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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 Energy Information System (CEIS)
March 2012
One of the most important
things to modern living is
electricity. Life without elec-
tricity would be unimagin-
able, particularly for the
more developed countries of
the world. In the Caribbean
and other parts of the world
electricity allows for the
lighting of houses, streets,
buildings/offices; it provides heating/
cooling and powers most equipment
used in factories, offices and homes.
Electricity is vital for the survival of
economies however it is the single-
largest cost to business in the
Caribbean. This is largely attributable
to the cost of the fuel used for the
generation of electricity in Caribbean
countries.
Approximately 30% of Caribbean
countries energy imports are consumed
by the electricity sector with Diesel
and Fuel Oil being the generation
fuels of choice. Caribbean countries
are seeking to build their economies,
reduce poverty and develop their infra-
structures. Efforts in this regard, in
itself, increases the demand for the
most vital resource required for mod-
ern living which ulti-
mately increases the
demand for the fuels
used in electricity gen-
eration. Notwithstand-
ing the negative environmental
impacts, Diesel and Fuel Oil are fossil
based fuels which continue to domi-
nate usage in the Caribbean electricity
sector. This comes at a high price and
also concerns with demand and supply
impacts the region. In most Caribbean
countries, prices per kilowatt hour of
electricity varies with any increase in
generation fuel prices and these prices
are passed directly to the consumers
in what is called a fuel surcharge
component on electricity bills. This
increases the burden on the economy
to find scare foreign exchange
resources to purchase fuel. What
ultimately occur is referred to as a
ripple effect or domino effect on
businesses and citizens of a
country whereby the cost of
every single good or service is
increased with any in-
crease in electricity costs.
Bearing these realities in
mind, countries in the
Caribbean that are highly
dependent on expensive
Diesel and Fuel Oil for
electricity generation are
seeking to diversify their
energy mix with cheaper
more efficient fuels. In the
more developed countries
of the world, electricity
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.
To access CEIS website
CONTACT US
Caribbean Energy Information System
Scientific Research Council
Hope Gardens, Kingston 6, Jamaica
1-876-927-1779 (Telephone)
1-876-977-1840 (Fax)
www.ceis-caribenergy.org
continued on page 2/
Image source: www.blogspot.com
page 2 Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2012
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 )
generation is not dependent on the two
common fuel sources used in the
Caribbean. The two most prominent
options used in regions such as the
United States, Asia and Europe are
Natural Gas and Coal which are both
fossil fuels and are considered cheaper
and more cost effective to utilize.
These fuels although providing
economic opportunities for electricity
generation have some negative
implications. Despite these negatives,
Caribbean nations having the necessity
to reduce electricity cost have been
giving much thought to the use of these
fuels. In this issue of the Caribbean
Petroleum Update, we will assess some
of the pros and cons associated to the
use of Coal for electricity generation.
Coal
Coal usually referred to as the “Black
Diamond” is a fuel formed through a
process called “Coalification.” This is
basically the continual decay, compres-
sion and burial of Peat (plant roots,
barks, etc.) by sediments over an
extended period in an environment
where heat is added thereby causing
the complex hydrocarbons in the Peat
to breakdown and alter in a variety of
ways. The stages of this trend proceed
from plant debris through peat, lignite,
sub-bituminous coal, bituminous coal,
anthracite coal, to graphite (a pure
carbon mineral). In the past many
considered coal the most impure fuels
largely due to the fact that it contains
large quantities of sulfur and other
impurities including heavy metals
such as uranium, thorium, aluminum,
mercury and iron. A 1,000 MW coal-
burning power plant is said to release
as much as 5.2 tons/year of uranium
(containing 74 pounds of uranium-235)
and 12.8 tons/year of thorium. The ra-
dioactive emission from this coal
power plant is 100 times greater than a
comparable nuclear power plant with
the same electrical output; including
processing output, the coal power
plant's radiation output is over 3 times
greater. However, in recent times, tech-
nology has allowed for reduced envi-
ronmental impact during the burning
process.
Coal is converted to electricity by first
milling the coal into a fine powder
thereby increasing the surface area
which allows it to burn more quickly.
The type of system where this powder
is used is called a Pulverized Coal
Combustion (PCC) System. The
powdered coal is blown into the
combustion chamber of a boiler
where it is burnt at high temperature
producing hot gases and heat energy
(See Fig 1). The hot gases and heat
energy produced converts water
contained in tubes lining the boiler into
steam. The pressurized steam is used to
push thousands of propeller–like blades
on a turbine shaft with a generator
mounted at one end with wounded wire
coils. Electricity is generated during
the rapid rotation. The generated elec-
tricity is transformed into voltages
up to 400,000 and transmitted via
power lines where it can be broken
down to lower and safer voltages
(100-250 volts) for consumption in
the domestic market.
