Sun | Sep 24, 2017

EDITORIAL - Don't give coal short shrift

Published:Tuesday | March 4, 2014 | 3:00 AM

Jamaica, as Christopher Zacca has observed, does, indeed, have the larger labour force. And, we might add, is in a far better geographic location for the trans-shipment business.

But Trinidad and Tobago has oil and gas, which it has used over the past two decades to transform itself into the English-speaking Caribbean's industrial powerhouse.

Jamaicans, as does Mr Zacca in his role as president of the Private Sector Organisation of Jamaica (PSOJ), understand fully the effect of Port-of-Spain's cheap access to energy. Jamaica has a negative trade balance with Trinidad and Tobago of nearly US$1 billion.

There are many problems to be fixed to make Jamaica's economy more competitive. But none, in our view, looms larger than the cost of energy. With the cost of electricity at around US$0.42 per kilowatt-hour - it is US$0.05 in Trinidad and Tobago - our firms start with a significant disadvantage for which the cheaper cost of labour is, of itself, insufficient to compensate.

In other words, fixing energy is crucial to end Jamaica's long drought to significant economic growth. That is why this newspaper is concerned if China Harbour Engineering Company (CHEC) signs an agreement with the Trinidad and Tobago government to develop a trans-shipment/ industrial facility in that country, with features similar to what it proposes in Jamaica.

Indeed, CHEC's Jamaican project, at a cost of more than US$1.5 billion, would be the largest ever in Jamaica. But whether it comes to fruition could turn on the cost of energy.

We have stumbled in getting LNG-fired power plants off the ground. A 360-megawatt facility for which the Government gave a go-ahead is uncertain, not least for the fact that LNG is difficult to find at a cost that would significantly reduce the price of power to Jamaican consumers. In this region, for instance, our most likely suppliers and better partners, Trinidad and Tobago and Venezuela, have little to sell. And the Americans remain undecided on whether they should export the stuff.

COAL FEASIBLE

CHEC, the Jamaican Government says, has proposed building a coal-fired plant for the planned port and logistics facility in the Portland Bight/Goat Islands vicinity. This newspaper believes that the idea should be given serious, and probably positive, consideration.

We appreciate the arguments of those who raise environmental and health concerns over the burning of coal. There are, however, countervailing considerations.

First, there remains the uncertainty over LNG. And if it can be found, it is unlikely that a developer could readily reach deals for the small quantities that would be needed to fire a power plant of, say, less than 100 megawatts, which is probably what CHEC would need.

This brings us back to the coal plant proposal. It would be relatively small, not carrying the severe environmental implications of a major power plant. Moreover, modern technologies can reduce the negative impact of greenfield coal-fired power plants.

Important, with its chronic low-growth economy, unemployment of nearly 16 per cent and massive underemployment need investment and jobs if Jamaica is to avoid worsened social dysfunction. That crisis is now!

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.