Tweet
LNG, FDI, corruption, energy strategy
FRANKLIN JOHNSTON
Friday, August 13, 2010
Bookmark and Share
The Caribbean LNG bid is unusual. A firm in which the main shareholder is a politically appointed ex-top honcho of the body which has to approve and monitor the deal raises eyebrows in any country. FDI and LNG are good but deals must be vetted as corruption via foreign investment is real. CLNG will invest some US$600m and has reputable partners, but as the file to topple the contractor general is being built we must confront its faceless LNG lobby.
Yes, FDI is not taxpayers' money but things that cost us nothing can harm us! Free Cuban light bulbs choke us; 500 mislaid truckloads of sand ruin beaches, and foreign hotels that flout building laws harm us. We are poor; must we be corrupt too? What must the Office of the Contractor General do when told of a likely corrupt act? Ignore it as it's not our money? We know BP's oil deal in Libya, its lobby to free the Lockerbie terrorist who murdered 270 people, and Trafigura gave toxic waste to the Ivory Coast. Corruption and FDI are friends.
The LNG lobby say, "Hands off!", but let's support the OCG. Energy is a strategic input and we will not be bullied! The ink is not dry and they are emboldened to belittle our OCG! We must proceed with eyes wide open. The LNG lobby protests too much!
Natural Gas (gas) is mainly methane - odourless, colourless, tasteless; we add an odorant so we can smell a leak. If we cap Riverton dump we have a massive supply. Gas was here since forever; gas in nature, ignited by lightning burns for centuries. The Jews' "burning bush", the Greeks' Olympus flame, Chinese bamboo pipelines from 700 BCE tapped earth's gas leaks.
The UK uses gas from the 1700s and fans know tanks near Oval cricket field store gas from Victorian times. US energy comes from oil, coal, gas - in that order - and gas produced in 34 states account for 25 per cent of energy use. The cost to transport gas is horrendous; but now we can turn gas to a liquid (LNG). The same vessel holds 60 times the amount and we turn it back to vapour before use. Gas is cheap, has a good record and US technology is cutting edge. CLNG - a new firm with no track record, ships, technology, power plants or gas fields - is unusual. It is set up just to make money from us and its gas price will be higher than integrated US firms or mature gas providers.
Minister James Robertson has marine heritage, business experience and a future. Hylton's LNG mantle fits well. Nations make progress building on good ideas of the past - "Paul plants, Appolus waters" power to him! Once gas is embedded in our light and water bills it's an ATM for CLNG. When some people say, "don't worry", be very afraid!
CLNG is an offshore firm registered in a tax haven - it is not transparent. It does not trust us with its brand, nor is it in our reach for tax, money laundering or OCG checks. As a new firm doing its first venture in a murder capital, it has cojones, or powerful mentors! Time will tell! I found no D&B reports on its principals. They can control our energy but we must not be "nosy"! This may be the only chance the OCG has to do checks as it has no jurisdiction in the British Virgin Islands. What if all our investors set up in a tax haven?
Minister Robertson hypes cheap gas. This is unwise as the benefit of LNG is choice, not price. There are some 30 LNG import terminals under way in our area. Teeside Gasport in the UK was a first. In 2007 a US firm modified an LNG carrier (total cost US$300m); docked it at Teeside, did re-gasification on board and discharged gas into the grid. The firm now has a fleet of these EBRV ships to serve gasports as far as Europe. Teeside was built in months and used T&T gas. UK electricity firms as Eon, British Gas also sell piped gas to homes and businesses. Why did we choose CLNG and not the cheap, flexible, integrated, proved gas firms of our friend and major trading partner who rescues us in a crisis?
LNG economics is basic. The US uses gas since the1800s. Texas drills wells; the oil goes to refinery, gas to power plants, homes and industry as the state is piped for gas. In 2008 oil prices shot up, gas followed so petrol and electricity costs soared! The result? All industry and the Texas economy collapsed so demand for gas fell. Gas producers could not cover costs so they capped their wells and went fishing. Demand and supply rule! As demand for gas rises so will price; when demand for oil falls oil will be cheap. Robertson is wrong. LNG is not our "preferred energy source". LNG is good because it gives us choice and more gas firms will give us more choice and better prices!
