Industry Minister Outlines Impact of Oil Bill


Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, says that approximately 29 per cent of the country’s Gross Domestic Product (GDP) earnings go toward paying for oil, and insists that it is time for the nation to improve its energy efficiency.

The Minister added that at times, the country’s oil bill exceeds its export earnings, and cited the high energy cost as one of the main threats to production and industry in the country. 

"Currently, Jamaica's energy cost is one of the highest in Latin America and the Caribbean, with approximately 90 per cent of businesses and households depending on imported petroleum fuel,” he said.

The Minister was speaking at the ISO 50001 Certification and Energy Efficiency Seminar, hosted by the Jamaica Public Service (JPS), in collaboration with the Bureau of Standards Jamaica (National Certification Board of Jamaica), at the Mona Visitors Lodge, in Kingston, today (July 10).

"At $191 billion annually in expenditure on energy import, a US$2 billion trade deficit, with electricity at times costing US$0.40-US$0.42 cents per kilowatt hour,  Jamaica has one of the highest electricity rates in the region, which makes us very uncompetitive in comparison to our major trading partners. Oil expenditure is not only consuming an increasing percentage of earnings, but has a serious impact on the efficiency, productivity and competitiveness of our companies," he said.

The Minister described the seminar as “particularly significant," in light of the rising oil prices on the world market and the country’s continued dependence on imported fuel.

Mr. Hylton said that the importance of standards must be seen within the broader context of Jamaica’s growth strategy and efforts to build a globally competitive platform.                                                                       

Explaining the ISO 50001 standard, he said it was specifically developed for energy management systems. “This new standard seeks to guide organisations on how to establish systems and processes to improve their energy performance, inclusive of efficiency and consumption,” he noted.

"The standard is applicable to all types and sizes of organisations. It is designed to demonstrate to all types of organisations how to make better use of their energy-consuming assets, evaluate and prioritise the implementation of energy-efficient technology, and promote efficiency,” the Minister added, citing several countries that have adopted the new standards since its creation last year.

He said he did not want the ISO 50001 to be viewed as “the imposition of yet another standard to burden businesses." Instead, he said it was "an excellent opportunity to save money, protect the environment and build important competitive advantages."

The Minister used anecdotal evidence to support his point, noting that Carib Cement’s total energy bill amounted to $3.2 billion in 2011, representing the company’s single largest cost. He said too, that high energy cost was largely responsible for a

47.3 per cent downturn in Kingston Wharves’ after tax profit, and pointed out that the continued operation of bauxite plants in Jamaica depends on the industry having a long term source of competitive energy.

Mr. Hylton emphasised that it was imperative that every effort be made to improve Jamaica’s energy efficiency, "not only because of the adverse effects on the country’s balance of payments, but also because of its overall critical impact on productivity and competitiveness."

"We recognise that in terms of energy management, there are certain factors that are outside of our control, chiefly, energy input prices and currency movements. However, there are certain factors that are within our control, such as the choice of technology, how efficiently we employ the technology, and of course, our decision to adopt standards such as ISO 50001,” he said.                    

Also speaking at the seminar was Minister of State in the Ministry of Science, Technology, Energy and Mining, Hon. Julian Robinson, who gave the Ministry’s full support of the workshop.

Mr. Robinson reminded participants that a significant part of the budget is spent on oil, and pointed out that the government is committed to diversification of the nation’s fuel sources and that by 2015, he anticipates that the much talked about Liquefied Natural Gas (LNG) project will be on stream.

Also endorsing the seminar were Executive Director of the Bureau of Standards, Ms. Yvonne Hall and President and Chief Executive Officer (CEO) of JPS, Ms. Kelly Tomblin, who explained that the company was working hard to improve its system, efficiency and plants, so that it uses less fuel.

 

By Andrea Braham

JIS Social