Belize's Gas Sources: Origins And Impact

Belize is a net importer of fuel, with gasoline being its primary fuel product. The country's energy sources are imported fossil fuels, biomass, hydro, and imported electricity. Belize imports 100% of its fossil fuel use, with the price of LPG in the country being driven by international LPG prices. Petroleum exploration in Belize began in the 1930s, with oil exploration licenses granted to large oil companies such as Shell, Esso, and Texaco, as well as smaller companies. In 2005, Belize Natural Energy Ltd. made the first commercial discovery of petroleum in the country, in Spanish Lookout. Belize Natural Energy is currently the only producer of crude oil in Belize.

Belize imports 100% of its fossil fuel use

The first discovery of petroleum and gas deposits in Belize was made by Belize Natural Energy Ltd. (BNE) in 2005 when the first well in Spanish Lookout began producing. BNE is currently the only producer of crude oil in Belize and has seen its production reach 5,000 barrels per day. The oil discovered in Spanish Lookout is a light crude oil, and the field is producing an average of 900 barrels of oil per day. BNE made another commercial discovery in October 2008 in the Never Delay area, and this field is producing an average of 25 barrels of oil per day.

The high dependence on imported fossil fuels has significant implications for Belize's economy. As an importer, the country is vulnerable to fluctuations in international prices, which can impact the cost of living and economic growth prospects. High energy costs can act as a "downside risk", as highlighted by economists and organisations like the International Monetary Fund (IMF). The complex dynamics of fuel prices and their impact on the economy present a challenge for policymakers.

Belize has taken steps towards sustainable energy and reducing greenhouse gas emissions. In 2003, the Public Utilities Commission implemented a project to develop a National Energy Policy promoting environmentally sound, safe, reliable, and affordable energy. The country has also participated in international initiatives, such as the San Jose Pact and the Kyoto Protocol, to address energy and environmental concerns.

The energy landscape in Belize is diverse, with a mix of imported fossil fuels, local biomass, hydro sources, and imported electricity. The country continues to explore options for energy security and sustainability while navigating the challenges of its high dependence on foreign fossil fuels.

Belize's LPG prices are influenced by international LPG prices

Belize's liquefied petroleum gas (LPG) prices are influenced by international LPG prices due to the country's dependence on fuel imports. As a net importer, Belize is vulnerable to fluctuations in international fuel prices, which directly impact the acquisition costs of LPG.

The cost of LPG in Belize is determined by several factors, including the landed cost of importing LPG, which involves international acquisition costs, transport and handling expenses, port charges, and government duties and taxes. Additionally, the cost for the National Gas Company (NGC) of Belize to receive, store, blend, distribute, and sell LPG at a wholesale price contributes to the final LPG price. The wholesale and retail margin, regulated by the Controller of Supplies, also influences the price.

The variability of international LPG prices, driven by seasonal demand and market factors, directly impacts local prices in Belize. This dynamic is not unique to Belize, as other countries like India also experience fluctuations in LPG prices influenced by the international market.

Belize has taken steps towards energy sustainability by signing the San Jose Pact in 1988, which secured concessionary credit from Mexico and Venezuela for oil exports. Additionally, drilling efforts in 2005 near Spanish Lookout and northwest of Belmopan resulted in the discovery of two oil fields. However, fuel prices remain a challenge, with a record high of over $10 per gallon in 2008.

The impact of international LPG prices on Belize's economy is significant. High energy prices can hinder economic growth, and the government must navigate the delicate balance between managing fuel prices and maintaining prudent fiscal management. The complex nature of fuel pricing, including various taxes and subsidies, further complicates this challenge.

Belize's first commercial discovery of petroleum was in 2005

The history of oil exploration in Belize dates back to the 1930s, with companies such as Shell, Esso, Texaco, and Gulf Oil conducting seismic surveys and drilling exploratory wells. Despite extensive drilling and exploration over the years, no commercial discoveries were made until BNE's success in 2005.

