WikiLeaks: ...U.S. Embassy cables document the unsuccessful diplomatic maneuvers made over two administrations to get a go-ahead for liquefied natural gas (LNG) pipelines from Florida to The Bahamas

Failed diplomacy in LNG bid


By CANDIA DAMES
NG News Editor
thenassauguardian
candia@nasguard.com


A series of U.S. Embassy cables document the unsuccessful diplomatic maneuvers made over two administrations to get a go-ahead for liquefied natural gas (LNG) pipelines from Florida to The Bahamas.

One of the cables obtained by The Nassau Guardian through the whistleblower organization WikiLeaks said that in 2009 AES Corporation proposed constructing an LNG pipeline from Ocean Cay near Bimini to New Providence at no cost.

According to a former AES representative, when this idea was presented to Prime Minister Hubert Ingraham, the PM said he “wouldn’t be pushed into doing it.”

AES eventually decided to forgo this idea due to technological challenges and associated costs, the 2009 cable said.

The cables show aggressive steps taken by companies like AES in an effort to convince, first the Christie administration, and then the Ingraham administration to approve the project.

In 2005, AES representatives met with then U.S. Ambassador to The Bahamas John Rood to discuss the status of their proposed $650 million LNG project.

“AES expressed its frustration at the inability to get a final decision from Prime Minister Perry G. Christie, whom they claim is delaying a decision in an effort to get them to withdraw so he will not be blamed for the project’s failure,” a U.S. Embassy official wrote in a cable.

“AES is the current front-runner to get the LNG project. Opposition has centered on the impact any possible environmental damage would have on the Bahamian tourist industry.”

The government at the time was also considering a pair of competing proposals for an LNG facility and pipeline in The Bahamas.

Both projects would have included an import terminal, a re-gasification plant, and an undersea pipeline to South Florida, in addition to other support infrastructure.

The AES project called for the construction of an LNG facility on Ocean Cay near Bimini.

The cable claimed the AES officials met with the ambassador “to provide an update on their LNG proposal and to request assistance in dealing with an indecisive Christie Cabinet.”

However, other cables show that AES officials were equally frustrated by the Ingraham Cabinet’s failure to make a decision on the project in a timely fashion.

At the 2005 meeting with the ambassador, AES representative Aaron Samson said the company had already spent more than $55 million on the project, and noted that an agreement in principle had been signed, “and the prime minister will not speak to them because there are no other requirements that AES must satisfy,” the cable said.

“AES officials are especially frustrated with Bahamians and complained that although they have visited an operating AES LNG plant and seemed to be convinced of its safety, they now fail to speak out in favor of an LNG plant on Ocean Cay,” the embassy official wrote.

The official said that at an earlier meeting, David Davis and Ronald Thompson of the Office of the Prime Minister said that in their opinion “LNG is dead”.

The cable noted that then Minister of Trade and Industry Leslie Miller, the government’s chief proponent of LNG, estimated that the project would generate approximately $40 million in average annual revenues over the course of 25 years, for a total contribution to the Public Treasury of nearly $1 billion.

The project was also expected to create about 450 jobs during the construction phase and 25 to 35 permanent positions.

The cable noted that Minister Miller had alleged in a radio interview that the environmental group Re-Earth’s opposition to LNG was getting more media attention than it normally might because the group’s leader, Sam Duncombe, is white.

“Had this been a regular Bahamian of a hue like you and I, it would not have been tolerated or she would not have gotten the coverage that she has certainly gotten,” Miller was quoted as saying.

The cable also documented the nasty exchange on Cat Cay between Miller and Cat Cay investor Manuel Diaz.

A protracted debate

In the comment section of the cable, the embassy official wrote, “The consideration of the various LNG proposals typifies the slow and opaque decision-making process of the Christie government.

“Government ministers have been promising a decision ‘in a few weeks’ for nearly two years.

“Even for the consensus-driven society of The Bahamas, the LNG debate has been long, protracted, and increasingly bitter.”

The embassy official wrongly predicted, “In the end a cash-strapped Bahamian government may be forced to make a decision about an LNG facility so it can start collecting the revenue the project will generate.”

In another 2005 cable, Christie told Ambassador Rood he did not want the Cabinet to touch the LNG issue while he was recovering from his stroke.

