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CARIBBEAN PETROLEUM UPDATE is a monthly Bulletin which highlights petroleum issues affecting or relevant to the Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.
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CARIBBEAN PETROLEUM UPDATE is a monthly Bulletin which highlights petroleum issues affecting or relevant to the
Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.
CONTACT US
Caribbean Energy Information System Scientific Research Council
Hope Gardens, Kingston 6, Jamaica 1-876-927-1779 (Telephone)
1-876-977-1840 (Fax) [email protected]
www.ceis-caribenergy.org
continued on page 2/
T he optimal utilization of our energy resources to gener-
ate long-term sustainable growth and development of
our economies and the creation of a better quality
of life for our citizens is dependent on several factors.
One of the main factors is the availability of these energy
resources. Another important factor is the price at which these
resources are acquired and how efficiently they are utilized. This
brings us to the question as to whether the Caribbean region is
optimally utilizing their energy resources for electricity genera-
tion. Electricity can be considered the most vital transformed
energy resource within a country since all sectors of the economy
relies heavily on the availability of this form of energy.
With the exception of Trinidad and Tobago (T&T), all Caribbean
countries over the past decades have been battling with some of
the highest electricity rates seen in the world. This leads us to ask
the question, what makes T&T different from other Car-
ibbean nations? The answer is very simple, T&T enjoys
the benefits of having 99% of its electricity being gener-
ated from Natural Gas and as such they can boast the
lowest electricity rates in the Caribbean. Reports from
an audit conducted in December 2010 by Houston-based
consultant Ryder Scott says natural gas reserves in T&T
were 13.4 trillion cubic feet which indicates that there is
no short term need for T&T to import fuel for electricity
generation.
What is Natural Gas?
Natural gas as you might already know is considered to
be the world’s cleanest burning fuel and it has emerged
as the environmentally preferred petroleum fuel of
choice. Natural gas is a combustible mixture of hydro-
carbon gases with the primary component being meth-
ane. Natural gas is often associated with oil deposits and
is found in reservoirs far beneath the earth.
Typical Composition of Natural Gas
Source: www.naturalgas.org
Caribbean Energy Information System (CEIS)
August 2011
Air view of Atlantic LNG, Trinidad & Tobago Source: www.lngpedia.com
Methane CH4 70-90%
Ethane C2H6
0-20% Propane C3H8
Butane C4H10
Carbon Dioxide CO2 0-8%
Oxygen O2 0-0.2%
Nitrogen N2 0-5%
Hydrogen sulphide H2S 0-5%
Rare gases A, He, Ne, Xe trace
To access
CEIS website
page 2 Call: 1-876-927-1779 | Caribbean Petroleum Update : August 2011
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
Is Natural Gas a solution to high electricity prices in the Caribbean? continued from page 1/
What do you think about this Issue? Share your thoughts with us at
Petroleum
News & Happenings Oil rises>> 31/8/2011
OUR, JPS and questionable electricity bills>> 30/8/2011
Fuel costs are pushing up the price of flying>> 22/8/2011
Fuel prices rise again>> 17/8/2011
OPEC sees growing world oil demand >> 10/8/2011
Gas prices down $4 tomorrow>> 10/8/2011
LNG pipe dream? Experts warn of impending world shortage of
the precious oil alternative>> 7/8/2011
Gasolene down 50 cents tomorrow>> 3/8/2011
Chevron completes sale of fuel businesses in French Caribbean
territories >> 1/8/2011
Natural Gas – LNG. As
LNG it takes up to 600
times less space than in
its gaseous state, which
makes it feasible or easier
to transport over long
distances thereby facili-
tating shipping from the
parts of the world where
it is abundant to where it
is in demand.
With many Caribbean
countries depending on
Diesel and Heavy Fuel
Oil – HFO for electricity
generation, and with die-
sel and international oil prices fluctuating more rapidly than
the rate at which electricity is generated, alternative fuel
sources for electricity generation is becoming a necessity for
the regions sustainability. Coupled with this dilemma are the
efficiency ratings and age of the region’s electricity generat-
ing plants some of which uses combined cycle technology.
Many of these plants are operating far below optimal
standards thereby placing a greater burden on the pockets of
the region’s consumers who would like to enjoy lower
electricity rates.
With the exception of hydro and wind plants, electricity
generating plants in the Caribbean are predominantly Gas,
Diesel/HFO, Steam or Combined Cycle Plants. These plants
operate at efficiencies ranging between 25% and 55% with a
Combined Cycle plant having the highest efficiency. The
combined cycle plants in the Caribbean are few in numbers.
