ORNL-SNO
An Ass.ssment of Energy Options for Uberia ORNL-5989
AN ASSESSMENT OF ENERGY OPTIONS FOR LIBERIA
Final Report of the Initial Phase of the Natona1 Energy Assessment for Liberia, a Joint Project of the Government of Liberia and the U.S. Agency for International Development
W. F. Barron and M.-H. Neufvi11e Project Managers
Date of Issue - November 1983
Research sponsored in part by the U.S. Agency for International Development under Interagency Agreement No. 40-1238-82, USAID No. RSSA-78-27
Prepared by the Energy Division OAK RIDGE NATIONAL LABORATORY Oak Ridge, Tennessee 37831 operated by UNION CARBIDE CORPORATION for the U.S. OEPARTMENT OF ENERGY under Contract No. W-7405-eng-26 PROJECT PARTICIPANTS
Oak Ridge National Laboratory Government of Liberia (GDL) Richard Barnes, P.E. James Guseh, J.D. (MDF) William Barron, Ph.D. Lucille Kawah (LEC) Jerowe Dobson, Ph.D. Miedi-Himie Neufvi11e, Ph.D. (BHC) Lawrence Hill, Ph.D. R. Emile Rhinelander (BHC) Benjamin Hobbs, Ph.D. Jacob Sandikie (BHC) Garland Samuels, M.S. Vermunah Sherif lLEC) Thomas Wilbanks, Ph.D. Gmakahn Sherman LPRC) G. Melvin Smith (BHC) Edmond Zowulu (FDA)
Consultants to Oak Ridge National Laboratory C. Gregory Knight, Ph.D., Penn;y1vania State University Carl Thomas, Ph.D., University of Tennessee William Schaffer, J.D.
USAID Project Advisers Patricia Koshe1, Energy Office, Washington, Project Officer Fred H.ge1, Monrovia Mission, Chief, Institutional Development James Pagano, Monrovia Mission, Energy Project Officer
Participating GOL Agencies Ministry of Lands, Mines and Enetgy (MLME) Bureau of Hydrocarbon (BHC) Ministry of Planning and Economic Affairs (MPEA) Ministry of Commerce, Industry and Transportation (MCIT) Ministry of Rural Development (MRD) Ministry of Agriculture (MOA) ~ Ministry of Internal Affairs (MIA) Ministry of Finance (MOF) Liberia Electricity Corporation (LEC) Liberia Petroleum Refining Company (LPRC) Forest Development Authority (FDA)
*In 1983, in a government reorganization, the Department of Energy (DOE) of the MLME superseded the BHC as the Secretariat of the National Energy Committee. CONTENTS
PAGE
LIST OF TABLES . • • vii PREFACE ix
ABSTRACT • • xv
SUMMARY • • xvii 1. PROJECT DESCRIPTION . 1 1.1 STATEMENT OF WORK • •• 2 1.2 APPROACH . . · · · 2 2. OVERVIEW OF THE LIBERIAN ECONOMIC SITUATION 5 2.1 GROSS DOMESTIC PRODUCT . ·· · ·· · · • 5 2.2 IMPORTS AND EXPORTS • · ···· ·· · •••••• 7 3. ENERGY SUPPLY AND DEMAND FOR MAJOR SECTORS •• 11 3.1 ENERGY USE IN 1981 8Y FUEL TYPE AND MAJOR· CONSUMING SECTOR • • • • 11 3.2 OVERVIEW OF PRESENT MAJOR· ··SOURCES·· · ·OF· ENERGY·· IN LIBERIA. · · ···· · ·· ·· · · ·· 14 3.2.1 Petroleum Products · • ·· · ··· 14 3.2.2 Hydroelectric Facilities •• •••••• 19 3.2.3 Wood Energy . · 20 3.3 ENERGY DEMANDS BY MAJOR· ··CONSUMING· · ··SECTOR·· ··. 21 3.3.1 Mines . • 21 3.3.2 Electricity·· Generation· · ··· and·······Consumption 24 3.3.3 Transportation ·· · ···· ··· • 28 3.3.4 Agriculture . ·· · ····· ·· · 29 3.3.5 Forestry • ··· •• · ·· • · ·· • 32 3.3.6 Government • • • • •• 32 3.3.7 Residential Charcoal· · ·· ·and ·Fuelwood· · 35 3.3.B Industrial and Commercial Sectors • 36
4. PROJECTED ENERGY DEMANDS, 1981-2000 • • 39 4.1 METHODOLOGY • ···· ·· ·· · 40 4.2 PROJECTIONS · · ··· ·· · · · 41 5. OVERVIEW OF LIBERIA'S ENERGY NEEDS AND SUPPLY AND CONSERVATION OPTIONS · • · • · • 47 5.1 SUMMARY OF THE MOST ···CRITICAL··ENERGY· NEEDS· · 47 5.1 •1 Public Electrical Services • ··· • 48 5.1.2 Transport Services · • ·· · • · · • 48 5.1.3 Residential Fuelwood and Charcoal · 49 5.1.4 Mines and Other Concessions ··· · · 50 5.1.5 Commercial and Governmental Buildings 51
v PAGE 5.2 OVERVIEW OF LIBERIA'S ENERGY SUPPLY AND CONSERVATION OPTIONS ...•••... • 51 5.2.1 Imported Petroleum ..••.• 52 5.2.2 Imported Coal .•.••.••.•• 52 5.2.3 Domestic Petroleum .•.... 53 5.2.4 Hydroelectric Energy Potential • 53 5.2.5 Wood ...... •..... 55 5.2.6 Energy Conservation .•..•. 57 5.2.7 Palm Oil ...... •.•.• 58 5.2.8 Alcohol Fuels ...••••. •. ••. 59 5.2.9 Interrrediate Energy Technologies: Biog8S, Improved Cooking Stoves and Charcoal Kilns, Solar, and Wind •....•••..•.• 60 5.3 CONSIDERATIONS IN THE DESIGN AND IMPLEMENTATION OF A TECHNOLOGY DEMONSTRATION PROGRAM FOR WOOD GASIFIERS ••••...•.•.•••. 62 6. INSTITUTIONAL DEVELOPMENTS ..••....••• 65 6.1 U.S. AND COUNTERPART WORKING RELATIONSHIPS. 65 6.1.1 Background ..•..•..•.•.• • 65 6.1.2 Counterpart Working Arrangements .• 67 6.2 MAJOR ACCOMPLISHMENTS AND PROBLEMS FACING THE NEe . .•.•..•••...... ••• •• 69 6.3 CONSIDERATIONS FOR THE ORGANIZATION OF FUTURE JOINT RESEARCH AND ASSESSMENT PROJECTS • 71 6.4 ESTABLISHMENT OF AN ENERGY LIBRARY ••• • •• 73 REFERENCES ...... •.... 75
vi LIST OF TABLES
Table Page S.l. Liberian energy balance for 1981 .. . .. xxv S.2. Simulated annual growth rates in energy use by sectors, 1981-2000 ..•••.•.•••• ...... xxvi ii 1. Member agencies of the Liberian National Energy COI1I11; ttee ...... 3 2. Liberia's 9ross domestic product of the money economy, 1971-81 ••...... ••.. 6
3. Estimated size of the traditional economy, 1971-81 6
4. Total export and import levels. 1971-81 •• ••• 8
5. Oil Import costs, 1971-81 •.• • 8
6. Liberian energy balance for 1981 • 12 7. Liberia Petroleum Refinery Company product sales history, 1971-80 ••...• 16
8. Petroleum products supplied in 1981 •• • 17 9. Consumption of major petroleum products in 1981 by customer class ...... • 17 10. Mid-1981 ex-refinery prices charged by customer class 18 11. Approximate breakdown of 1981 revenues owed to the Liberia PetrOleum Refining Company ... 18
12. Energy use by Liberian Iron Jre mines in 1981 • 22 13. Estimated electrical generating capacity in Li~eria, 1981 •..•••..• 25 14. Estimated electrical production in Liberia, 1981 26 15. Energy use for electricity generation, 1981 . .. 26 16. Sector distribution of all Liberian energy use for electricity generation, 1981 27 17. Transport fuel use. 1981 29
vii Table Page 18. Agricultural lana and fuel use in liberia by crop type, 1981 •.•...•••... 31 19. Forest production and fuel use, 1975-82 33 20. Estimated government energy use in 1981 34 21. Estimated total annual fuel wood and charcoal energy use by region ...... 36 22. Retail price ranges reported for residential energy purchases .•••..•.••. .. · . . . . . 36 23. Estimated electricity use by the industrial and conrnercial sector...... •.•. 37 24. Simulated annual growth rates in ener9Y use by sectors, 19B~-2000 ... . •• . .. . • · •• . . . 43 25. Simulated annual 9rowth rates in energy use by fuel type, 198~-2000 ...... • · ... .. 45
viii PREFACE
Because the complete set of 18 appendices to this report is relatively lengthy and since each appendix is of a specific nature, the appendices have not been included here. However, copies of individual appendices may be obtained by written request from Thomas J. Wilbanks, Energy Division, Oak Ridge National Laboratory, P.O. Box X, Oak Ridge, Tennessee 37831, or from William F. Barron, c/o Secretariat of the National Energy Committee, Government of Liberia, Monrovia, Liberia. For the reader's convenience, the appendices and their respective numbers are listed below by general subject category. To assist the reader in better understanding the text discussions in this report, the Preface also includes reference maps of Liberia, Liberia summary statistics, and a list of energy conversion factors.
LIST OF APPENDICES
1981 Ener9Y 8alance 1. G. Samuels, "Liberian Energy Consumption and Sectoral Distribution for 1981," ORNL, March 1983.
Sector Analyses 2. C. Thomas, "Background Paper on Petroleum Refinery Operations, Mines and Industry in Liberia," ORNL, August 1982. 3. W. Barron, B. Hobbs, L. Kawah, and V. Sherif, "Background Paper on Electrical Services Provided by the Liberia Electricity Corporation {LEC)," DRNL, January 1983. 4. L. Kawah, J. Sandikie, and W. 8arron, "Project Paper on the Liberian Transport Sector," NEC, December 1982. 5. C. G. Knight, J. Dobson, and J. S. Sandikie, "Project Paper on Energy Use and Supply Potential in the Agricultural and Forestrv Sectors in Liberia," ORNL, March 1983. 6. T. Wilbanks and W. Barron, "Energy Use in the Governmental Sector in Liberia," ORNL, March 1983.
ix 7. M.-H. Neufville and J. Sandikie, "Project Paper on Residential Ener:.J Use in Liberia," NEe, Mar'ch 1983. 8. W. Barron, "Background Paper on the Conmercial Sector in Liberia," ORNL, September 1982.
9. R. Barnes and R. E. Rhinelander, "The Potential for Early Energy Conservation in the Light Industrial and Comrr~rcial Sectors in the Liberian Economy," ORNL, November 1982.
Energy Demand Projections 10. L. Hill, "The Liberian Macroeconomy an.d Simulation of Sectoral Ener9Y Demand: 1981-2000," ORNL, April 1983.
Special Topic Papers 11. Technical Subcommittee of the NEC, "Possible Actions for Near-Term Energy Conservation," NEC, December 1982. 12. M.-H. Neufville and T. Wilbanks, "Domestic Petroleum As an Energy Supply Option for Liberia," ORNL, March 1983.
13. W. Barron, G. Samuels, and T. Wilbanks, "A Near-Term Alternative for Reduci ng Li berian Oil Imports (Wood Gas i fication l ," ORNL, November 1982. 14. A. Compere, W. Griffith, and G. SamuelS, "Liquid Fuels Substitution with Vegetable Oils and Alcohols," ORNL, March 1983. 15. B. Hobbs, "Background Paper on Costs of Alternative Electrical Generation Technologies for Liberia," ORNL, February 1983. 16. W. Barron and T. Wilbanks, "An Introduction to the Ener9Y Assessment Process," ORNL, November 1982. 17. G. Samuels, "An Evaluation of the Economics of the Liberian Petroleum Refining Company Operations: Crude Oil Refining vs Product Importa tion," ORNL, January 1983; W. Barron, R. Barnes, G. Samuels, B. Hobbs, and L. Hill, memorandum to Or. M.-H. Neufvil1e on "Estimates of Refinery Viability," ORNL, January 1983.
18. B. Hobbs, W. Barron, and R. Cooper, "The liberian Energy Library," ORNL, March 1983. x REFERENCE MAPS
The two reference maps of Liberia included here show the geographical relationship of a number of important geophysical, biological, and economic features of the nation. The first map emphasizes the economic features, and the second indicates the locations of resources and economic features that are related to major recommendations of the project team.
LIBERIA SUMMARY STATISTICS land Area: 112,000 km2 Bordering Countries: Sierra leone, Guinea, Ivory Coast 19B1 National Population (est.): 1,900,000 19B1 Monrovia Population (est.): 150,000 Official language: English Currency: U.S. Oollar 1981 Gross Domestic Product: $841 million (monetary); $1 billion (combined monetary and traditional) 1981 Value Major Exports: ($ x 1D6) 1981 Volume Iron Ore 325 20 million long tons Rubber 87 169 million pounds Timber 37 94 million board-feet Other 80
Major Imports; Crude Oil 130 Other Raw Materials 120 Food 80 ·Machinery and Parts 57 Transport Equipment 27 Other 33
xi QRNL-DWG 83-t006R
REFERENCE MAP 1 OF LIBERIA
o 50 '00 I I I I : KOLAHUN MILES \ .. ..--rr~ VO:NJAMA -'...... ~lWOLOGIZI SITE . AFRICA / MI!:~RGUI SITE LAMCO SANNIOUELLE
IVORY ROBERTSPOR .•' COAST BOMIHiLLS.\.. MONROVIA
6° NORTH--- -'-'~"""'.~.. tTl-- . .... BUCHANAN,,'
--PRIMARY ROAD IIII I RAILROAD ···--·APPROX. EXTENT OF LEC CENTRAL GRID • HYDROELECTRIC DAM fa IRON ORE MINE (OPERATING) o IRON ORE MINE (PLANNED) • TOWN WITH ITS OWN ELECTRIC STATION
xii ORNL-DWG 83-47749
REFERENCE MAP 2 OF LIBERIA
o 50 100 I I I MILES
AFRICA
. ".
CAPITAL' .' '. (MONROVIA) ' .•::...... FARMINGTON R. .:. ;;.
FIRESTONE HYDROELECTRIC . FACILITY 4 ...... <... .'".-z,>- . /C'
o tr MONROVIA PETROLEUM REFINERY MAJOR RI VER OR STREAM • APPROXIMATE EXTENT OF RUBBER FARMING (CURRENTLY IN USE OR ABANOONED) • EXISTING HYDROELECTRIC FACILITY '<1 PROPOSED HYDROELECTRIC FACILITY • TOWN WITH PUBLIC ELECTRIC GENERATING STATION • TOWN WITHOUT PUBLIC ELECTRIC GENERATING STATION APPROXIMATE EXTENT OF LEC CENTRAL GRID
xiii ENERGY CONVERSIO~ FACTORS
Barre1$ of crude Fuel 106 Btu all equivalent (BCOE)
Petroleum products Crude oil, 1 barrel (bb1) 5.B 1.000 Fuel oil, 1 bb1 6.3 1.084 Gas oil, 1 bb1 5.B 1.004 Gasoline, 1 bb1 5.3 0.906 Liquid petroleum gas, 1 bb1 3.7 0.634 Kerosene, 1 bb1 5.7 0.97B Asphalt, 1 bb1 6.6 1.144 Wood Wood, 1 ft 3 0.3 0.053 Wood, 1 m3 10.B 1.B6 Wood, 1 dry metric ton 20.0 3.44 Charcoal, 1 metric ton 2B.2 4.B7
Electricity Petroleum inputs to Energy available at generate 1 MWh end use from 1 MWh
1 megawatt-hour (MWh), or 6 1 6 1000 kilowatt-hours (kWh) =10 to 15 x 10 Rtu =3.4 x 0 Btu
Powet-co~~ersions 1 watt (W) = 3.4 Btu/hour (Btu/h) 1 hp = 745.7 W= 2545 Btu/h Energy conversions 1 Btu = 1055 Joules (J) = 252 calories (cal)
xiv ABSTRACT
Under funding from the U.S. Agency for International Development (USAID), the Oak Ridge National Laboratory provid~d energy planning assistance to the National Energy Committee of the Government of Liberia (GOL), West Africa, duriog a period of ooe year ending March 31, 1983. This report outlines the scope of activities of the joint GOLf USAID project and summarizes the major findings by Liberian and U.S. project participants. The study included an examination of current energy use by sector and fuel type, projections of future energy demands, and a preliminary evaluation of a variety of alternative energy resource and technology options for Liberia. The primary finding is thet Liberia has significant opportunities for the substitution of indigenous energy resources for imported petroleum. The principal candidates are wood eoergy and hydroelectric power. The major alternatives for wood are gasification technology for small-scale electric and nonelectric applications (e.g., those under about 25-gigajoulefhour input requirements) and wood-fired steam electric generation for larger scale applications where hydroelectric power is unattractive. For major hydroelectric developmont the principal candidates are the St. Paul River Proposal an~ the Mana River Proposal. The Mana River Proposal is the smeller of the two and would meet Monrovia area electrical grid requirements and some iron are mine demand for about the next two decades. An additional important finding of this study is that the Monrovia Petroleum refinery is highly uneconomical and should be closed and petroleum products imported directly.
xv SUMMARY
This section provides a brief stateffient of the principal conclusions of the initial phase of the national energy assessment for Liberia and a narrative summary of the project a. a Whole.'
