LNG Project

There has been a lot of debate about the LNG project and recently the World Bank has just released its findings which are very critical about aspects of it, in particular the administration and management of the process.  There are many who think that we are simply switching from one source of fuel over which we have no control to another.  The question is does it make sense for Jamaica to change from oil to natural gas?  In order to answer that question we need to address two issues.

The first issue is that we need a source of fuel that can replace a significant portion of our oil use and that is reliable and cost effective.  Solar, wind and hydro power are good examples of renewable energy that we can generate ourselves but the problem is the cost of implementing them.  They are the most expensive forms of providing energy and have a long payback period.  In addition, they require significant amounts of space in order to meet our needs and tend to spoil the look of the environment.  The cheaper options that can supply large amounts of power include LNG, coal and nuclear power.  Coal is relatively cheap but extremely messy and creates problems for the environment.  Nuclear power creates waste materials for which we cannot handle the waste product.  LNG is cheaper than oil and according to estimates there are more worldwide reserves of it than of oil.  The problem surrounds the cost of installing pipelines and ensuring the safety of those lines.  For this reason, I would not put pipes around the island but would focus on the electricity providers and the major industries such as bauxite, cement and sugar.
The second issue is that of reliance on one single fuel option.  If we rely on one option especially one that we do not produce then we can be held hostage by the producers of that product.  In order for us to have a sustainable energy policy there must also be a diversification into other energy sources especially renewable ones.  We therefore need to set a target of producing say 25-30% of our energy needs from renewable by say 2020.  The focus should be on encouraging households, hotels and small businesses to convert to these types of energy.  These products should be free of or have minimal taxes and a provision should be made for the sale of the excess power to the JPS or other electricity provider.

In the short term, we need to change to a cheaper energy source than oil which is also readily available and if LNG can do this then that will be good.  However for the long term, diversification of the supply of power is necessary in order to ensure that we have more control over meeting our energy needs and are less dependent on other countries.

Tags: Carl Wilson