MICRONESIAN LEADERS WANT CHEAPER ENERGY

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By Agnes Donato

SAIPAN, CNMI (Saipan Tribune, March 22) – The two oil companies serving Micronesia were asked to find ways to lower fuel prices and invest in developing renewable energy sources in the region.

Exxon Mobil and Shell made presentations on their operations at the 7th Western Micronesia Chief Executives Summit, which was on its second day yesterday. Both companies were urged to assist the island governments in reducing the cost of fuel.

"We are at the mercy of you, our corporate partners. We hope you will be more sympathetic to our needs. We know your companies have posted significant profits over the past few years," said Palau President Tommy Remengesau.

He also urged the oil firms to invest in research on renewable energy. "We have an abundance of wind, sun, and ocean, yet there is no single source of alternative energy in place in the islands," he said.

Gov. Benigno R. Fitial also asked the oil firm executives about the feasibility of options such as regional procurement and having a local refinery to reduce the cost of fuel on the islands.

Alan Heng, Exxon Mobil manager for the Pacific, shot down both ideas.

He said that regional procurement would entail having a uniform price for all markets—big or small. In effect, smaller markets such as Palau, the Marshalls, and the Federated States of Micronesia may pay less while bigger markets such as Guam and Saipan may have to pay more. "You can do it, you might want to think if it's a worthy effort," Heng said.

As to building a refinery in the region, Heng said it may not be cost-effective, as Micronesia's oil demand amounts to only 10 percent of the capacity of a regular refinery.

Heng added that, since fuel costs are largely driven by product specifications, the islands may consider changing the specifications of the oil product they purchase. He urged the governments to work with the industry in making the change.

For his part, Shell-North Pacific president Ruben Domingo said one way to stabilize oil prices is by locking in prices at a certain level through "hedging."

According to Domingo's presentation, Micronesia uses 35 million gallons of oil products each month. Guam consumes 60 percent of the total volume, while the CNMI consumes 40.6 percent. The rest is divided among Palau (5.2 percent), the Marshall Islands (4.8 percent) and FSM (4.1 percent).

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