“He acknowledged that certain Cabinet members — Foreign Minister Fred Mitchell; Tourism Minister Obie Wilchcombe and Transport Minister Glenys Hanna-Martin — were resolutely against LNG, but that many others saw the benefit the project would have for The Bahamas,” the cable said.

“The PM gave his assurances that LNG ‘would be dealt with’.”

But it never was before the change of government in 2007.

The Americans’ hope that LNG would be approved under Ingraham also turned out to be wrong.

After a courtesy call on Deputy Prime Minister and Foreign Affairs Minister Brent Symonette by U.S. Charge d’ Affaires Brent Hardt in 2007, an embassy official noted in a cable that Symonette was against approving any such projects.

In June 2007, Phenton Neymour, state minister responsible for energy issues, noted that the new government had not had time to address the LNG issue “but he signaled that the door was still open to eventual approval.”

“Views on LNG within the new Cabinet are quite diverse, with some ministers known to be strongly opposed and some in favor,” an embassy official wrote.

“Having provided the initial approvals for LNG development back in 2002, however, the FNM will certainly take a close look at whether to move ahead with what would be an important new economic direction that would help diversify the tourism-dependent economy.

“Energy prices are very high in The Bahamas and the embassy continues to encourage the government to explore alternative sources of energy.”

Recognizing though that LNG was not a priority for the Ingraham-led government, AES officials planned to review other ancillary projects on Ocean Cay including a rest stop for cruise ships and reopening mining operations on the island.

A source close to AES told The Nassau Guardian that while the project was never officially taken off the table, it is not now being aggressively pursued.

Jun 24, 2011

thenassauguardian

Caribbean Blog International

The Bahamas Government Supports Liquefied Natural Gas (LNG) Projects in The Bahamas

Bahamian Government's Policy Decision in Support of Liquefied Natural Gas (LNG) Projects in The Bahamas

Gov’t Supports LNG

By Candia Dames

Nassau, The Bahamas

2 May 2006

The government has made a policy decision that it is not opposed to liquefied natural gas (LNG) projects in the Bahamas, according to Prime Minister Perry Christie, but he still did not give any timelines for when the government hopes to give the green light to any of the energy companies with LNG proposals.

He said LNG "can happen in the country".

"I think we are making good progress," Prime Minister Christie said in an interview with the Bahama Journal, referring to the government’s consultations and review of the proposals.

"We know that the former government had given a commitment to it, but did not allow for some of the developments that have taken place.  I think that we have had an exhaustive review of it and the government has made a policy decision that it is not opposed to LNG in the country and now it is moving forward to the final review of most certainly at least one of the applications before us."

The prime minister was no doubt referring to the Virginia-based AES Corporation, which is proposing an LNG project at Ocean Cay, near Cat Cay and Bimini.  The company wants to run an LNG pipeline to Florida to help meet that state’s growing demand for energy.

But it has had a wait of several years after it received approval in principle from the Ingraham Administration.  One year ago, AES appeared poised to get final approval from the government, but objections from wealthy second homeowners on Cat Cay further delayed a decision on the matter.

The government is also considering a second proposal from Suez and El Paso Corporations, which have combined a proposal for Grand Bahama after first presenting separate plans.

But the CEO of Suez indicated recently that his company had grown weary of the wait for a decision from The Bahamas government and would seek to get approval from the state of Florida for an LNG project off the Florida Coast.

Last week, Deputy Chief of Mission at the U.S. Embassy in Nassau Dr. Brent Hardt said the government should establish timelines for investors so that when they submit proposals they would have an idea of how long it would take to get an answer.

"I think the worst thing for investors is to continue month after month without clarity," Dr. Hardt said.

When he spoke to the Bahama Journal, the prime minister responded to Dr. Hardt’s comments, intimating that the U.S. diplomat was out of line.

"I am surprised at the comments," Prime Minister Christie said.  "That’s like me saying the same thing about the United States of America.  I assume he is well intentioned in saying it, but I think sometimes Dr. Hardt doesn’t realize what a minister or a cabinet has to do in balancing development applications."

He added: "Oftentimes, there is an application that has important policy implications.  For example, LNG was one where some people feel very strongly about opposing the installation or establishment of a facility in The Bahamas and it took time for that process to move forward, more time than those who would have wished it to happen in Florida would have allowed for and so timelines couldn’t help that process."

Mr. Christie said the government needed the time it took to consider the LNG applications and will make an announcement after it is has concluded final review of the proposals.

