Talk is Cheap! Is LNG?

Marcia Forbes PhD

Following the most recent announcements and pronouncements about Liquefied Natural Gas (LNG) has been an interesting experience for me. A ‘game changer’ is how it is being positioned. Changing the game for whom and when? There is much talk about the significant savings to come from the LNG project. Some US$1.2 billion savings in energy costs is how the argument is being presented. Question -- Over what period will these savings be realized and by whom? Government proposes to spend J$1 Billion of taxpayers money in the project. In what ways and over what time will this investment be recouped? Where is JPS Co. in all this cheap talk?

Environmental Benefits of LNG
Soon after I had resigned as Permanent Secretary in the Ministry of Energy and Mining, I engaged in a conversation regarding LNG. Having expressed concern about the manner it was beginning to be positioned to Jamaicans, with focus entirely on pricing, I opined that a better strategy was to talk-up its environmental advantages. I was concerned that based on everything I had learnt about LNG, by the time it became available to the householders of Jamaica, light bills would perhaps not actually be reduced to the extent they were led to believe would happen.

The person with whom I was talking declared that environmental matters were of little interest to most persons and that anyone not in support of LNG was a traitor to Jamaica. Despite my clarification that I was not opposed to LNG per se but rather to the tack being taken in selling it to Jamaicans, she continued to ‘huff n puff’. Her friends who were apparently big in LNG seemed to have fed her the ‘kool-aide’. She seemed to have willingly drank it and thereafter appointed herself ‘missionary spreading the gospel of LNG’.

Paulwell is right!
Former Minister of Energy, Phillip Paulwell, has voiced some of the concerns I have regarding LNG. He questions the ability to deliver this product to Jamaicans at the cost benefits being promoted by the government. He highlights the significant infrastructural work required to deliver gas to households. Say what you may about Paulwell, the man has a brain which he uses and has been making some valid interventions.

The process and quite likely progress of delivering LNG to householders and the business community will in all probability cost much more than the U$600 million plus the price of gas that is being fed to Jamaicans. The timeline of early 2013 for its implementation is likely to be a pipe dream. Wake up, we are already half way though 2010!! Skillfully, we are told that this deadline is contingent on the project remaining ‘on track’. Yet we have no idea if the 1st Quarter 2013 timeline was based on fast-track, i.e. most optimistic projections, which all of us who run businesses know is tantamount to the ‘road to hell paved with good intentions.’

Paulwell questions the extent to which the bauxite sector, a key stakeholder in supporting the LNG initiative, is ‘on board’, meaning not just word of mouth support but a signed commitment. He also knowledgably alludes to LNG prices within the context of global oil economics. The price of LNG, though cheaper than oil, does track that of oil. When oil prices climb, so does the price of LNG. Similar to discoveries of natural gas with new technologies able to explore and exploit it are discoveries of oil reserves with new technologies to go ‘where no one has gone before’.

One does not get the impression that Paulwell is arguing against LNG but rather that the country be given further and better particulars regarding the project. That is also my position. Beyond party politics there must be a deeper commitment to Jamaica. Some time ago a politician seemed aghast and mildly amused when I told him that my first and foremost duty was/is to my country, not to any minister or to any politician party. He thought I was joking. Based on my subsequent action, he learnt that I was/am quite serious.

Sweet Talk
Politicians need to know that service to country means more than ‘roundin up dem mouth, believing dem talking nice and soundin bright’. Based on the numerous snickers and in some cases outright laughter I’ve heard from media as well as those who tweet, when these people begin to pontificate in what they may believe are sweet-sounding words, very few believe them. Many laugh loudly behind these politicians’ backs, while others, especially those under 30, tweet away with expressions like LMAO (laughing my a.. off) and ROL (roll over laughing) when commenting about them and their words.

Jamaicans are reading through the act and the staged performances. They are looking at the actions of politicians on all levels, including the company they keep, the assets and lifestyle they boast. Many are being found wanting, not just in sincerity but importantly, in their ability to deliver on promises and to take the country forward.

Jamaicans from all walks of life are moving beyond those who aim to sound ‘posh to impress white people’, as one tweeter recently described the affected delivery of a politician, to just wanting to hear ‘the truth, the whole truth and nothing but the truth’. As it relates to LNG, give Jamaicans the unvarnished truth even if the savings on our light bills may not be the much vaunted 30%. There are other benefits to the country!

Anyway, with the intervention of the OCG to save Jamaica from any LNG mix up, some truth will be revealed!! Jamaica may be a long way off from the cheap gas being promised. In the meantime the sun shines bright and breeze blow sweet. Solar and wind energy anyone?