Petroleum update november 2014

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : NOVEMBER 2014 

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CARIBBEAN Petroleum Update A Publication of the Caribbean Energy Information System (CEIS)

NOVEMBER 2014 ISSUE

Is Geothermal Energy the answer for the Caribbean Electricity Sector?

M

Wotten Waven Sulphur Springs, Dominica [Dean Fleischman, DMF Photography].

Image Source courtesty of http://earthconsciousmagazine.com

ost Caribbean countries depend on petroleum for the provision of electricity, transportation and just about everything relating to their survival. The electricity infrastructure in most countries requires fuels such as Heavy Fuel Oil (HFO) and Diesel to produce electricity which is used in every sector or sub-sector of our society. Due to the age of the generation infrastructure and the instability in fuel prices, providers of electricity are faced with high cost of operations and high levels of inefficiencies due to aged

electricity generating infrastructure.

Ultimately, the costs of the inefficiencies and fuel are passed in the electricity tariffs to the dependent consumers or end users.

Since the year 2000, there has been an improved thrust toward renewable energy use in the Caribbean.

This thrust to a great extent, has been driven by the continued fluctuations in prices for international crude oil and other petroleum products. Geothermal energy generation has the potential

to contribute clean, reliable, locallysourced power and reduce costs for Caribbean countries oil dependent electricity sector. In this issue of the Caribbean Petroleum Update, we will evaluate geothermal energy potential - one of the solutions being explored as a means of providing cheaper electricity in some Caribbean countries.

The tropical climates of the Caribbean countries create high prospects for renewable energy use. However,

continued on page 2/

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : NOVEMBER 2014

Is Geothermal Energy the answer for the Caribbean Elec tricity Sec tor? continued from page 1/ despite this fact, the region still remains largely dependent on imported petroleum. As the quests continue towards finding sustainable solutions to our energy dependence, geothermal energy has come to the forefront as the most beneficial renewable energy for use in electricity sector - particularly in the Eastern Caribbean States. Most of the Eastern Caribbean islands are situated on continental plate boundaries that indicate geothermal potential. For many of these developing countries, it is believed that geothermal has the potential to contribute clean, reliable, locally-sourced power that can expand access to electricity, grow the economy, create jobs, and boost prosperity.

This indicates the importance of an increasing reliance on sources of renewable energy, particularly in small island developing states, which are now struggling significantly with the high cost of fossil fuel-based energy systems. The average price of electricity in Caribbean is approximately US$0.35/kWh with past data showing some countries having higher prices as high as US$0.42/kWh with fuel surcharge accounting for approximately 50% or more of the electricity prices in many of these countries. This is clearly not a sustainable model, particularly with a predicted demand growth in the next two decades.

Dominica hopes geothermal will take a bite out of its 220-million-dollar a year fuel bill. Credit: Courtesy of Government Information Service (Dominica). Image source courtesy of http://www.ipsnews.net/

Why choose Geothermal Power Plants?

Several attributes makes geothermal a good source of energy for the Caribbean electricity sector.

The main reason lies in the fact that this type of energy source is one of cleanest. This is largely

Geothermal power plants in Costa Rica generating electricity corresponds to 13% of total capacity production Electricity System (SEN), the Costa Rican Electricity Institute (ICE).

Image source courtesy of http://thecostaricanews.com

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : NOVEMBER 2014

due to the fact that there is no burning of fossil fuels to extract this source of energy. Other reasons include: •

•

Cheaper production of electricity using geothermal power plants as opposed to conventional power plants.

More environmental advantages: including low emissions (Geothermal fields produce only about onesixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases. Binary plants, which are closed cycle operations, release essentially no emissions).

•

24 hours a day geothermal energy availability, 365 days a year (geothermal power plants have average availabilities of 90% or higher).

•

Operation and maintenance costs of geothermal power plants ($0.01 to $0.03 per kWh) are much lower than conventional power plants.

•

Electricity prices to the consumer are far lower than prices from a conventional fossil fuel power plant.

