CEIS Petroleum Update March 2014

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Caribbean Petroleum Update : March 2014 | Call: 1-876-927-1779

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CARIBBEAN ENERGY INFORMATION SYSTEM (CEIS) MARCH 2014 ISSUE

Image Source: www.telegraph.co.uk

Coal is considered to be the dirtiest of all fossil fuels, yet it generates nearly 40% of the world’s electricity. When compared to the other fossil fuels it is the cheapest form, but its contribution to carbon emissions is nothing far from costly. The largest source of carbon emissions is coal fired plants. This puts coal among the greatest threats facing climate change. To curb global pollution to the levels needed to minimize the risk of catastrophic global warming, we must end our dependence on coal fired plants especially in major contributing countries like the United States and China (the largest consumer of coal in the world). On the Caribbean scene, the Dominican Republic has plans in the pipeline for the construction of two coal fired plants of 384.9MW each that will burn ‘clean’ pulverized coal.

Similarly, recent reports have surfaced highlighting the Jamaican government’s endorsement of using coal generated electricity to power it logistics hub that is to be constructed on parts of the Goat Islands. Emphasis was placed on the utilization of “clean coal” but is there such a product? Apart from the obvious danger to climate change, coal poses a lot of health problems. The by-products of coal include carcinogens that can cause cancer, mercury, radioactive materials and obvious externalities such as black smoke. However, given the high cost of electricity, having a coalfired generating plant will provide lower electricity costs to the logistics hub, but at what expense? Can the use of clean coal be economical and environmentally practical? continued on page 2/

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CC ARIBBEAN PETROLEUM UPDATE is a monthly Bulletin which highlights petroleum issues affecting or relevant to the 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

Caribbean, S) 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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Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2014

Reducing Harmful Emissions by Using Clean Coal Technologies……….continued from page 1 In this issue of the Petroleum Update we seek to explore clean coal technologies and methods and associated costs that may arise as a consequence. Firstly, it is quite interesting to know that there is “clean coal”. Coal is usually associated with black smoke and pollution. When the term clean coal is used it is not the coal itself that is clean, but it is the technology. Clean coal technology includes a variety of technologies to help reduce harmful emissions and improve efficiency of coal burning power plants. Clean coal technology seeks to reduce emissions of sulphur dioxide and nitrogen oxide into the atmosphere.

In addition to emitting sulphur dioxide, coal fired plants also emit nitrogen oxide. According to the United States Environmental Protection Agency, scientific evidence links short-term Nitrogen Dioxide (NO2 ) exposures with adverse respiratory effects including airway inflammation in healthy people and increased respiratory symptoms in people with asthma. In an attempt to reduce emissions of nitrogen oxide, power plants use what is called Low Nitrogen Oxide (NOx) burners to reduce the creation of nitrogen oxides by restricting oxygen and manipulating the combustion process. Electrostatic precipitators remove particulates by charging particles with an electrical field and then capturing them on collection plates.

Gasification. This method avoids burning coal altogether. The coal is combined with steam and oxygen that forces carbon molecules to separate. With this combined method, the result is what is called syngas which is a mixture of carbon monoxide and hydrogen. This mixture is then cleaned and burned in a gas turbine to make electricity. The heat energy from the gas turbine can also power a steam turbine. Clean coal technology seeks to reduce harsh environmental effects by using multiple technologies to clean coal and contain its emissions, however one cannot ignore the hard ‘coal’ facts that coal fired plants are not suitable for a renewable energy future despite these

Coal is mostly used in power generation and composed primarily of carbons and hydrocarbons. Utility companies and businesses with coal power plants burn coal to make the steam that turns turbines and generates electricity. When coal is burnt carbon dioxide is released into the atmosphere. Some clean coal technologies purify the coal before it burns; one such method is called coal washing. This method removes unwanted minerals by mixing crushed coal with a liquid and allowing the impurities to separate and settle. Another method seeks to minimize emissions of sulphur dioxide and particulates. Gas Desulfurization systems remove sulfur dioxide, a major cause of acid rain, by spraying flue gas with limestone and water.

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Image Source:climatetechwiki.org

Figure 1: An Overview of a Integrated Gasification Combined Cycle Process (A Clean Coal Method)

An additional method used to mitigate against the harmful emissions by coal fired power plants is known as

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clean coal technologies. Coal not only contributes to the dangerous consequence of climate change but people

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Caribbean Petroleum Update : March 2014 | Call: 1-876-927-1779

are becoming more knowledgeable about the health risks that burning coal presents. In the short term coal does prove economical; it is cheap and plentiful, however from an environmental standpoint it is detrimental. Additionally, in the long term the economical health of a country may be compromised as a result of environmental deterioration caused from burning coal.