PRINCIPAL CONCLUSIONS Liberian Economic Conditions and Energy A major cause of Liberia's severe economic problems is the cost of petroleum imports. Unless oil prices fall substantially and remain low, Liberia will continue to experience considerable difficulty in meeting its commercial energy needs primarily through imports of petroleum. Both conservation and the substitution of domestic resources for imported energy can help reduce the severity of the energy problems. Oomestic resources could prove less expensive, generate local income, and reduce balance of payments problems. Continuing the present near-total reliance on imports, on the other hand, is likely in the next decade to reduce Liberian economic productivity and to lower the level of services to the modern part of the economy (e.g., electricity and transport).
Energy Demand Projections Oemands for petroleum-based fuelS and for electricity are highly sensitive to the level of activity in various sectors of the Liberian economy, particularly iron ore mining. If activity in the mining sector declines significantly (e.g., one of the large mines Closes), demand for heavy fuel oil would drop dramatically and demand for all petroleum prod'lcts would probably fall over the next several decades. Under rather optimistic conditions, such as a return to the export and economic growth , The information in this surrmary and in the full report is drawn from the detailed analyses conducted as part of the Liberian National Energy Assessment conducted jointly by the Government of Liberia (GOL) and the U.S. Agency for Internation.l Development (USAID). Detailed references for the data presented in this report can be found in the 18 appendices, which are bound separately (see a listing of appendices in the Preface). Only in those cases where reference is made to specific outside data sources is the reference inCluded here. xvii patterns of the 1970s, total ener9Y demand could grow as much as 3 to 5% annually over the next two decades. This wide range of possible future energy demand levels suggests that a prudent energy policy will emphasize flexibility: importation of refined petroleum products rather than crude oil, incremental rather than massive increases in hydroelectric capacity, and utilization of technologies which can be readily scaled up or down to meet changing conditions. Transportation and the operation of stationary internal combustion engines (largely to generate electcicity) represent the most important uses of imported oil in the Liberian economy. Reducing balance of pay ments problems by reducing oil imports will require changes ·in one or both of these kinds of activities. Existing markets for residential fuel wood and charcoal function well (i.e., supplies appear adequate and prices appear reasonable). However, if industrial and other large-scale uses of wood energy con tinue to grow as they did starting in 1982, then residential consumers could eventually face serious competition from these large-scale users, resulting in higher prices for fuelwood and charcoal in some locations. Also, fuelwood supplies could become more expensive if areas currently in shifting agriculture convert to settled agriculture and more intensive utilization of the land. It appears at this time, though, that both competition from large-scale wood energy users and competition from food crops for land use will take at least a decade to become significant considerations in the market for residential fuelwood and charcoal.
Conservation Potential Increased use of metal kilns for the manufacture of charcoal could save considerable amounts of energy, and the widespread use of more efficient fuel wood and charcoal stoves - even if limited to urban areas might save an even greater amount of energy and lessen the impact of any increases in fuel wood and charcoal prices. However, both steps would require significant capital outlays. Further, competition from metal kilns could eliminate some of the self-employment opportunities now enjoyed by small charcoal producers using earth mounds.
xviii Considerable long-term potential exists for reducing energy con sumption in the cooling of buildings. Improved seals on windows for air-conditioned rooms and the use of passive cooling techniques (e.g., shading sunlit rooms, improving cross ventilation) can reduce electricity use, especially during peak periods. However, relatively large capital investments would be required to achieve a high level of energy savings. Improvements in air conditioner and other motor efficiency can be attained through better m~aintenance and purchase of more efficient units upon replacement. Energy audits by the Liberia Electricity Corporation (LEC), as well as the development and enforcement of building and appliance energy-efficiency standards, could help to set Liberia on a more energy-efficient path. Existing informa~ion is insufficient to recommend detailed energy conservation programs. Additional studies should be undertaken to further investigate conservation potential and the costs of achieving these savings in the building, industrial, and transportation sectors. The Monrovia oil refinery appears to be sufficiently uneconomic under plausible assumptions regard,ng long-term world oil price trends that considerable monetary savings and some energy savings ~ould be achieved by closing the refinery and directly importing refined petroleum products. Closure of the refinery would have adverse employ~nt impacts, especially among highly trained Liberians. Considering the limited alternative employment opportunities currently available in Liberia, the loss of several hundred skilled positions at the refinery presents a major problem. However, estimates of the savings resulting from refinery closure range from $10 to $20 million annually, levels that are easily sufficient to meet the original payroll (about $3 to $5 million) and still provide substantial savings, if the government deems it appropriate to maintain staff positions temporarily.
Domestic Energy Sources Liberia has a large underutilized energy resource near most demand centers in the form of its secondary-growth forests and abandoned rubber farms. Wastes at sawmills could also provide important energy resources
xix in certain locations. By making use of these energy resources 1 Liberia can eventually meet most of its energy needs without using its ecologi cally fragile virgin forest regions. In '~e near term. the abandoned rubber farms offer an attractive resource. while in the longer term. short-rotation (3- to 8-year) energy tree farms located within acceptable transport distances of demand centers are likely to be t~e most economic wood resource for many demand centers. Hydroelectric energy potential in liberia is quite large. The major problem is the expense of water storage for low-flow augmentation during the dry season. Currently. the principal options for large-scale hydro development are the St. Paul River and the Mana River proposals; of the two. the St. Paul would provide considerably more power (nearly 1 GW). but at a much higher investment cost ($1 to $1.5 billion) than the Mana (about 150 MW at a cost of about $300 to $400 million). Although the St. Paul could provide for liberia's electricity needs into the distant future. the facilities would face relatively low utilization for several decades unless electricity demand grew very rapidly (above 5% annually). The Mano could provide for most of liberia's needs for at least the remainder of this century. while presenting less risk of costly underutilization.
Wood Energy Technologies Wood gasification appears to be an especially attractive option for liberia because (1) the feedstOck resource base is large. (2) gasifica tion can be combined with familiar technologies (diesel electric generators or spark ignition engines) to meet high-valued needs now met by imported petroleum. (3) the technology is relatively simple and likely to be readily adopted by the private and public sectors in liberia jf its effectiveness has been demonstrated. and (4) wood gasification would result in substantial employment and income in the rural areas which would supply the fuel. Wood-fired steam electrical generators might also be economically feasible for the larger of the rural electric stations in Liberia and for some industrial applications.
xx The Energy Assessment Process The close working relationships that developed between the project staff members from the member agencies of the National Energy Committee (NEC) and their project "counterparts" from Oak Ridge National Laboratory (ORNL) proved to be a key factor in the overall success of the energy assessment. The Liberian participants gained a more thorough understanding of the analytical process involved in an energy assessment, and the American participants gained a deeper understanding of the planning process in Liberia. Oata collection efforts were aimed at providing information for a number of potentially important policy issues. When specific crucial energy problems arose, the NEC moved quickly and effectively to apply the available information to the understanding of the situation. This ability and willingness of the NEC to use the technical information to help focus the national debate on important energy matters demonstrated the value of the institution-building efforts which occurred as part of the assessment project. The assessment activities were carried out by persons participating in the work part-time. This use of part-time staff created some administrative difficulties and in some cases slowed the pace of the assessment itself, but it also provided several important advantages. One advantage was that the project managers were able to draw on some of the more highly qualified mid-level staff persons from a number of member agencies of the NEC, many of whom would have been unavailable on a full-time basis. The U.S. project staff was in Liberia for about 7 out of the 12-month project period. This length of time was probably the minimum feasible for a successful project, but the less-than-full time U.S. presence allowed time for the Liberian staff members to work on their own, an important feature in the professional development goals of the project. The ability of the U.S. team members, including the project manager, to return periodically to ORNL also allowed the project staff to draw on the larger resources of the Laboratory in evaluating the technical options open to Liberia in meeting its energy problems.
xxi Recommended Additional Studies Feasibility studies and technology demonstrations should be under taken for several energy technologies which appear attractive on the basis of preliminary investigations. In particular, detailed studies should be undertaken of wood gasification, small hydroelectric plants, the processing of palm oil or its by-products as gas oil (diesel fuel) extenders, and energy conservation potential in buildings, industry, and transportation. For wood gasification, initial investigations should determine the appropriate design for a technology demonstration project. For small-scale hydroelectric plants, studies should be aimed at site selection and system design. For palm oil utilization. initial studies should investigate issues associated with processing techniques and basic economic evaluations. Other technologies, such as biogas and solar energy, could be important in a few favorable situations in Liberia and should be examined more closely to determine the appropriate type and scale of programs to encourage their use. Conservation studies should include. for example, the examination of the likely cost-effectiveness of investments to improve the thermal seals in air-conditioned rooms, the use of high-efficiency equipment for new or replacement applications, and the impact on fuel use of improved maintenance of engines for vehicles or stationary applications. In addition to these technical and economic an"lyses of specific energy technologies, it would also be valuable to investig"te the impact on energy conservation of such factors as (1) the perceived accuracy of electricity metering and billing, (2) public attitudes concerning the equity of energy supply allocation and prices, and (3) other social and cultural factors associated with energy usc Datterns.
PROJECT SUMMARY Introduction In April 1982 the GOL and the USAID began a one-year joint energy assessment prJject for Liberia. ORNL managed the U.S. portion of the project through funding from USAID. The descriptions of project activities
xx;; and the major findings are reported at three levels of detail: the summary, the report, and the appendices to the report. This summary presents a brief overview of activities and findings. Because much important information cannot be included here, the reader is referred to the full report for a more comprehensive description. The eighteen appendices to the report include detailed descriptions of individual sectoral analyses (including methodologies) and a number of special studies undertaken as part of this project. A listing of the appendices and instructions for obtaining copies of them are given in the Preface to this report.
Project History In response to requests f,'om the NEG, an interagency organization within the Gal, the Office of Energy of USAID agreed to fund a one-year project to provide energy planning assistance to the GDl. This assistance was to involve both direct help in conducting a National Energy Assessment and professional development support to enhance the energy planning capability of GOl agencies and staffs. U.S. project participants were ORNl staff members and subcontractors. The NEG served as the principal cour.terpart organization for U.S. project staff members. Individuals from member agencies of the NEG formed an Energy Assess ment Team which worked with visiting U.S. project staff, who acted as advisers to the team. U.S. team members also worked closely with the NEG's Technic.l Subcommittee. Together, the Energy Assessment Team and U.S. project steff gathered and analyzed the data for an initial National Energy Assessinent. The resulting jointly conducted first phase of the assessment consisted of a comprehensive review of past and current energy use by sector and fuel type, projections of future energy demands, and a preliminary review of potential supply sources. During the project period (April 1982 through March 1983), the Energy Assessment Team and U.S. project staff frequently reported their preliminary findings to the NEG and its Technical Subcommittee. The NEG met monthly or bimonthly to discuss energy issues and on several occasions made recommendations to other parts of the GDl. Participating DRNl staff members also held frequent meetings with USAID Monrovia Mission personnel. xx'iii National Energy Assessment A national energy assessment is an ongoing process of evaluation of energy options for a country. Its key elements are a description of energy flows for a recent time period (i.e., energy supply by source and demand by type of use), a projection of future energy demands, and an evaluation of how specific energy supply and conservation options might ser've to meet future needs. In practice, these separate elements are, of course, closely interconnected, and the whole assessment process must relate closely to the political and social processes of the country.
Energy Supply/Demand Balance* Liberia's energy needs are currently met through wood, petroleum products, and hydroelectric power. Of these, petroleum imports present the major energy problem in liberia. liberia's oil import bills are becoming an increasingly severe economic drain for the country. In 19B1, oil imports cost liberia $129.6 million, nearly one-fifth of the value of the country's gross domestic product, as compared with $12 million a decade before. Although the reduction of world oil prices in late 1982 and early 1983 provided some relief from steady increases in prices, problems in paying for oil imports continued to mount. Even if oil prices continue to fall some what, it is clear that Liberia must make fundamental readjustments in its use of imported oil to alleviate its growing fiscal problems. Table S.l summarizes Liberian energy use for 1981. The first three rows show total energy, exports, and energy conversion losses, respectively. Of the 11.4 million barrels of crude oil equivalent {BCDE)t originally entering the Liberian economy, 0.4 million BCDE were exported* and
*Data in this section are taken from Appendix 1. tOne barrel of crude oil equivalent (BCOE) = 6.2 gigajoules (GJ). or 5.8 million Btu. *"Exports" as used here includes sales of jet fuel to international carriers and bunker fuel (heavy fuel oil) to oceangoing vessels engaged in international commerce.
