Energy

Energy

With international petroleum prices still spiralling, Barbados is banking on a significant offshore oil or natural gas find to turnaround its longer term energy fortunes.

Since 2007 government has been courting international oil companies, inviting them to back the petroleum search, following geological reports that suggest there may be about 10 hydro carbon fields off shore.

Seismic data has shown an “excellent and obvious” oil site in the south-east of Barbados, as well as a further six to eight prospects west of the island, says Halvor Snarvold, a geologist and business development advisor at Wavefield Inseis, the main company involved in the acquisition of the seismic data needed to attract the oil majors.

Last June (2007) the government announced that as many as 60 International oil giants were lining up to possibly drill offshore Barbados for oil. Exxon-Mobil and Hess were said to be among those who, up to then, had paid a total of BDS$8 million to get the Barbados seismic data.

The then Energy Minister, Elizabeth Thompson explained the importance of finding oil, by noting that in three year’s Barbados’ expenditure on energy had jumped from $175 million to $450 million annually.

Additionally, she said the number of vehicles on the road had shot up from 40,000 in the 1994 to a staggering 120,000 by the end of 2006.

Given the high energy demands, Thompson said the island was forced to explore the offshore potential or face serious challenges down the road.

At last count, Barbados was consuming between 8,000 and 8,500 barrels of oil a day, excluding what’s used by the airlines. The Barbados National Oil Company (BNOC), which for over 20 years has been into modest oil drilling, says gasoline consumption has been growing at about 3 per cent a year.

BNOC itself has been producing up to 1,100 barrels a day from a handful of on-land wells, mainly in the Southeast of the island.

Parallel with the proposed offshore search for oil is an on-going BNOC experiment using natural gas as an alternative vehicle fuel. The BNOC, which already provides natural gas for about 16,000 local households, is working with local Nissan dealer, Courtesy Garage to test a handful of natural-gas powered vehicles.

Courtesy Garage, itself a vehicle rental operator, has been importing the Phill home refueling appliance as part of the pilot project, introducing Nissan natural gas vehicles (NGV) to the island.

As there are no commercial NGV refueling stations, a single vehicle/single station approach was considered more efficient to start the NGV market. This pilot project involves using NGVs and Phill refuellers in high profile situations to gain public exposure and awareness of NGVs as an alternative to vehicles using the higher priced gasoline.

The goal of the project is to win over at least 10% of Barbados households on the natural gas grid to the benefits of using NGVs. Courtesy Garage is initially concentrating on company fleets, using FuelMaker’s vehicle refueling appliances to grow the infrastructure on the island.

Senior Courtesy Garage executive Nicholas Mackie is confident in the growth of the natural gas market in Barbados and the wider Caribbean, especially in the face of rapidly rising oil prices.

Barbados has also been discussing whether to participate in a regional under sea pipeline project to funnel additional natural gas from Trinidad and Tobago, which has abundant supplies.

Dr Trevor Byer, one of the directors of the Eastern Caribbean Gas Pipeline Company (ECGPC), says the pipeline is designed to deliver gas from Tobago to Barbados, as well as to St Lucia, Martinique, Guadeloupe and Dominica for oil substitution in their economies, with the power generation sector being the largest potential user.

The BNOC General Manager says Barbados is considering two options to receive the Tobago gas: the underwater pipeline and compressed natural gas (CNG) sent to the island on a barge.

The primary user being targeted for the Tobago gas is the Barbados Light and Power (BL&P) company, in order to lower electricity costs.

BL&P is the sole commercial provider of electricity in Barbados, with 2006 peak generation hitting 157 megawatts.

At the end of 2006, BL&P reported having more than 114,000 customers – just over 96,000 being domestic and nearly 18,000 commercial. In addition, it was providing the electricity for over 27,000 street lights on this 166 square mile island.

For many years, by astute technology upgrades, the company has kept electricity rates relatively stable. But, recently, the cost of electricity in Barbados has closely followed the sharp increases in International oil prices.

In its long term plan to deal with the situation, BL&P has been eyeing a number of lower-cost, environmentally friendly options. The company has been in discussions with the sugar industry about the possibility of a 50,000-60,000 kilowatt co-generation plant in conjunction with a new single sugar factory.

The company has also been talking with the government about a proposed plant of 1,000-2,000 kilowatt capacity at a central Barbados garbage dump, to convert the landfill gas into electricity.

In addition BL&P has begun a feasibility study on the construction of a 10,000 kilowatt wind farm at Lamberts, St. Lucy, in the north of Barbados. If it materializes, BL&P says, the plant would have a generating capacity of about 32 million kWh per year, enough power to meet the average annual needs of some10, 600 homes.