Connect with us

Features

New Fortress Energy, Sri Lanka, and Planet Earth

Published

on

By Dr. Asoka Bandarage

On September 17, New Fortress Energy (NFE), a US-based energy infrastructure company, signed a momentous legal agreement with the Government of Sri Lanka (GOSL). The signing apparently took place in the dead of the night, at 12.06 a.m., and the foreigner who came for the signing swiftly returned to the US on a flight at 2 a.m.

The back-door deal allows NFE to build a terminal for liquefied natural gas (LNG, natural gas kept in a liquid form for ease of transport) off the coast of Colombo. It also enables NFE to purchase, for USD 250 million, the Sri Lankan Treasury’s 40 percent stake in West Coast Power (WCP), which owns the 310 MW Power Yugadanavi Plant in Kerawalapitya, a contributor to the national electricity grid. NFE would have the right to build a new LNG terminal aiming to increase output to 700 MW, with a target of 350 MW by 2023. NFE will initially supply an estimated 1.2 million gallons of LNG a day to the GOSL, with expectations of significant growth as new power plants become operational.

This complex deal, involving a floating LNG terminal (also known as a Floating Storage Regasification Unit, or FSRU), power plants and energy sales estimated at six billion USD, is likely the largest contract the GOSL has ever made with a private company. It also threatens Sri Lanka with a loss of hundreds of millions of dollars and a serious compromise of the country’s energy security.

Interestingly, the Chairman and CEO of New Fortress Energy is Wes Edens, the American billionaire deemed the ‘new king of sub-prime lending’ by the Wall Street Journal in 2015 (and a ‘slumlord’ by community protesters in Milwaukee). He is also a big donor to the Democratic Party and a co-owner of the Milwaukee Bucks basketball team. Celebrating his deal with pandemic-ravaged, debt-ridden and economically desperate Sri Lanka, Wes Edens said:

“This is a significant milestone for Sri Lanka’s transition to cleaner fuels and more reliable, affordable power. We are pleased to partner with Sri Lanka by investing in modern energy infrastructure that will support sustainable economic development and environmental gains.”

Local Opposition

In Sri Lanka, however, the united trade union alliance, other mass organisations, as well as several Ministers and Members of the Parliament, are protesting the agreement. They are calling for its abrogation on grounds that it threatens national political, economic and energy security.

The Ceylon Electricity Board Engineers’ Union (CEBEU) is championing the resistance and points out that the agreement violates the government’s own National Energy Policy, approved in August 2019. The policy clearly states in strategy 3.1.2 that “considering the impact to the national energy security, operation of the first LNG terminal and LNG procurement shall be kept under state control.” The policy also states in 3.8.2 that the “procurement of plant, equipment, crude oil and other fuels as well as power purchase agreements and similar concessions, will be made through a streamlined competitive bidding scheme ensuring transparency and accountability.”

The CEBEU argues that the NFE’s ‘unsolicited proposal’ contradicts “the procurement policies and principles” of the National Energy Policy and the Sri Lanka Electricity Act. As CEBEU President, Saumya Kumarawadu explains, the signing of the NFE agreement during the ongoing bidding process has completely disrupted the transparent and formal procedures to procure an LNG terminal facility and pipelines through competitive offers from other parties, more favourable to Sri Lanka.

The CEBEU fears that the agreement would result in the Ceylon Electricity Board, the long-time provider of electricity to the country, losing its ability and mandate to supply the cheapest source of power under its least-cost operating guidelines. The CEBEU has extensively examined the pricing formulas for LNG supply in the NFE agreement, and considers them “very much disadvantageous to Sri Lanka.” They cite offensive conditions of the agreement, including:

  • “Inclusion of very high Take or Pay (TOP) gas volumes than the actual minimum requirement of the country with strict conditions that NFE should be paid irrespective of whether the contracted volumes are consumed or not.
  • Contract term initially for five years with almost definite compelled further extensions.
  • Exclusive rights of supplying LNG to Sri Lanka electricity generation.
  • NFE being granted all tax exemptions/benefits/investment incentives available under Sri Lankan law.”