xxiv T.... 8. •• u___lor .". 10) Barrels of Crude Oil Equivalent (BCOE)
Petroleum usc other than electricity ror Tolal Total E1e Total enerlY 489 658 390 52 204 239 2,016 4.250 3.010 11,358 3.501 Eltports" 14 200 189 29 432 02 Loacs' 195 2,610 2,80S 195 Domestic 489 M4 190 52 15 5 2,016 4,250 460 8,121 2,814 Transport· Total 469 311 15 8SS 855 Road 464 261 131 131 Rail 98 98 98 )< Se. 6 6 6 < " Air 5 15 20 JO Mines 203 186 1,076 1.465 J,45 I Indllllri•• 15 4 58 10 81 35 Resklentiat 42 2 481 4,210 450 5,185 293 Commcrtial 5 10 241 10 10 216 118 Government 3 89 92 40 AJriculture and (oratry 20 50 11 20 161 82 'Othe" includes refinery 10u (195), naphtha (29), liquid potro'cum au (2). and uphalt (3). 'Electricity includes fud oil (1,160), au oil (319), and bydro (537); clcdric:al pacn'.ton Ioua tobl.bout 1,390 BCOE; thcac IOIICI are ,nocated to the: end usc secton. fUports include fuel UMd for internalional commcrco. 'Relinin,1ou (195) one! chorooal prod_Iou (2.610), 'Inch.da JOYCfnmcnt transport fuol COftIUmJ'C.ion of pIOliae (43), IU oil (19). Source: Appendix I. another 2.8 million BCaE were consumed in the energy conversion losses involved in charcoal manufacturing and petroleum ref~ning. The remaining estimated 8.1 million BCOE were consumed in energy-related activities within Liberia in 1981. Of this domestic energy consumption, 35% was in the form of petro leum products, 7% in the form of hydroelectric power, and 58% in the form of fuel wood and charcoal. In 1981, electricity generation required 2.02 million BCOE, 57% of which came from fuel oil, 16% from gas oil (diesel fuel), and 27% from hydroelectric power. Mining operations used about 60% of all petroleum products in Liberia in 1981. This total includes mine-related transport activities. For Liberia as a whole, the transport sector (including mine- related transport) accounted for 0.9 million BCOE, or 30% of all petroleum consumption. About 85% of this amount was for road transport. Another 12% of transport energy was consumed by the three railroads owned and operated by the mining companies. Combined domestic sea and air trans port accounted for only 3% of all transportation energy use. Direct energy use in the industrial (excluding mines), commercial, government, and agriculture and forestry sectors was small. * The com- bined activities of these sectors accounted for less than 10% of the petroleum products supplied to the domestic market. The residential sector consumed virtually all the fuel wood and charcoal produced in 1981 (an estimated 4.7 million BCOEl along with at least 0.04 million BCOE of kerosene, 0.002 million BCOE of liquid petroleum gas, and 0.48 million BCOE of electricity.T Of the total residential electricity consumption, 43% comes from hydro facilities' *The national energy balance (Table 5.1) prepared for this assess- ment includes transport activities by government, forestry, and the other sectors listed here in the transport sector. TEnergy inputs into generation of electricity. 'Hydroelectric power is equated with thermal electricity generation on the basis of 1 kWh = 10,000 Btu. xxvi and the remainder from petroleum. One-half of the petroleum-based electricity used by resider.~es (0.15 million BCOE) is generated at the three iron ore mines for their associated communities. Total national electrical output in 1981 was estimated to be 2.02 million BCOE, or 1,160 gigawatt-hours (G.h). The iron ore mines generated 60% of this electricity, relying entirely on petroleum products, mostly heavy fuel oil.* The Liberia Electricity Corporation (LtC) generates 35% of Liberia's electricity, relying on its Mt. Coffee hydroelectric facility for nearly two-thirds of its output nationwide. Energy Oemand Projec~ior.s for 198i-2000t Projections of future energy demands have been made by C. T. Main, Inc.,l for electricity and by the Liberia Petroleum Refining Company for petroleum products. 2 Project staff felt that these projections for the 1980s and 1990s were largely based on assumptions of a continuation of the high growth conditions which prevailed in the 1970s. In the present investigation, project staff preferred the more flexible approach of sensitivity analysis to permit examination of the consequences of a wider range of future economic conditions. The methodology utilized to simulate Liberian sectoral energy demand over the period 1981-2000 involved the recursive interaction of a macroeconomic model and individual, econometrically estimated, sectoral demand equations. Projections were made under four scenarios involving different assumptions for such critical factors as future oil prices, world prices for Liberia's major exports, and the level of Liberian export production. In each of the analyses, population growth was assumed to be 3%. Scenario 1 provides an "upper bound" for the simulations of future economic activity and related energy demand. It assumes no real growth *The proportion of the mines' power going to their residential users is included in the "Residential" rather than the "Mines" row in Table 5.1. 70ata in this section are taken from Appendix 10. xxvii in the price of crude petroleum and very ausplcl0US annual growth in the real price of Liberia's major exports (iron ore, rubber, and wood) over the 1981-2000 simulation period. Scenario 2 assumes that the real annual 9rowth in the world price of crude petroleum will mirror the projections made in 1982 by the U.S. Energy Information Administration of the U.S. Department of Energy. Assumptions about exports are the same as in Scenario 1. The intent of Scenarios 3 and 4 is to examine the impact on total energy demand of less optimistic internal economic conditions in Liberia. Scenario 3 assumes that the Liberian American-Swedish Mining Company will totally withdraw from its Liberian operations in 1985 and that the Bong Minin9 Company will withdraw in 1990, It is further assumed that rubber production will decline by two-thirds in 1990 because of a pullout or major activity reduction by Firestone Rubber Company. Scenario 3 can be viewed as a "l ower bound ll on the energy demand simula tions provided in this study. Scenario 4 reflects a more moderate decline in Liberian export pro duction. Here, it is assumed that the decline in production for exports is one-half that in Scenario 3. Table S.2 shows the projections by consuming sector under each scenario. Although growth in overall energy demand is positive under all four scenarios, as could be expected t it is relatively low under Scenarios 3 and 4. Residential demand is the least sensitive of the sectors because much of its energy demand (primarily fuel wood and char coal) is determined by assumed population growth (3% annually), a factor not varied in these four scenarios. Projections of the use of specific fuels in the four scenarios show fuel oil ranging from an annual average growth of nearly 2% under Scenario 1 to a 25% annual decline under Scenario 3. The iron ore mines are the principal users of heavy fuel oil in Liberia, and an assumed dramatic decline in mining activity is a major difference in Scenario 3 compared with Scenario 1. Gas oil demand projections range from a high of 4.6% under Scenario 1 to a low of 0.7% under Scenario 3. Projected gasoline demand grows under all four scenarios, ranging from a high of xxviii ·Reflects total sectoral end use of energy purchased in end-usc markets and, as such, does not coiJlcide in aU cases with the figures used in Table S.I. Source: Appendix 10. 6.5% annual average growth to a low of 3.7%. Electricity demand pro jections range from a high of just over 8% (Scenario 1) to a low of -0.3% (Scenario 3). Wood and charcoal demands are the same for each scenario, since their demands are based primarily on the assumed population growth. It is important to note that the projection methodology employed here does not account for fuel switching possibilities. Rather, the pro jections by fuel type reflect changes in the projected levels for activities currently utilizing the specific fuel under consideration. Factors having a major influence on Liberian energy demand are very difficult to predict with reasonable confidence. For example, the output of Liberian iron ore and rubber could change dramatically (and not necessarily in the same direction as worldwide trends), depending on the decisions of a few large foreign concessions. This prospect suggests that a prudent energy policy will emphasize flexibility in energy supply systems. In general, smaller, less-capital-intensive technologies can be scaled more readily to meet changing needs than can larger, more capital-intensive technologies. xxix Summary of the Most Critical Energy Needs by End Use and Fuel .~ Public Electrical Services. Although 65% of the Liberia Electricity Corporation's (LEC's) total generation nationwide comes from the Mt. Coffee hydro facility, the remaining generation, oil-fired output, is a serious drain on LEC·s financial resources. This oil-fired generation threatens the ability of Liberia to maintain its existing level of electrical services, much less to increase such services in response to needs for economic and social development. Liberia needs to develop hydro and thermal electric generation alternatives to oil-fired generation. The existing situation in which many customer bills are not paid also seriously weakens LEC's ability to fund capital improvements and meet its operating expenses. Means need to be found to revamp LEC's metering, billing, and collection system. Transport Services. The existing public transport system (taxis, minibuses, and "country wagons") appears to operate efficiently, given the prevailing price structure, the conditio" of the road system, and the needs of most of the population. A more extensive bus system (especially to Monrovia's fringe areas), however, might provide somewhat greater fuel efficiency and lower fares under certain conditions. The transport system will remain vulnerable to any oil price increases, and it could face serious problems in the future. The basic alternatives appear to be (1) development of non-petroleum transport fuels (e.g., vegetable oil and alcohol fuels and mobile wood gasifiers) Or (2) adjust ments in the transport system to reflect any major increases in fossil fuel prices (e.g., use of even more fuel-efficient vehicles and less driving). Overview of Liberia's Energy Supply Options Domestic Petroleum. At this time, Liberia's prospects for domestic petroleum resources remain speculative, while exploration continues offshore. If petroleum is found, the project team recommends that Liberia use part of its oil revenue to develop domestic renewable energy resources to help in the balanced development of the nation and to build a base for long-term energy supply. xxx Hydroelectric Energy Potential. The project team recommends that careful comparison be made of the St. Paul River Proposal and the proposed storage and generation facility on the Mano River near the National Iron Ore Company mine site. For LEC's rural systems, small hydro plants (200 to 5000 kW) could prove feasible in several locations. Mini-hydro plants (under about 200 kW) may be attractive in a few selected locations if LEC provides personnel for periodic visits and emergency calls or if local technical expertise is available (e.g., from a hospital staff). Wood. Liberia's wood resource base can support levels of production which could eventually meet most or all of Liberia's energy needs. Considerable wood energy is ready for immediate use in the abandoned rubber farms, sawmill wastes, and secondary growth in areas under long rotation bush-fallow cultivation and in the longer term from short rotation intensive wood energy plantations on sites close to demand centers. Wood for residential cooking is currently being used in very low efficiency stoves. Efficiency improvements in cooking stoves and in the production of charcoal provide considerable potential for freeing part of the wood resource base for industrial and electrical applications. In addition, the productivity of the wood resource base near demand centers could be considerably increased through planting designated areas specifically for energy purposes. Palm Oil. Vegetable oil, especially palm oil, may eventually be a valuable source of energy in Liberia. The two major current problems are (1) technical questions regarding the type of refinement necessary to upgrade palm oil into a motor fuel and (2) palm oil's higher cost relative to the current cost of petroleum. In the long term, the price of gas oil may rise well above that of palm oil. However, if Liberia is to develop palm oil fuels in the near future, the basic question is whether the likely higher price would be acceptable in light of the potential benefits stemming from production of a domestically produced fuel. xxxi Institutional Developments A major goal of this project was to enhance the capability of GOl institutions to evaluate systematically the advantages and disadvantages of different energy policy options facing the nation. Considerable progress has been made toward meeting this goal. The gains made were the result of a number of factors. The Liberian project staff was highly motivated and worked diligently on the energy assessment, in many cases while still performing their regular work assignments. The Liberian staff worked closely on a daily basis with U.S. project staff, providing necessary insights into local conditions. This situation greatly improved the effectiveness of the U.S. team. The close working relationship also helped the more senior Liberian project staff gain a better understanding of the technical aspects of energy assess ments, and it provided the less senior Liberian project staff with pro fessional development opportunities through on-the-job experience in energy data gathering and analysis. The U.S. staff members were able to draw on the extensive and varied resources of ORNl between their trips to Liberia. This interaction helped to supplement the skills and staff time that could be directly devoted to the project by the limited number of ORNl staff who actually worked in liberia. xxxii 1. PROJECT DESCRIPTION liberia faces severe problems that stem from its inability to meet its oil import bills. Oil price increases have resulted in an increas ing'y severe drain on the economy. In 1981. oil imports cost liberia $129.6 million, nearly one-fifth of the value of the country's gross domestic product (GOP), as compared with $12 million a decade before. The public sector share of this oil bill contributes to escalating government deficits and increasing economic instability in the country. The private sector share of this bill is a major factor in the cost of production for liberia's primary product exports. Among the major obstacles to solving liberia's energy problems has been the absence of adequate data about liberia's ability to utilize its own energy resources to meet a larger part of its energy requirements. A second major problem has been the small number of persons trained to do assessments related to this issue. In response to requests from the National Energy Committee (NEC). an interagency organization within the Government of liberia (GOl). the Office of Energy of the U.S. Agency for International Development (USAID) agreed to fund a one-year project to provide energy planning assistance to the GOl. This assistance involved both direct help in conducting a National Energy Assessment and professional development support to upgrade the energy planning capability of GOl agencies and staffs. The assessment was intended to help identify energy options for liberia and to serve as a basis for eventual development of a National Energy Plan. In March 1982, USAID and the U.S. Department of Energy entered into an interagency agreement through which Oak Ridge National laboratory (ORNl) provided energy planning assistance to the GOl (Interagency Agreement No. 40-1238-82. USAID No. RSSA-78-27). This assistance amounted to approximately 1-1/2 person-years of effort, plus travel and other expenses. The GOl provided counterpart support for the project in the form of (1) a budget for the NEC, which serves as the principal counter part agency; (2) staff time of personnel from member agencies of the NEC to work on the project ("counterparts"), amounting to about 1-1/2 1 2 person-years of effort; and (3) office space and a project vehicle with a monthly allotment of fuel for use by U.S. project personnel. U.S. team members arrived in Liberia on April 7, 1982, and initiated activities with their GOL counterparts and USAID Monrovia Mission per sonnel. Liberian and U.S. project personnel worked together in Liberia for approximately 7 months of the 12-month period. Liberian counterparts also worked briefly with ORNL project staff at Oak Ridge, Tennessee, USA, during the latter part of the project. During other times, Liberian and U.S. staff members worked separately in Liberia and in the United States on project activities. 1.1 STATEMENT OF WORK The objective of this project was to develop the data base and energy planning capability needed for the GOL to develop a National Energy Plan. Such a plan is considered a key element in (1) formulating national energy policies coherent with the country's resources and development goals; (2) utilizing energy resources more effectively; (3) increasing the use of indigenous energy resources, both conventional and unconventional; and (4) strengthening the capability of Liberian personnel and institutions to analyze energy problems. It is expected that Liberia's National Energy Plan will be developed over the next two years or so following the completion of the initial assessment. The scope of the project comprised the following activities: 1. Assistance in gathering and analyzing basic energy information. Based on both existing studies and newly gathered data, the follow ing information was generated: a. a preliminary inventory of Liberia's energy resources; b. Liberials energy production and imports; and c. energy use in five major economic sectors - industry and mining, transport, agriculture (including commercial forestry activities), households (rural and urban), and commercial and government. 2. Assistance in compiling energy demand projections for the years 1981-2000 by major consuming sectors. 3 3. Advice on government policies anct programs affecting energy production and use; identification of key impediments to the development of the energy sector (in terms of application of most efficient forms of energy production and use); provision of recommendations on development strategy, policies, govern ment organization. and programs for the energy sector and its major subsectors; advice to the GOl on all matters pertaining to energy policies and administration. 1. 2 APPROACH The project was carried out by personnel from member agencies of the NEC (Table I), ORNl project staff. and ORNl subcontractors. Ministries Mintstry of Lands, Mines and Encrgy-Cbair Ministry of PlanDinS and EcoDomic Affairs Millistry of Commerce. Industry and TransportatioD Ministry of Rural Development Ministry of Agriculture Ministry of Internal Affairs Government corporatioos and authorities Liberian Electricity CorporatioD Liberian Petroleum RefmiDg Company Forest DevelopmCllt Authority Secretariat of the National Energy Committee Bureau of HydrocarboD. MLME °In addition. Dr. A. E. Nyer.2lah Jones. ManlJing Director of the National Iron Ore Company, was appointed to act as representative of the Liberian mining sector. and Or. Mic:di-Himie Ncufville was appointed head of the NEe's Secretariat. The Ministry of Finance participates in the NEe as an affiliated member. An Energy Assessment Team was created to be the lead GOl group dealing with data collection and analysis. The team was composed of individuals from ~arious GOl ministries and agencies. These individuals worked closely with their U.S. project staff counterparts. who served as advisers to the team. Together, the Energy Assessment Team and U.S. project staff gathered and analyzed the data for an initial National Energy Assessment, consisting of a comprehensive review of past and current energy use by sector and fuel type. a review of potential supply sources, and projections of future energy demands. 