Could The US Help To Solve Jamaica's Energy Woes?

In my last post, the focus was on the implementation of 78 megawatts of renewable energy projects, these projects are aimed at lowering our energy costs by 2016. However, seeing that close to 90% of our energy output is derived from heavy fuel oil (HFO) and automotive diesel oil (ADO), additional steps are needed to significantly lower the cost of electricity in Jamaica.

To understand why, let's look at some figures. Data from the petroleum corporation of Jamaica (PCJ), suggests that Jamaica's oil import bill was approximately US $344 million in 1998. This rose markedly to US $1.84 billion in 2006, and now exceeds US $2 billion.

Of our oil import bill, 33% is used to produce electricity, 28% in road and rail transportation and 14% in the bauxite/alumina sector. Making the electricity generation sector the largest consumer of oil. You can see from these numbers, that it is foolhardy to continue on the same path.

Consumption of oil by sector. Source of image: Petroleum Corporation of Jamaica

Various projects over the years, sought to diversify our fuel source, we've had minor successes in this area. However, on the push to reduce electricity tariffs, there has been not any success.

US Shale Oil And Gas Boom, And Possible Benefits To Jamaica.

Thanks to new hydraulic fracturing (fracking) techniques; techniques used to extract natural gas from shale rock formations, and relatively high oil and gas prices, the United States have been able to do the improbable. It was once thought that the US had reached their peak petroleum output. 

However, data out of the US shows that, Crude oil output in 2014 was the highest since 1986. See vox.com for additional information The US Hasn't Produced This Much Oil Since 1986. This has spurred the US to loosen a four decades long export ban on Light crude. A step that should be beneficial to Jamaica and the Caribbean.

News emerged late last year, that the US may assist Jamaica to solve our perennial energy problem. Information was also available today in the Jamaica Gleaner, entitled A Hug From Uncle Sam.

The news piece suggests that, Prime minister Portia Simpson Miller and Energy minister Phillip Paulwell Will be meeting the US Secretary of sate John Kerry on January 26. The aim of the meeting is find solutions to Jamaica's Energy Woes, while exploring areas of cooperation. The article didn't elaborate on the extent of assistance. However, it is likely that Energy minister Phillip Paulwell will be seeking access to cheap natural gas to supply future energy projects, a step that has been futile over the years.

Let's hope for a fruitful outcome, as this would augment the renewable energy projects, diversify Jamaica's fuel mix and lower electricity tariff rates.

References

Frequently Asked Questions

http://www.myjpsco.com/about-us/faq/

Background, Energy Efficiency and Conservation

http://www.pcj.com/dnn/EnergyEfficiencyandConservation/Background/tabid/119/Default.aspx