Trade & Industry Minister Leslie Miller said recently that the government would soon give provisional approval to one or two of the three proposed gas pipeline projects between The Bahamas and Florida. The multinationals involved are El Paso of Houston, Applied Energy Services of New Jersey and Tractebel of Brussels (which purchased the Enron project from a bankruptcy court last November).
We are not necessarily opposed to these initiatives. In fact, they hold great economic promise for The Bahamas in terms of diversification and new corporate partners. But the Bahamian people know very little about the three competing proposals, and what their benefits or costs might be. And the government has not been very forthcoming. In fact, we understand that the three companies are under a gag order. Why should this be such a dark secret?
In addition to operational details and environmental concerns, we need to know more about the financial capacity of the competing companies and the kind of deal we can expect. The last thing we want is a firm which starts such a major project and then cannot finish it. Financial analysts say all three companies are highly leveraged. El Paso, for instance, is seeking to sell nearly $7 billion in non-core assets by the end of this year to pay down debt.
It would be inappropriate for the government to approve these projects (even though things are tough) without completing an independent analysis of the pros and cons, both financially and operationally. An environmental impact assessment is just a starting point for negotiations in other jurisdictions.
And while on the surface $20 million in tax revenue sounds good, in the larger scheme of things it is not that much. And we don’t even know how the $20 million that Mr. Miller mentioned is derived.
It is difficult to analyse the potential jobs that may be created by these projects, but let’s estimate 1000 new jobs at an average salary of $25,000.
That amounts to only $25 million. Let’s double it to $50 million, add in government’s $20 million… that brings us to a total of $70 million.
We venture to say that one industrial disaster could cost us a lot more. The bottom line is we hope that the government invites qualified professionals to assist in evaluating these proposals before entering into any agreements. And the environment is not the only issue on the table.
Where else can these companies go to service the burgeoning South Florida energy market?
Editorial, The Nassau Guardian