4 During the process of the assessment, the Energy Assessment Team and the U.S. project staff periodically reported their findings to the NEC and its Technical Subcommittee. The permanent members of the NEC are the ministers and managing directors of the member agencies or their designated representatives. Membership in the Technical Subcommittee is not fixed. but participating persons are generally upper mid-level GOl staff (e.g.• bureau directors or program heads). The Technical Sub committee and the Energy Assessment Team worked with the U.S. project staff to define energy issues to be brought before the full NEC for dis cussion and evaluation. At the NEC's request. the members of the Energy Assessment Team and U.S. project staff also acted as advisers to the NEC. describing the technical implications of issues raised by the NEe or brought before it for consideration. Staff members from ORNl also held frequent meetings with USAID Monrovia Mission personnel to seek their advice and comments and to keep them informed on project activities. U.S. project staff also interacted extensively with their colieagues at ORNl. 5 2. OVERVIEW OF THE LIBERIAN ECONOMIC SITUATION Energy demands occur within the context of overall activity within the economy. This chapter presents background information on the Liberian economy to provide a perspective for the energy supply and demand analyses which follow. 2.1 GROSS DOMESTIC PRODUCT* Since the relative boom years of the 1970s, the Liberian economy has experienced severe problems. This reversal has occurred for a number of reasons, one of which has been the hi9h cost of imported oil. Table 2 shows Liberian gross domestic product for the period 1971-81 in both current and real 1981 dollars.t Between 1971 and 1979, the Liberian economy showed an average annual real 9rowth rate (i.e., discounting the effects of general price inflation) of 1.6%. Following the first major oil price increase by the Organization of Petroleum Exporting Countries (OPEC) in 1973-74, economic conditions in Liberia worsened, but they quickly recovered. After OPEC's second major price increase in 1979 and the weakening of economic conditions in Liberia's principal trading partners, however, t~e Liberian economy entered into a dramatic decline. Real overall output in the money economy fell by 4.7% in 1980 and by another 5.1% in 1981. Preliminary data show the decline continuing through 1982 and into 1983, spreading across nearly every major economic sector. ~xcess s.pply of petroleum in the world market in 1982 and early 1983 helped Liberia, as it has all oil-importing nations. However, the oil payments problems in Liberia are so severe that much greater price declines will be required to eliminate energy imports as a critical constraint on the Liberian economy. *Data for this section are taken mainly from Appendix 10. t"Current dollar" values reflect actual prevailing price levels over time. UReal dollar" values reflect relative price changes after eliminating the effects of general price inflation in the economy. 6 Ta.IlIe 1. """''s an- « r<" ...-..a 01 eM ....,ec...,. 1971-11 Millions or Millions or cunool S real 1981 S 1971 372.' 818.6 1972 401.6 859.9 1973 414.6 809.6 1914 501.2 821.3 1915 609.6 815.8 1976 631.6 849.3 1911 111.9 856.2 1918 773.7 894.3 1919 880.5 930.0 1980 916.6 886.6 1981 841.4 841.4 Source: Appendix 10. In Liberia, as in most developing countries, a significant sub sistence (i.e.• traditional) economy also exists in which activities particularly subsistence farming. village housing construction, and handicrafts - take place without entering into the money economy. Table 3 shows the estimated economic value of the output from the traditional economy from 1971 throu9h 1981. The traditional economy appears to have been unaffected by the 1980-8l declines in the money economy, at least as far as can be determined from the available estimates. The traditional economy is. however. only about one-fifth the size of the money economy. Thus. the total economy still declined significantly in these years. ToWel. __" ... tfMIt'-aJ ec....,-. 1971-11 Millions of Millions of current $ rea.I 1981 S 1911 57..5 '49.3 1972 58.9 156.1 1973 78.0 1.57.9 197. 110.6 118.1 1915 117.3 116.6 1916 130.2 190.9 1977 155.0 200.5 1978 170.0 200.5 1919 187.) 202.5 1980 200.2 201.1 1981 214.0 214.0 Source: Appendix 10. 7 2.2 IMPORTS AND EXPORTS Liberia, again like many other developing countries, is heavily dependent on the income from a few primary product exports. Major exports are iron ore. rubber. lumber, diamonds, coffee, cocoa, and palm oil. Export income for Liberia depends largely on iron ore, rubber, wood, and assorted agricultural products. The levels of the major exports fluctuated considerably over the decade between 1971 and 1981. For example, iron ore output was 25 million tons in 1974 and 18 million in 1975. In 1979 it was 20 million tons, but it fell to 17 million in 1980. Lumber exports are particularly volatile. They rose by 13% from 1972 to 1973. However, in 1974, they declined by 24% (from 150 to 80 million board-feet). Lumber exports reached a peak of 166 million board-feet in 1980 but fell dramatically to 94 million in 1981. These drastic changes in production for the major exports resulted in sudden shifts in employment, local income multiplier effects, and tax revenues. Prices for primary products also changed dramatically from one year to the next, further impacting tax revenues and producer profitability. Such instability created major fiscal planning problems because of the difficulty in anticipatin9 the substantial changes in employment levels and earnings from one year to the next in major sectors of the econ~. Table 4 shows export earnings and import levels in current dollars for the years 1971 through 1981. These figures include net financial transactions in each of the two accounts. Liberia's "resource balance ll has gradually worsened since 1972 and since 1977 has been negative (i.e., in each year since 1977, Liberia has bought more goods and services from abroad than it has exported). In 1980 the resource balance was nearly zero, after several years of relatively high deficits; but in 1981 the resource deficit again began to increase. Table 5 shows import costs for petroleum (crude and refined products) from 1971 through 1981. The real oil import bill rose steadily from 1971 until 1980, with major jumps occurring in 1974 and 1980. In nominal terms, the oil bill rose elevenfold between 1971 and 1980, representing a real-cust increase of over 200%. As noted by the Ministry of Plannin9 and Economic Affairs,3 this dramatic increase placed severe strains 8 T_ 4. T.... __...'-' _ 197HIl' T_ ,. 00 _ _ 197HIl Millions of current S MiUiODS of Millions of ~ of total Imports current $ real 1981 S impo 1971 251.8 114.3 77.5 1971 11.8 41.3 7 1972 274.8 184.2 90.8 19n 12.0 40.3 6 1913 329.9 240.9 89.0 1973 14.7 39.3 6 1974 17 1974 407.2 332.1 15.1 56.4 109.1 1975 403.7 371.9 31.8 '975 48.3 85.2 13 1976 467.1 446.2 20.9 1916 59.5 103.1 13 1971 459.0 521.9 -62.9 1977 68.8 101.0 13 1978 500.0 548.6 -48.6 1978 84.6 120.7 15 1919 553.6 587.4 -33.8 1979 103.2 127.1 18 1980 613.5 614.0 -0.5 1980 152.1 162.0 25 1981 540.7 549.0 -8.3 1981 129.6 129.6 24 ·These figures include both goods and ser Source: Appendix 1O. VK:es and other nonfactor services. Source: Appendix 10. on the ability of the nation to pay for other imports (including capital goods) and increased the production costs for Liberia's exports. Investor confidence, shaken by the weakening economic situation, was further eroded by the political uncertainty resulting from the military takeover of government in April 1980 and subsequent economic, social, and political adjustments. 3 Continuing government deficits remain a major problem, particularly since Liberia does not control its own currency (i.e., it uses the U.S. dollar). Payments for imported oil and government payrolls along with debt service costs have been sources of recurrent and significant fiscal problems in Liberia. In 1982 and early 1983, credit was extremely scarce in Liberia,3 with interest rates typically in the range of 20% (early 1983) - when money was available at all for borrowin9. This tight credit situation made it very difficult for Liberians to obtain investment capital. As a result of the overall decline in economic activity, and energy conservation resulting from higher prices, the oil import bill fell in 1981 by more than $22.5 million in nominal terms. Nevertheless, oil imports continued to cause major fiscal problems for the government in 1982. The government-owned refinery had difficulties collecting its accounts, including those of the government itself and government 9 corporations such as the Liberia Electricity Corporation (LEC). In addition to the direct problems of finding the revenue to pay the oil bills. slow payments to suppliers by the Liberia Petroleum Refining Company substantially raised the cost of delivered oil through added interest and tanker demurrage charges incurred while credit was arranged. Throughout 1982. U.S. Economic Support Funds and drawin9s from the International Monetary Fund were used to meet oil bills and avoid a cut off in oil supplies. Such a cutoff would have. within two to six weeks. led to a shutdown of the nation's transport system and its rural electric systems. If an oil cutoff had occurred in the dry season. it would also have resulted in a near-total blackout of the Monrovia electrical grid. During the first quarter of 1983. shortages in oil supply did coincide with the dry season and resulted in rolling blackouts throughout the period. In this case. electricity supply problems were aggravated by mechanical problems with several large fuel-ail-fueled generators. Although capacity existed for use of gas oil to meet the shortfall. gas oil supplies were insufficient. 11 3. ENERGY SUPPLY AND DEMAND FOR MAJOR SECTORS This chapter presents base year data and recent historical trend infonnation for the major energy supply and demand sectclrs of the Liberian economy. The first section describes the energy supply and demand situation for 1981 by fuel type and consuming sector. A compre hensive summary of the economy's energy flows for a single period pro vides a perspective for the analyses of specific energy supply sources and sectoral demands which fo11(~. Calendar year 1981 is the base year for the analysis because it was the most recent period for which adequate data were available at the time of data collection (mid-1982). The second section presents an overview of the major existing sources of - '.'. Liberian energy supply." Recent energy demands by each of the major consuming sectors and supplementary data on factors affecting energy demand are presented in the third section. The descriptions in Chap. 3 are intended to serve as a general . , reference on recent energy supply and demand conditions ·in the Liberian economy. As such, the accompanying narrative i, brief and the tables cover a wide range of topics. For more detailed reporting of the data. as well as descriptions of the assumptions and methodology employed in the analyses, the reader is referred to the appropriate appendices. 3.1 ENERGY USE IN 1981 8Y FUEL TYPE AND MAJOR CONSUMING SECTORt Table 6 summarizes Liberian energy use in 1981. The first row of the table gives the total energy entering all parts of the Liberian economy. Hydroelectric output is equated to the quantity of oil that would be required to generate the electricity, using a conversion factor of 1 barrel of crude oil equivalent (8COE) = 575 kWh. This conversion factor is based on the efficiency of large, low-speed diesels nonna11y "Prospects for future energy sources and possibilities for efficiency improvements are considered in Chap. 5. tExcept as otherwise noted 7 data in this section are taken from Appendi x 1. TaMe 6. U ...... -uw.ee f. 1911 IOlBCOE Petroleum use other than for electricity Total Total Electricityl Wood Charcoal eRerlY petroleum Gasoline Gas oil Fuel oil Kerosene Jet fuel Others' Total energy 489 658 390 52 204 239 2,016 4,250 3,070 11,358 3,501 Exporut 14 200 189 29 432 432 Losses' 195 2,610 2,805 195 Domestic 489 644 190 52 15 5 2,016 4,250 460 8,121 2,874 TraRsport~ Total 469 371 15 855 855 Road 464 267 731 731 Rail 98 98 98 50. 6 6 6 ~ N Air 5 15 20 20 Mines 203 186 1,076 1,465 1,451 Industrial 15 4 58 10 87 35 Residential 42 2 481 4,210 450 5,185 293 Commercial 5 10 241 10 10 276 118 Government 3 89 92 40 Agriculture aRd forestry 20 50 71 20 161 82 ·Othen includes refinery loss (195), naphtha (29), liquid petroleum gas (2), aDd uphall (3). ·Electricity includes fuel oil (1,160), Bas oil (319). and hydro (531); elcctric&l aene,.tion Iosscs total about 1,390 BCOE; these IOSICS are allocated to the. end use sectors. 3.2 OVERVIEW OF PRESENT MAJOR SOURCES OF ENERGY IN LIBERIA Of the total 11.4 million BCOE consumed in 1981 in Liberia, about 31% was in the form of petroleum products. The remaining 69% came from domestic renewable resources (roughly 64% from wood and 5% from hydro electric power). This section describes the role each energy source plays ir meeting Liberia's energy needs. 3.2.1 Petroleum Products* The Liberia Petroleum Refining Company (LPRC) operates the only refinery in Liberia and, with two exceptions, is the only authorized importer of finished petroleum products. The two exceptions are that (1) the major concessions are permitted direct imports if the LPRC con cession price should rise above "fair world market prices" and (2) the *for more detailed descriptions, see Appendices 1, 2, and 17. 15 concessions and major distributors are allowed some ad hoc imports when LPRC is not in a financial position to handle them. Since LPRC states that these conditions did not exist in 1981, the company's records should 9ive a complete picture of petroleum use in the country. Although several questions remain about the pr.0er interpretation of the LPRC data, it is the most comprehensive availau,e and thus is used as a basis for analyzing the country's petroleum consumption. The Monrovia refinery was constructed in the 1960s by Sun Oil Corpora tion of the United States. The refinery is relatively small, having a sustainable capacity of approximately 13,500 barrels per day (bbl/d). It operated at about 11,000 bbl/d in 1982. The refinery was operated by Sun Oil until late 1976, when a major fire caused a shutdown. In 1978, the government corporation lPRC purchased the refinery and refurbished it. Table 7 shows the product sales history (1971-80) for the refinery by product type and major customer. The decline in sales in 1977 and 1978 apparently reflects a shift to direct importation by the major fuel oil consumers (the mines) when the refinery was shut down. On an equal-energy basis, heavy fuel oil* accounts for nearly half (47%) of the petroleum products supplied, followed by gas oil* (29%), gasoline (15%), and jet fuel (6%). Liquid petroleum gas (LPG), kerosene, naphtha, and asphalt represent the remaining 3%. About 90% of Liberia's petroleum product demand in 1981 was satis fied through products refined by LPRC; the remaining 10% was met through the importation of refined products. Heavy fuel oil is the largest product supplied by the refinery~ and gas oil is the most significant import. All heavy fuel oil was provided by the refinery, while imports accounted for 27% of gas oil supply in 1981. Table 8 shows the breakdown of LPRC crude oil and refined products in 1981. liberia has suffered severe liquidity problems in recent years, par ticularly with regard to its ability to pay for oil imports. In any analysis of possible remedial measures, it is useful to understand how *"Heavy fuel oil" ;s the equivalent of No.6 fuel oil; "gas oil ll is the equivalent of diesel fuel or NO.2 fuel oil. 16 Tallie'. liMN Peer_ R...... ~...... 1971-80 10' barrels (bbl) 1971 1912 1973 1974 197.5 1976 1977 1978 1979 1980 Fuel oil Retail 32.1 32.4 55.4 40.5 19.1 13.0 14.5 22.7 5.0 5.3 BMC" 517.7 640.8 8L2.5 775.8 832.9 830.6 553.1 146.4 1273.2 1341.9 LAMC()6 835.2 678.1 738.2 679.1 693.3 591.1 188.4 111.3 159.9 LEe'" 26.3 99.2 Bunker 186.9 34.1 42.9 12.3 22.9 79.0 5.3 46.8 270.4 Plant 67.1 32.8 79.2 52.3 61.4 65.7 16.5 8.4 126.0 98.4 Export 520.3 156.7 Subtotals 1639.0 1418.2 1728.2 1578.0 1619.6 1579.4 772.5 182.8 2108.9 2131.3 Gas oil Retail 342.0 361.5 359.0 383.8 453.3 475.5 454.8 450.9 505.5 469.1 LEC 278.6 244.1 436.8 419.4 259.8 294.9 378.4 314.1 352.2 192.1 LAMCO 262.1 303.3 266.7 219.1 283.9 255.3 295.0 294.7 274.2 311.3 NIOC' 117.6 118.5 118.2 122.3 120.2 119.2 120.4 118.7 116.2 98.9 BMC 61.2 62.3 82.2 62.6 75.1 82.1 93.2 87.4 102.8 102.7 LMC 11.9 56.9 60.7 58.8 42.9 42.4 49.4 43.9 53.6 37.8 Bunker 30.1 33.8 16.6 )3.3 22.6 33.0 15.7 24.4 19.9 20.2 Plant 18.9 19.5 18.5 16.7 15.4 17.6 4.8 9.5 15.7 16.6 Subtotals 1182.6 IISloS 1358.7 1356.0 1273.6 1321.0 1411.1 1343.6 1440.• 1248.6 Gasoline 468.9 410.3 502.7 507.1 561.2 559.7 600.5 636.5 663.5 617.1 Kerosene 87.5 92.4 92.0 81.0 75.5 77.9 75.1 80.3 68.1 62.3 Jet fuel 89.05 135.5 199.3 241.S 281.7 250.8 266.6 316.2 313.9 223.2 LPG 7.6 8.1 10.7 12.3 13.5 12.0 2.8 0.5 4.1 3.9 Naphtha 14.3 146.4 Asphalt 7.6 16.6 10.9 15.4 16.2 10.1 17.8 5.4 18.4 13.8 Totals 3492.7 3322.6 3902.5 3791.3 3850.9 3810.9 3147.0 2565.0 04631.3 .....6 aBon, Minin. Company. bliberian American-Swedish Minerals Company. ~Liberia Electricity Corporation. dNationallron Ore Company. Source: Appendix 2. different customer classes contribute to the overall oil bill. Table 9 shows the estimated consumption by major customer classes. Table 10 shows the 1981 ex-refinery price structure. and Table 11 shows estimated revenues owed LPRe by each customer class. The two private iron ore companies, Bong Mining Company (SHC) and Liberian American-Swedish Minerals Company (LAMCD). accoented for 75% of total fuel oil consumption. 43% of 9as oil consumption. and about 7% of 17 TUie 8. Petral """b .,"••M. Prod"", 10' bbl 10' BCOE Fuel oil 1430 1550 Gas oil 973- 971 Gasoline 590' 4119 Jet fuel 209" 2(>' Kerosene 53 52 Napbtha 32 29 LPG 4 2 Asphalt 3 3 Totals 3294 3306 r..oII ...... oII .... I. -Jor e.cl (10' bbl) '. Customer Fuel oil Gu oil BMC 964 101 LAMCO 114 284 NIOC 0 80 LEC 103 103 -Iachldes import of 260,636 bbl by LPRe. 'Includes import of 83.410 bbl by LPRC. ~lnclude$ import of 20,219 bbl by LPRC and 7,922 bbl by Mobil. Source: Appendix I. TaIlIe9. eGa ;1100 '" Mjo<...-,...... ill J981 .y c.e~ ellis Fuel oil Gas oil Gasoline Customer class 111 gal ~ 10' ,al ~ Io',al ~ LAMCO 1.3 II 11.9 31 1.0 4 BMC 40.5 64 4.5 12 0.6 3 LEC 4.3 1 4.3 11 Gavcrnme!!! 1.0 3 2.0 8 transport Private 8.0 21 19.5· 81 transport Bunker and 1.1 12 0.4 e.port Plant 3.6 6 0.1 Othcn 0.2 I 8.1· 21 0.' 4 Totals 63.6 38.3 24.0 ·Data are not complete cnough to determine precisely the split between LAMCO gasoline llSe and tbat of private InllSport ClIstomcn. or between private transport use of gu oil and ..other" uses. The estimates an blSCl:! on indirect information and are only approximate. Source: Appendix 1. 18 T_.t. MW-.l!8.....-,... ...... ,.~.lrdaM S/,.. Product Asphalt \.SO' FueloiJ O.1S 1.40 Gas oil l.OS 1.8S GasoliDe 2.50 K...... 2.00 LPG J.2S Jet fuel 1.05 •All values rouDdcd to nearat SO.05. Soun:e, AppeDdiJl 10. TaMe.I. Apfroxillate "-k....fl.,". ,.,... 11 .... I•• LiIleria Petrel!. RetW-c CO'''' Customer class 10' S ~ Private iron ore companies 57 lS LEe. private share and pcmment 7 5 <:orporations LEe, lovemmcnl share I Government, eJcludina electricity 8 5 Transport, iDcludinllOvcmmcnt 66 "0 corporations Jet fuel 5 Bunker fuel oil •6 4 Miscellaneous products Kerosene 4.5 J LPG 0.2 -For example, the National Iron Ore Company. Source: Appendix 11. 19 9asoline consumption. Sales to BMC and LAMCO represent about 35% of the total revenue owed to LPRC. Private domestic transport accounted for about one-third of gas oil sales and about 80% of gasoline sales. Sales to LEC represented about 5% of the revenue owed to the refinery, and direct sales to the GOL represented another 5%. In addition, sales to other government corporations are included in the nongovernment "LEC," "Transport,1I and "Other sales" categories. Insufficient information was gathered to determine the significance of government corporations in LPRC's revenue picture. 