BAHAMAS ENERGY MINISTER CONFIRMS PETROCARIBE ON

C O N F I D E N T I A L NASSAU 000939

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/30/2017
TAGS: PGOV ENRG SENV BF VZ
SUBJECT: BAHAMAS ENERGY MINISTER CONFIRMS PETROCARIBE ON
BACK BURNER; KEEPS DOOR OPEN ON LNG

REF: A. NASSAU 0608

B. NASSAU 0631

C. SECSTATE 80334

D. NASSAU 1558 (2006)

Classified By: CDA D. Brent Hardt, Reasons 1.4 (b) and (d)


1. (C) Summary: During a courtesy call with the Charge' and
PolChief, Minister of State for Public Utilities Phenton
Neymour confirmed that Petrocaribe was not and would not be a
priority for the new Bahamian government. He also indicated
that the government had not had time to assess the Liquefied
Natural Gas (LNG) investment proposals inherited from the
previous government, but he signaled that the door was still
open to eventual approval. In the same meeting, Minister of
Works and Transport Deveaux (to whom Neymour reports)
emphasized his desire to reinvigorate relationships with the
state of Florida, including information sharing on Florida's
innovative land use policies. End Summary.

Where the Rubber Hits the Road: Works, Transport and Energy
-------------- --------------


2. (U) In his continuing round of calls on the new FNM
ministers, Charge, accompanied by PolChief, met with Minister
of Works and Transport Earl Deveaux and Minister of State for
Public Utilities Phenton Neymour. The FNM government
abolished the Ministry of Energy and the Environment created
by the previous government, and has moved the energy
portfolio under the Minister of State for Public Utilities.
Both ministers are U.S.-educated. Deveaux is a seasoned
politician who served in the previous FNM government as
Minister for Agriculture. Minister Neymour had been a member
of the upstart Coalition for Democratic Reform (CDR) -- the
Bahamas short-lived third party -- but he shifted his
allegiance to the FNM prior to recent elections. Together,
Deveaux and Neymour from a team critical to the FNM's
success, as their ability to improve public utilities, roads,
traffic, and address energy challenges will directly affect
the Bahamian public.

Florida Connections
--------------


3. (U) Minister Deveaux emphasized his strong interest in
reinvigorating Bahamian ties with the State of Florida. He
believed Florida could offer valuable partnerships in
education, agriculture, and forestry management. He
expressed hope that Florida could eventually offer in-state
tuition to Bahamian students. The Minister also expressed an
interest in obtaining information on Florida's innovative
land use policies, such as "Livable Florida," noting that
both The Bahamas and Florida faced the challenge of
maintaining rural lands despite rapid development. The
Charge' noted that former Governor Bush had visited The
Bahamas in 2006 to launch a series of partnerships in
education, environment, health and energy. With changes of
leadership both in Tallahassee and The Bahamas, he agreed it
was time to reinvigorate and refine these partnerships. He
said he had just spoken to Governor Crist's International
Affairs Director, who had been part of Governor Bush's
delegation in 2006, and that he confirmed Governor Crist's
interest in reaching out internationally, particularly in the
area of the environment and renewable energy. The Charge
offered to facilitate connections between Florida and The
Bahamas, and promised to convey the Minister's interests in
Florida partnerships to the Governor's office.

Energy: Petrocaribe not a priority
--------------


4. (C) Asked by the Charge about comments that appeared not
to close the door to Petrocaribe, Minister Neymour confirmed
that Petrocaribe was not and would not be a priority for the
FNM government (see ref B). Minister Deveaux, a strong
advocate for the private sector, seconded this point,
emphasizing that the last thing The Bahamas needed was more
government involvement in the energy sector. Both confirmed
that The Bahamas had no interest getting involved with Chavez
and noted that they have heard of other countries'
disappointment with the program thus far.

LNG to Get a Closer Look
--------------


5. (C) The Charge then turned to the issue of pending U.S.
energy investment proposals to develop LNG regassification
plants in The Bahamas. The FNM government had initially
approved a proposal by the AES company prior to being voted
out in 2002. The PLP moved it forward -- albeit slowly --
and was reportedly close to approval when they were voted
out. Prime Minister Ingraham, in an early post-election news

conference had indicated that LNG was "not a priority" for
his government. Neymour softened the PM's stance, however,
noting that the government has been focused on the airport
and sea ports, and would soon take up other issues that had
been on the back burner. He noted that he personally
intended to take a closer look at the LNG proposals in the
coming days. Minister Deveaux said that the original LNG
proposals had encompassed the possibility of linking the LNG
facility to The Bahamas to meet some of its future energy
needs, noting sarcastically that the PLP was unable to
contemplate anything other than oil for domestic needs.


6. (C) The Charge' welcomed the new government's openness to
the U.S. companies' energy proposals, noting that the
Embassy's interest was in ensuring a level playing field for
U.S. investors. He pointed out that the companies continue
to invest considerable resources to keep the proposals
viable, and that they were hoping for clarity on the new
government's direction. The Charge also noted that Florida
would welcome a decision to move ahead on LNG, but that they
could not wait indefinitely on The Bahamas. If they waited
too long, he cautioned, the Bahamas stood to lose 10-50
million dollars per year in potential revenues.. The Charge
renewed the invitation to both Ministers to attend the
Washington Renewable Energy Conference scheduled for March

2008. (ref. C)

Comment
--------------


7. (C) Neymour's assurances on Petrocaribe confirm that the
FNM government has no interest in Chavez and has a clear
understanding of the importance of the private sector in
ensuring the Bahamas' future energy needs. Views on LNG
within the new cabinet are quite diverse, with some ministers
known to be strongly opposed and some in favor. 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. (ref D) This
tracks well with Department priorities and the Florida
Governor's new international emphasis, and offers scope for
development of energy cooperation with the FNM government.

HARDT
HARDT