"That process just had to have time for consideration, the time for consultation and I think people have to understand that a country moving forward with a huge infusion of cash coming into it, inflows, development proposals, the question [is] how far we have to go in developing our country at a time when we don’t even have the manpower to service the construction jobs," the prime minister told the Bahama Journal.

"So, a lot of consideration goes into decision making. Sometimes there are those persons who are looking from outside [who wouldn’t know]."

Bahamian Voters Call for Answers and Updates on Issues of National Importance in The Bahamas

Even Supporters of The Ruling Progressive Liberal Party - PLP are Also Conceding that The PLP Government of Prime Minister, Perry Christie has to Do More to Improve its PR

Bahamas: Voters Want Answers 

 

 

By Candia Dames

Nassau, The Bahamas

25 August 2005

 

Many Bahamians are anxious to hear from Prime Minister Perry Christie on a number of issues of concern, including the much discussed Petrocaribe oil deal, the liquefied natural gas proposals, the decision to remove Sir Stafford Sands from the $10 bill, and the government’s progress in establishing a national health insurance scheme.

But his illness, which struck back in May, coupled with the traditionally slow summer period means that the Prime Minister has been off the front pages for weeks.

In January 2004, Mr. Christie started what he promised would be a quarterly ‘meet the press’ event where reporters could pose questions to him on a variety of issues.  But it was an initiative that was short lived.  In fact, nearly six quarters have passed without the event taking place again.

Mr. Christie also has made no national addresses for the year.

The Prime Minister had promised after returning to work nearly two months after his slight stroke that he would hold a press conference soon to address a number of issues of national importance that arose during his illness.  But that too has not happened as yet.

There are other issues that some people want an update on.  For instance, after much talk about the redevelopment of Bay Street, the transformation has still not started, leaving some merchants asking why.

Speaking about the planned downtown overhaul at his party’s last convention in November 2003, the Prime Minister said, "We have to change and we have to do so without delay."

But that was nearly two years ago.

At that same convention, he also announced that work on the Heads of Agreement for the $2.5 billion Ginn investment project for West Grand Bahama was being finalized.

"I have assured the Ginn group that my government is committed to bringing the project on line as speedily as possible," Prime Minister Christie said at the time.  "We have therefore agreed to complete a Heads of Agreement as quickly as possible so that this project can be underway early in the New Year."

But the New Year of 2004 came and left, but there has still not been any Ginn deal sealed.

The need for better public relations on such matters is something some Bahamians pointed to on Wednesday.

PLP’s are also conceding that the government has to do more to improve its PR.

 

Only recently PLP Chairman Raynard Rigby said that it’s a shortcoming the government needs to address.

For Bahamians waiting to hear from the Prime Minister, the concerns are varied.

"I would like to see [the Prime Minister] report on the Petrocaribe oil deal because I am not getting sufficient information from [Minister of Trade and Industry] Leslie Miller," said Jacob Rolle, a teacher at Central Andros High School who was on Bay Street on Wednesday.

"Another point is I am very apprehensive about the dealing with the president of Venezuela and his connection with Cuba.  I don’t think the U.S. would like us to be involved with those two dictators so we have to be very careful how we move ahead with friendly relations with those two countries."

Ricardo Mackey, who also teaches at the Central Andros High School, said rising oil prices continue to be a major concern and he too would like to hear what the Prime Minister has to say about Venezuela’s plan to sell fuel to the region at significantly lower costs.

"Right now there’s a concern about gas prices in Nassau…something needs to be done about that because gas only goes up in the Family Islands, it never goes down whereas gas fluctuates in New Providence," Mr. Mackey said.

He added that civil servants also want to hear specifics from the Prime Minister on planned salary increases given that the cost of living continues to increase.

"I think we need to find out what’s going on," he said.

If he could hear from the Prime Minister, Mr. Mackey said he would also like him to report on the status of the national health insurance scheme, something that was a part of the PLP’s platform when it was elected to office in 2002.

"I think it would be good if we have this kind of medical plan," the Andros schoolteacher added.

Darnell Finlayson, a straw vendor, has something closer to home on her mind.  She said that she would like the Prime Minister to speak directly to straw vendors about when a new straw market will be built on Bay Street.

The old market was destroyed by fire in September 2001, nearly four years ago.

