Alternative Energy and LNG - Is Energy Sector Liberalization necessary?

I will not bend and I will not break

And I won't water down my faith

I won't compromise in a world of desperation

What has been I cannot change

For tomorrow and today

I must be a light for future generations

Excerpt from the song Future Generations by the group 4Him

It seems that this is the theme song of the PSOJ (Private Sector Organization of Jamaica) president Mr. Matalon, the umbrella group JMA (Jamaica Manufacturers Association) president Mr. Azan, the JCC (Jamaica Chamber of Commerce) president Mr. Samuda, John Public, who has been demanding “just  balances, just  weights” as expounded in my blog article entitled “Alternative Energy - A Telecom Provider's Strong Tower”.

This is in face of the defiance and indifference being shown by the JPS Co is light of their recent granted (and I must concede contractually obligatory) 4.7% increase in their electricity rates from the OUR (Office of Utilities Regulation) despite the improving health of the Jamaican Economy, arguments from a concerned Jamaican Citizen Rodwin Green in his concise analysis in his Letter of the Day entitled “LETTER OF THE DAY - Misleading JPS Advertising”, published Friday June 11, 20100, The Jamaica Gleaner notwithstanding.

Indeed, one is now left to ponder if JPS Co really is thinking that people with an eye on the future development of Jamaica will continue to persist under a Power Utility Company that is not opened to negotiations with regards to Energy Sector Liberalization, despite the insistence of Senator Phillip Paulwell, Opposition Senator on Telecoms and ICT, who had made calls for both MNP (Mobile number Portability) and Energy Sector Liberalization as stated in the article “Paulwell calls for number portability”, published, Wednesday April 21, 2010, Daraine Luton, Senior Staff Reporter, The Jamaica Gleaner.

It is thus the PNP (Peoples National Party) point man thus far the ONLY voice in Parliament singing the song along with the rest of Jamaica. Senator Phillip Paulwell, Opposition Senator on Telecoms and ICT further went on to say that “the current cost [electricity and fuel] is astronomical, especially for businesses.

What is needed at this time is competition in the sector,” as he stated in the article “‘Follow my Blueprint” – Paulwell pushed for breakup of JPS Monopoly – Not possible before 2020, says OUR”, published Friday April 30 2010, Mark Titus, Business Reporter , The Jamaica Gleaner, in his call for Liberalization of the Energy Sector.

Worse, JPS Co is indeed published as making a statement that customers would benefit from the implementation of LNG (Liquid Natural Gas) Gas Turbine Generator upgrades to their Generators with an estimated cost reduction of 20% to 30% in the electricity bills of consumers as stated in the article “Gov’t eyes LNG cure for energy problems”, published Wednesday June 16 2010 by Laura Redpath, Senior Staff Writer, The Jamaica Gleaner.

To add further fuel to the fire, Senator James Robertson, Minister of Energy and Mining also presided of the mysterious sale of 2% of the Government of Jamaica’s stake in the state run oil refinery, PCJ (Petroleum Corporation of Jamaica) to the Government of Venezuela thus giving them majority stake and effectively control  by increasing their 49% stake in the oil refinery to 51% and hence controlling rights as stated in my blog article entitled “PetroCaribe Trap - does this mean that Energy Sector Liberalization will not occur?”.

It does not help much either that the PCJ recently had to rid itself of a corrupt yet rather vocal Dr. Ruth Potopsingh, insistent on her innocence, despite evidence to the contrary as uncovered by those nosy minded busybodies, who go by the official sounding title of Government of Jamaica Auditors, indicating that she was indeed “dipping her fingers in the cookie jar” as stated in the Prime Time News, aired Tuesday April 20^th 2010, on Television Jamaica.

At least the Government of Jamaica is following the directives of the Prime Minister, Bruce Golding, who while in Opposition in 2006 had exhorted University of the West Indies Students on the occasion of the re-launching the G2K (Generation 2000) by saying “I am going to challenge you [students] to watch this oil exploration.

We are going to be insisting on it that if it is confirmed that Jamaica has commercial quantities of oil within our territorial waters, we are going to want the benefits of that oil managed in such a way to secure Jamaica's economic future” also illuminated in my blog posting “Bruce Golding, Corruption in the PCJ and the search for Oil”. 

Strong words indeed.

As cricket is a favorite spectator sport of mine, it appears that these arguments are a follow-on from his previous attempt to force a divide on the issue in an attempt to elicit details from Senator James Robertson, Minister of Energy and Mining in Parliament earlier as stated in the article “Government, Opposition wrangle over energy”, published Saturday April 3, 2010, The Jamaica Gleaner.

The price of Electricity cannot continue to be on its upward march without a fight in light of , and the good Senator James Robertson, Minister of Energy and Mining is very much aware of this, having made public televised declarations of his intentions to address the problem in a Press Briefing at the Ministry of Energy and Mining Headquarters based on the First News, aired Tuesday June 15 2010 by Simone Clarke-Cooper, Smile Jamaica, Television Jamaica as well as now confirmed by published statements as stated in the article “Gov’t eyes LNG cure for energy problems”, published Wednesday June 16 2010 by Laura Redpath, Senior Staff Writer, The Jamaica Gleaner.