•

Potential sale of by-products generated during operation of geothermal plants ((zinc, silica, and sulfur,

•

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for example), hence making the resource even more valuable and environmentally friendly.

folio, the Caribbean islands provide a unique opportunity for renewable energy uses.

Geothermal power plants use relatively small acreages, and don’t require storage, transportation, or combustion of fuels. Either no emissions or just steam are visible.

These qualities reduce the overall visual impact of power plants in scenic regions.

Conclusion

The vulnerability of Caribbean islands to commodity market volatility is more exposed with the lack of diversified power generation in these countries.

This is further compounded by the lack of new development which leaves many islands reliant on outdated, sometimes unreliable power plants. The key to reducing and stabilizing electricity prices on Caribbean islands is therefore to install a diversified and modern electrical generation portfolio. Some would argue that renewable energy systems should not be a part of the energy portfolio until they are cost competitively with fossil fuel generation. However, for efficient performance and low volatility, an electrical generation portfolio, similar to any investment portfolio, must be balanced. A balanced energy portfolio can be achieved by carefully choosing both traditional and renewable generation to supply each island’s unique generation profile. While there will always be a place for traditional generation in a country’s power port-

Governments in the Caribbean are now examining with greater scrutiny the impact of oil prices on costs incurred in both the electricity and transportation sectors. In an effort to reduce costs and achieve greater efficiency in these sectors there is an increased thrust towards renewable energy sources such as geothermal energy. The increasing electricity demand and population growth will require continued growth of electricity generation capacity and outputs.

Geothermal energy generation seeks to promote clean, locally based power and most importantly a cost reducing method for Caribbean countries oil dependent electricity and transportation sectors. Renewable energy can help to diversify electrical generation while stabilizing electrical prices and supply for islands; however, issues with scale, grid stability, and access to capital have to be overcome.

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : NOVEMBER 2014

PETROLEUM NEWS & HAPPENINGS CNG buses to roll soon [...]...Read more Oil search on… for another five years, at least [...]...

Read more Gas Prices Down $0.87 Tomorrow [...]...Read more Irish firm Tullow chosen for oil exploration in Jamaica [...]...Read more JPS Bills To Go Down 8.4 Per Cent For November [...]...

Read more

Caribbean Energy OPEC Keeping Oil Output On Hold Despite Low Prices [...]... Read more RBC Caribbean economist: PetroCaribe countries paying more with lower oil price [...]...Read more Gas Prices Down $1.69 Tomorrow [...]...Read more Oil market oversupply to increase next year: Iran [...]...Read more Venezuela and China amend oil-for-loans agreement [...]..Read more Exclusive – Venezuela sets date for Citgo bids despite ruling sale out [...]...Read more Petrobras untendered deals could exceed 70%, inquiry told [...]...Read more Local pumps not keeping pace with fall in global oil prices [...]...Read more Gas prices down $3.07, diesel down $2.57 [...]...

Read more Uruguay port prepares for 2015 offshore drilling [...]...Read more ExxonMobil announces US$200mn Guyana offshore plans [...]...Read more Average electricity rate now down to US 33 cents per kWh, says JPS [...]...Read more

Gov’t To Announce New Oil And Gas Licence [...]...

Read more PCJ to announce new exploration for oil and gas [...]...

Read more Get ready Jamaica for the new international geopolitics of oil [...]...Read more U.S.-CARICOM energy initiative working [...]...

Read more Let’s not get complacent because oil prices are falling [...]...Read more Drop in oil prices could boost Jamaica’s economic growth [...]...Read more

FOR MORE NEWS VISIT CIPPET NOW!!

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : NOVEMBER 2014

Underground Resource Model

(Model showing the origin of geothermal energy) Source: Geothermal Energy, Serial No. 87 (July 1999)

THIS IS OUR CONSULTANT ON GEOTHERMAL ENERGY.

