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Caribbean Islands-Energy

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Caribbean Islands Index

Jamaica has no known oil reserves; as a consequence, the island was about 90 percent dependent on imported oil for energy generation in the late 1980s. Most of Jamaica's oil imports came from Mexico, Venezuela, Trinidad and Tobago, and the Netherlands Antilles. Over 30 percent of imported petroleum imports were destined for the oil-intensive alumina subsector. Oil resources and imports were managed by the state-owned Petroleum Corporation of Jamaica (PCJ). In 1985 the PCJ accounted for 73 percent of the imported petroleum, with private bauxite companies directly importing the other 27 percent. Total oil consumption averaged nearly 13 million barrels a year in the 1980s.

The island's only oil refinery, located in Kingston, had a refining capacity of 36,000 barrels per day. Formerly owned by Exxon, the refinery was purchased by the government of Jamaica in 1982 for US$55 million. Subsequent to the refinery's sale to the government, PetroJam, a subsidiary of the PCJ, managed the plant's operations. The Kingston refinery was considered strategically important to Jamaica because of the country's great dependence on foreign oil and the high oil intensivity of the economy. For example, the per capita energy consumption of Jamaica in the early 1980s exceeded that of Brazil or the Republic of Korea (South Korea), mostly as a result of the bauxite industry.

Ethanol, an octane enhancer, was produced for export for the first time in 1985. The first ethanol plant was established in the early 1980s by Tropicana, a subsidiary of a California-based firm. Representing an investment of about US$23 million, the plant was easily the largest investment that had entered Jamaica or the Caribbean under the CBI by 1987. Even though the plant had not completed a full year of production in 1985, output still reached approximately 75 million liters of anhydrous ethanol. The ethanol was exported solely to the United States market. In addition, in 1987 the Jamaican government arranged with Belize to process ethanol from sugarcane there.

Demand for electricity grew with the country's aggregate growth. In the mid-1980s, roughly 90 percent of all energy generated was oil based. Hydroelectric power and bagasse (sugarcane residue) fuels made up most of the balance of energy generation. Government energy policy in the 1970s focused on increasing rural access to electricity. Before 1975 only about 10 percent of rural areas had electricity. In 1975 the government of Jamaica, in conjunction with the Inter-American Development Bank (IDB), launched the Rural Electrification Program, which improved rural access to electricity. By 1987 general access to electricity was greater than in most developing countries, about 54 percent, with access in urban areas reaching close to 100 percent.

Power outages were very common until the mid-1980s, when the sector was upgraded and expanded as part of physical infrastructure improvements in the new industrial strategy. The island's installed capacity increased from 680 megawatts in 1980 to over 700 megawatts by 1983. Government electric policy, implemented by the Ministry of Public Utilities and Transport, focused on efficiency, conservation, and alternative energy sources in the 1980s. Work on developing alternative energy sources focused on hydropower, peat, coal, bagasse, and others.

In 1983 approximately 70 percent of total electricity was generated by the government-owned Jamaica Public Service Company whereas the remaining 30 percent was produced by private industry in alumina, sugar, and cement factories. Electricity was produced primarily by steam plants (83 percent), although hydroelectric systems (11 percent) and gas/diesel plants (6 percent) were increasingly being used. At least 60 percent of electricity was consumed in the major urban areas of Kingston and Montego Bay. Total commercial energy consumption was equivalent to 11.2 million barrels of oil in 1985. The electrical transmission system included 864 kilometers of 138-kilovolts and 69-kilovolt lines in addition to some 8,000 kilometers of primary distribution lines at a voltage of 24 kilovolts and below. Oil prices and electricity rates became political issues in the 1980s, as oil prices remained above market prices and electricity rates increased very sharply.

Data as of November 1987

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