But correct me I am wrong, but have I not heard this song before as well?

One of the major sources of Electrical Energy for the Power Utility Company was intended to be LNG (Liquid Natural Gas), which then Prime Minister Portia Simpson of the PNP in 2006 had courted the Republic of Trinidad and Tobago for a supply of LNG at local market rates in a MOU (Memorandum of Understanding) in early 2005.

According to the article “No Trinidad LNG for Jamaica anytime soon”, published Friday December 15, 2006, Friday Gleaner by Linda Hutchinson-Jafar, Business Writer, The Jamaica Gleaner, the Republic of Trinidad and Tobago had drilled a Test Well at a cost of US$80 million and had found no oil or LNG hence they decided they were unable to supply Jamaica with LNG due to unavailability of supply.

But it seems politicians like to play the follow-on game a lot as in cricket, as then Prime Minister Patrick Manning of the Republic of Trinidad and Tobago in the article  “LNG for Jamaica a national priority – Manning”, published Friday June 26, 2009, The Friday Gleaner, by Linda Hutchinson-Jafar, Business Writer, The Jamaica Gleaner.

Trinidad and Tobago later went on to state that that LNG for Jamaica is a “national priority” with Republic of Trinidad and Tobago supplying Jamaica with LNG to Jamalco so as to lower the cost of the production of alumina, which would then be shipped to the Alutrint Facility in Republic of Trinidad and Tobago to be smelted and converted to Aluminum.

 Like I said, follow-on.

The fact that is that there is now a supply of LNG  coming to Jamaica, possibly by 2010 – 2011 and possibly from the Government of the Republic of Trinidad and Tobago as apparently confirmed and implicitly implied by the statements of Senator James Robertson, Minister of Energy and Mining as stated in the article “Gov’t eyes LNG cure for energy problems”, published Wednesday June 16 2010 by Laura Redpath, Senior Staff Writer, The Jamaica Gleaner.

There is a possibility of more due to increased competition from LNG suppliers in China, the Middle East and Far East countries. According to the article “Rivalry sends Trinidad in search of new LNG markets”, published Saturday, July 4, 2009, The Saturday Gleaner, by Linda Hutchinson-Jafar, Business Writer, The Jamaica Gleaner.

The market for LNG has since changed for Republic of Trinidad and Tobago LNG since 2006, as stated by Robert Riley, Chairman and CEO (Chief Executive Officer) of BP Republic of Trinidad and Tobago. Currently there is no central body or cartel that controls the price of LNG worldwide, much in the same way that OPEC (Organization of Petroleum Exporting Countries) controls the price of oil worldwide.

These producers, for who LNG is merely a by-product as they produce more valuable chemicals such as methanol and ammonia, can flood the LNG Market with large and cheaper volumes of LNG.

The United States of America is Republic of Trinidad and Tobago’s largest buyer of LNG and thus the possibility exists that these cheaper suppliers of LNG can effectively compete with Republic of Trinidad and Tobago for supply to the United States of America, presently the largest current and future user of LNG, as the United States of America, under an initiative spearheaded by President George W. Bush, is looking to Renewable Energy as a means of reducing the United States of America’s dependence on Foreign Oil.

As such, LNG is part of the Renewable Energy for the United States of America for its Domestic Supply of Fuels along with Bio-Diesel and E80 to be used for Electrical Power Generation and Motor Vehicle Fuels respectively.

From the breakthrough by venture capitalist K.R. Sridar, CEO of Bloom Energy in developing what Leslie Stahl on “60 Minutes”, aired Sunday 21^st February 2010 refers to as “the Holy Grail” of power engineering is a Bloom Power Server, a fuel cell technology that is based on a semi permeable membrane made from pyrolized sand i.e. sand that has been heated and temperature controlled sintering under anaerobic (oxygen free, vacuum) conditions, a process described in my blog article entitled “The Secret of the Bloom Energy Server unraveled – and can be locally Reverse Engineered”.  

There are recent developments aimed at weaning the United States of America from its dependence on Corn-based Ethanol by the production of Anhydrous Ethanol using sewage, and pyrolized organic waste from any organic source as stated in the articles:

1. “Microbes to start making ethanol, Chemicals”, published November 18, 2009 9:52 AM PST by Martin LaMonica, CNET News – Green Tech
2. “Microbe converts sludge into ethanol”, published Friday 11, December 2009, by Martin LaMonica, CNET News – GreenTech
3. “Wood-chip ethanol maker opens plant”, published October 15, 2009 7:50 AM PDT by Martin LaMonica, CNET News – Green Tech
4. “A Forest epidemic turns into energy opportunity”, published April 7, 2010 2:04 PM PDT by Candace Lombardi CNET News - Green Tech,
5. “Gene-altered bugs make Bio-Diesel”, published Wed Jan 27, 1:31 pm ET by Yahoo! News (AFP)
6. “Researchers coax bacteria to make Bio-Diesel”, published January 27, 2010 3:59 PM PST by CNET News – Green Tech, Martin LaMonica.

