Strategic Dependence on LNG is Bad Policy

Government’s proposed LNG project is fraught with too many uncertainties including source of natural gas, absence of end user take off agreements and financing arrangements. Government should not be determining the fuel source of preference; rather, policy should promote diversification of sources. And government should initiate a renegotiation of the JPS licence with a view to opening up the national electricity grid to more energy providers.

 Our lack of competitiveness and low efficiency are due largely to the high cost of energy, in particular, electricity. The current price of US$0.30 cents per kilowatt hour is exceedingly high and will continue to rise as the cost of crude oil increases. With the recently imposed ten percent GCT on electricity we have reached another major crisis situation. In many instances it is becoming a cheaper option for businesses to exit the public grid and run their own private generators. The presentation of an energy policy has taken too long for such an important area of our lives. The Ministry Paper was tabled in November 2009 and it has taken one year for Parliament to grant its approval. All previous Government of Jamaica energy policies dating back to the mid-1990s had, as their central impetus, the establishment of a broad diversification strategy to address the impact of economic shocks  occasioned by geopolitical developments, energy market volatility and unpredictable
price movements which triggered unstable macro-economic conditions in the local economy.


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