Jamaica has no known oil reserves; as a consequence, the island
was about 90 percent dependent on imported oil for energy
generation in the late 1980s. Most of Jamaica's oil imports came
from Mexico, Venezuela, Trinidad and Tobago, and the Netherlands
Antilles. Over 30 percent of imported petroleum imports were
destined for the oil-intensive alumina subsector. Oil resources and
imports were managed by the state-owned Petroleum Corporation of
Jamaica (PCJ). In 1985 the PCJ accounted for 73 percent of the
imported petroleum, with private bauxite companies directly
importing the other 27 percent. Total oil consumption averaged
nearly 13 million barrels a year in the 1980s.
The island's only oil refinery, located in Kingston, had a
refining capacity of 36,000 barrels per day. Formerly owned by
Exxon, the refinery was purchased by the government of Jamaica in
1982 for US$55 million. Subsequent to the refinery's sale to the
government, PetroJam, a subsidiary of the PCJ, managed the plant's
operations. The Kingston refinery was considered strategically
important to Jamaica because of the country's great dependence on
foreign oil and the high oil intensivity of the economy. For
example, the per capita energy consumption of Jamaica in the early
1980s exceeded that of Brazil or the Republic of Korea (South
Korea), mostly as a result of the bauxite industry.
Ethanol, an octane enhancer, was produced for export for the
first time in 1985. The first ethanol plant was established in the
early 1980s by Tropicana, a subsidiary of a California-based firm.
Representing an investment of about US$23 million, the plant was
easily the largest investment that had entered Jamaica or the
Caribbean under the CBI by 1987. Even though the plant had not
completed a full year of production in 1985, output still reached
approximately 75 million liters of anhydrous ethanol. The ethanol
was exported solely to the United States market. In addition, in
1987 the Jamaican government arranged with Belize to process
ethanol from sugarcane there.
Demand for electricity grew with the country's aggregate
growth. In the mid-1980s, roughly 90 percent of all energy
generated was oil based. Hydroelectric power and bagasse (sugarcane
residue) fuels made up most of the balance of energy generation.
Government energy policy in the 1970s focused on increasing rural
access to electricity. Before 1975 only about 10 percent of rural
areas had electricity. In 1975 the government of Jamaica, in
conjunction with the Inter-American Development Bank (IDB),
launched the Rural Electrification Program, which improved rural
access to electricity. By 1987 general access to electricity was
greater than in most developing countries, about 54 percent, with
access in urban areas reaching close to 100 percent.
Power outages were very common until the mid-1980s, when the
sector was upgraded and expanded as part of physical infrastructure
improvements in the new industrial strategy. The island's installed
capacity increased from 680 megawatts in 1980 to over 700 megawatts
by 1983. Government electric policy, implemented by the Ministry of
Public Utilities and Transport, focused on efficiency,
conservation, and alternative energy sources in the 1980s. Work on
developing alternative energy sources focused on hydropower, peat,
coal, bagasse, and others.
In 1983 approximately 70 percent of total electricity was
generated by the government-owned Jamaica Public Service Company
whereas the remaining 30 percent was produced by private industry
in alumina, sugar, and cement factories. Electricity was produced
primarily by steam plants (83 percent), although hydroelectric
systems (11 percent) and gas/diesel plants (6 percent) were
increasingly being used. At least 60 percent of electricity was
consumed in the major urban areas of Kingston and Montego Bay.
Total commercial energy consumption was equivalent to 11.2 million
barrels of oil in 1985. The electrical transmission system included
864 kilometers of 138-kilovolts and 69-kilovolt lines in addition
to some 8,000 kilometers of primary distribution lines at a voltage
of 24 kilovolts and below. Oil prices and electricity rates became
political issues in the 1980s, as oil prices remained above market
prices and electricity rates increased very sharply.
Data as of November 1987