Obviously, the United States of America is accelerating research into the development of Anhydrous Ethanol for E85 production and Bio-Diesel!

I am hoping that the Republic of Trinidad and Tobago has taken into account the current Recession worldwide and has decided to supply us with at least one (1) train of LNG, with the possibility of getting additional three (3) trains of LNG from Republic of Trinidad and Tobago by 2011-2012 as the market for LNG from Republic of Trinidad and Tobago, especially as the market begins to contract due to the availability of cheaper LNG  from LNG suppliers in China, the Middle East and Far East countries.

As such, for Republic of Trinidad and Tobago’s survival in an Unregulated LNG  Market, it is most likely the Republic of Trinidad and Tobago would consider the option of selling the additional three (3) trains of LNG  to us, considering the fact that Republic of Trinidad and Tobago cannot and will not be able to find any market.

This as it will be too expensive in the future as their current markets Chile and Brazil who will be courted by LNG suppliers in China, the Middle East and Far East countries, suppliers, who, because of economy-of-scale can effectively compete with Republic of Trinidad and Tobago in terms of Pricing and Volume of Supply.

It would thus be in the Government of Jamaica’s and the Government of Republic of Trinidad and Tobago’s best interest with respect to fixing the Trade Deficit that exists between the two (2) countries as well as Republic of Trinidad and Tobago’s Trade Deficit with CARICOM to display a strong interest in the recovery of the entire CARICOM Trading Bloc by selling the additional three (3) trains of LNG as suggested above to Jamaica and CARICOM with the following benefits:

1.      Lowering the cost of Electrical Power Generation by JPS Co

2.      Lowering the cost of Public Transportation (Jamaica Urban Transport Association, Jamaica Railway Corporation

3.      Lowering the cost of operating and owning Private Passenger and Carrier Vehicles modified with flexfuel engines to use LNG, E80, Bio-Diesel, etc.

4.      Lowering the cost of the production of Alumina by Jamalco

The use of LNG would result in a the lowering of the cost of the above, with a direct benefit to consumers in the form of a cheaper bus service and motor vehicles, by virtue of lower fuel costs and cleaner burning fuel which is good for your engine, and by extension the reduced cost of transportation, as LPG (Liquid Petroleum Gas), the vehicle portable version of LNG costs almost JA$50 per liter, or roughly half the cost of Diesel or E10 Gasoline.

Such a supply of cheaper fuel could also see the economically feasible revival of the train services here in Jamaica and even small aircraft for flights between the various aerodromes in Jamaica could be revived by just the simple conversion of the engines to burn LPG, as offered by the company Challenger Transport company Ltd (926-6414). This is a company more known for the rental of buses and trucks which has decided to launch the installation and servicing of such units in Jamaica which is already common in Dominican Republic.

Challenger Transport company Ltd (926-6414) have apparently having undergone two (2) years of extensive training of its technicians to be ISO9001 certified to not only offer the installation but the sole maintenance of the units based on the presentation made on “Smile Jamaica Morning Time” broadcast 8:15am March 16^th 2010 on Television Jamaica and explained in some detailed in my blog article entitled “LPG and the Challenger Transport Co Ltd - A Cheaper Fuel”.

Other companies that do this type of conversion are soon to appear and as such a partnership annex between Carlos Slim owned AMX, operating under the brand name of CLARO can partner with Challenger Transport Company Ltd (926-6414) the Technology Partner, Gas Pro (928-7301) and IGL Gas Ltd (923-8434) the Distribution Partners and PEMEX (Petroleos Mexicanos) the LPG Supplier to provided a VAS (Value Added Service) the retrofitting of vehicles to work with LPG.

A very popular option in Dominican Republic and thus an implicit benefit to CLARO in terms of reducing the cost of operating its fleet vehicles as well as its generators by retrofitting them to work with LPG as explained in my blog article entitled “Telecom Providers and Alternative Energy - A Environmental Marketing Strategy”.

This would lead the way in a clean Energy Revolution that not only will save the environment but also save the Government of Jamaica billions of US dollars on the cost of imported Oil. It also bears repeating that my main point in that it would drive the cost of energy to more business-friendly levels and thus be a driver of growth in our economy by virtue of lowering Energy Costs in terms of Electricity Generation and Transportation.

My blog article thus far suggest and as Senator James Robertson, Minister of Energy and Mining seems to be effectively promising with the implementation of LNG by 2012 and re-negotiating JPS Co 2001 license to allow for a rate increase every five (5) years as stated in the article  “Gov’t eyes LNG cure for energy problems”, published Wednesday June 16 2010 by Laura Redpath, Senior Staff Writer, The Jamaica Gleaner.

It even offers a solution to the little known and ill-published scourge of Diesel Fuel Theft from generators and may even lead to increased co-location on Telecom Providers cell sites allowing the usage of the same generator to power multiple Node B’s or BTS (Base Transceiver Stations) by Telecom Provider LIME and Telecom Provider CLARO, otherwise known as RBS (Remote Base Station) by Telecom Provider Digicel…………again fodder and preview of another well researched article in the future.