Home' Trinidad and Tobago Guardian : April 24th 2014 Contents APRIL 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
The government of The Bahamas is considering
applications from two oil companies that are seeking
exploration and production licences to search for oil
in waters north of Grand Bahama.
Bahamas Petroleum and Atlantic Petroleum have
applied to the government for eight licences for ter-
ritory covering an area of around 5.4 million acres.
Minister of the Environment and Housing Kenred
Dorsett and Bahamas Petroleum Company Ltd (BPC),
confirmed that the companies are separate and apart
from any exploratory efforts being undertaken by
BPC, which currently has five active exploratory
licences in the southern Bahamas, close to the border
Dorsett said that the government is now seeking
public feedback on the proposed licences, according
to the law.
"We look at each applicant on its merits and make
decisions based on each application, and I think that's
what has historically been done. BPC are the only
ones who have been issued a licence, at present, but
there are others who have, in this instance, made an
application, but they've not been licensed. The law
requires a process and the areas involved have to be
Dorsett did not say whether the government is
minded to approve the licenses.
Permanent secretary Camille Johnson said there
is a "nexus" between the two companies, Atlantic
Petroleum and Bahamas Petroleum, although it is
unclear in what regard at this stage.
According to filings before the United States Secu-
rities and Exchange Commission in July 2010, a com-
pany called Offshore Petroleum Corp (OFC) listed
companies called Atlantic Petroleum Ltd and Bahamas
Exploration Ltd as subsidiaries.
While it is unclear if there is a connection between
this subsidiary and Atlantic Petroleum, and if Bahamas
Exploration Ltd and Bahamas Petroleum Ltd may, in
fact, be one and the same, OFC said that its objective
was to "explore and, if warranted, develop the area
covered by eight licenses to be granted by the gov-
ernment of the Commonwealth of The Bahamas."
The filings later stated there was "no assurance
the licenses will be granted."
"We will not list our shares on any exchange, or
further pursue the effectiveness of the registration
statement of which this prospectus forms a part,
until the licenses are received," said OFC.
Attempts were made to reach the company at the
phone contact provided, but the number listed, for
an office in Fort Lauderdale, was out of service.
The development comes as investors in BPC, which
is listed on the Alternative Investment Market (AIM),
a sub-market of the London Stock Exchange, continue
their efforts to identify a partner who will bring the
capital needed to spud an exploratory well in Bahamian
Such a well is necessary to test the results of the
data gathered by the company so far, which it says
indicate a significant possibility of a major oil find
in Bahamian waters.
Last week, Business Guardian reported that BPC's
share price has fallen to its lowest level since 2009,
as investors questioned whether or not the company
will be successful in its "farmout" efforts to find a
company to partner with in the drilling initiative.
What better fuel
could one want? It
is cheap and simple
to extract, ship and
burn. It is abun-
dant, with proven
reserves amounting to 109 years of current
consumption, according to the British energy
giant BP. Those reserves are mostly in polit-
ically stable places, and there is a wide choice
of dependable sellers.
Other fuels are beset by state interference
and cartels, but in this industry consumers
-- in heating, power generation and metallurgy
-- are firmly in charge, keeping prices low.
In the same way this wonder-fuel once pow-
ered the industrial revolution, it now offers
the best chance for poor countries wanting
to get rich.
Such arguments are the basis of a new
public relations campaign launched by
Peabody, the world's largest private coal com-
pany, which unlike some rivals is profitable,
thanks to its low-cost Australian mines. Coal
would indeed be a boon, were it not for one
small problem: It is devastatingly dirty.
Mining, transport, storage and burning are
fraught with mess, as well as with danger.
Deep mines put workers in intolerably filthy
and dangerous conditions, but open-cast
mining, now the source of much of the
world's coal, rips away topsoil and gobbles
water. Transporting coal brings a host of
The increased emissions of carbon dioxide
from soaring coal consumption threaten to
fry the planet, as the Intergovernmental Panel
on Climate Change reminded everyone in a
new report this week.
