The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama’s hard-pressed economy has this week received a game-changing boost from US regulators approving a project that could reduce the island’s oil imports by 250,000 barrels annually, and lower high energy costs.

The US Department of Energy, in an October 19 order, backed plans by Grand Bahama Power Company’s 80.4 per cent majority shareholder, Emera, to ship compressed natural gas (CNG) from the Port of Palm Beach to Freeport.

Monday’s developments ended an almost-two year wait for federal regulatory approval for the project, which has received strong backing from several of Freeport’s major industrial players.

Emera now has the go-ahead to construct a natural gas compression and loading facility at the Port of Palm Beach, with the ability to produce up to 2.92 billion cubic feet of CNG per year.

The finished product will be exported some 75 miles by sea to Freeport, where it will be unloaded from roll-on/roll-off carriers arriving at a decompression facility on the Bahamian island.

The decompressed gas will then be transported to Grand Bahama Power Company’s generation plants and used tor produce electricity.

The project effectively represents the first utility-scale effort in the Bahamas to both reduce energy costs, diverse fuel supply and sources, and employ a more environmentally friendly, clean burning and sustainable power source.

“The primary purpose of the project is to fuel power generation facilities owned by an Emera affiliate, Grand Bahama Power Company (GBPC), located on the island of Grand Bahama,” the US Department of Energy’s order said.

“Emera expects that it will enter into a long-term contract to supply natural gas to GBPC, and that under the terms of such agreement, CNG from the facility will be transported approximately 75 nautical miles from the Port of Palm Beach to an unloading and decompression facility in Freeport, Grand Bahama.”

The Department’s order noted that Grand Bahama Power Company’s installed generation capacity was pegged at 102 Megawatts (MW), and Emera had pledged that there “will be an opportunity for other companies operating in Freeport in close proximity to the pipeline to utilise the exported natural gas.”

The order added: “Emera states that its proposed exports will enable electric generation facilities in the Bahamas, and potentially elsewhere in the Caribbean, to switch from using heavy fuel oil and diesel to natural gas.

“Emera asserts that, in addition to stabilising electricity rates in the area, imports of CNG to Grand Bahama would have significant positive environmental benefits through the reduction of emissions at fuel oil and diesel-burning electric generators.

“Emera states that the Bahamas and the Grand Bahama Power Company (GBPC), in particular, are currently importing 100 per cent of their fuel, which consists of heavy fuel oil and diesel,” the Department of Energy added.

“Emera anticipates that, in the case of GBPC, over 250,000 barrels of foreign-sourced heavy fuel oil per year currently used in electric generators would be displaced by domestic natural gas supplied pursuant to its application.

“Citing figures published by the US Environmental Protection Agency (EPA), Emera contends that natural-gas fired generation produces one third less carbon dioxide per megawatt-hour, 99.2 per cent less sulfur dioxide, and 58 per cent less nitrogen oxides than fuel-oil fired generation.”

Emera, in its original November 2013 application, said the project was “expected to reduce and stabilise customer electricity rates, and thereby stimulate economic growth in the Bahamas”.

Sarah McDonald, Emera Caribbean’s president, in a letter accompanying that application, told the US regulator: “The cost of electricity in the Bahamas and throughout the Caribbean presents a major barrier to economic growth, and has resulted in decreased customer satisfaction.

“To improve economic conditions, a plan needs to be developed and executed that reduces and stabilises fuel costs.”

She was backed by Greg Ebelhar, Polymers International’s chief operating officer, who said the CNG initiative would “help us enhance our operational performance while providing the stability required to boost the local economy’.

He added: “Emera’s project proposal is a solution to stabilise the cost of electricity and provide a cleaner fuel supply that will lower greenhouse gas emissions.

“The project also requires construction activity and permanent operations of an unloading facility in Freeport, which will provide economic benefits.”

Another backer was PharmaChem Technologies and its president, Randy Thompson, who wrote that the pharmaceutical supplier was “in full support” of the plan.

“In addition, PharmaChem is in discussion with Emera to identify opportunities to utilise this exported CNG to enhance our operational performance while providing the stability required to boost the local economy,” Mr Thompson wrote.