Sri Lankan activists argue that under the NFE agreement, the supply of LNG may not be limited to just the electricity sector but could also extend to other sectors, such as transport and domestic usage, giving a foreign company enormous control over the country. As the CEBEU points out:

“The main aim of NFE is not the mere USD 250 million investment in shares of WCPL but the securing of multi-billion dollar LNG supply contract without a competition and with exclusive rights of supplying LNG to the whole country with an undefined extended duration beyond five years with massive controlling power on the country’s national security and energy security and with guaranteed exorbitant profits.”

Given the Asia-Pacific Strategy of the US to control the Indian Ocean, including strategically located Sri Lanka, local activists point out the dangers of complete dependence on the US for LNG supply to local power plants. Activists lament: “They [the U.S.] will not let us off the hook once they establish their foothold here. We are in deep trouble.”

A Press Release by the National Joint Committee of Sri Lanka of August 2, 2021, points out that the current GOSL was elected into office with a massive mandate to safeguard national resources and strategic assets from neocolonial exploitation.

The current economic crisis and external political pressure should not be excuses to sell the country for short-term political and economic expedience. This, of course, is the situation for many countries, not only Sri Lanka.

NFE and LNG in global context

NFE is a global company with an expanding “network of liquefied natural gas (LNG) terminals, power generation facilities and natural gas logistics infrastructure,” around the world. With operations in North America, Europe, the Caribbean, Central America, and Africa it has positioned itself to be the leader in the world’s transition to LNG and to “light the world.”

As in Sri Lanka, NFE presents its global LNG projects as “clean, cheap and safe alternatives to coal and oil.” However, activists (and energy experts critical of ‘greenwashing’) question its assumptions and practices. As the Natural Resources Defense Council (NRDC) points out in its report ‘Sailing to Nowhere: Liquefied Natural Gas is not an Effective Climate Strategy’, expansion of US-produced LNG “could have enormous environmental impacts and costs for decades to come.”

LNG production involves extensive use of hydraulic fracturing (‘fracking’), the process of injecting liquid at high pressure into subterranean rocks to force open fissures and extract oil or gas, and LNG processing can increase air pollution and contaminate water supplies, harming human and environmental health.

The fracking-driven expansion has transformed the US from a gas importer to a gas exporter, aggressively seeking overseas markets to sell its oversupply. While natural gas is considered a ‘bridge fuel’ towards sustainability, with lower carbon dioxide emissions than coal or oil, the extraction, processing, and transport of gas emits greenhouse gases, including through leaks and releases from wells, pipelines, storage and processing facilities. Methane, the principal component of the gas, is the second biggest driver of climate change, and gas production systems are the second largest emitters of methane in the US. The NRDC concludes that:

“…using LNG to replace other, dirtier fossil fuels, is not an effective strategy to reduce climate-warming emissions. In fact, if the LNG export industry expands as projected, it is likely to make it nearly impossible to keep global temperatures from increasing above the 1.5 degrees Celsius threshold for catastrophic climate impacts.”

The Public Accountability Initiative, a nonprofit organization that researches connections between corporate and government power, argues that “Financial firms like Wes Edens’ New Fortress Energy are critical players in propping up the fossil fuel industry, which is responsible for our current climate crisis.”

Ecological alternatives

Social and environmental activists also point out that, while NFE and other power companies seek to make huge profits from LNG, flooding energy markets in countries such as Puerto Rico and others in the Caribbean with ‘fracked gas’ will not build resilience. Instead, they call for localised renewable energy sources, such as rooftop and community solar and distributed microgrid technologies, which are more sustainable and more resilient to natural disasters such as earthquakes and hurricanes than centralised fossil-generated power.

Sri Lanka, like Puerto Rico, is an environmentally challenged island that needs to heed these warnings.

The recent environmental devastation, off the coast of Sri Lanka, caused by the explosion of the X-Press Pearl ship carrying toxic cargo, should provoke similar demands for action. For example, strict regulations on the maritime transport of toxic substances, including LNG, are desperately needed to avoid further disasters.