3.2.2 Hydroelectric Facilities Two hydroelectric facilities provide power in Liberia. These are the Mt. Coffee plant, a 64-MW facility* built in 1966 and owned by the LEC, and the Farmington River plant, a 4-MW facility built in the 1930s and owned by the Firestone RUbber Company. The Mt. Coffee plant generates approximately 300 GWh annually with a load factor of 50 to 60% and provides about 70% of the current power requirements of the LEC Monrovia interconnected grid. During the height of the rainy season (August), the Mt. Coffee facility provides nearly 100% of the daily electric requirements of the Monrovia grid, but toward the end of the dry season (February), the dam's output falls to one-fourth or less of the electrical energy demand. The Farmington River facility generates power for a major portion of the rubber processing and other electric needs of the Firestone Rubber Plantation headquartered at Harbel. It produces roughly 25 GWh annually. On an energy replacement basis (575 kWh' 1 BCOE) , Liberia's two hydroelectric facilities save the nation about one-half million BCOE annua 11y. *Mt. Coffee's capacity has been variously reported between 60 and 68 MW. For this report, we use 64 MW, which is the figure used by C. T. Main, Inc., in its study of the proposed St. Paul Hydroelectric Project.' 20 3.2.3 Wood Energy At least half and possibly as much as 75% of Liberia's energy consumption is in the form of wood and charcoal made from wood.* Based on preliminary estimates from a household energy survey. this study uses a level of 64% as wood's total contribution. Until mid-1982. virtually all wood use was for fuelwood and charcoal consumed by rural and urban residences. In 1982. several large industrial applications of wood began - one at the Firestone Rubber Plantation and another at a sawmill in Grand Gedeh County. Late in 1982, BMC tendered an offer to purchase substantial amounts of wood and charcoal (100 tons/d and 70 tons/d. respectively) for a third application. By early 1983. an acceptable supplier had not been identified. although negotiations continued. Relatively few data on fuelwood and charcoal use by residences are available because much of the production (especially fuelwood) does not enter the market economy. When fuel wood and charcoal are marketed, transaction amounts are small. and few records are kept. However, such consumption has been estimated through a household energy sample survey conducted as part of this project. Current estimates are that rou9hly 3.0 million tons of fuelwood was consumed in 1981. Another approximately 2.1 million tons was converted to charcoal. mostly through traditional earth-covered mounds having a thermal efficiency of 10 to 15%. An impor tant but undetermined share of charcoal production is through use of metal kilns with a thermal efficiency between 20 and 30%. On an energy equivalent basis. fuel wood and wood inputs into charcoal production amount to about 7.3 million 8COE compared with 1981 petroleum product consumption of 3.5 million BCOE. In mid-1982. Firestone Rubber Plantation began using old rubber trees as the feedstock for a process heat boiler. About 600 of the plantation's 3,000 acres of rubber trees cut each year are used to supply the boiler. This use amounts to an annual wood energy consumption of about 24.000 dry tons, or about 0.063 million 8COE. The Liberia Logging and Wood Processing Corporation operates a com bined logging. sawmill. and plywood facility on the Cavalla River east of *The basis for these estimates is provided in Appendices 5 and 7. 21 Zwedru. In mid-1982, it adopted a full wood-fired system for electricity generation and process steam production. The wood-fired boiler, steam en9ine, and 600-kVA generator may replace about 10 to 16 8COE/d. 3.3 ENERGY DEMANDS BY MAJOR CONSUMING SECTOR 3.3.1 Mines* Liberia possesses a number of commercial mineral deposits. Although gold and diamonds are also currently bein9 mined, iron are operations dominate the minin9 sector in Liberia in terms of energy consumption, national income generated, and employment. Because of the limitations on the resources available to this project, data gathered on the mining sector were limited to iron are extraction and processing activities. Three iron are mines operated in Liberia during 1982. These are, in order of production levels, (1) LAMCO, (2) BMC, and (3) the National Iron Ore Company (NIOC). A fourth company, the Liberian Mining Company, operated a mine at 80mi Hills until 1978, when it ceased eperation. Between 1978 and 1981, total output of Liberia's three iron are mines fluctuated around roughly 18 million tons per year. Total sales rose steadily over this same period from $288 million to $344 million in nominal dollar terms. Just over half of total output derives from LAMCO; SHC accounts for over one-third. The NIOC share of total Liberian output fell considerably from 16% in 1977 to 7% in 1981. A greater share of total sales revenue falls to BMC than its produc tion share alone would suggest; BMC accounts for 43 to 50% of total sales income in anyone year, but its production levels range from 35 to 38%. This disparity is due to the higher prices it receives for its are, pre sumably a result of value added through pelletizing. The NIOC share of total sales is very low and barely half of its relative share of total output. *Data in this section are taken from Appendices 1 and 2. 22 Together, LAMCO, BMC, and NIOC consume over half of all petroleum products in Liberia - mostly for generation of electricity. but also for transport and process heat. These mines represent large potential markets for domestically produced energy. Table 12 shows the breakdown for the energy use by the three mines. T.... 11. F-p _ .. lAoriu .... Oft _ 10 IMI Ill' bbl Fuel oil Gas oil Electrical generation LAMCO"' Yckcpa 95 Buchanan 17. 19 BMe· 792 5 NIOC' .3 Mine operation LAMCO 9. 8MC 85 NIOC 2. Railroad LAMCO 77 8MC 16 NIOC 5 Pellet plant 8MC 172 Total 1138 463 -Liberian Sndish-American Minerals Company. "Bon. Minin. Compaoy. eNation.llron Ore Company. Source: Appendix I. The largest of the mining companies, LAMCO, had a 1981 production of 10.8 million tons. The company's operations are split between the mine at Yekepa and its facilities at the port of Buchanan. Until recently the company operated a pelletizing plant at Buchanan, but it has been terminated. The company also operates its own 16B-mile railroad between Yekepa and Buchanan. Although B~C is the second largest of the mining companies in pro duction (7.50 million tons of ore in 1981), it uses far more energy than LAMCO because part of its production is concentrated and pelletized, an 23 ve operation. The company operates its own railroad 'ine and Monrovia (50 miles). About 7% of the total elec t, ;n by BMC in 1981 was supplied to the town of Bong. The '~'ived 20.5 MWh (out of a total consumption of 503.4 MWh) ir arrangement whereby BMC receives 1.3 kWh from lEC '" ,'<', S son for each 1.0 kWh that it provides to lEC during ".on. The company also purchases electricity from lEC for o' of its facilities in Monrovia. " '. 'JC. an independent GOl corporation. is the smallest of the three mining operations, with a 1981 production of 1.2 million long tons. The company also operates its own 95-mile narrow-gauge railroad between the Mana River mine and Monrovia. An estimated two-thirds of electricity generation by NIOe was for the townsite at Mano River. The company also purchases electricity from lEC for operation of its port facilities in Monrovia. At one time. Bomi Hills was one of the richest iron ore deposits in the world. but its reserves were exhausted by 1978. The Bong Mine is expected to face resource exhaustion sometime in the 1980s. In the late 1970s. development of an iron ore deposit in the Wologizi Mountains was under active consideration. but apparently development will be postponed well into the future. In late 1982, g concession agreement was signed for a new iron ore mine near the present NIOe site. This new mine (Sea Mountain) is expected to be somewhat larger than NIOC but considerably smaller than BMC. Production could begin in 1984 or 1985.' finally. there are prospects for development of the Mifergui Range across the border in Guinea from the lAMCO site at Vekepa. Because of location. ore extracted from Mifergui would probably be exported through liberia via the LAMCO railroad (see the reference map of liberia in the Preface). This review of past and possible future mining developments underscores how this important sector is subject to resource exhaustion and new development possibilities with substantial output and regional development impacts. 24 3.3.2 Electricity Generation and Consumption• Four types of electrical service systems operate in Liberia: (1) LEC's interconnected grid in the Monrovia area with a peak demand of about 70 MW and installed capacity of about 177 MW; (2) LEC's Rural Electrification Department, which currently serves nine towns throughout Liberia with a peak demand of approximately 7 MW (existing installed capacity equals about 13 MW with additional capacity of 3 MW available for installation); (3) large, independent power systems operated by foreign concessions (primarily iron ore mines) for industrial and municipal use with a total capacity of about 172 MW; and (4) small independent units (typically under 200 kW) providing power to individual buildings (e.g., a hospital) or industrial operations (e.g., a sawmill). Total LEC generation for the Monrovia grid in 1981 was reported to be 377 GWh: 283 GWh from hydro, 79 GWh from new low-speed diesels, 12 GWh from old medium-speed diesels, and 4 GWh from gas turbines. In 1981 BMC received 25 GWh from LEC and, under the terms of the agreement, should have returned 19 GWh. Thus, the net supply to BMC was 6 GWh. Total output of the rural systems was about 27 GWh. Table 13 lists the installed capacity of private and public elec trical generating units in liberia. The BMC and LAMCO iron ore mines represent nearly all of the existing private generating capacity. As noted previously, a portion of the BMC capacity is utilized part of the year (dry season) to provide electricity to part of the LEC central grid. The iron ore production of LAMCO exceeds that of BMC, but its electrical generating capacity is lower than BMC's because LAMCO no longer pelletizes its ore (in part an electricity-powered operation). Information of NIOC's electrical generation capacity was not obtained, but it is known that NIOC generated approximately 24 GWh in 1981. This output suggests a capacity in the range of 5 to 9 MW (at 50% to 30% utilization). At Firestone's Harbe1 Plantation, a new wood-fired boiler is being used to provide direct heat to a rubber process formerly requiring elec tric power. This change will reduce Firestone's utilization of its thermal generation capacity and its purchases of electricity from LEt . •Data in this section are taken from Appendices 1 and 3. 25 Organization Capacity (MW) Mining companies BMC (th Firestone Rubber Thermal 2 Hydro 4 All other non-LEe producers 4-8 Non-LEe subtotal 174--182 LEC Central grid Thermal 113 (100 presently operational) Hydro 64 Rural systems (tberman IJ LEe subtotal 190 Total 364-372 •All ranges indicate the inclusion of estimates. Source: Appendix 3. No systematic data are available on the smaller non-LEG electrical generation plants. However, from observation and discussions with persons familiar with such systems, t,e combined capacity of lumber companies (especially those with sawmills), hospitals, and other small operators in areas without LEG power appears to be between 4 and 8 MW. Table 14 shows the estimated outputs for the three mining companies, the LEG central grid, and the approximate output levels of other gener ators. As a first estimate, a 50% capacity factor is assumed for the generators for which data were not collected. Estimated total energy use for generation of electricity in 1981 is shown in Table 15. It should be noted that the LEG thermal capacity listed in Table 13 includes several gas turbine generators (65 MW). They are little used, since newer, more efficient slow-speed diesels (40.8 MW) have been installed. 26 T.....4. -.-... declricol ...... 1100 10 ~ .,.. lo'kWb Non-LEe producers Liberian American-Swedisb Minerals Company Yekepa 52 Buchanan 98 Bona Mining Company (net of LEe cxcbanac) .n National Iron Ore Compauy 2' Fm:stooe 28 Others- 18-)6" Non·lEC subtotal 697-115 LEC Central arid 377 Rural 27 LiC subtotal 404 Total 1101-1119 ·Assumina a 50% capacity factor. most of this mimate renects Voice of America radio transmislioa power consumption. "Ruses indicate the indlJSion of estimates. Source: Appendix 3. Tallie IS. E.eru .. tor electridty PMNdoli. .98. Fuel oil Gas oil Hyd", Total (10' bbl) (10' bbl) (10' BCOE) (lo'BCOE) LEC 103.' 102.6 491.9 707.0 Mines 966.6 161.9 1210.4 Firestone 5.1 44.9 so. I Voice of America 36.2 36.3 r.dto transmitter Others (estimated) 12.0 12.0 i Total 1070.0 317.8 536.8 2015.8 Source: Appendix I. 27 For the LEC central grid, residential and commercial customers each represent about one-third of the total customers, a fraction which has risen slightly from 1977 to 1981. Industrial customers accounted for about 12% of total sales. Government sales rose from 8% in 1979 to 12% in 1981. Sales to mines have declined substantially from 25% in 1977 to 9% in 1981 (probably due to the closing of the 80rni Hills mine). Illegal hookups continue to be a major problem for LEC. Central system sales in 1981 were only 273 GWh compared with the total output of 377 GWh. Line losses represent 7 to 15% of total generation (30 to 60 GWh), leaving between 50 and 80 GWh unaccounted for by either sales or resistance losses. Table 16 gives the distribution of all energy used for electricity. Major generation plants other than LEC and the mines are Firestone and the Voice of America (VOA) installations. The VOA data are based on LPRC gas oil sales records for July 1981 through June 1982, with this energy assumed to be used for power generation. Estimated total energy use for hospitals, businesses, sawmills, and private residences is still specu1.tive. In many cases, such as hospitals, power is also provided to staff residences. As would be expected, there are several instances in which it is impossible to determine sectoral breakdowns. For example, the generation at the mines listed as residential includes some energy for commercial establishments. Taillt 16. Sedor distrilMltic:.- of d UMriu '*'1J' .. ror eIedridty ..,.tt.. .98. IO'BCOE Voice of Sector LEC Mines Firestone Others Total America Residential 325 153 3 481 Commcn:ial 202 3. 3 241 (ndustria! 55 3 58 Agriculture 18 50 3 11 and ror~try Government 80 80 Mines 18 1058 107. Total 707 1211 SO 3. " 2016 Source: Appendix 1. 28 3.3.3 Transportation* The primary modes of transport in Liberia are trucks, buses (mostly minibuses), cars, and railroads. Air and water transport piay relatively small roles. Movement of people for short distances is by minibuses, taxicabs, large buses, and cars. For longer distances, cars and "country taxis" (pickup trucks with seats on the bed or vans) are used. For the transport of most goods, heavy trucks, pickups, and railroads are used. Relatively few Liberians own cars. For short travel in Monrovia, paople generally walk or use the individually owned taxi cabs or the fleet of privately owned, small public transport buses. For longer distances, "country taxis" are the principal means of travel. Local air flights are provided by the government-owned Air Liberia Corporation and by a few private charter airlines. Only Air Liberia" maintains regularly scheduled flights within Liberia. Water transport involving petroleum-based fuels occurs only along the Atlantic coast of Liberia. There are no navigable rivers of any significant length in the country. The mines use their railroads for most goods movement between the coast and the mine sites. The railroads transport primarily fuel to the mine (an uphill grade) and mostly iron ore back to the Monrovia port (BMC and NIOC) or the Buchanan port (LAMCO). Some lumber is also. shipped from the interior to the coast via the LAMeO railroad. Rubber plantations and other agricultural and forestry producers use mostly heavy trucks for goods shipment. Transport activities accounted for about 30% of Liberia's domestic use of petroleum products in 1981. Table 17 shows estimated fuel use by fuel type and transport mode. Motor vehicles accounted for 86% of total fuel use, followed by railroads (11%). Air and water transport combined accounted for only about 3% of total transport fuel use. rn 1981, private vehicles accounted for about one-third of the roughly 21,000 motor vehicles. Business and transport vehicles for hire *Data in this section are taken from Appendix 4. 29 Table 17. Traaspclf1 1M ate. 1911 10' bbl Aviation Jet Mode Gas oil Gasoline Toto! ('To) gos fuel Motor vehicles 264 SI2 776 (g6) Railroads 9g 98 (II) Airplanes S 17 22 (2) Coastal trade vessels 7 7 (I) Total 369 SI2 S 17 902{1lJO) Source: Appendix 4. were the next largest classes, accounting for 28 and 26%, respectively. Government vehicles made up about 11% of the total, but a substantial number of vehicles owned by government corporations (e.g., LEe) are included in the business category, not under government. No data on the actual number of vehicles owned by government corporations were obtained. In 1981, cars made UP about 64% of the registered motor vehicle fleet, while pickup trucks accounted for 19%; heavy trucks, 9%; and buses, 8%. Only 119 motorcycles were registered; very few bicyclas were observed: Liberia's road system in 1981 was about 6300 miles in length, roughly 400 of which were paved. The total primary road system (paved and wide laterite) was about 1200 miles in length. The remainder consisted of secondary (narrower laterite) and feeder roads. Between 1976 and 19B2, the total road system in Liberia increased by 26%. In 19B2, however, the roads were in poor repair and appeared to be getting worse. Liberia's road system, especially its laterite and earth roads, deteriorates sig nificantly during the rai~y season. Over the past several years, road maintenance activities have apparently been unable to keep pace with the deterioriation problems. 3.3.4 Agriculture* Most liberian agriculture uses traditional methods. Hand tools and human labor are used for virtually all work on small and most large farming *Data for this section are taken from Appendix 5. 30 operations. Larger farms generally employ vehicles to move some people and materials, but planting, maintenance, and harvesting techniques are still generally labor-intensive on farms of all sizes. Table 18 shows estimates of fossil fuel consumption in Liberian agriculture. Nearly all food production occurs on small plots under farming systems based upon human labor and firewood rather than mechani zation and fossil fuels. Virtually all farms over 20 ha are devoted to tree crops (rubber and oil palm), which require far less energy per unit of production than agricultural row crops in large-scale commercial pro duction. For example, rubber farms up to 250 ha use manual labor for all clearing and cutting. Trucks are used to haul the products from collec tion ?oints, but mechanization is minimal. No processing occurs onsite. Most of the energy use of these middle-level farms is for transportation involved in farm management. The large rubber plantations use tractors for transporting raw latex onsite, heavy equipment for road building and land clearing, and light vehicles for transportation used by management. In 1981, Firestone's Cavalla Plantation (~3240 hal, for example, used a total of 31,000 gal of diesel fuel and 65,000 gal of gasoline to transport 7.9 million pounds of latex from collection points to a processing facility.* An additional 60,000 gal of diesel and 12,000 gal of gasoline were used in farm oper ations, and 297,9l0 gal of gas oil fuel was consumed to generate elec tricity. Thus, an average of approximately 5 gal of diesel fuel and 1 gal of gasoline were used for every 100 lb of rubber produced. This is twice the amount of fuel used per unit of rubber on middle-level farms and appears to be considerably more energy-intensive than any other form of agriculture now operating in Liberia. Agriculture consumes an estimated 3% of all petroleum energy use in Liberia. About half of this agricultural energy use is in the rubber industry, which includes Firestone's industrial-scale processing operation at Harbel. Swamp rice is the next largest agricultural energy use subs 'cour, accounting for jus~ under one-fifth of the sectoral total. *in 1982 the Firestone Cavalla Plantation was closed because of market conditions. , T.... ••. ...