Burning of coal releases Carbon
Dioxide and other pollutants such as
sulfur, adding to the greenhouse
gases in the atmosphere. The
combination of sulfur with moisture
in the atmosphere forms sulfuric
acid and when it rains, causes "acid
rain". The acid can lower the PH
levels in lakes and ponds suffi-
ciently so that fish and other aquatic
life forms cannot survive thereby
continued on page 3/
Fig 1
PROS & CONS: COAL FOR GENERATING ELECTRICITY IN THE CARIBBEAN...continued from page 1/
Caribbean Petroleum Update : March 2012 | 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 )
impacting the human eco-system. With
this in mind, Caribbean countries that
depend heavily on fishing and farming
would need to ensure that if a Coal
powered plant is established in their
country efforts are made to prevent ash
in disposal landfills from contaminat-
ing aquifers through groundwater
infiltration as this could impact the
very survival of inhabitants.
However, despite the negatives men-
tioned, coal is considered one of the
most efficient fuel sources largely due
to the price (approximately US$60/
Short Ton), the large reserves and read-
ily available supply. Coal can be easily
stored and does not require special
pipelines and dedicated supply routes.
Approximately one ton of the coal used
in a Power Plant generates about two
megawatt hours of electricity i.e. it
takes approximately one pound of coal
to generate one kilowatt hour of
electricity which would approximate to
a generation rate of US$0.03/kwh.
Looking at this rate comparatively with
rates that are in the range US$0.15 –
US$0.40/kwh the financial gains are
impressive.
In the United States (US), over 50% of
the electricity generated is produced
through the use coal - most of which is
produced locally. This means that with
the U.S being so close to the Caribbean
there is a likely chance that access to
the raw material may not be a problem
to Caribbean Countries. The eighteen
CEIS Network member countries
together currently have a total electric-
ity installed capacity of approximately
13000 MW. If you do the math to
identify the cost of the raw material to
meet the full generation capacity for
these countries; it is likely that you will
find such cost to be significantly lower
when compared to the conventional
fuel sources used for electricity genera-
tion in the region.
There are other advantages and disad-
vantages of coal; however, the ones
mentioned above are the most common
ones. Although coal is very useful for
several things, like many other sources
of energy it does have its drawbacks.
However, improvements in efficiency
of Power Plants can reduce the impacts
on the environment.
Improvements in conventional PCC
power station design and new combus-
tion technologies can allow more
electricity to be produced from less
coal. This is known as improving the
thermal efficiency of the power station.
Efficiency gains in electricity genera-
tion from coal-fired power stations will
play a crucial part in reducing global
CO2 emissions. It is believed that a one
percentage point improvement in the
efficiency of a conventional PCC plant
can result in a 2-3% reduction in CO2
emissions. In addition to reduced
emission of carbon dioxide per mega-
watt (MW), PCC plants are also more
ideal to retrofitting with CO2 capture
systems.
Efficiency improvement is currently
the focus in the coal industry as this is
one way of reducing the environmental
impacts associated with the use of
Coal. The current technology being
promoted for coal generated electricity
is higher efficiency supercritical and
ultra-supercritical plants through the
wider use of Integrated Gasification
Combined Cycle (IGCC) systems for
power generation. These systems could
reap significant benefits for the
Caribbean in reducing electricity cost
thereby stimulating economic growth
for Caribbean countries.
Apart from the financial gains in
electricity generation, other advantages
from the use of coal include manufac-
turing metal products, ceramics, paper,
cement and chemicals. Ethylene and
methanol, which are sometimes manu-
factured using Coal gas, are utilized in
the production of products like tar,
fertilizers, various medicines and plas-
tics. There are also specific industries
that use a large amount of Coal such as
paper manufacturing and cement
manufacturing. Jamaica has been
looking at the use of coal in the
Cement Industry. Caribbean Cement
Company of Jamaica has plans to
establish a 30MW coal generated
power plant to offset fuel cost
(expected savings of US37M/Yr). The
location for the plant has been identi-
fied in close proximity to a port of
entry where the raw material can be
easily off-loaded and transported to the
identified plant site. If plans by the
Jamaica Public Service to use LNG to
reduce electricity cost were not to ma-
terialize, the Jamaica Public Service
could also utilize Coal as fuel source
instead of Diesel and HFO. This would
provide greater savings to the
consumer. Other countries such as
Dominican Republic having large in-
dustries, if desirous of reducing
electricity cost could look at Coal as a
part of their energy mix bearing in
mind the environmental impacts. It is
also imperative that careful thought be
given to the pros and cons associated
with the use of this abundant, cheap
and efficient fuel source before action
is taken to establish a Coal fueled
power plant in the Caribbean.
