Trinidad's offer and Jamaica's energy debate

Published: Sunday | June 28, 2009


It is likely to be mere coincidence that the Government has finally got around to soliciting public comment on its energy green paper that has languished for three years.

That it is now stirring is, nonetheless, timely, given the the signals from the Trinidad and Tobago prime minister, Patrick Manning, that it he intends to make the supply of liquefied natural gas to Jamaica "a national priority".

Noticeably, Mr Manning addressed the issue not once, but twice during the past week. First, at a conference of his People's National Movement (PNM), and then in Parliament - both times as part of a package of initiatives that Port-of-Spain is fashioning to shore up the troubled economies of its Caribbean Community (CARICOM) partners.

patronising benefactor

It is unfortunate that Mr Manning, perhaps unintentionally, adopted the tone of patronising benefactor ready to dole out charity. He would have done better laying out a rigorous case for integration and of the logic of CARICOM.

Indeed, the prime minister's failure to articulate adroitly the economic benefits Trinidad and Tobago, and the basis thereof - as opposed to a fear of unstable neighbours with their unemployed citizens rushing to Port-of-Spain - would have contributed to an Opposition response, suggestive of an intent by Mr Manning to squander his country's resources on foreigners.

"The duty of the Government is to look after its own citizens first," said Basdeo Panday, the leader of the Opposition.

The Panday detachment and Mr Manning's unfortunate posture, notwithstanding, it is important, we believe, for Jamaica and others in CARICOM to eschew hubris and seriously engage Trinidad and Tobago.

In Kingston's case, it is an opportunity to insist on the crafting of a regional energy policy, to be applied equitably across the CARICOM Single Market and Economy (CSME), rather than energy resources being allocated solely on a basis of bilateral agreements, the outcomes of which may represent the skills of one country's negotiator over the other.

Mr Manning is keen on delivering LNG to Jamaica, he says, because of the collapse of Jamaica's alumina sector, its refineries shuttered in the face of the global recession. Recovery over the long term will depend on access by Jamaica to cheaper energy with which to fire the plants.

That was the same case Kingston made three years ago to Port-of-Spain when it argued for of "national treatment" in the delivery and pricing of LNG. That is, Jamaica wanted common principles to operate across a seamless economy. In that regard, Jamaica would pay the same rate as Trinidadian consumers for natural gas, plus the cost of its liquefaction and transport.

different product

Port-of-Spain balked at that notion, insisting that LNG was a different product to natural gas. In the end, it said there was no LNG to sell. The result: the collapse of a U$1billion expansion of the Jamalco alumina refinery at Hayes, Clarendon.

Mr Manning expects new gas finds and improved technology to enhance the availability of natural gas. He has raised the prospect of a kind of production sharing: Jamaican alumina for an aluminium smelter being built in his country. That is an exciting prospect.

However, there is a more fundamental issue to be settled: how you treat critical resources with major impact of factor costs - in this case energy - across a single economy.

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