Source: www.cartoonstock.com

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : NOVEMBER 2014

Prices at the Pump

NOVEMBER 2014

Retail prices for Regular Unleaded Gasoline in the fourteen Caribbean countries reviewed at the end of November 2014 showed decreases in prices for eight countries: Bahamas, Belize, Dominica, Grenada, Jamaica, Monsterrat and St.Vincent and the Grenadines and Suriname between 2.8% and 9%. Bahamas saw the highest price decrease of 9.3% while Barbados saw a slight increase in prices of 0.9%. Prices in the remaining six countries were stable. The average retail price at the end of November 2014 was 3.5% lower when compared to the previous month.

Unleaded Gasoline: Regular : Average Retail Price – January - November (US$/Litre) 2014 COUNTRIES

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

AVG

ANTIGUA/ BARBUDA

1.23

1.23

1.23

1.23

1.23

1.23

1.23

1.23

1.23

1.23

1.23

1.23

BAHAMAS [91 OCT]

1.36

1.36

1.38

1.38

1.43

1.43

1.43

1.44

1.41

1.38

1.25

1.39

BARBADOS

1.54

1.57

1.59

1.66

1.76

1.76

1.81

1.81

1.78

1.79

1.81

1.72

BELIZE [87 OCT]

1.41

1.43

1.47

1.49

1.51

1.48

1.54

1.52

1.49

1.47

1.37

1.47

DOMINICA

1.15

1.16

1.18

1.19

1.19

1.22

1.30

1.25

1.25

1.15

1.10

1.19

GRENADA (95 OCT)

1.26

1.26

1.28

1.31

1.31

1.31

1.32

1.32

1.31

1.27

1.19

1.29

GUYANA

1.09

1.10

1.12

1.14

1.16

1.15

1.16

1.16

1.16

1.13

1.14

1.14

JAMAICA 87 Octane[E10]

1.21

1.23

1.25

1.27

1.25

1.26

1.26

1.25

1.23

1.18

1.14

1.23

MONTSERRAT

1.25

1.25

1.25

1.25

1.25

1.25

1.25

1.25

1.25

1.22

1.17

1.24

ST. KITTS/ NEVIS

1.35

1.35

1.35

1.28

1.28

1.29

1.29

1.29

1.29

1.03

1.03

1.26

ST. LUCIA

1.32

1.31

1.31

1.31

1.31

1.31

1.31

1.31

1.31

1.31

1.31

1.31

ST. VINCENT/ GRENADINES

1.13

1.13

1.15

1.16

1.16

1.19

1.22

1.23

1.24

1.22

1.19

1.18

SURINAME [95 OCT]

1.39

1.39

1.43

1.43

1.45

1.47

1.47

1.43

1.40

1.36

1.25

1.41

TRINIDAD/ TOBAGO [92 OCT]

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

0.42

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.

2.00

Comparative Retail Pump Prices Regular Unleaded Gasoline NOVEMBER Avg vs 11 Mths Avg (Jan - November 2014)

US$/Litre

1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00

14 Caribbean Countries

See prices for all products at www.cippet.org

International OIL PRICES

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : NOVEMBER 2014

Average Weekly & Monthly Crude Oil Prices (September November 2014) 110 100

US$/BBL

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90 80 70

94.06 91.44 78.24

60

Sep

50

Oct

Nov

40

Period

FEATURED OFFERS: P E TS TATS - t h e Ca r i b b e a n E n e rg y I n fo r m at i o n 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.

WK2

WK3

WK4

MTH AVG

Average Monthly World Crude Oil Prices (2011 2013) 120.00 110.00

US$/BBL

International Crude Oil Prices continue to trend downwards with an average price of US$75.62. bbl for the period September to November 2014. This shows a 18.9% decrease in prices when compared to September 2014 and a 12.1% decrease in average prices when compared to October 2014. The highest weekly price seen in November for the commodity was US$78.24/bbl-reflected in week one while week four accounted for the lowest price of US$72.36/bbl. It is expected that prices will continue on a downward trend to as low as US$50/bbl if global supply continues on an upward trend.

WK1

106.60

106.61

107.81

100.00 90.00 80.00 70.00

2011

2012

2013

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Period

Yr Avg

Scientific Research Council, Hope Gardens, Kingston 6, Jamaica 1-876-927-1779 (Telephone) 1-876-977-1840 (Fax)

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