The CO2 makes the oceans acid, and burn-
ing coal also produces sulfur dioxide, which
makes buildings crumble and lungs sting,
among other toxic chemicals. By some counts
coal-fired power stations emit more radioac-
tivity than nuclear ones. They release tiny,
lethal particulates. Per unit generated, coal-
fired stations cause far more deaths than
nuclear ones, more even than oil-fired ones.
Poverty kills people too, though, and slow
growth can cost politicians their jobs.
Two decades of environmental worries are
proving only a marginal constraint on the
global coal industry. Some are trying to get
out: In America Consol Energy is selling five
mines in West Virginia to concentrate on
shale gas. Big coal-burners such as American
Electric Power and Duke Energy are shutting
Despite America's shale-gas boom, how-
ever, the federal Energy Information Admin-
istration reckons that by 2040 the country
will still be generating 22 per cent of its elec-
tricity from coal, compared with 26 per cent
now. The International Energy Agency has
even predicted that, barring policy changes,
coal may rival oil in importance by 2017.
As countries get richer they tend to look
for alternatives. China, for example, is scram-
bling to curb its rising coal consumption.
However, others such as Africa and India are
set to take up the slack.
America's gas boom has prompted its coal
miners to seek new export markets, sending
prices plunging on world markets. So long
as consumers do not pay for coal's horrible
side-effects, that makes it irresistibly cheap.
In Germany power from coal now costs half
the price of watts from a gas-fired power
station. It is a paradox that coal is booming
in a country that in other respects is the
greenest in Europe. Its production of power
from the cheap, dirty, brown coal called lignite
is now at 162 billion kilowatt hours, the high-
est since the days of the decrepit East Ger-
Japan, too, is turning to coal in the wake
of the Fukushima nuclear disaster. On April
11 the government approved a new energy
plan entrenching its role as a long-term elec-
International coal companies face two wor-
ries. One is that governments may eventually
impose punitive levies, tariffs and restrictions
on their mucky product. The other is the
global glut. Prices for thermal coal, the kind
used for power and heating, are at US$80 to
US$85 a tonne, which barely covers the cost
of capital. Some Australian producers are
even mining at a loss, having signed freight
contracts with railways and ports that make
them pay for capacity whether they use it
One answer to that is cost-cutting and
efficiency, much stressed by companies such
as BHP Billiton. Unlike oil and gas, coal is
geologically simple and does not require a
costly array of drills, platforms and pipes. If
the price is too low, companies can decide
to stop production and await better times.
Thriftiness with capital has its limits, of
course. The cost of mining is going up, as
the easiest coal seams are worked out.
Some companies have tried to switch
efforts to metallurgical or ''met'' coal, which
fuels smelters. This was thought to be scarcer
and more profitable, but that theory has suf-
fered. Supplies of met coal have proven more
abundant than expected.
Perhaps the biggest hope for all involved
in the coal industry is technology. Mining
and transporting coal always will be messy,
but this could be overlooked were it burned
cheaply and cleanly.
Promising technologies abound: pulverising
coal, extracting gas from it, scrubbing emis-
sions and capturing the CO2. None of these
seems scalable, however, in the way needed
to dent the colossal damage done by coal.
All also require large subsidies from con-
sumers, shareholders or taxpayers.
A US$5.2 billion, taxpayer-supported "clean
coal" plant in Mississippi incorporates all the
latest technology. At US$6,800 per kilowatt,
however, it will be the costliest power plant
ever built. A gas-fired power station in Amer-
ica costs US$1,000 per kilowatt.
At those prices, coal is going to stay dirty.
@2014 The Economist Newspaper Ltd.
Distributed by the New York Times Syn-
Two more companies
seek Bahamas oil
The fuel of the
In last week's issue of the Business
Guardian, April 2014, Week Three, Page 4,
the article headlined, BP farms out deepwa-
ter blocks to BHP, was erroneously attrib-
uted to the Energy Chamber. The error is
Links Archive April 23rd 2014 April 25th 2014 Navigation Previous Page Next Page