"We need our straw market back because [the makeshift one] is in a bad condition," Ms. Finlayson said as the rain poured around her.

"The floors are flooding.  The tourists can’t walk inside.  They’re getting all wet.  It needs to be in a better position for the tourists.

Four years is enough time to build our market and I don’t know why we don’t have our market back, but Prime Minister, we really need a market back for our guests."

Across the street, Anthony Gibson, a manager at Diamonds International, said he too would like to hear from the Prime Minister as it relates to a timetable for a new straw market.

"I know there have been many promises made to the [vendors].  I have been in [the market] and I have seen the conditions these people have worked under.  Right now, this is the rainy season, only God one knows how they make it in there," Mr. Gibson said.

Mr. Gibson also raised the issue of Petrocaribe.

"What I really think we need to look at right now is this gas situation," he said.  "What I think is that we need to go full force ahead and get this thing on the run."

Allan Whyley, a retired Bahamian, also has Petrocaribe on his mind.  He said that it’s one issue he too would like to hear the Prime Minister speak about.

"The Petrocaribe accord has been so politicized.  To comment on it intelligently, you have to know more about it and we don’t have that," Mr. Whyley said.

He also noted that the Prime Minister earlier in the year announced that the government would have approved one of the liquefied natural gas projects before the end of January.  But that never happened.

Mr. Whyley said Bahamians want to know from the government what it intends to do about the proposals on the table.  He hopes that the Christie Administration rejects them.

"I really don’t want the government to approve LNG," he said. "I think [Mr. Christie] needs to make a statement about LNG.  These are issues that need to be addressed, but there are more immediate things happening with the small man that need to address. The government needs to say exactly what is reserved for Bahamians in this economy because I see foreigners coming in here and doing everything."

Lionel Carey, who said he was one of the chairmen of the former Vanguard party, said he like many Bahamians would like to hear an update on LNG.

"In the U.S. if they don’t want that in their own country, I think that’s a lesson for us.  We have tourism and we have to be sensitive about anything that could affect it in a negative way," said Mr. Carey, who now works in the Ministry of Housing.

Mr. Whyley, meanwhile, said that the immigration issue is also one that many people are concerned about.

"That’s something that really needs to be addressed seriously," he noted.  "What is happening?  Don’t the people deserve to be brought up to date?"

But not everyone thinks the Prime Minister is being too quiet on issues of national importance.

Mark Symonette, a law student, said various Ministers have been doing a good job at reporting on what has been going on in their individual portfolios.

"There are a number of issues that are outstanding," Mr. Symonette said.  "But I feel that the Prime Minister is doing an excellent job given the economic and social climate that we are in.  I think we must remember that the Ministers of the government are appointed to handle their portfolios and I think they are doing an excellent job also.

"They are reporting on their particular portfolios so I don’t see a need for the Prime Minister to get involved in every issue."

While a guest on the Love 97 Programme "Jones and Company" nearly two weeks ago, former Deputy Prime Minister Sir Clement Maynard said that the government appeared to be falling down in reporting to the public on what it is doing.

It’s something he indicated needed to be addressed.

Florida Power & Light Company (FPL) puts On Hold a Plan to Seal a Deal for Long-term Supplies of Liquefied Natural Gas (LNG)

Florida Power & Light Company (FPL) announced that it was now focusing on other potentially more viable options to meet FPL’s increasing requirements because there appears to be limited opportunity in accessing LNG at this time

Utility Co. Pulls Out Of LNG Plan

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

6th June 2005

Florida Power & Light Company (FPL), which was involved in a partnership with two energy firms to construct a liquefied natural gas terminal in The Bahamas, has announced that it has temporarily put on hold a plan to seal a deal for long-term supplies of LNG.

The announcement has placed the fate of one of the LNG proposals for The Bahamas on an even more uncertain path.

FPL had hoped to carry out an arrangement with El Paso Corp. and Tractebel Electricity & Gas whereby through their partnership, natural gas would have been liquefied, shipped from the source and then re-gasified for delivery to Florida.

Last December, the utility company announced that it had agreed to combine development efforts and resources with the two energy companies "in order to bring a new supply of natural gas to South Florida."

Under that plan, the three companies had planned to carryout one project.  Prior to that, Tractebel and El Paso had been pushing separate LNG proposals before The Bahamas government.

But in a recent release, FPL announced that it was now focusing on other potentially more viable options to meet FPL’s increasing requirements because there appears to be limited opportunity in accessing LNG at this time.

