’ve heard from media as well as those who tweet, when these people begin to pontificate in what they may believe are sweet-sounding words, very few believe them. Many laugh loudly behind these politicians’ backs, while others, especially those under 30, tweet away with expressions like LMAO (laughing my … off) and ROL (roll over laughing) when commenting about them and their words.
Jamaicans are reading through the act and the staged performances. They are looking at the actions of politicians on all levels, including the company they keep, the assets and lifestyle they boast. Many are being found wanting, not just in sincerity but in their ability to deliver on promises and to take the country forward.
Jamaicans from all walks of life are moving beyond those who aim to sound “posh to impress white people”, as one tweeter recently described the affected delivery of a politician, to just wanting to hear “the truth, the whole truth and nothing but the truth”. As it relates to LNG, give Jamaicans the unvarnished truth even if the savings on our light bills may not be the much-vaunted 30 per cent. There are other benefits to the country!
Anyway, with the intervention of the OCG to save Jamaica from any LNG mix-up, some truth will be revealed! Jamaica may be a long way off from the cheap gas being promised. In the meantime the sun shines bright and “breeze blow” sweet. Solar and wind energy anyone?