Energy, tax policies needed for successful introduction of LNG

There are several changes, including those related to policy, that must be done for the successful introduction of liquefied natural gas (LNG) to Jamaica.

That is according to Dr Malaika Masson, energy specialist at the Inter-American Development Bank (IDB). "Energy and tax policies need to be crafted. Technical and safety standards need to be established and monitored, and new technical expertise for maintaining gas infrastructure and equipment needs to be developed," Masson stated responding to questions from The Gleaner.

The energy specialist asserted that the "successful introduction of natural gas in particular requires a coordinated effort by various government ministries and agencies."

According to Masson, Jamaica's economic growth depends in large measure on decreasing the cost of energy for households and businesses. She argued that while LNG has high up-front infrastructural costs, pricing is likely to be more competitive and stable compared to oil-based alternatives in the long run.

More competition

Masson told The Gleaner that greater fuel options for businesses will result in more competition between fuels and this should lower fuel prices across the board.

This, in turn, would lead to an improvement in the competitive position of Jamaica's manufacturing and mining sectors in particular.

Masson stressed that fuel transition required the development of new technical expertise.

This, she said, would generate new jobs related to training and the maintenance of gas infrastructure, including terminals, pipelines and trucks, as well as end-user equipment like generators and engines.

The IDB energy specialist said reduction in emissions provides direct environmental and health benefits to Jamaica's population, thereby lowering health costs for individuals, businesses and the public sector.

She said: "A cleaner environment with lower greenhouse gas emissions also improve the country's standing as a tourism destination and as a signatory to the Paris Climate Accord."

'Jamaican households will benefit from LNG'

Dr Malaika Masson, energy specialist at the Inter-American Development Bank (IDB) said the introduction of liquefied natural gas (LNG) to Jamaica will see households and businesses benefiting from lower electricity rates as a greater number of renewable power plants connect to the grid, facilitated in part by responsive base load generation from LNG-fired turbines, like the ones in operation at the JPS plant in Bogue, Montego Bay and others that will go into operation in Old Harbour.

The introduction of LNG to Jamaica also gives independent power producers the option to convert their heavy fuel oil dependent plants to LNG, given that the fuel is already in the island. At the same time, other energy-intensive industries like manufacturing, mining and transport, also have this fuel option available.

And Masson explained that LNG can be used to fuel combined heat and power plants that are designed to take advantage of excess heat for other industrial processes, providing gains in efficiency that make businesses that invest in this technology more competitive in the domestic and regional markets. The IDB is one of the main sponsors of the inaugural natural gas conference to be held from October 4-6 at The Jamaica Pegasus hotel in Kingston.

The conference is sponsored by the Office of Utilities Regulations and the Petroleum Corporation of Jamaica. Among other objectives, it will highlight the benefits of the introduction of natural gas to Jamaica.