New generating plants would have to be built in most
countries to replace existing Diesel and HFO plants in order
to facilitate the use of LNG. If this is done regional consum-
ers could envisage approximately 30% reduction in their
electricity bills. However, such reductions would not be seen
in the short-term as construction of a LNG power plant is
not a cheap or quick venture. The Jamaica Public Service
through a competitive bidding process has been granted
approval to construct a 360MW combined cycle/dual fuel
electricity generating plant in Jamaica between April 2012
and January 2016. This is however contingent on the final-
ization of plans to have LNG as a source of fuel in Jamaica.
These plans are well on the way with the sending out of two
request for proposals (RFPs), one for LNG Supply and the
other for the Infrastructure required for the receiving, storage
and re-gasification of the LNG. continued on page 3/
Some advantages in using Natural Gas
It is inexpensive
It is natural and is an energy source that has much lower
air emissions than other fossil fuels, such as oil or coal
It is odorless, colorless, non-corrosive and non-toxic
Most homes use it so it is quite popular
Was not affected much by the second Gulf War so its
better value then ever
Weight is less than one-half that of water.
Proven to be reliable and safe process and it has been in
use since 1944.
Some disadvantages in using Natural Gas
It is highly flammable
It is toxic if inhaled in large amounts.
It's a Non-Renewable resource
It is creating cavities in the earth.
Transportation of Natural Gas
In its gaseous state, natural gas is difficult to transport. As
such, it is super-cooled to minus 260 degrees Fahrenheit
(minus 162 degrees Celsius). At that temperature, natural
gas condenses into a liquid and is referred to as Liquefied
Source: www.sempralng.com
Caribbean Petroleum Update : August 2011 | Call: 1-876-927-1779 page 3
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
Is Natural Gas a solution to high electricity prices in the Caribbean? continued from page 2/
The current fuel surcharge on electricity bills within the
Caribbean ranges between US$0.20/Kwh and US$0.40/Kwh.
Trinidad & Tobago does not have a fuel surcharge compo-
nent as part of their electricity tariffs and electricity is pro-
vided to consumers at an average rate of approximately
US$0.05/Kwh using natural gas as the main source of gen-
eration fuel. The existing generating plants in the Caribbean
utilizes between 0.0014 Barrels and 0.0035 Barrels of fuel
per Kilowatt Hour. The rate of fuel use varies in the range
depending on whether the plant is Gas, Steam, Diesel/HFO
or Combined Cycle.
In a natural gas powered electricity generation plant approxi-
mately 0.003412 MMBTU is used to generate 1 Kwh of elec-
tricity. Prices for natural gas on the international market are
within the range of US$3 and US$4.5 per MMBTU. Below is
a table indicating possible approximate cost of generation
fuel per kilowatt hour at assumed per barrel prices for oil on
the international market versus assumed prices per MMBTU
of Natural Gas (see table below).
Can you imagine if all countries in the region could enjoy the
benefits of using natural gas for electricity generation? This
would create an almost level playing field for all Caribbean
countries as it relates to the cost of manufacturing; bearing in
mind that T&T not having to purchase electricity fuel would
still have a competitive edge. However, more avenues for
increased productivity and increased foreign investments in
many countries would still be
created as the region’s highest
manufacturing overhead cost
(electricity) would be at a
more cost effective level to
allow competitiveness. We
must be cognizant of the fact
however, that demand and
supply determine prices and
improved energy security and
competitiveness in this in-
stance would only be sus-
tained if prices for natural gas
remain stable over the long
term.
Price of Oil US$/BBL 70 80 90 100 110 120 130 Fuel Cost Low Range (US$/Kwh)
0.10 0.11 0.13 0.14 0.15 0.17 0.18
Fuel Cost High Range (US$/Kwh)
0.25 0.28 0.32 0.35 0.39 0.42 0.46
Natural Gas Prices US$/MMBTU 3 3.2 3.4 3.6 3.8 3.9 4
Natural Gas Cost (US$/Kwh) 0.010 0.011 0.012 0.012 0.013 0.013 0.014
Variance in Fuel Cost (Oil Vs Natural Gas) US$/Kwh
Fuel Cost Low Range (US$/Kwh) 0.09 0.10 0.11 0.13 0.14 0.15 0.17
Fuel Cost High Range (US$/Kwh) 0.23 0.27 0.30 0.34 0.37 0.41 0.44
POSSIBLE ELECTRICITY FUEL COST WITH VARYING PRICES OF OIL AND NATURAL GAS
Observe speed
Though all vehicles have optimal fuel efficiency at different speeds its good to note that speeds over 60 miles per hour decreases the vehicles gas mile-age drastically.
Extra Weight Removal
Ensure there is no unnecessary weight added to the vehicle. Extra weight in the vehicle can decrease your fuel efficiency while driving.
Idling Too Much
Avoid idling as much as possible. When your idling, your car is not getting you anywhere and is burning gas.