-...... 'OIl _10 Laooto .....,..... I'll Estimated crop'jaDd Estimated fllel UJC c._) (10'••1) SmaU C.rms MOIdIe- ....rae commen:ial GuolUM: Guoil 1...1 (arms and To Tolal 929,770 54,941 46.879 174,303 1,205,893 1,881.4 203.4 5,6ol3.9 611.6 Source: Appendix S. 32 Although data are still limited, there are no apparent trends toward more energy-intensive forms of agriculture in Liberia. Thus, even if the nationls agricultural expansion programs are successful, impacts on the nation's consumption of commercial energy may present no significant problems. This question should, however, be investigated more fully in the future. 3.3.5 Forestry* Wood harvesting for lumber is relatively capital- and energy intensive. Frequently, the logging companies build new roads into logging areas. Table 19 shows the data on energy use by the forest industry gathered through an industry energy survey. Transport activi ties account for 60% of sectoral energy use, with the remainder going to road building to reach new logging areas, cutting of trees, and saw mill and plywood operations. Based on the results of the survey con ducted as part of this project, it appears that logging and sawmill operations consume approximately 9 gal of gas oil and 1 gal of gasoline for each cubic meter of round log production. Wood waste amounts to approximately 60% of the volume of the round logs processed into lumber. This waste represents two to three times the fossil fuel energy used in the industry. However, this wood waste would be a convenient substitute for petroleum fuels only at central processing sites (i.e., sawmills and plywood mills) or at nearby towns. In 19B2, liberia's forest industries were in a deep and worsening recession, with production less than half of the production peak reached in 1980. 3.3.6 Government; The GOl plays a relatively large role in the economy and in Liberia's total energy consumption. A major problem in determining the actual *Oata for this section are taken from Appendix 5. t Oata for this section are taken from Appendix 6. TaWt 1'. FONIt ...... ,..-. 1975-I2 Estimated fuel comumptionli (10) .al) Round loa v~ume Round 101 ¥OIume Total domeatk: Total wood wute for upon· prooeuod in Liberia round 10& prochtetion- GuoIiDe Ouotl l J J (10) m ) (10) m ) (lO'm ) (10' m'" (,o'OJ)' TlInlJlOrt Nontrmsport Transport Nontranspott CY 1975 ....0 CV 1916 ..... CV 1977 598.5 CY 1978 174.6 CV 1919 w 155.8 w CV 1980 488.6 286.3 774.9 111.8 2130 J87 406. 2712 July 1980- 341.0 198.2 539.2 118.9 1480 "lS'" 27. 2831 1887 June 1981 July 1981- 234.] 117.5 411.8 106.5 1320 J09 206 2162 144' June 1982 -Data from tbe Forestry Development AUlhority. ·Calelliated u ~ of total process volume. ~Calculated at 45 Ib/ft' and 7400 Btu/lb. "Estimated at 10 sal total fuel per m) of rou~ lot prodUClton. 12!. of which is psoliDe. Source: Appendix 5. 34 level of Itgovernmentll energy use is that infonnation on activities by the 23 government corporations is often counted as IIbusiness ll or "conmercial,1l even when a specific IIgovernment" category is also included (e.g., vehicle registrations and electricity sales). The significance of the government corporations is suggested by the fact that one in five government employees works for a government corporation. These corpora tions engage in a wide range of activities, including utilities, airline service, forest development, agricultural prod"ce processing and marketing, and oil refining. Table 20 shows the data collected on government energy use for 1981. It is important to note that these consumption figures do not include consumption by government corporations, except for electricity use in certain Monrovia-area buildings. Fuel Coluumption level BCOE Gasoline" 2 x 'o'pJ 45,000 Gas oil" I x J(:J'lal 24,000 EJectricit~ Monrovia street lightin. 12 x lo'kWh Otber MOIIrovia·area use 22 x lo'kWb Rural station use 6 x lo'kWb Total electricity Total 138,600 ·Exclusive of COOIumption by lovertlrDCDt oorporatiool. IlIoc:ludinJ only a portion of COllSUrnption by JOYCI1lment corporations. Soort:e: AppeDdiI 6. The inability of the government, including government corporations, to pay for the energy consumption reported in Table 20 is a major problem for the nation. The government's overdue bills to LEC contribute to that agency's payment problems to LPRC.s This problem, in addition to the unpaid bills which the government owes directly to LPRC, creates cash flow problems for LPRC. Late payments by LPRC, in turn, result in added tanker demurrage and interest charges while credit is arranged. 35 3.3.7 Residential Charcoal and Fuelwood* Residences in Liberia consume energy for cooking, lighting, and air conditioning. Data on electricity and petroleum product use (e.g., kerosene and LPG) by residential consumers were generally available, although in some cases estimates had to be made regarding the split between residential and commercial use. Systematic information on the use of fuel wood and charcoal, however, were lacking. To address this problem, Liberian project staff developed a residential energy use questionnaire, which was administered in 44 localities around Liberia. Of the residences surveyed, 43% were in areas officially classified by government as rural. The remainder were in cities and towns classified as urban. Although most of the questionnaires were administered by Liberian project staff, several hundred were administered by Peace Corps volunteers stationed throughout Liberia. The geographic distribution of the ·questionnaires was not as repre sentative as desired, and some questions remain regarding the degree of consistency in interpretation of several important questions by the different persons who administered the survey. Thus, the results reported here must be considered preliminary until a more geographically representative sample can be obtained and existing questionnaires can be re~iewed more fully to check for possible reporting inaccuracies. Table 21 shows the preliminary findings regarding total fuel wood and charcoal consumption. For consistency, charcoal energy figures are based on the energy embodied in the wood used to make the charcoal, assuming a 15% national average thermal efficiency for the earth-covered mounds and metal kilns employed by charcoal manufacturers in Liberia. Table 22 shows the retail prices reported by survey respondents for residential energy. On an equal-energy basis, fuel wood prices are well under those for charcoal, and both are far below the cost of substitute forms of energy. These prices suggest why fuel wood and charcoal are still widely used, even in urban areas where modern substitutes are available. *Data for this section are taken from Appendix 7. 36 T_ 21.--..-Estiooa... tolol .-I.. -f...... Wood Charcoal -Based on the wood energy required to produce these amounts of charcoal. amImia. a 15% thermal conversion effJcieJlcy (rom raw wood to cban:oal. Source: Appendix ,. TaMe n. 1letaI)II'icc,... II" ...I. re-'1 ps""-o,. t en Price raDse Price rute oa Fuel of stoodanI coerJY-eqv.ivalcat basil units (S/GJ) Fuelwood, bWtClk SO.2S to $1.00 $1.10 to $4.30 Charwal. baa Sl.SO to $2.50 $3.00 10 16.00 Kerosene. pi 52.SO to 53.1S $11.SO to $26.30 LPG.aal SI.70 SIUO Electricity, kWh $0.15 $4\.70' -£DerBY available at cod use. Source: Appendix ,. 3.3.8 Industrial and Commercial Sectors· With the exception of the iron ore mines covered above. most industry in Liberia is light industry. Data on this sector are sparse and often inseparable from data on "corrrnercialll activities. In this energy assess ment, an "industry" is distinguished from "coornercial activity" by defining the former to include the production of physical products and the latter as the provision of services only. Even this distinction •Data for this section are taken from Appendix 9. 37 breaks down with such important activities as the distribution of products. Thus. it is necessary and convenient to treat the two categories together here. Electricity is the primary source of energy in Liberia's indus trial and commercial sector. An estimated breakdown of combined activity for electricity use by the industrial and commercial sector is shown in Table 23. This level of consumption represents about 46% of the total electric sales by LEe in the Monrovia area. T_:I3. £_ eIecCrIdIy _ ~ .... ill. bial ClsrrdaJ.aor 10' kWh/month Lighting 2.2 Air conditioning 1.4 Processing and other 9.6 Total 13.2 Source: Appendix 9. In a sample survey of commercial and industrial establishments around Monrovia, the usage of gas oil, LPG. and kerosene for process heating was found to be moderate. Data were. however. not complete enough to estimate the actual consumption levels for these other fuels. 39 4. PROJECTED ENERGY DEMANDS, 1981-2000* Energy demand projections for Liberia have been made by several organizations. In 1981, for example, LPRC made a set of five-year petroleum product sales projections {1981-1985).2 In 1982, under con tract with LEC, C. T. Main, Inc.,l prepared sectoral demand projections for electricity throu9h the next several decades. For several reasons, however, the energy assessment project staff felt that the available projections were not sufficient for use in the National Energy Assessment. The LPRC memorandum describing its projections noted that the study was carried out using limited in-house expertise and data. It recom mended "a more detailed marketing study to be carried out by a profes sional team." Based on its existing in-house marketing study, LPRC projected relatively rapid growth for petroleum products over the 19B1 1985 period (e.g., more than 4% annually for gasoline; 5% annually for heavy fuel oil). Although a marketing study can be a useful approach for near-term demand projections, project staff felt that the data available for the existing one by LPRC were too limited. Further, the staff felt that longer-term projections were required for planning ,pur poses of a National Energy Assessment. For these longer-term projections (i.e., beyond five years), an evaluation of energy demand as an explicit function of various economic conditions was required. The C. T. Main study used a series of sectoral demand equations for electricity. These demand equations considered demand as a function of electricity price and gross domestic product (GOP), which was projected on the basis of a probabilistic distribution (a Markov Chain). The probabilities for various levels of GOP were based on conditions pre vailing during the 1960s and 1970s. The C. T. Main study was limited to electricity demand projections and was thus too narrow for the pur poses of the National Energy Assessment. With regard to the specific electricity demand projections made by C. T. Main, project staff felt *Except as otherwise noted, data in this chapter are taken from Appendix 10. heYious Paq.- Blank 40 that they reflected a risky assumption that the high-growth conditions of the 1970s would continue through the 1980s and 1990s. The staff concluded, therefore, that a more flexible approach should be adopted, requiring the examination of future macroeconomic conditions. This chapter provides an overview of the econometric methodology used to forecast the sectoral energy demands and summarizes the pro jections made by project staff for sectoral energy demand in liberia from 1981 to 2000. 4.1 METHODOLOGY· The three primary sources of energy in liberia are (1) wood, (2) crude oil, and (3) hydroelectric power. After conversion of wood charcoal~ to crude oil to refined petroleum products t and the kinetic energy of falling water and the thermal energy of oil products into electricity, the resulting available energy is consumed by seven end use sectors. These seven consuming sectors are the basis of the energy demand equations estimated in this study. The preferred modeling framework for forecasting sectoral energy demand integrates the macroeconomy with the energy economy. That is, the ideal model would allow feedback effects from growth in output and income to the energy sector and, similarly, from the energy sector to the overall performance of the economy. However, because of data limi tations, such a modeiing framework could not be utilized in deriVing the energy demand projections for this study. The modeling framework that was used is based on the recursive interaction of a macroeconomic model and individual, econometrically estimated sectoral energy demand equations. That is, given the pro jections for gross output and income in the liberian economy from the macroeconomic model, sectoral energy demand was projected. The macroeconomic model is an econometrically estimated representa tion of Liberian expenditure sectors. Included in those sectors are private consumption, government expenditures, investment outlays, and an •More detailed discussion can be found in Appendix 10. 41 export/import sector. The specification of the export sector explicitly incorporates Liberia's three primary exports: iron ore, rubber, and wood. The individual energy demand equations were estimated on the basis of economic variables that influence energy consumption in the respective sectors (e.g., price and output). The data used to econometrically estimate the macroeconomic model were gathered from the United Nation's statistical tables6 and cross referenced with published documents of the GOl.7 Oata used to estimate sectoral energy demand equations were gathered from individual Liberian corporations (e.g.• lEC and lPRC). 4.2 PROJECTIONS In evaluating these projections. it should be recognized that the modeling framework utilized for simulating both the macroeconomic per formance of the Liberian economy and individual end-use sectoral demands for energy is based on assumptions about the future state of the world economy and its subsequent impact on the Liberian economy. The per formance of the Liberian economy is inextricably related to international markets for crude petroleum, iron ore, rubber, and wood products. For example, by assuming no real growth in the international price of crude petroleum (and therefore no real growth in the price of refined petro leum products in Liberial, the simulated use of energy in liberia is higher than would occur with real increases in the world price of crude petroleum over the forecast horizon. Similar arguments hold, of course, for the assumed real growth in international iron are, rubber. and wood prices. The advantages of econometric simulation include the ability to systematically treat relatively large historical data bases and. on the basis of historical experience. to indicate significant interactions among different parameters. These advantages are so important to energy analysis that econometric models are nearly always utilized when the data permit. But such models are incapable of capturing any major structural changes in the Liberian economy, changes in technology and 42 consumer tastes, or other factors which are not reflected in data from the historical period used as the basis for the forecasts. Unfortunately, it is virtually impossible to consider systemati cally the full range of plausible international scenarios. Thus, decision makers face a dilemma. A failure to provide for unanticipated high levels of energy demand could make energy availability a constraint on national economic growt'. Yet investments in unnecessary energy resource development reduce the already scarce funds available for investments in other sectors on the economy (e.g., food production). The dominant fact in Liberian economic planning is the high degree of uncertainty about both future domestic conditions and international markets. Thus, a determination of a certain Umost likelyU path of growth in energy demand is not particularly useful. The projections presented below should, therefore, be viewed as an indication of the consequences for energy demand of certain combinations of domestic and international conditions. Whether these conditions will, in fact, exist remains a matter of speculation. Scenario 1. In this scenario, the selection of forecasted values for the exogenous variables needed to execute the models reflects a highly favorable set of internal and external conditions for Liberia. Specifically, it is assumed here that there will be no real growth in the world price of petroleum over the next two decades and, consequently, that the real price of energy to Liberian consumers will remain unchanged over the simulation horizon. Moreover, it is further assumed that the real unit cost of production for Liberia's three major exports (il'on ore, rubber, and wood) will not change over the 1981-2000 period. Scenario 2. In contrast to Scenario 1, the simulated growth in aggregate output in Scenario 2 is based on the forecasted real growth in the world price of petroleum provided by the U.S. Oepartment of Energy's Energy Information Administration. All other assumptions us.~d for predetermined variables in this scenario are the same as in Scenario 1. Scenario 3. The intent of this scenario is to examine the impact of a much less optimistic set of internal circumstances on the growth of energy demand in Liberia. For purposes of this simulation study, it is 43 assumed that LAMeD withdraws from its iron ore ffilnlng operati~ns in Liberia in 1985 and that 8MC withdraws in 1990. Furtherr,~re, it is assumed that the Firestone Rubber Company will withdraw from rubber production in 1990. Scenario 4. This scenario is the same as Scenario 3 except that the reduction in iron ore output and rubber production is assumed to be one-half of the levels reflected in Scenario 3. The other input assumptions are the same as those of Scenario 3. A summary of the total annual sectoral growth rates of energy demand over the 1981-2000 simulation horizon under the four alternate scen.cios is provided in Table 24. The aggregate annual projected growth reveals significant variation under the four scenarios selected for analysis. Growth in ener9Y demand ranges from 3.8% under the most favorable set of circumstances (Scenario 1) to 1.5% under the conditions assumed in Seer.ario 3. As might be expected, the iron ore mines, which accounted for about 21% of the total end use of energy in 1981, are the primary contributing factors to this variation. Under Scenario 3, for example, the projected annual decline in energy use by the iron ore mines (fuel gas, gas oil, and electricity) over the simulation period is 7.6%. Indeed, even under the much less stringent condition of real petroleum price increases (Scenario 2), the mines' use of energy is projected to decline at an annual rate of 3.3% over the period under consideration in this study. 'Includes the use cf fuels for electric generation and excludes electric line losses and electricity appropriated without paymeot. The scctorat use of fuels for eiectric gen;:ratioo includes 216.000 BCOE of au oil aod 1,047.000 BCOE of fuel oil. Source: Appendix 10. 44 The residential sector shows the least v "This assumed growth is sowewhat below the 3.4% annual increase which some analysts believe is closer to actual current trends in Liberia. 45 thermal ecergy to provide motive power sufficient to generate 100 million kWh of electricity) with a substitute for imported petroleum. Given the significance of such substitution possibilities, the project staff believes that the principal conclusions of this report regarding energy resource development and conservation options are valid under a variety of conditions involving relatively large differences in the future level of total energy demand. Actual energy ase in 1981 Simulated annual JfOW1h rates (") volume" (l()lOCOE) " Scenario I Sccaario 2 Scenario ) Scenario 4 Gasoline 490.1 '.2 ,.\ 4.' l1 4.3 Oas oil 860.3 11.0 4.6 2.3 -0.7 0.' Fuel oil 1231.0 15.8 -4.8 -25.2 -15.7 Kerosene 51.8 0.1 0.1I.' -0.7 -1.4 -0.8 Jet fuel \5.0 0.2 '.4 2.8 0.' ... Total renned products 2654.2 33.8 Weilhled Ivg. l' 0.8 -).9 -0.9 Elearicily 476.5 6.1 8.1 2.' -0.3 1.1 Total ("eluding wood 3130.7 39.9 Weighted Ivg. 4.8 1.2 -1.8 -0.6 and charcoal Wood and charcoal 4710.0 60.1 '.0 3.0 '.0 '.0 Total 7840.7 100.0 Weighted aVI. H 2.3 I.S 1.8 -Includes the use of fllels for electric generation and excludes e1eclric line losxs end elmricity appropriated without payment. The $«:Ioral u:;:; of fucb rOT electric generalion includes 216.000 BCOE of 8U oil and 1,047,000 BCOE of fllel oil. Source: Appendix 10. 