EDITORIAL - Transparency in our choice of energy

The prime minister got that bit right. The concentration of his administration going forward must be on "stimulating growth and creating jobs".

For the PM's goal to be sustainably achieved, though, it will demand a competitive economy. In this regard, we feel that energy is the potential game-changer.

That is why this newspaper insists that while it moves quickly on an energy policy, the administration must do so with due care to ensure that whatever is introduced provides power to consumers at the cheapest price. We are not convinced that this has been the case, so far.

There is no gainsaying that the average price of generating electricity in Jamaica, at US$0.29 per kilowatt-hour - which is substantially higher than most of our regional neighbours - undermines the competitiveness of the country's economy.

Cheaper alternative

We, therefore, support the initiatives, including the so-far-unsuccessful search for hydrocarbons, to find a cheaper alternative to imported petroleum, which accounts for more than 90 per cent of Jamaica's energy needs.

Our Government has locked on to liquefied natural gas (LNG), largely because it is cheaper than oil and releases, up to now, fewer global-warming emissions than other hydrocarbons, including coal.

What is not clear, however, is the deeper economic and technical basis on which LNG was favoured, and whether gas or coal would be better at liberating the potential of the Jamaican economy.

There is, of course, a reasonable explanation for why LNG had a head start with policymakers. Early in the last decade, the Trinidad and Tobago government, led then by Mr Patrick Manning, promised a secure supply of LNG to Jamaica at a preferential price.

Mr Manning couldn't deliver on his promise. Now, his party is out of power and the new administration shows no inclination of embracing that initiative. The cold fact is that any supply contracts that Jamaica enters into for LNG will have to be at market price, at a time when demand for the commodity, especially in the United States and Europe, will be on the rise as these countries meet obligations for significant reductions in greenhouse gases.

Finding the right mix

There are a number of other things to note.

First, Jamaica is not, and, even with coal-fired power plants, would not be a significant emitter of greenhouse gases. Moreover, new coal plants are substantially more efficient and are far less pollutant than older ones.

More critically, coal, which produces about half the electricity in the United States and about 45 per cent globally, is substantially cheaper than natural gas, which accounts for about a fifth of America's electricity.

In America's case, at an average cost of US$0.04 per kWh, coal plants generate electricity at half the cost of natural gas. A British study that assumed a cost to hydrocarbon emissions in that context placed coal, with its far higher emissions, only marginally more expensive than gas.

It is perhaps not surprising, therefore, that in China, with its galloping economy, coal accounts for around 80 per cent of its power output.

This is not to assume that coal, or any other fuel, should be the automatic leader in Jamaica's energy mix.

Rather, we feel that it is important that there be transparency in the data and analysis that has taken us to this point. The bottom line must be the least-cost option for the Jamaican economy.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.