Cruise Control Option
Cruise control can help save gas by keeping your speed of the vehicle constant. When your driving and you let go of the gas and then press the gas (changing speeds) your causing your vehicles rpm to spike unnecessarily. Using this in the city is a stretch considering how often you have to stop for stop signs, traffic lights, pedestrians, etc, but on the highway this tip is the most effective.
Maintenance On Your Vehicle:
Check your air filters to ensure you do not have a clogged air filter. Also keeping your tires properly inflated is one of the most important tips in fuel sav-ing as well as your safety on the road. Also, driving with the windows down also will reduce fuel mileage as wind that goes into the vehicle will create drag.
Source: www.wiinjamod.com
page 4 Call: 1-876-927-1779 | Caribbean Petroleum Update : August 2011
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP
January - August 2011 Retail prices for refined petroleum products remained relatively high in comparison to prices seen at the beginning of the
year when crude oil prices were approximately US$90/BBL. Of the sixteen countries reviewed at the end of August, retail
prices for regular unleaded gasoline in three Caribbean countries had shown increases when compared to the previous
month while eight countries showed slight declines and the other four remained relatively stable.
NOTE:
*US Gallon = 3.785 L
*Imperial Gallon = 4.546 L
*As at November 1, 2009
MTBE was phased out from all
gasoline blends in Jamaica
and replaced with 10% Etha-
nol.
CHART 1
See prices for other products at See prices for other products at See prices for other products at www.ceiswww.ceiswww.ceis---caribenergy.orgcaribenergy.orgcaribenergy.org ...
Table 2: Regular Unleaded Gasoline Average Retail Price (US$/Litre)
2 0 1 1
COUNTRIES JAN FEB MAR APR MAY JUN JUL AUG AVG
ANTIGUA/ BARBUDA 1.00 1.00 1.07 1.15 1.25 1.33 1.30 1.30 1.18
BAHAMAS [91 OCT] 1.24 1.25 1.30 1.46 1.47 1.47 1.45 1.43 1.39
BARBADOS 1.47 1.48 1.49 1.59 1.59 1.59 1.59 1.66 1.56
BELIZE [87 OCT] 1.33 1.34 1.48 1.50 1.54 1.51 1.49 1.51 1.46
B.V.I [87 OCT] 1.12 1.13 1.20 1.26 1.26 1.27 1.25 1.22 1.21
DOMINICA 1.01 1.05 1.06 1.11 1.21 1.24 1.22 1.20 1.14
GRENADA (95 OCT) 1.05 1.06 1.17 1.23 1.29 1.32 1.29 1.28 1.21
GUYANA 0.99 0.99 1.06 1.08 1.08 1.12 1.15 1.14 1.08
JAMAICA 87 Octane[E10] 1.17 1.18 1.25 1.28 1.29 1.29 1.31 1.29 1.26
MONTSERRAT 1.13 1.14 1.18 1.27 1.38 1.42 1.35 1.32 1.27
ST. KITTS/ NEVIS 1.04 1.07 1.20 1.13 1.14 1.23 1.27 1.28 1.17
ST. LUCIA 1.14 1.14 1.16 1.22 1.27 1.28 1.28 1.27 1.22
ST. VINCENT/GRENADINES 0.99 0.98 1.00 1.06 1.10 1.10 1.10 1.10 1.05
SURINAME [95 OCT] 1.21 1.32 1.34 1.47 1.55 1.51 1.48 1.48 1.42
TRINIDAD/[92 OCT] 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42
TURKS/ CAICOS 1.36 1.36 1.42 1.42 1.45 1.55 1.61 1.61 1.47
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
US$
/Litr
e
16 Caribbean Countries
Comparative Retail Pump Prices Regular Unleaded Gasoline
August Avg vs 8 Mths Avg (Jan - Aug 2011)
Aug Avg
8 Mths Avg
Caribbean Petroleum Update : August 2011 | Call: 1-876-927-1779 page 5
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
International oil prices over the period June to August
2011, remained above the US$100/BBL mark with the
highest price seen in the first week of August
(US$114). The lowest weekly price seen in August for
the product was US$102.34/BBL - reflected at the end
of the 2nd week. This price was approximately 30%
below the highest price seen during the record oil
price year of 2008. With the exception of first week,
prices seen in August when compared to the other two
months (Jun & Jul) were lower.
With prices remaining above the US$100 mark,
productivity in the Caribbean is on the decline as the
already fragile economies are faced with high energy
cost and the harsh ongoing impact of the global
recession.
Featured Offers:Featured Offers:Featured Offers:
Caribbean Energy Information System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.
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US$/B
BL
US$/B
BL
Average Weekly & Monthly
Crude Oil Prices
(Jun - Aug 2011)
113.5 113.87114.41
102.34
95
100
105
110
115
120
WK1 WK2 WK3 WK4 Mth Avg
Period
US
$/B
BL
2011-Jun
2011-Jul
2011-Aug
