by Larry Smith
The extraction of oil and gas from beneath the Bahamian seabed is a medium-term likelihood that many may instinctively oppose for environmental reasons. But we could cut costs and pollution now by generating electricity from liquified natural gas - imported from the US.
That's a scenario made possible by the development of large, unconventional gas fields in the US. Right now, the cost of natural gas is much cheaper than oil, and burning gas instead of heavy fuel oil or diesel produces 30 per cent less pollution.
The recent increase in North American gas reserves, combined with projected growth in global demand, will make the US a major liquified natural gas exporter over the next few years, experts say. This is in sharp contrast to previous years, when the US was seeking to import LNG from the Middle East and Trinidad.
Natural gas accounts for about 16 per cent of the global energy mix, but the US has near zero LNG export capacity. Existing LNG import terminals in Louisiana and Texas are already adding liquifaction capacity to allow for major LNG exports by 2015.
Carib Energy wants to export LNG to the Bahamas and other countries in the region using special cryogenic tanks fitted inside 40-foot shipping containers. Each tank holds 10,200 gallons of LNG at a temperature of minus 260 degrees. The company says smaller utility, industrial or resort power plants could save up to 20 per cent in fuel costs by switching to LNG.
"We will be able to import LNG into the Bahamas without any large infrastructure being built, as early as 2012," Carib Energy President Greg Buffington told Tough Call recently. "We will supply customers with a re-gasification unit on a small skid to convert the liquid back to gas and send it straight to the generators."
Carib Energy is a partnership between Buffington's Coral Springs-based EFG Industries, which has 31 years experience in the engineering and construction of LP gas facilities around the world, and the Argosy Group of Bellaire, Texas, which specializes in heavy lift transportation solutions.
Gas turbine generators will take any fuel while diesel gensets can easily be converted to use natural gas. Smaller 1-3 megawatt units can be converted for under $50,000. They can also be modified so that they start up on diesel, but use gas for peak loads.
"We are looking to displace up to 60 per cent of the diesel fuel on these units," Buffington said. "At the outset we are more interested in the smaller Bahamian islands like Bimini and perhaps some percentage of replacement in Nassau. The container systems are being built now and our supply capability will grow month by month and year by year. We are currently negotiating agreements with two resorts in Jamaica, and we are also talking to the power company there."
using gas to fuel our out island power plants would eliminate the prospect of catastrophic oil spills. Although a gas-based solution, on its own, does not provide a long-term path to a low-carbon future, it can be part of a range of options - including renewables - that will eventually get us there.
Several years ago there were at least two proposals on the table to build LNG re-gasification terminals in the Bahamas - on Grand Bahama and on Ocean Cay near Bimini - each costing hundreds of millions of dollars. These terminals were to receive LNG from Trinidad to supply Florida by pipeline. And there was talk about diverting some of the gas to power plants in the Bahamas.
But neither PLP nor FNM governments could bring themselves to approve the projects in the face of stiff opposition from environmentalists, combined with the lack of a robust regulatory regime.
The hysteria that swirled around these LNG proposals was never much rooted in reality. LNG infrastructure has its risks, but they are no greater than the risks we currently face with heavy fuel oil and diesel transport and storage, where the environmental hazards are well known.
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