The new energy paradigm

12-17-2008 | ERIC JACKSON

thepanamanews@gmail.com

Thoughts on the new price of oil and what it means to Panama and the Canal expansion project

Panama Star Time and again, the Torrijos administration and the political milieu from whence it comes have done and said things that either indicate that they do not understand what they do or say, or else they are talking down to people whom they take to be uneducated suckers.

I think it varies from person to person in that crowd --- some of the people making specious claims during the canal expansion referendum clearly knew better, but then all that talk about "development clusters" and the "articulated" mantra about the solution to Panama City's transportation woes bore the hallmarks of people chanting slogans that they did not understand. Think of it as the mirror image of a leftist movement that commands the support of maybe 10 percent of the population chanting "The People united will never be defeated."

The energy spike brought about by the Iraq War has for the most part come down again. Not all of its consequences will go away anytime soon, but some of the things that are coming are quite predictable. The problem is that in Panama our public institutions are led by people who believe in cost projections by the people who did the estimates for the Boston Big Dig, or who at least expect the general public to believe in such fairy tales.

If the price of petroleum is down and probably will be for the next few years, the urgent need for the world to kick that habit so as to take its foot off of the climate change accelerator remains. Flat or diminishing oil demand, lower prices, less hope for the future of that industry -- what do these things mean for Panama?

For starters, would it not suggest that the idea of building an oil pipeline from Las Minas in Colon, alongside and partly underneath the Panama Canal to Veracruz, then under the Pacific Ocean to a platform near Taboga Island, is now economically impractical as well as environmentally irresponsible?

A confrontation between the national government and Kuna Yala prompted by a decision to grant Harken Oil a concession to drill in waters that are historic Kuna fishing grounds -- if that made any sense before, does it make any now?

And what about all of those hydroelectric dam projects that would displace Ngobe or Naso communities? Setting aside the political, environmental and human rights issues, has Panama been committed to a development strategy that makes no economic sense?

And what about Panama Canal tolls? Those were raised on the assumption that given high fuel prices, slightly longer competing routes -- Asia to the east coast of North America via the Suez Canal and so on -- would be precluded. Are the canal toll structures adjusted, or even adjustable, to lower fuel prices?

Consider the plans to develop a Panamanian biodiesel industry with Brazilian help. Does this make economic sense anymore?

I do not have the answers to many of these questions. Other energy related questions, such as about the wisdom of repeating the historic US blunder of designing metro areas around cars rather than people, I think I can answer correctly.

In any case, Panama needs to reconsider -- or in many instances think about for the first time -- many public policies that are based upon assumptions about energy.