The discovery in Spanish Lookout was a light crude oil with an API gravity of 40°. BNE developed this discovery into the Spanish Lookout Oilfield, which currently produces an average of 900 barrels of oil per day. The oil is trucked from the oil field to BNE's export facility in Big Creek and sold to Shell Trading.

The success of BNE was notable given that it was a small company with limited funding, founded by two Irish women and a Belizean engineer. The company faced challenges, including the death of one of its founders, Mike Usher, in 2004, just a year before their major discovery. The first well was named in his honour, and BNE has since drilled over 62 wells, with 21 named after him.

Since 2005, BNE has produced more than 10 million barrels of crude oil, with output reaching a high of 5,000 barrels per day. The company has also made another commercial discovery in the Never Delay area in 2008, which is currently producing an average of 25 barrels of oil per day.

The story of Belize's first commercial petroleum discovery highlights the perseverance and innovation of a small company, overcoming challenges and making a significant contribution to the country's energy sector.

Belize's petroleum industry is governed by the Petroleum Act and Regulations

Belize is a net importer of fuel products, with gasoline being the most prominent. As such, Belize is subject to international prices and associated acquisition costs. In 2008, fuel prices jumped to a record high of over $10 per gallon.

The Petroleum Act and Regulations, along with the terms and conditions of the licenses granted to exploration companies, provide the legal framework for the industry. This includes companies such as Belize Natural Energy Ltd. (BNE), which made the first commercial discovery of petroleum in Spanish Lookout in 2005 and is currently the only producer of crude oil in Belize.

The wholesale and retail markets downstream of the National Gas Company (Belize) Limited are controlled by subsidiaries of regional giants Grupo Tomza, Tropigas, and Zeta, who hold 57% of the market. Competing Belizean companies, including small operators, hold the remaining 43%.

Belize's energy profile consists of four main sources: imported fossil fuels, biomass, hydro, and imported electricity. As of 2020, indigenous renewable resources such as hydropower and biomass accounted for a significant portion of Belize's installed capacity and electrical generation, with fossil fuels supplying the remainder.

Belize has taken steps to reduce greenhouse gas emissions

Belize is a net importer of fuel products, with gasoline being the primary import. In 2003, the country imported 100% of its fossil fuel use. However, Belize has taken several steps to reduce its greenhouse gas emissions and promote sustainable energy.

Firstly, the Public Utilities Commission implemented a one-year project in 2003 called the Formulation for a National Energy Plan for Belize. This project, funded by the United Nations Development Fund, aimed to develop a comprehensive National Energy Policy to promote environmentally sound, safe, reliable, and affordable energy. The plan was updated in 2011 with the Framework for the National Energy Policy, which led to the founding of the Ministry of Energy, Science & Technology, and Public Utilities.

Belize has also participated in international efforts to reduce greenhouse gas emissions. The country signed the San Jose Pact in 1988, which entitled it to a concessionary credit from 20-25% of the purchase price of oil exports from Mexico and Venezuela. Additionally, Belize has been a participant in the Kyoto Protocol and the United Nations' REDD (Reduction of Emissions from Deforestation and forest Degradation) program.

Furthermore, Belize has taken specific actions to reduce emissions and prevent deforestation. The Belize and Nicaragua Logs Recovery project aims to reduce greenhouse gas emissions and prevent deforestation by salvaging mahogany and other logs in the Belize and Nicaragua Rivers.

Belize has also made efforts to improve its energy efficiency and reduce its carbon intensity. According to data, Belize's greenhouse gas emissions declined by 100% from 2020 to 2021 and by NAN% from 2021 to 2022.

Additionally, the country has taken steps to address the economic impact of high fuel prices, which are often cited as a "downside" risk by economists. The complex nature of the fuel price situation presents a challenge, but Belize is exploring various policy responses to find a solution that supports economic growth while practising prudent fiscal management.

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