EDITORIAL - Opportunity for LNG transparency

The announcement, reported by this newspaper yesterday, that Houston-based energy company, AEI, is selling its majority stake in the Colombian gas pipeline operation, Promigas, will have triggered new uncertainties about the future of the Jamaican government's problem-plagued project to convert from oil to liquefied natural gas (LNG) as the main energy source.

Not only is Promigas the financially strongest member of the consortium - led by Belgium's Exmar Corporation - that was named as the government's preferred bidder for a LNG storage and regasification facility, but was/is to have responsibility for pipelines to deliver natural gas from the consortium's facilities to offtakers.

It, however, is uncertain whether Promigas' new majority owners, primarily a clutch of private-equity firms, will want to continue with a project that independent reviewers say was badly structured, and whose tender process is being investigated by the independent contracts watchdog agency, the Office of the Contractor General.

At the very least, there are likely to be delays while Promigas' new partners review the deals and decide on their strategic direction.

That may not be a bad thing for the Jamaican government. Indeed, it may be a good thing. It allows the administration to take stock and to be transparent in how it goes about its energy policy.

This newspaper believes that the provision of appropriate and cheap energy could be the game-changer to drive enterprise and drag the Jamaican economy from the doldrums in which it has simpered for decades. In that regard, we are not certain that our government is making the best choice.

There is a strong global constituency that insists on the efficacy of coal, with regard to price, for energy generation, even taking into account environmental factors, including the fact that natural gas is a cleaner fuel.

Our government, unfortunately, has failed in any robust fashion to outline the economic basis on which it made a decision in favour of LNG, notwithstanding the urgings of this newspaper and others. Indeed, the government has kept officially secret the recent report by its consultants revealing the stream of conceptual flaws in the project.

We believe that the administration owes it to the Jamaican public to engage a serious debate about our energy future and what is the least cost option to generate power to drive our industries.

Our decisions can't be based on the preferences of rich, developed and powerful nations.

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.