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