If the Democratic administration in the US is genuinely committed to mitigating climate change, it needs to move away from the global export of dangerous and controversial LNG. Instead, economically struggling countries and regions like Sri Lanka and Puerto Rico need to be allowed, with their sovereignty intact, to develop truly clean, safe, and cheap energy sources, such as solar and wind power, that uphold local and bioregional paths to environmental and human protection.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Features

Encouraging signs, indeed!

Published

on

Derek and Manilal

Local entertainers can now breathe a sigh of relief…as the showbiz scene is showing signs of improving

Yes, it’s good to see Manilal Perera, the legendary singer, and Derek Wikramanayake, teaming up, as a duo, to oblige music lovers…during this pandemic era.

They will be seen in action, every Friday, at the Irish Pub, and on Sundays at the Cinnamon Grand Lobby.

The Irish Pub scene will be from 7.00 pm onwards, while at the Cinnamon Grand Lobby, action will also be from 7.00 pm onwards.

On November 1st, they are scheduled to do the roof top (25th floor) of the Movenpik hotel, in Colpetty, and, thereafter, at the same venue, every Saturday evening.

Continue Reading

Features

Constructive dialogue beyond international community

Published

on

by Jehan Perera

Even as the country appears to be getting embroiled in more and more conflict, internally, where dialogue has broken down or not taken place at all, there has been the appearance of success, internationally. President Gotabaya Rajapaksa will be leading a delegation this week to Scotland to attend the UN Climate Change Conference (COP26). Both the President, at the UN General Assembly in New York, and Foreign Minister Prof G L Peiris, at the UN Human Rights Council, in Geneva seem to have made positive impacts on their audiences and, especially amongst the diplomatic community, with speeches that gave importance to national reconciliation, based on dialogue and international norms.

In a recent interview to the media Prof Peiris affirmed the value of dialogue in rebuilding international relations that have soured. He said, “The core message is that we believe in engagement at all times. There may be areas of disagreement from time to time. That is natural in bilateral relations, but our effort should always be to ascertain the areas of consensus and agreement. There are always areas where we could collaborate to the mutual advantage of both countries. And even if there are reservations with regard to particular methods, there are still abundant opportunities that are available for the enhancement of trade relations for investment opportunities, tourism, all of this. And I think this is succeeding because we are establishing a rapport and there is reciprocity. Countries are reaching out to us.”

Prof Peiris also said that upon his return from London, the President would engage in talks locally with opposition parties, the TNA and NGOs. He spoke positively about this dialogue, saying “The NGOs can certainly make a contribution. We like to benefit from their ideas. We will speak to opposition political parties. President Gotabaya Rajapaksa is going to meet the Tamil National Alliance on his return from COP26, which we will attend at the invitation of the British Prime Minister. So be it the NGO community or the foreign diaspora or the parliamentary opposition in Sri Lanka. We want to engage with all of them and that is very much the way forward”

INTERNAL FRAGMENTATION

The concept of a whole-of-government approach is indicative of a more cohesive approach to governance by government ministries, the public administration and state apparatus in general to deal with problems. It suggests that the government should not be acting in one way with the international community and another way with the national community when it seeks to resolve problems. It is consistency that builds trust and the international community will trust the government to the extent that the national community trusts it. Dialogue may slow down decision making at a time when the country is facing major problems and is in a hurry to overcome them. However, the failure to engage in dialogue can cause further delays due to misunderstanding and a refusal to cooperate by those who are being sidelined.

There are signs of fragmentation within the government as a result of failure to dialogue within it. A senior minister, Susil Premajayantha, has been openly critical of the ongoing constitutional reform process. He has compared it to the past process undertaken by the previous government in which there was consultations at multiple levels. There is a need to change the present constitutional framework which is overly centralised and unsuitable to a multi ethnic, multi religious and plural society. More than four decades have passed since the present constitution was enacted. But the two major attempts that were made in the period 1997-2000 and again in 2016-2019 failed.

