EDITORIAL - Place nuclear on the agenda

Correction & Clarification


In our editorial titled 'Place nuclear on the agenda', we reported that the Office of the Contractor General pointed to "what, on the face of it, seems to be grave conflicts of interest and lack of transparency. For example, the official who managed the technical side of Jamaica's plan to transition from oil to LNG had a separate, private business arrangement with Exmar".

The Gleaner would like to clarify that the OCG Report in fact stated that the official had declared that he had "a financial interest with one (1) of the potential partners of the Exmar Consortium, Exmar Marine NV, to the PCJ and the Ministry of Mining and Energy" and" ... had a prior affiliation with one of the potential bidders for the 'FSRU LNG Project". According to the report, the official disclosed that "he was involved in a project in Colombia which also involved Exmar Marine NV", he did not "have any commercial relationship with Exmar", and "nevertheless if the project is successful, both Exmar and [the official] will benefit".

We regret any inconveniences or embarrassment caused to anyone arising from the above.

----------------------------------------------------

We expect that in short order the Golding administration will rescind its naming of the consortium led by Exmar MV as the preferred bidder for establishing an offshore storage and regasification facility for liquefied natural gas (LNG) in Jamaica.  Its impulse will be to retender the project - on which we suggest caution - a matter to which we will return.

First, though, we again declare our support for any decision to halt the agreement with the Exmar consortium, given the prima facie evidence that the bidding process was infested with irregularities - and perhaps worse.

The Office of the Contractor General (OCG), which probed the bid, pointed to what, on the face of it, seems to be grave conflicts of interest and lack of transparency.

For example, the official who managed the technical side of Jamaica's plan to transition from oil to LNG had a separate, private business arrangement with Exmar, yet was part of a group that evaluated its bid. The same person was also deemed to have excluded one potential bidder that could have seriously challenged Exmar.

Additionally, a principal of one of Exmar's partners was a former chairman of the vehicle used by the Government for the LNG project and may have operated with insider information.

It is not surprising that the government task force on LNG, acting on private legal advice, proposed the scrapping of the agreement.

The administration may feel pressured to head back to the market with the LNG project, given the view that places cheaper energy as the potential game-changer for the island's stagnant economy.

Current trends

Put another way, at US$0.30 per kilowatt-hour for electricity, Jamaican firms, and the economy more broadly, cannot compete with others in the region where power is substantially cheaper.

The administration hitched the country's energy future to LNG, going to market with a bid for 480 megawatts of electricity-generating capacity, based on that fuel.

However, the administration is itself opaque about the basis on which it arrived at LNG as its preferred price of fuel. Moreover, current trends do not suggest that LNG, whose demand is on the rise, can be delivered at a price to make energy Jamaica's hoped-for game-changer. Most analysts suggest that a competitive Jamaican economy requires energy at around US$0.10 per kWh, or lower.

That is why we suggest that the administration should not rush into another bid.

Our suggestion is that Jamaica enter a serious, robust debate on its energy future, ruling in all forms of energy sources, with the assumption that all can be in play at the same time.

These, we suggest, should include coal and nuclear power, especially given the substantial work now being done on small, safe nuclear reactors for electricity generation.

We understand that there is often a visceral reaction against nuclear power. But what is not widely appreciated is that a small research nuclear reactor has been in operation at the University of the West Indies (UWI), Mona, for more than two decades.

It may make sense that a semi-private think tank on energy be launched by the UWI to help Jamaica, and the wider English-speaking Caribbean, think through these energy issues. Fortuitously, the Americans, as Hillary Clinton noted last week, see this as a critical issue for our region.

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.