Feb 22, 2017 Last Updated 12:56 AM, Feb 15, 2017

Reducing fuel dependency

3 countries pool resources for EU funding

Energy plays a critical role in the development efforts of the Pacific region. For instance, access to affordable and sustainable sources of energy has strong linkages with the reduction of hardship and poverty.

Energy plays a critical role in the development efforts of the Pacific region. For instance, access to affordable and sustainable sources of energy has strong linkages with the reduction of hardship and poverty. In the Pacific, where poverty is often characterised by lack of access to basic services, opportunities and adequate resources, the case for increasing access to energy is particularly strong. The delivery of essential social services, such as health and primary education, requires energy services. Further use of electricity or gas for cooking, rather than firewood, has positive impacts on gender equality, the environment and quality of life. In many cases, the provision of modern energy sources can increase opportunities for income generation. This has led most Pacific Islands countries and territories to embark on aggressive programmes to increase access to energy while bringing down their reliance on fossil fuels. In the north Pacific, the Republic of the Marshall Islands (RMI), Federated States of Micronesia (FSM), and the Republic of Palau have prioritised their energy sector for funding under the European Union

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But less attention paid to it in region

Around 7 million out of the 10 million people living in the Pacific Islands countries and territories still do not have access to any form of electricity. Therefore, the region has largely concentrated on generating extra electricity. Considerable effort is being made to develop renewable energy sources, but according to a recent study conducted for the Secretariat of the Pacific Community (SPC), more efficient use of electricity already available is often a more cost-effective option. In its role as the lead agency coordinating the implementation of the new Framework for Action on Energy Security in the Pacific, SPC with the support of partners, including the Australian Government

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THERE is growing anger in Vanuatu as fuel prices remain high while dropping elsewhere in the Pacific.
World fuel prices have dropped 50 per cent since January 2014 and crude oil is currently around US$50 a barrel compared to US$117 in 2007.
In Australia, fuel prices have dropped from around $1.50 a litre to as low as 99 cents – which has not been seen for years - and New Zealand has already had seven price drops so far this year. Fuel in Auckland is around $1.73 per litre.
Fiji had its first price fall on January 15 – with prices down five to seven cents a litre.
In Vanuatu it was still 174 vatu per litre at the end of January with a small drop of around eight vatu on February 1. (174 vatu equates to AU$2.02, NZ$2.13 and FJ$3.30.)
Prominent Opposition MP Robert Bohn said there should have been a price decrease in Vanuatu before February 1.

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By Tony Wilson

Investors brace for LNG shock

A wave of optimism was about to sweep through the finance sector in Papua New Guinea in 2015 as the country appeared to be on track to reap a revenue windfall from sales of oil this year.
But falling world oil prices in December have put pressure on the profitability of PNG’s new US$19 billion LNG project, which began churning out exports last year to China and Japan, the world’s second and third largest economies.
Last month oil companies associated with energy prices and which have heavily invested in PNG’s LNG project, took a battering on the stock market due to collapsing oil prices. The 3.5 per cent fall in global oil prices hit those companies involved in oil and gas projects as the stock values were wiped off like never seen in the past five years.
Australian companies with interests in energy mining or production like Santos and Oil Search in PNG were massively targeted. Santos lost 17 per cent of value in early December and Oil Search, a company that explores and develops oil and gas deposits in PNG LNG lost 8.5% in just one week in December.
A weakening world economy compounded by increased production of shale oil in the United States in the past six months prompted a marked drop in world oil prices last month. From a top of US$111.87 per barrel of brent crude in June to a low of $78 in early December and $69 before Christmas, the steep decline has raised profit prospects in all industries which are oil-dependent in the world.

But the oil producing countries like PNG and Australia have been pushed into the raw end of the trade – with low prices against unchanged cost structure of preparing and carting the oil to the consumer countries.
Since construction of the new LNG in PNG, the industry has being touted as the next big mining boom – fuelling renewed interest at a time when investment in mining has been dwindling in the resources-rich country.
PNG’s principal buyer for LNG has been Japan, where the price of the LNG in Japan is intricately linked to the oil price and consequently the falling oil price has put pressure on the viability of the LNG projects in PNG

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ByDavendra Sharma

 

 

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