President Rajapaksa, who has confidence in his ability to stick to his goals despite all obstacles, has announced that a new constitution will be in place next year. The President is well situated to obtain success in his endeavours but he needs to be take the rest of his government along with him. Apart from being determined to achieve his goals, the President has won the trust of most people, and continues to have it, though it is getting eroded by the multiple problems that are facing the country and not seeing a resolution. The teachers’ strike, which is affecting hundreds of thousands of schoolchildren, is now in its fourth month, with no sign of resolution. The crisis over the halting of the import of chemical fertiliser is undermining the position of farmers and consumers at the present time.

EARLY WARNING

An immediate cause for the complaints against the government is the lack of dialogue and consultation on all the burning issues that confront the country. This problem is accentuated by the appointment of persons with military experience to decision-making positions. The ethos of the military is to take decisions fast and to issue orders which have to be carried out by subordinates. The President’s early assertion that his spoken words should be taken as written circulars reflects this ethos. However, democratic governance is about getting the views of the people who are not subordinates but equals. When Minister Premajayantha lamented that he did not know about the direction of constitutional change, he was not alone as neither does the general public or academicians which is evidenced by the complete absence of discussion on the subject in the mass media.

The past two attempts at constitutional reform focused on the resolution of the ethnic conflict and assuaging the discontent of the ethnic and religious minorities. The constitutional change of 1997-2000 was for the purpose of providing a political solution that could end the war. The constitutional change of 2016-19 was to ensure that a war should not happen again. Constitutional reform is important to people as they believe that it will impact on how they are governed, their place within society and their equality as citizens. The ethnic and religious minorities will tend to prefer decentralised government as it will give them more power in those parts of the country in which they are predominant. On the other hand, that very fact can cause apprehension in the minds of the ethnic and religious majority that their place in the country will be undermined.

Unless the general public is brought aboard on the issue of constitutional change, it is unlikely they will support it. We all need to know what the main purpose of the proposed constitutional reform is. If the confidence of the different ethnic and religious communities is not obtained, the political support for constitutional change will also not be forthcoming as politicians tend to stand for causes that win them votes. Minister Premajayantha has usefully lit an early warning light when he said that politicians are not like lamp posts to agree to anything that the government puts before them. Even though the government has a 2/3 majority, this cannot be taken for granted. There needs to be buy in for constitutional reform from elected politicians and the general public, both from the majority community and minorities, if President Rajapaksa is to succeed where previous leaders failed.

Continue Reading

Features

JAYASRI twins…in action in Europe

Published

on

The world over, the music scene has been pretty quiet, and we all know why. This pandemic has created untold hardships for, practically, everyone, and, the disturbing news is that, this kind of scene has been predicted for a good part of 2022, as well,

 

The band JAYASRI, however, based in Europe, and fronted by the brothers Rohitha and Rohan, say they are fortunate to find work coming their way.

Over the past few months, they have been performing at some of the festivals, held in Europe, during the summer season.

Says Rohitha: “As usual, we did one of the biggest African festivals in Europe, AfrikaTage, and some other summer events, from July up to now. Some were not that big, as they used to be, due to the pandemic, health precautions, etc.”

For the month of October, JAYASRI did some concerts in Italy, with shows in the city of Verona, Napoli, Rome, Padova and Milano.

The twins with the
late Sunil Perera

On November, 12th, the JAYASRI twins, Rohitha and Rohan, will be at EXPO Dubai 2020 and will be performing live in Dubai.

Rohitha also indicated that they have released their new single ‘SARANGANA,’ describing it as a Roots Reggae song, in audio form, to all download platforms, and as a music video to their YouTube channel – www.youtube.com/user/jayasri

According to Rohitha, this song will be featured in an action drama.

The lyrics for ‘SARANGANA,’ were created by Thushani Bulumulle, music by JAYASRI, and video direction by Chamara Janaraj Pieris.

There will be two audio versions, says Rohitha – a Radio Mix and a DUB Mix by Parvez.

The JAYASRI twins Rohitha and Rohan

After their Italian tour, Rohitha and Rohan are planning to come to Sri Lanka, to oblige their many fans, and they are hoping that the showbiz scene would keep on improving so that music lovers could experience a whole lot of entertainment, during the forthcoming festive season.

Continue Reading

Trending