Cabinet and the nation must consider some other issues:
(1) A gas cartel as in oil will soon exist. Producers will not cap their wells when prices fall and CLNG will not fold. Like OPEC they will fix volume, price and screw us royally!
(2) Open our strategic sectors to multinationals or local firms only; ban new firms formed in tax havens. They make money here but are not subject to all our taxes and scrutiny.
(3) Raw gas is cheap CLNG's replacement, maintenance, royalty and other costs are not. With this and US$600m capital in our electricity formulae our energy will not be cheap.
(4) Has Cabinet done risk studies, plans, budgets? National security, safety, environment? Coast Guard, marine fire service, law, regulation, no-fly, no-boat zones? The lobby is wrong. CLNG will cost taxpayers millions and we may get none of their taxes!
(5) T&T will give its nation a bigger "bly" to cancel Jamaican export gains from LNG. For JMA it's a zero sum game! T&T has the sources; it's their game; they will always win!
(6) Ban politicians, family and political appointees from going into business or jobs in their area of service during and for five years after leaving office. Let's block this corrupt path!
(7) For US$150m local investors can develop "Mobay Gasport" - as Teeside - and use the US firm's EBRV fleet. The west would be energy sufficient, can backstop the JPS and accept Trinidad's gas offer! We have many oil marketing firms as Shell, Esso; let's have many for gas too! By 2016 local gas and oil prices will converge. A MoBay gasport will ensure convergence at a lower price than a monopolist CLNG would wish. Let's protect ourselves! You read it here first in 2010! Stay conscious, my friend!
The Minister of Health's plan for a book to track health status of children is good. But in 2010 a chip embedded in an all-weather ID card, read, coded at clinics, is the shot!
Dr Franklin Johnston is an international project manager with Teape-Johnston Consultants currently on assignment in the UK.
FRANKLIN JOHNSTON
Friday, August 13, 2010
Bookmark and Share
The Caribbean LNG bid is unusual. A firm in which the main shareholder is a politically appointed ex-top honcho of the body which has to approve and monitor the deal raises eyebrows in any country. FDI and LNG are good but deals must be vetted as corruption via foreign investment is real. CLNG will invest some US$600m and has reputable partners, but as the file to topple the contractor general is being built we must confront its faceless LNG lobby.
Yes, FDI is not taxpayers' money but things that cost us nothing can harm us! Free Cuban light bulbs choke us; 500 mislaid truckloads of sand ruin beaches, and foreign hotels that flout building laws harm us. We are poor; must we be corrupt too? What must the Office of the Contractor General do when told of a likely corrupt act? Ignore it as it's not our money? We know BP's oil deal in Libya, its lobby to free the Lockerbie terrorist who murdered 270 people, and Trafigura gave toxic waste to the Ivory Coast. Corruption and FDI are friends.
The LNG lobby say, "Hands off!", but let's support the OCG. Energy is a strategic input and we will not be bullied! The ink is not dry and they are emboldened to belittle our OCG! We must proceed with eyes wide open. The LNG lobby protests too much!
Natural Gas (gas) is mainly methane - odourless, colourless, tasteless; we add an odorant so we can smell a leak. If we cap Riverton dump we have a massive supply. Gas was here since forever; gas in nature, ignited by lightning burns for centuries. The Jews' "burning bush", the Greeks' Olympus flame, Chinese bamboo pipelines from 700 BCE tapped earth's gas leaks.
The UK uses gas from the 1700s and fans know tanks near Oval cricket field store gas from Victorian times. US energy comes from oil, coal, gas - in that order - and gas produced in 34 states account for 25 per cent of energy use. The cost to transport gas is horrendous; but now we can turn gas to a liquid (LNG). The same vessel holds 60 times the amount and we turn it back to vapour before use. Gas is cheap, has a good record and US technology is cutting edge. CLNG - a new firm with no track record, ships, technology, power plants or gas fields - is unusual. It is set up just to make money from us and its gas price will be higher than integrated US firms or mature gas providers.