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Similarly, to generate 100 MWh of energy using petroleum, the hub would require 187.62 barrels of oil. At a rate of US$100.76, this would cost US$18,904.59 to run the hub for a year using oil. Using this example shows that coal is the cheaper of the two fuel sources highlighted. However, whilst coal might be cheap and plentiful when compared to other fuels, if the logistics hub is to be powered by ‘clean coal’ the product would become expensive when compared to other fuels. Using clean coal technologies involve scrubbing mechanism that will have to be factored into the price of coal and the increased amount of coal that would be needed as a result of the application of clean technology. Additionally, the maintenance of the plant, cost of raw materials and associated environmental and social costs would have to be taken into consideration. Conclusion

Table 1: Cost per unit of Coal and Petroleum Energy Sources as at March 2014

With a renewed focus on a clean energy future and active energy plans to achieve this, it maybe a step back into the past if coal fired power plants were to be used to power the logistics hub. The nature of the logistic hub would require 24 hour power in order to facilitate transport of goods and services to and from ports in other countries. A more renewable approach should be sought for power generation for the logistics hub. Although it may be impossible to power the logistics hub totally by renewable sources of energy, priority should be given to the maximum use of combined renewable energy sources before considering coal as a primary option.

Based on the negative environmental impacts and the numerous health risks the burning of coal poses, using coal fired would not be an ideal alternative energy source for the logistics hub. However, in the short term because coal is plentiful and cheap it could be considered as a viable alternative, but one should bear in mind that due to the various processes that coal undergoes to minimize the level of harmful emissions from burning, this could increase the price of coal relative to other fuels such as natural gas and so clean coal may not even become an option.

The amount of fuel used to generate electricity depends on the efficiency or heat rate of generators used in power plants and the heat content of the fuel. Using data from the EIA, and accounting for power plant heat rate and heat content for coal and petroleum, assuming that the Logistics Hub would need 100 MWh (for the purpose of simplification) of electricity per year, therefore the hub would need 54.288 tonnes of coal each year. Using the average price of coal for March 2014 of US$44.68, to import this amount of coal would cost US$2425.62. Image Source: www.ezwebsite.org

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Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2014

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Caribbean Petroleum Update : March 2014 | Call: 1-876-927-1779

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REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP MARCH 2014 Retail prices for Regular Unleaded Gasoline in the fourteen Caribbean countries reviewed at the end of March 2014 showed increases in prices for six countries namely; Bahamas, Barbados, Dominica, Grenada, Jamaica and St. Vincent and the Grenadines. Prices in the remaining eight countries remained stable. Price increases ranged between 0.4% and 3%, with Grenada experiencing the highest increase of 2.6%.

Regular Unleaded Gasoline: Average Retail Price (US$/Litre) 2014 COUNTRIES

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ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] B.V.I [87 OCT] DOMINICA GRENADA (95 OCT) JAMAICA 87 Octane[E10] MONTSERRAT ST. LUCIA ST. VINCENT/ GRENADINES SURINAME [95 OCT] TRINIDAD/ TOBAGO [92 OCT] TURKS/ CAICOS

1.23 1.36 1.54 1.42 1.21 1.15 1.26 1.23 1.25 1.32 1.08 1.39 0.42 1.52

1.23 1.37 1.57 1.42 1.21 1.16 1.25 1.24 1.25 1.31 1.07 1.37 0.42 1.52

1.23 1.38 1.59 1.42 1.21 1.18 1.28 1.26 1.25 1.31 1.09 1.37 0.42 1.52

3 Mths AVG 1.23 1.37 1.57 1.42 1.21 1.16 1.27 1.25 1.25 1.31 1.08 1.37 0.42 1.52

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% Ethanol.

See prices for all products at www.cippet.org

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Call: 1-876-927-1779 | Caribbean Petroleum Update : March 2014

International Crude Oil Prices ended the three month period January to March 2014 with an average price per bbl of US$100.76. Prices in March 2014 was 6.6% above January 2014 average and 0.2% lower than the average price in February 2014. The highest weekly price seen in March for the commodity was US$103.07/bbl-reflected in week one while the lowest price for the three month period was in January (US$92.42/bbl). New pipeline capacity from the Midwest to the Gulf Coast helped to reduce inventories in the United States.

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