The government is close to approving one or two liquefied natural gas projects involving undersea pipelines that would link the Bahamas and Florida , a government official revealed this week, but that revelation has sparked controversy that could threaten these investments.
At issue is the lack of government policies that would facilitate independent environmental assessment studies, Ambassador to the Environment and Chairman of the Bahamas Environment Science and Technology Commission Keod Smith admitted Thursday.
The government is reviewing EIA statements from three companies that have funded their individual studies, but critics point out that firms that commission their own assessments tend to receive reports favourable to them.
Mr. Smith said he recognizes this point, but he said the government does not now have the resources to conduct independent studies to determine the impact that such projects would have on the environment.
There are three companies that want to originate liquefied natural gas pipelines from the Bahamas to serve Florida ‘s increasing natural gas needs. (Liquefying gas makes it easier to transport it when the distances are long.)
One of those companies is the El Paso Corporation, which claims to be the leading provider of natural gas services and the largest pipeline company in North America . The company proposes to transport natural gas from Grand Bahama to West Palm Beach , Florida and has said that its operation should be in place by the summer of 2005.
Another company that is jockeying for the governmental green light is AES Corp., which says it is the leading global power company. AES plans to build a plant on Ocean Cay, south of Bimini, that would convert liquefied natural gas to gaseous form.
“The concept is to try to get liquefied natural gas imports into the United States ,” said Aaron Samson, AES’s project director. “This is the single best place in the world to bring LNG into southeast Florida , just from population density, deep water access, having appropriate exclusion zones from the LNG facility to any population. It’s difficult to think you can find anywhere on the Florida Coast within the same distance that Ocean Cay is…that has anymore favourable attributes.”
A cash-strapped AES recently reported that its third-quarter profits fell 39 percent as it works to bail itself out of financial problems. Company information says AES owns or has an interest in 160 plants in 23 countries.
Trade and Industry Minister Leslie Miller, who announced that the government is moving closer to giving the LNG projects the go-ahead, said the firms that have submitted proposals are deep-pocketed and he said the El Paso project would provide more than 400 jobs for Bahamians. The company expects to invest some $2 billion in the project by the final phase, Minister Miller said.
“It’s a very intense project with regard to funding,” he said.
In addition to the more than 400 Bahamians who would be employed by the project, 135 foreign workers would also be needed, he said. Minister Miller said that the former government felt that the project was very important to create jobs for Grand Bahamians.
Tractebel North America Inc. also proposes a pipeline project that would run from Grand Bahama to Port Everglades, Florida . The company purchased the project from the beleaguered Enron Corp.
Minister Miller said whatever the government decides concerning these projects would undoubtedly be in the best interest of Bahamians.
“If and when we sign on this parliament and the Bahamian people would be duly informed,” Minister Miller said in the House of Assembly Wednesday night.
He said that one or two of the proposals could be approved by the end of this year.
But environmentalist Sam Duncombe, spokesperson for ReEarth, said the government should be doing more to inform Bahamians at the early stage of such proposals.
“The process is shrouded in secrecy,” she told the Bahama Journal. “I’m not saying the project isn’t a viable one, but don’t tell us we’ll be a part of the process and then keep us out of the process.”
She said the impact of such projects is obviously going to be profound and the government should do more to educate the public on the proposals while providing more details on the companies involved.
For now, many Bahamians don’t appear to know much about what is being proposed or the track record of the firms involved.
A recent study, for instance, found that a proposed AES project in Uganda violates the World Bank’s policies on involuntary resettlement, environmental assessment, natural habitats, disclosure of information, and the economic evaluation of investment operations, according to CorpWatch, a watchdog organization that seeks to hold corporations accountable for their actions.
According to CorpWatch, that study found that an AES project in Uganda would be “unfavourable and not always up to International Best Practice.”
Companies like AES are bracing for the growing demand for natural gas. And according Mr. Samson, the company is well positioned to carryout its proposed project.
U.S. media reports say that electric companies, which are proposing to build more than 80 new power plants in Florida through 2010, are looking to make heavy use of natural gas.
The popularity of natural gas continues to increase because of stricter clean air standards in the United States , which means that more and more companies are willing to invest millions of dollars – and even billions – in natural gas projects.