Minister James Robertson has marine heritage, business experience and a future. Hylton's LNG mantle fits well. Nations make progress building on good ideas of the past - "Paul plants, Appolus waters" power to him! Once gas is embedded in our light and water bills it's an ATM for CLNG. When some people say, "don't worry", be very afraid!
CLNG is an offshore firm registered in a tax haven - it is not transparent. It does not trust us with its brand, nor is it in our reach for tax, money laundering or OCG checks. As a new firm doing its first venture in a murder capital, it has cojones, or powerful mentors! Time will tell! I found no D&B reports on its principals. They can control our energy but we must not be "nosy"! This may be the only chance the OCG has to do checks as it has no jurisdiction in the British Virgin Islands. What if all our investors set up in a tax haven?
Minister Robertson hypes cheap gas. This is unwise as the benefit of LNG is choice, not price. There are some 30 LNG import terminals under way in our area. Teeside Gasport in the UK was a first. In 2007 a US firm modified an LNG carrier (total cost US$300m); docked it at Teeside, did re-gasification on board and discharged gas into the grid. The firm now has a fleet of these EBRV ships to serve gasports as far as Europe. Teeside was built in months and used T&T gas. UK electricity firms as Eon, British Gas also sell piped gas to homes and businesses. Why did we choose CLNG and not the cheap, flexible, integrated, proved gas firms of our friend and major trading partner who rescues us in a crisis?
LNG economics is basic. The US uses gas since the1800s. Texas drills wells; the oil goes to refinery, gas to power plants, homes and industry as the state is piped for gas. In 2008 oil prices shot up, gas followed so petrol and electricity costs soared! The result? All industry and the Texas economy collapsed so demand for gas fell. Gas producers could not cover costs so they capped their wells and went fishing. Demand and supply rule! As demand for gas rises so will price; when demand for oil falls oil will be cheap. Robertson is wrong. LNG is not our "preferred energy source". LNG is good because it gives us choice and more gas firms will give us more choice and better prices!
Cabinet and the nation must consider some other issues:
(1) A gas cartel as in oil will soon exist. Producers will not cap their wells when prices fall and CLNG will not fold. Like OPEC they will fix volume, price and screw us royally!
(2) Open our strategic sectors to multinationals or local firms only; ban new firms formed in tax havens. They make money here but are not subject to all our taxes and scrutiny.
(3) Raw gas is cheap CLNG's replacement, maintenance, royalty and other costs are not. With this and US$600m capital in our electricity formulae our energy will not be cheap.
(4) Has Cabinet done risk studies, plans, budgets? National security, safety, environment? Coast Guard, marine fire service, law, regulation, no-fly, no-boat zones? The lobby is wrong. CLNG will cost taxpayers millions and we may get none of their taxes!
(5) T&T will give its nation a bigger "bly" to cancel Jamaican export gains from LNG. For JMA it's a zero sum game! T&T has the sources; it's their game; they will always win!
(6) Ban politicians, family and political appointees from going into business or jobs in their area of service during and for five years after leaving office. Let's block this corrupt path!
(7) For US$150m local investors can develop "Mobay Gasport" - as Teeside - and use the US firm's EBRV fleet. The west would be energy sufficient, can backstop the JPS and accept Trinidad's gas offer! We have many oil marketing firms as Shell, Esso; let's have many for gas too! By 2016 local gas and oil prices will converge. A MoBay gasport will ensure convergence at a lower price than a monopolist CLNG would wish. Let's protect ourselves! You read it here first in 2010! Stay conscious, my friend!
The Minister of Health's plan for a book to track health status of children is good. But in 2010 a chip embedded in an all-weather ID card, read, coded at clinics, is the shot!
Dr Franklin Johnston is an international project manager with Teape-Johnston Consultants currently on assignment in the UK.
Comment