PROS & CONS: COAL FOR GENERATING ELECTRICITY IN THE CARIBBEAN...continued from page 2
page 4 Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2012
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 )
CC A R I BA R I B PP E T R O L E U ME T R O L E U M NN E W SE W S & H& H A P P E N I N G SA P P E N I N G S
ARUBA
Oil refinery in Aruba suspends operations >>
21/03/2012
GLF offered to expand deal >> 20/03/2012
Valero To Suspend Refining Operations
At Aruba >> 19/03/2012
BAHAMAS
No application for oil drilling in Bahamas, says
Chinese embassy >> 17/03/2012
BELIZE
Energy company strikes oil on first well on Belize
concession >> 13/03/2012
CUBA
Bill on oil prospecting in Cuba waters considered
by US Congress >> 26/03/2012
Cuba resumes domestic production of aviation
fuel >> 05/03/2012
CURACAO
Caribbean island Curacao faces oil refinery
dilemma >> 14/03/2012
GRENADA
Former minister calls for electricity deregulation
in Grenada>> 30/03/2012
GUYANA
Guyana gets US technical, capacity building
help for oil, gas industry >> 01/03/2012
JAMAICA
Jamaicans to pay more at the pumps
tomorrow >> 21/03/2012
Russians interested in setting up ethanol plant in
Jamaica >> 05/03/2012
Gas station operator happy to serve
Oracabessa >> 03/03/2012
ST LUCIA
Big Decisions for Hess Oil GIS Saint
Lucia >> 26/03/2012
INTERNATIONAL
Research and Markets: Valero Energy Corporation:
SWOT Analysis & Company Profile >> 29/03/2012
Gas prices continue upwards >> 22/03/2012
Oil drops on Saudi supply promise >> 21/03/2012
Oil slides on growth prospects, less tension over
Iran's nuclear programme >> 07/03/2011
BP reaches US$7.8 billion deal >>03/03/2012
Caribbean Petroleum Update : March 2012 | Call: 1-876-927-1779 page 5
C A R I B B E A N E N E R G Y I N F O R M A T I O N S Y S T E M ( C E I S )
REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP
March 2012
Retail prices for Regular Unleaded Gasoline in the sixteen Caribbean countries reviewed at the end of March 2012 remained
relatively stable in five countries. Marginal decreases were seen in Jamaica and St Vincent/Grenadines whilst marginal in-
creases were seen in nine countries in the range of .08% and 1.05% when compared to the previous month. The average re-
tail price at the end of March 2012 for the product over the sixteen countries when compared to the average retail price seen
in December 2011 remained relatively the same.
NOTE:
*US Gallon = 3.785 L
*Imperial Gallon = 4.546 L
*As at November 1, 2009
MTBE was phased out from
all gasoline blends in Ja-
maica and replaced with
10% Ethanol.
CHART:
See prices for other products at See prices for other products at See prices for other products at www.ceiswww.ceiswww.ceis---caribenergy.orgcaribenergy.orgcaribenergy.org ...
Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2012
COUNTRIES J A N F E B M A R 3 Mths AVG
ANTIGUA/ BARBUDA 1.23 1.23 1.23 1.23
BAHAMAS [91 OCT] 1.33 1.35 1.44 1.38
BARBADOS 1.55 1.59 1.66 1.60
BELIZE [87 OCT] 1.41 1.45 1.51 1.45
B.V.I [87 OCT] 1.26 1.27 1.29 1.27
DOMINICA 1.12 1.14 1.19 1.15
GRENADA (95 OCT) 1.24 1.28 1.32 1.28
GUYANA 1.06 1.08 1.09 1.08
JAMAICA 87 Octane[E10] 1.27 1.30 1.28 1.28
MONTSERRAT 1.19 1.21 1.29 1.23
ST. KITTS/ NEVIS 1.20 1.19 1.32 1.24
ST. LUCIA 1.21 1.22 1.22 1.22
ST. VINCENT/ GRENADINES 1.19 1.16 1.13 1.16
SURINAME [95 OCT] 1.40 1.43 1.49 1.44
TRINIDAD/ TOBAGO [92 OCT] 0.42 0.42 0.42 0.42
TURKS/ CAICOS 1.58 1.58 1.61 1.59
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 GasolineMARCH Avg vs
3 Mths Avg (Jan - Mar 2012)
MAR
AVG
page 6 Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2012
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 Crude Oil prices over the period January
to March 2012 indicated instability in the oil industry
with prices seen at approximately US$97.50/BBL in
February then escalating to a year to date high of
US$107.54/BBL in the first week of March. Since
then, prices have remained above US$106/BBL. Car-
ibbean consumers a very concerned with this trend.
When oil prices for the period examined (Jan—Mar)
were compared with the same period last year, prices
were seen at a low of US$84.39/BBL (Feb. 2011) and
a high of US$104.34/BBL (mar. 2011).
Featured Offers:Featured Offers:Featured Offers:
Caribbean Energy Information System (CEIS)
primary report of historical annual petroleum energy
statistics provided for 18 Caribbean Countries.
Included are data on total energy production,
consumption, and trade; overviews of petroleum,
natural gas, electricity, as well as financial and
environmental indicators for over twenty years.
US$/B
BL
76.19
88.14
109.61
38
48
58
68
78
88
98
108
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Avg
US$
/BBL
Period
Average Monthly World Crude Oil Prices (2009 - 2011)
2009 2010 2011
102.39
107.18107.54
92.00
94.00
96.00
98.00
100.00
102.00
104.00
106.00
108.00
110.00
WK 1 WK 2 WK 3 WK 4 Mth Avg
US$
/BBL
Period
Average Weekly & MonthlyCrude Oil Prices
(January March 2012)
Jan-12 Feb-12 Mar-12
Subscriptions If you wish to subscribe (free of charge) or cancel your
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