47 5. OVERVIEW OF LIBERIA'S ENERGY NEEOS AND SU?PLY AND CONSERVATION OPTIONS The ultimate purpose of this project is to assist Liberian policy makers ill identifying potentially attractive energy supply and conser vation options. This chapter first reviews the findings on the most critical energy needs by end-use sector and fuel type. These are the areas of energy ~emand where existing supply sources appear inadequate or too costly to meet future energy needs (even jf these needs do not grow at a fast rate). The second section of this chapter reviews the supply potential and obstacles to development of a number of energy resource and conservation options. The chapter's last section outlines steps for the design and implementation of a proposed technology demon stration project for wood gasification. The final determination of energy policy rests with the senior policymakers in government. It is the job of the analysts to present sufficient information on the implications of the various options so that the policymakers can make informed decisions. The objective of this energy planning assistance project was to initiate and carry out the first phase of an ongoing National Energy Assessment. During the course of this project, a wide range of energy supply options was reviewed in light of the data gathered. Generally, the available data were adequate to permit preliminary conclusions regarding the major advantages and disadvantages of specific supply and conservation options. From this review, it is possible to indicate those options which appear to warrant in-depth investigations and those which appear unpromising. 5. I SUMMARY OF THE MOST CRITICAL ENERGY NEEDS The evaluation of energy supply and conservation options requires information on the importance of particular energy needs facing the nation. This section reviews the energy needs for different types of energy use. 48 5.1.1 Public Electrical Services While 65% of LEC's total generation nationwide comes from the Mt. Coffee hydro facility, the remaining oil-fired output (roughly 140 GWh) causes serious drains on LEC's financial resources. This oi1 fired generation, especially in rural areas, threatens the ability of Liberia to maintain its existing level of electrical services. For example, during 1982 and early 1983 most rural stations were restricted to 12-h/d operation because of fuel shortages. Monrovia itself expe rienced prolonged blackouts from January into March 1983 due in part to fuel shortages. Clearly, Liberia needs to develop alternatives to oil-fired generation. The limited success of LEC in collecting electricity bills oerious1y weakens its ability to fund capital improvements and meet its ow, bills. Illegal hookups account for as much as one-fourth of all cons'Jmptior.. ~ore effective enforcement would increase revenues and lower energy usage. A1so, the current metering system suffers from widespread public skepticism regarding the accuracy of bills. Studies should be undertaken to revamp the electric metering and billing system. 5.1.2 Transport Services The existing public transport system (taxis and minibuses) appears to operate efficiently, given the prevailing price structure (fares and fuel cost), the state of the road system, and the needs of most of the population. In effect, the high load factor for most cab and bus trips already provides the fuel efficiency advantages of a mass transit system of larger vehicles. A more extensive bus system (especially to fringe areas) might provide somewhat greater fuel efficiency and lower fares under certain conditions. Moderate government efforts in this area are warranted, but substantial efficiency improvements through higher load factors are probably unattainable. Efficiency improvements probably can be achieved through upgraded maintenance of vehicles. One potential obstacle is that. at least in the case of many taxis. the owners pay for maintenance and the hired operators pay for fuel. 49 The transport system will remain vulnerable to future oil price increases and so will face serious problems if oil prices rise substan tially again. The use of motorbikes and bicycles would provide some help with regard to fuel use. In the end, however, the basic choice appears to be between the development of nonpetroleum transport fuels (e.g., vegetable oil substitutes for gas oil and mobile wood gasifiers) on the one hand and, on the other, periodic adjustments in the transport system to reflect changing fossil fuel prices (e.g., reduction in vehicle size and less use of motorized transport). The use of small wood and charcoal gasifiers attached to spark ignition engines for motorized vehicles was common throughout much of Europe during World War II. Their use has been increasing recently in the Philippines and Brazil on a commercial basis and experimentally in Europe, the United States, and other countries. The spark ignition engines operate in a normal manner when the "producer gas" (obtained from the partial combustion of wood or charcoal) is injected as fuel in place of gasoline. Drawbacks include added weight, a minor reduction in engine power output, and a required warm-up period (15-20 min). The use of vegetable oils, such as palm oil, as a substitute for gas oil in diesel engines must still be considered experimental at this time. Diesel engines can operate on vegetable oil~ but certain problems, such as contamination of the lubricating oil system, have not been fully eliminated. Research continues in the United States and elsewhere on the use of vegetable oils in buses, trucks, and tractors. Several pro cessing techniques, including esterification and other types of blending, appear promising. The important point is that, in the longer term, nonpetroleum substitutes exist for the transport sector. Their introduction will, however, take time and in some cases require additional engineering research and experimentation. 5.1.3 Residential Fue1wood and Charcoal The existing private sector production, transport, and distribution system for household use of fuel wood and charcoal appears to function 50 well. Despite occasional short-term problems caused by temporary changes in supply and demand (e.g.• weather and disruptions in supplies of alternative fuels). prices generally seem reasonable and supplies adequate. The types of industrial wood energy demands envisioned elsewhere in this report may cause dislocations. perhaps long-term ones in some areas. in the residential fuel wood and charcoal system. These changes (higher prices and tight supplies. especially in towns) would make the introduction of efficient charcoal production facilities and use of more efficient wood and charcoal cooking stoves more attractive. Put simply, wood is likely to become more valuable as an energy resource for the entire Liberian economy. The high energy losses which currently occur in the low-efficiency production of a unit of usable wood or charcoal energy will then likely become uneconomical. As noted elsewhere in this report. efficiency improvements from these steps would provide con siderable room for expa~sion in industrial use of wood without an increase in wood cutting. The project team recommends: (1) that GOL consider means for encouraging the more widespread use of efficient charcoal kilns and (2) that GOl disseminate information on. and consider aiding in the dis tribution oft efficient fuelwood and charcoal stoves.- 5.1.4 Mines and Other Concessions The concessions are now able to pay for their fuel imports, but their operations would become more competitive in world markets if they could utilize domestic energy resources that were less expensive than oil. Their use of domestic energy resources could also have substantial income multiplier effects on the Liberian economy and could demonstrate the feasibility of new technologies to other sectors. Such steps would require substantial capital investments and a willingness to innovate. despite the current depressed market situation. *Partners for Progress has initiated the latter in Nimba County. 51 The project team encourages uSe of domestic energy resources, espe cially wood (for direct heat and gasifiers) by the mines. Public agencies should investigate possible incentives to encourage the concessions to use domestic energy resources. For example, the Forest Development Authority or a private contractor might assist in setting up a fast growing wood plantation, harvesting, and transport system in conjunction with the mines. 5.1.5 Commercial and Governmental Buildings Air-conditioned buildings in Liberia appear to be highly inefficient, in large part due to the widespread use of louvered windows, which give a poor seal when closed. There also appears to be only limited use of passive cooling techniques in office buildings. Improvements in both areas will require investments, and, in some cases, relatively long periods to recover such outlays through reduced electricity bills. Maintenance and replacement of broken windows along with the use of curtains, cross-ventilation, and fans may be the most cost-effective first steps. The project team recommends that the GDL encourage passive solar cooling designs in new buildings. The government should further take steps to reduce the number of air conditioners in government buildings and to improve the monitoring of electricity consumption by individual government offices. Efficiency standards for energy-using appliances such as air conditioners and refrigerators should also be considered. 5.2 OVERVIEW OF LIBERIA'S ENERGY SUPPLY AND CONSERVATION OPTIONS It is important to note that. while it is not the role of this project to make definitive judgments on energy policy options, it is the job of energy analysts to point out the possible consequences of pursuing par ticular resource development and conservation options. In a one-year data gathering and analysis effort, it is not possible to conduct detailed investigations of all of Liberia's supply and conservation alternatives. However, sufficient infonmation was gathered to permit a preliminary evaluation of many alternatives and to identify those which appear to warrant further consideration. 52 5.2.1 Imported Petroleum For at least the next several decades, Liberia will need to continue using petroleum. The future level of oil imports will depend on the state of the Liberian economy, particularly the activity levels of the nation's iron ore mines, and the success of measures to substitute domestic resources for imported oil in selected applications. A major recommendation of the project team is the closing of Liberia's petroleum refinery and the substitution of imported refined oil products for imported crude oil. This move would likely save liberia at least $10 million and perhaps as much as $20 million annually by eliminating the high cost of refinery operation. It would, unfortunately, eliminate several hundred jobs at a time of high unemployment. Still, the savings from refinery closure are more than sufficient to permit keeping the refinery staff on payroll for a time and employing them in alternative activities important to solving the nation's energy problem. * 5.2.2 Imported Coal+ Prospects for coal importation in the near future are limited in Liberia. Use of coal would require substantial investments in the form of port han~ling facilities and steam power plants. Such investments are likely to appear unattractive to the iron ore mines, given the current depressed state of the demand for their products and the prospect of resource exhaustion. Possibilities would exist, however. for a new mine such as that previously under active consideration in the Wologizi Mountains. However, in the case of a new mine, the expense of coal would have to be evaluated against the cost of wood fuel as well as against oil products and hydroelectric power. In the case of LEC, the near-term attractiveness of coal is also likely to be low. Hydroelectric power provides 70% of the central grid's *For additional information on the analysis of the LPRC, see Appendix 17. +Oata in this section are based in part on Appendix 15. 53 output and even in the dry season provides a substantial part of the base load. Utilization levels for a coal plant would be too low to make the investment economically viable compared with the cost of using heavy fuel oil for the existing, large, slow-speed diesels. However, if demand should grow considerably, small coal-fired plants might possibly be cost competi tive with large hydro schemes in certain situations while providing greater flexibility (especially if coal supply could be arranged under special price conditions as in the case of liberia's rice imports from the United States). Still, among the thermal generation alternatives, wood fired steam plants may prove to be the less expensive while providing the additional benefit of using a domestic resource with high employment benefits. A major consideration in evaluating any steam system is the need for personnel specifically trained in its operation. 5.2.3 Domestic Petroleum At this time, liberia's prospects for domestic petroleum resources are still speculative. A contract has been signed for exploration rights offshore, and some onshore exploration has been undertaken, although it is currently (mid-1983) stalled. Information on liberia's oil produc tion potential. if any. may be available as early as 1984 or 1985. If oil is found in commercial quantiti~s, then prod',ction could possibly begin by 1985 or 1986. If petroleum is found, the project team recommends that liberia use part of its oil revenue to develop domestic renewable resources which are less expensive than the price of the petroleum on the world market. Development of these renewable resources will help in the balanced development of the nation and in building a base for long-term energy supply. 5.2.4 Hydroelectric Energy Potential Although liberia has considerable hydroelectric potential, highly seasonal flows are a major problem. The low-flow period reduces utili zation levels and requires the use of thermal backup facilities. Alter natively, storage facilities can be built to reduce variations in flow, 54 raise utilization levels on the hydro generators, and reduce or eliminate thermal backup requirements. Storage facilities are, however, generally quite expensive. The LEC is actively investigating a storage and generation facility which would be located at the confluence of the St. Paul and Via rivers and which would have an ultimate capacity of about 1 GW. Detailed investigations have also been undertaken on a proposed storage and generation facility on the Mano River near the NIDC mine site; this facility would have a capacity potential of several hundred megawatts, most of which would go to Liberia. The Mano is a boundary river, but only a small part of the proposed faci.lity would be dedicated to users on the Sierra Leone side. The European Economic Community has expressed active interest in providing financial support for the Mano River facility. Of the two proposals, the St. Paul is much larger and provides considerably more power output capacity. However, the cost of the St. Paul project is also several times that of the Mano River Proposal. Development of the Mano as proposed would provide for virtually all of LEC's and much of BMC's electricity needs until at least the end of this century. For LEe's rural systems, small (200 to 5000 kW) hydro plants should prove attractive in at least a few locations. The best sites might provide power at much less than the cost of gas oil-fired diesel electric generation. However, except for the most favorable sites, dry season power would still have to come from diesel generators. Transmission distances are also a problem since many of the best sites are relatively far from towns and rural population densities are generally too low to warrant local electrification. Transmission costs can double the cost of power in such cases. Finally, even small hydro plants are relatively capital intensive and do not provide the employment benefits of wood burning power plants. Mini-hydro (under about 200 kW) plants may be attractive in a few selected locations. Such sites must have well-trained personnel to operate the system. It is also necessary to have the national electric utility make personnel available for periodic visits and emergency calls. Hospitals with a resident technical staff may be especially attractive users of such syst~ms. 55 5.2.5 Wood Liberia's wood resource base is capable of supporting levels of production adequate to eventually meet most or all of Liberia's energy needs. The major immediate source of wood energy is abandoned rubber farms, many of which are relatively close to potential demand centers. As this reSource is used, the old rubber farms could be replanted as short-rotation wood energy plantations. Other potentially valuable sources of wood energy are the mature rubber trees retired each year from the working rubber farms, lumber industry wastes, and the secondary growth in areas under long-rotation, bush-fallow shifting agriculture. Improvements in the efficiency of charcoal production and in the use of wood and charcoal by residences would also free large quantities of wood energy for use by other consumers, such as industry. Use of remaining virgin rain forests in liberia would not be required to meet foreseeable future wood energy needs. Large-scale wood use (e.g., by an iron ore mine or LEC at Bushrod Island) would require commercial cutting of several acres daily for each application. Such levels of output would necessitate replanting old rubber farms or fallow bush near the end-use site with fast-growing wood species and establishment of relatively short-rotation systems (i.e., 3 to 8 years). If large-scale wood cutting begins, environmental condi tions will need to be monitored. At this time, however, it appears that reasonable care can prevent any serious environmental impacts, even at relatively high levels of utilization. Short-rotation intensive silviculture appears to be potentially viable in Liberia. Experimental plantings of gme1ina and eucalyptus in Liberia have shown annual growth rates in the range of 20 to 40 m3/ha (equivalent to 35 to 70 BCOE/ha) on unmaintained plots. Leguminous species such as ipil-ipi1 could be grown in some areas, and these would offer the advantage of nitrogen enrichment of the soils. Old rubber trees from Firestone's annual cutting of 1214 ha alone could offer a potential contribution to Liberian energy supply of more than 314,000 BCOE. Considerable energy is also available from other rubber farms in Liberia. For many applications, energy from 56 retired or abandoned rubber trees would economically compete with imported petroleum up to a wood transport distance of 64 km or so. Improvements in the efficiency of charcoal production from the current 15 to 20% up to about 30% through the use of metal kilns could free about 1.5 million BCOE annually within the wood resource base already being used and make it available for industrial use. Improvements in the efficiency in fuelwood and charcoal cooking stoves could also add to the amount available without an increase in total amount of wood harvested. Sawmills generate wastes in an amount that is almost two-thirds of all round logs processed through the mill. Waste generated from July 19B1 through June 19B2 amounted to 1.32 million GJ (Table 19). This figure is the equivalent of 0.22 million BCOE and is five times the amount of energy used in nontransport activities in forestry. Another readily available wood energy source is natural forest pro duction (typically not virgin rain forest). Most towns have sufficient forest within a reasonable transport distance. With an annual stemwood growth of 13 to 25 m3/ha and an energy content of 11 x 199 J/m 3 , it would take 160 to 300 ha to support a 600-kW plant (at a 50% load factor), adequate for many sawmills and small towns in Liberia. Finally, it may be feasible to integrate wood energy production with the shifting cultivation practiced throughout Liberia by planting fast-growth species during the fallow period (typically 7 years). This practice could begin without devoting any new land to fuel wood production and might require little additional labor. The primary issues here are the distance from the system of shifting agriculture to energy demand centers and the impact on crop productivity of removing biomass that might otherwise enter the cropping cycle as nutrients. The principal alternatives available for the use of wood are (1) direct burning for process heat or steam generation and (2) wood gasification to produce a low-energy gas (producer gas: CO + H2 ) which can be used to drive internal combustion engines. Wood-fired steam generation (indeed ~ steam generation system) involves relatively high capital costs and requires the employment of expensive technical 57 staff to ensure proper operation and maintenance. These costs can only be justified for generators in areas of relatively large demand and high load factors. Currently only two operators generate steam in Liberia. One of these facilities was built at a capital cost of $2 million for a boiler, steam engine, and 600-kVA generator. Its operation requires 1 full-time engineer (expatriate), 3 experienced boiler operators (expatriates), and 12 skilled laborers (Liberians). Wood gasifiers to achieve the same amount of generation might require as little as 40% of the capital cost and half the imported labor. When a stationary internal combustion engine is already in place and running on petroleum products, the added cost of wood gasification is even considerably less than this. In short, the levelized cost of power from wood gasifier/diesel generator sets could be considerably lower than that of standard gas oil-fired diesel generators. However, important uncertainties remain in the cost of wood, the reliability of the wood sup~ly system, and gasifier and diesel operation and maintenance requirements. These questions need to be resolved through research and technology experimentation and demon stration. The project team believes that more thorough investigation of wood gasifiers in Liberia should be given a high priority. Moderately sized (3- to 8-MW) wood-fired steam plants might prove more attractive than gasifiers for appropriately sized demand centers. For these somewhat larger-scale applications, wood-fired steam plants can offer advantages of greater efficiency in the use of the fuel and lower capital and maintenance casts. Currently, however, LEe has only two rural stations with demand levels near this range. Most of Liberia's rural electric needs and many other centralized energy requirements are in the range suitable to gasifiers (100 to 2000 kW). 