Mr. Samson said there are four terminals in the United States which have all been contracted for all of their capacity for LNG projects around the world and so there is a need for additional gas. The vast majority of new power plants in the United States are natural gas powered facilities, he pointed out.
“The U.S’ domestic production has not kept up with the demand,” Mr. Samson said. “And so there is a big demand for natural gas in the United States which has caused gas prices to be at levels where LNG economics make sense from many places in the world today.”
And as indicated by Minister Miller, these projects could mean widespread benefits for Bahamians.
The AES project, for instance, would pay $7 million a year in business license fees, according to Mr. Samson.
Like the El Paso project, it also promises to create up to 400 jobs for Bahamians over a two and a half year period during the construction phase and about 40 permanent jobs.
The benefits would trickle down to the Bimini community, Mr. Samson said.
He added that all of these benefits would flow with “minimal” fallout to the Bahamian environment.
The EIA’s for the various projects are in the hands of government officials and are not yet available to members of the public.
But Mr. Samson revealed in a Friday morning interview with the Bahama Journal from his Connecticut office that impact to the environment is really “not that dramatic.”
He said the environmental impact would be related to the initial construction activities. The existing deepwater channel into Ocean Cay would have to be widened and deepened, Mr. Sampson said. But those are existing disturbed areas,” he said.
A government official examining the assessment said off the record that the project would do little – if any – damage to the environment.
But observers like Sam Duncombe want to know what’s the catch.
Mrs. Duncombe is widely known for the stand she took against the developers who were proposing a $400 million gated community at the Clifton site in western New Providence in 1999. Mr. Smith, the new environmental ambassador, was also on the frontlines of the Clifton protest.
Mrs. Duncombe expressed concerns that the present government may be “trying to pull another Clifton .”
The companies’ choice of the Bahamas for their plans is also being scrutinized.
Mrs. Duncombe charged that these corporations may have chosen the Bahamas because of “our very loose environmental laws.”
“I think a lot of it is that if they chose the Bahamas they would avoid the environmental laws that they would have to adhere to in the United States ,” she said.
Mr. Smith recognized that, “Our legal regime for environment protection is not what it needs to be. We are working hard at developing it and improving it.”
He stopped short of saying that this imperfect system was attracting companies that wished to dodge stringent environmental laws.
But St. Margaret Member of Parliament Pierre Dupuch was more direct.
Mr. Dupuch, a former Cabinet Minister and now independent MP, said before the government signs any agreement, it should ask itself, “Are these people coming here because they’re Santa Clauses or because they can’t go anywhere else?”
“If it’s so environmentally friendly, why don’t they just put it in Florida ?” Mr. Dupuch questioned, referring to the El Paso project. “But the fact is that the Florida people know it is environmentally unfriendly. We talk about millions of dollars and every time we talk about millions of dollars we run like crazy and forget about the environment.”
Mr. Dupuch, speaking in the House of Assembly Wednesday night, said that by reading an EIA, one can tell “who paid the piper.”
“There are big dollars involved in this El Paso project. My suggestion to the government is first of all find out who some of the players are in the El Paso project. Having done that, then I suggest to them to decide not to have an American controlled company do any environmental impact study,” he said.
Mr. Dupuch further advised the government not to “add to that environmental cesspit called Freeport . Every single project they have got up there has passed the so-called environmental studies.”
But Mr. Samson, the AES executive, shunned any suggestion that his company was trying to dodge U.S. environmental laws.
He said under U.S. standards, his company’s project would undoubtedly receive approval.
“I don’t think the other projects could say that,” Mr. Samson said.
The other companies proposing the LNG projects have not yet responded to Journal inquiries regarding their proposals.
Mr. Smith said the Bahamas ‘ close proximity to Florida is probably a key reason why the country is being eyed for such multi-million dollar LNG ventures.
Echoing the sentiments expressed by Minister Miller, Mr. Smith said his government was committed to ensuring that no project would be carried out in the country that would wreak havoc on the environment.
Mr. Smith said that he is trying to bring a change regarding environmental impact assessment studies.
He recognized that these reports are “self serving.”
Mr. Smith said he wants to put in place a system where companies proposing such projects would pay into a special fund to be held by the BEST Commission and used to fund independent EIA’s.
The Bahama Journal