The Tractebel proposal had called for the construction of an LNG terminal in the Freeport Harbour while El Paso planned to build a terminal in East Grand Bahama.  But The Bahamas Environment Science and Technology Commission rejected both sites as being viable locations for the construction of LNG plants.

Government officials later indicated that the consortium was eyeing another site in Grand Bahama for the construction of the terminal.  The plan also entails laying an LNG pipeline from the northern Bahamas to Florida.

In December, El Paso spokesman, Aaron Woods, said that both El Paso and Tractebel will continue their individual efforts on the development side of each pipeline.

But he said, "Ultimately, one pipeline and one LNG facility will be built.  The companies will be participants in the ultimate project that is selected."

Although it had indicated last year that it had formed an arrangement with El Paso and Tractebel, FPL said in its recent release that none of the proposals received as a result of a request for proposals for the long-term supplies of LNG presented "sufficiently compelling reasons for FLP to proceed with its [request for proposals] at this time."

The utility company said in a release, "The lack of benefit to FPL customers and no bidders meeting all the specifications of the [request for proposals] contributed to the decision."

Terry Morrison, vice president of FPL’s energy marketing and trading organization, said in a statement, "We remain interested in LNG, but we have to know our customers will benefit before we will enter into any long-term transaction."

The announcement by FPL appeared to have left some confusion.

Mr. Woods, in an interview with The Bahama Journal from Houston, Texas last Thursday, said as far as El Paso is concerned, its agreement with FPL Group Resources, a subsidiary of FPL Group, Inc., still stands.

"FPL Group Resources, SUEZ (Tractebel) and El Paso Corporation continue to believe that having LNG and re-gasifying it there in The Bahamas providing South Florida with an alternative source of natural gas would be in the best interest of consumers in South Florida," he said.

"Based on the announcement by FPL utility, we are assessing our options and at this time, that’s all the information I have."

LNG Project Approved

By Candia Dames

candiadames@hotmail.com

Nassau, Bahamas

16th December

 

 

 

 

Minister of Trade and Industry Leslie Miller told the Bahama Journal yesterday that the government has approved in principle the proposal submitted by the AES Corporation to build a liquefied natural gas pipeline in The Bahamas.

 

The minister was asked to respond to reports in the Trinidadian press yesterday, which quoted him announcing the approval at the IBC/Energy Caribbean conference.

"We intend to diversify and expand the economic mix which will enable us to move ahead", he said. "The environment and tourism impacts can and will be addressed and the government intends to provide the clarity and stability necessary to attract these investments."

Minister Miller's announcement came on the same day that the Tractebel and El Paso energy companies and FPL Group Resources were announcing an alliance geared at sealing the government's approval to carry out a similar project in the northern Bahamas.

Some Bahamians, particularly those who are a part of environmental groups, are worried about a possible adverse environmental impact any LNG project could have.

AES officials have tried to placate those anxieties, assuring communities in The Bahamas and South Florida that any negative impact would be negligible.

Company officials continue to point to the significant benefits that such a project would bring to The Bahamas.

According to Project Director Aaron Samson, the AES project for The Bahamas would pay $7 million a year in business license fees.

The project is also expected to create about 450 jobs during the construction phase and 25 to 35 permanent employment opportunities.

"We're convinced that this is a very finance-able project and we won't have difficulties bringing it to fruition", Mr. Samson told the Bahama Journal in an earlier interview.

Company information says AES owns or has an interest in 160 plants in 23 countries.

Local environmentalists like those belonging to the group ReEarth continue to raise concerns regarding such projects.

ReEarth spokesperson Sam Duncombe has questioned whether companies like AES choose The Bahamas for their projects because of "our country's very loose environmental laws."

"I think a lot of it is that if they choose The Bahamas they would avoid the environmental laws that they would have to adhere to in the United States", she has told the Bahama Journal.

But it is a criticism Mr. Samson has repeatedly dismissed as he pointed to the unwavering commitment that AES has to the strictest international environmental standards.

The entire project would include a liquefied natural gas import terminal; a liquefied petroleum gas removal plant; a seawater desalination plant; an undersea pipeline to supply potable water from Ocean Cay to North Bimini; as well as Ocean Cay employee housing and associated facilities on South Bimini, and an undersea natural gas supply pipeline.