5.2.6 Energy Conservatlon.* The largest individual end uses of energy by the light manufacturing, commercial, and governmental sectors are lighting and air conditioning. *Data in this section are taken in part from Appendix 9. 58 These two uses represent about 45% of electricity consumption by the com bined industrial, commercial, and governmental sectors. The remainder of the energy use in these sectors is for activities such as materials handling, water heating, refrigeration, and cooking. The use of lighting and air conditioning can be reduced through controls imposed by government, by voluntary reductions, through the use of passive cooling and natural lighting techniques, or, finally, through planned power outages. Although the efficiency of air conditioning can be increased by 10 to 30%, this approach requires the replacement of the existing stock of equipment with more efficient models. Efficiency standards should be imposed on new air-conditioning equipment. Also on a longer-term basis, investigations should be undertaken to evaluate passive cooling and natural lighting through the use of natural ventila tion, shading, and thermal mass to moderate temperatures and better use of daylight for illumination. The more immediate solution is to make better use of air conditioning by sealing air-conditioned rooms with weatherstripping, insulation, and air locks at entrances. Improved engine and motor maintenance also offer energy conservation opportunities in the industrial and transport sectors. In general, project funds did not cover detailed investigations of energy conservation opportunities. Additional studies are required to allow development of specific recommendations for public policy in the area of energy conservation. 5.2.7 Palm Oil Vegetable oils, especially palm oil, may eventually be a valuable source of energy in Liberia. Each hectare of oil palm produces approxi mately 16 metric tons of fresh fruit per year, which yields more than 3 metric tons of palm oil with roughly the same energy content for a given volume as gas oil - the equivalent of 21 bbl/ha annually. Liberia is potentially capable of meeting all of its liquid fuel needs from palm oil. The two major problems are the production cost and technical uncer tainties regarding the type of processing necessary to upgrade palm oil into an acceptable motor fuel. The current retail price of Liberian 59 palm oil is $2.55/gal. This compares favorably with the retail price of gas oil ($2.80/ga1). Even with additional refining costs, the palm oil could probably compete in many remote areas. However, this retail price of gas oil is currently affected by a $0.31/ga1 tax and bv cost transfers at the refinery. The world market price for gas oil landed in Monrovia in 1982 was about $1 .00/ga1. Under the best of production conditions, production costs for palm oil are expected to be at least $1.25 to $1 .50/ga1 . The basic question for Liberia is whether this cost difference is acceptable given the potential benefits stemming from consumption of a domestically produced fuel. The real price level of palm oil can be expected to stay reasonably stable, at least at moderate levels of out put. compared with the possibility of continued increases in oil prices. The Delegation of the European Economic Community in Liberia has discussed with the NEC the possibilities for Jetailed investigations of the economic ar~ t~r.hnical issues regarding the use of palm oil as a gas oil substitute. A promising, but limited, near-term alternative may be the use of palm oil soapstock (fatty acids) and methanol microemu1sions as a gas oil extender (see Appendix 14). Palm oil soapstock is a low-value by-product of palm oil refining. A microemulsion fuel can be formed when water, alcohol, and a soap or surfactant are dispersed in a petroleum phase. Microemulsion droplets on the order of 2 to 8 om are formed with simple stirring at appropriate composition and temperature. Recent U.S. Army experience has indicated that the equipment is simple and that it is relatively easy to train personnel to use it. The mixture, which is a good diesel engine fuel, contains about 10% palm oil soapstock, 10% water, 5% alcohol. 75% gas oil. and an additive (perhaps 0.5% of ammenia) to ne"tralize the fatty acids. The project team recommends that the economic and technical processing issues associated with the use of palm oil as a fuel be investigated more fully. 5.2.8 Alcohol Fuels Alcohol fuels from sugar and starch traps (e.g., sugar cane and cassava) appear unattractive in Liberia. Liberia imports both food 60 staples and refined sugar at this time. Alcohol fuels from these crops might compete with food production. It is possible that certain crops not used for human consumption (e.g., bitter cassava) might be produced on marginal lands for alcohol fuel production without affecting food production. Such alternatives appear to warrant further investigation. Also, if sugar refining oper ations are revived in Liberia, co-production of ethanol and sugar might prove more economically attractive than sugar production alone. In Liberia, methanol produced from wood appears to be a better choice than ethanol from sugar and starch crops for moderate- to large scale alcohol fuel production facilities. 5.2.9 Intermediate Energy Technologies: Biogas, Improved As used here, the term "intermediate technologies" means those which cannot meet a large share of the nation's national energy needs, but which could possibly provide important local contributions under appropriate circumstances. The introduction of biogas might possibly lead to more profitable livestock operations in a few rural areas and improve the familiarity of rural residents with eoergy technology. Although the impact of biogas technology will probably be limited, the project team believes that an investigation should be undertaken to identify and evaluate possible applications at several selected sites. It should be noted that for larger-scale operations, such as running internal combustion engines, biogas generally compares unfavorably with wood gasifiers as an energy sou,ce for diesel generators. This disadvantage holds even for optimistic assumptions concerning the ability to collect large amounts of digestible wastes. The absence of Extensive animal wastes, the existing sanitary practices in Liberia, and the lack of intensive crop cultivation means that biogas probably cannot playa major role for centralized energy *Data in this section are taken in part from Appendix 15. 51 needs. Nevertheless, in some localities it could provide an economic source of cooking and lighting fuel. Solar energy can substitute for petroleum products in uses such as water heating needs for institutions (e.g., hospitals and resident schools) and middle-class homes. However, Liberia's extensive cloud cover will likely restrain applications of solar energy to a few selected locations, with a small national impact. Even without the expense of storage, capital costs of photovoltaic cells (now roughly $5000/kW) make solar electric power uneconomical com pared with gas oil-fired diesels. Inclusion of storage expenses would push solar power's cost to well over $l/kWh. If solar cell ccsts even tually fall by 90%, as some have projected, then solar cells without storage could replace gas oil in some applications. Wind energy appears relatively unattractive, but data on winds are too limited to make a final determination. I: is possible that wind energy could be useful in a few locations. Liberia, however, lies in the poorest wind class in Africa. As a result, wind turbines, even with out storage costs, compare unfavorably with gas oil-fired generators. Even under generous assumptions concerning wind velocities and the amount of storage required for a stand-alone system, wind power would cost more than $0.50/kWh. For nonelectric applications (e.g., water pumping or water heating) wind and solar energy again appear relatively unattractive in Liberia, although they might prove useful in a few carefully chosen locations. Among the energy conservation possibilities in this class of inter mediate technologies, improved fuelwood and charcoal cooking stoves and more widespread use of efficient charcoal production kilns appear worth careful consideration. At this time, Liberians (and Liberia as a nation) can afford the large loss of wood energy due to production of charcoal in inefficient kilns and the burning of wood and charcoal in highly ineffi cient cooking stoves. Indeed, given the scarcity of capital and the surplus of wood, expenditures for more efficient use of wood energy might not be cost-effective under existing prices. Nevertheless, as mentioned previously, if industrial use of wood energy grows, as apparently it will, 62 market prices of wood could rise and residential users could find effi cient stoves more attractive. One problem might be consumer reluctance if the improved ~~oves do not permit users to retain charcoal or wood flavor in foods cooked over open grills. The use of metal or brick charcoal production kilns in place of earth-covered mounds would also result in substantial energy savings. However, introduction of the metal or brick kilns would eliminate the employment opportunities now available to the traditional producers who lack access to the capital required to purchase a modern kiln (about $400 to $1000). This loss in employment opportunities will need to be weighed against the benefits of greater energy efficiency and lower retail charcoal prices. 5.3 CONSIDERATIONS IN THE DESIGN AND IMPLEMENTATION OF A TECHNOLOGY DEMONSTRATION PROGRAM FOR WOOD GASIFIERS Among the most important recommendations of the project team is that the technical and economic feasibility of wood gasifier technology be fully evaluated as a means of fueling stationary diesel engines. The team believes that such use of wood gasifiers is attractive in Liberia because (1) the wood resource base is large; (2) gasifiers can be used to drive diesel engines, a technology already in place in Liberia; (3) it could meet an important national energy need and reduce oil imports relatively quickly; and (4) it would result in substantial employment and income growth in the rural areas which supply the fuel. Features of the appropriate study design for the demonstration project fall into three categories: (1) those which help ensure that supply bottlenecks are anticipated and dealt with, (2) those which help ensure that the demonstration project team has the resources to respond to unanticipated technological and institutional problems, and (3) those which ensure the relevance of the demonstration project cost-accounting records to the interests of potential private sector and public sector users of the technology. The wood gasifier demonstration project should be designed in detail through ~ feasibility study which includes examination of the following: 63 1. Type of gasifier (e.g., updraft or downdraft) 2. Choice of the fuel (wood size, charcoal, etc.) for the gasifier 3. Design of the fuel feedstock (wood/charcoal) production and collection system 4. Design of the feedstock transport system 5. Design of the feedstock storage system a. At the production site b. At the eno-use site c. Problem of seasonality of demand 6. Proper instrumentation to permit optimization of end-use system design and operation 7. Requirements for spare parts and maintenance 8. Requirements for technical skills a. Training for host country personnel (1) Offsite (2) On-the-job b. Type and level of outside technical assistance 9. Identification of candidate application sites and feedstock sources 10. Determination of the appropriate roles for public and private sector participants in the actual demonstration project 11. Development of a cost-accountin9 record-keeping system for the demonstration program which will permit other potential users to fully evaluate the implications of the financial data for commercial applications. The feasibility study would take about four to seven months and, if the results are promising, should be followed relatively quickly by the demonstration project itself. The actual demonstration project might operate for as short a period as two years before decisions about further deployment can be made. Such a project should probably include private sector involvement (including risk capital) for an important segment of the demonstration. The assessment project team believes that, if the wood gasifier is successfully and appropriately demonstrated, the tech nology will be readily adopted by both private and public sector poten tial users. 65 6. INSTITUTIONAL DEVELOPMENTS 6.1 U.S. AND COUNTERPART WORKING RELATIONSHIPS 6.1.1 Background At the start of the project in April 19B2, the NEC was identified as the U.S. project staff's principal counterpart agency within the GOl. At that time the NEC was still a relatively new organization whose effec tiveness was as yet largely undetermined. Designing an approach to project activities that would support the NEC most effectively was an important first challenge when U.S. personnel arrived in liberia. Miedi-Himie Neufvi11e, Ph.D., Director of the Bureau of Hydrocarbon (3HC), Ministry of lands, Mines and Energy (MlME), and Secretary of the NEC, was identified as the initial GOl contact person for incoming U.S. project staff. Or. Neufvi11e and two of his staff from the BHC, Jacob Sandikie and R. Emile Rhinelander, formed the core group of counterparts who worked initially with William Barron, Ph.D., U.S. Project Manager from ORNl; William Schaffer, J.O., consultant to ORNl; and Fred Hagel, Chief, Institutional Development, USAID, Monrovia. In keeping with the NEC/USAID energy planning assistance project agreement. Neufvi11e. Barron, and Hagel signed a Memor~ndum of Under standing (MOU) outlining the role of the joint GOl/U.S. energy project team and its relationship to the NEC. The principal features of the MOU are shown in Exhibit 1. Neufvi11e, Barron, and Hagel further agreed that the Liberian and American team members would act as advisers to the NEC and that the USAID Mission would seek to utilize the NEC whenever possible in dealing with energy matters in liberia. Two.examp1es of this involvement occurred soon after the MOU ~as signed. The USAID Mission notified GOl agencies that all requests for USAID energy training programs should be channeled through the NEC. The USAID Mission also requested that the NEC examine means by which the USAID/U.S. Peace Corps Mini-Hydro Project in Yandohun (lofa County) could be transferred to GOl administration. The NEC agreed to look into this matter and was instrumental in starting investigations on the role various GOl agencies would play in the mini-oydro project 66 Exhibit 1 Memorandum of Understanding Energy Planning Assistance to the Government of Liberia May 5, 1982 The principal objectives of the joint USAIO/GOL energy planning assistance project a~e: 1) To conduct an energy assessment for Liberia, with the U.S. team members working in close cooperation with counterparts from member agencies of the National Energy Committee and other interested agencies and organizations. 2) To use the energy assessment process as a means of furthering the capability of the National Energy Committee's Technical Subcommittee to comprehensjvely examine energy issues in Liberia and develop policies for government action to improve Liberia's energy situation. 3) To further the capability of the Bureau of Hydrocarbon of the Ministry of Lands, Mines and Energy to conduct engineering and economic assessments of the potential for specific energy tecr.~ologies in Li;eria. 67 after USAID and Peace Corps involvement ends in late 1983 or 1984. 80th actions helped to increase awareness of the NEC within GOL and among international donor institutions. 6.1.2 Counterpart Working Arrangements As the research activities for the National Energy Assessment got underway, U.S. and GDL counterpart relationships evolved at three levels: (1) with the NEC, (2) with its Technical Subcommittee, and (3) with the Energy Assessment Team. National Energy Committee. The National Energy Committee is a functional body that maintains linkages with energy-oriented organiza tions of both the public and private sectors. Toward this end the NEC is organized as follows: 1. The chairman and members of the NEC that have been appointed by the Head of State each designate a permanent proxy to be concerned with the energy matters in their organization. These permanent represen!atives have the voting rights. 2. The proxies constitute the Technical Subcommittee that also includes representatives from the University of Liberia and The Cuttington University College to work along with the Secretariat (8HC). 3. A Commission may be constituted out of the NEC at an appropriate time. The objective of the NEC is to assess and evaluate the nation's energy needs and its available energy resources, as well as to develop a national energy policy and coordinate its implementation. The functions of the National Energy Committee are: 1. to provide immediate and future policies and strategies for national energy supply; 2. to compile and analyze information on energy sources, distri butions, availability, and utilization to aid in the develop ment of future energy policies; 3. to provide regulations for energy sources development; 4. to review and propose price and market structure guidelines for the energy sector; 68 5. to propose measures for energy conservation and the development of new energy supplies; and 6. to advise the government on all matters relating to energy. The permanent members of the NEC are the administrative heads of the NEC's member agencies (i.e., the ministers and managing directors of the government corporations and authorities). Technical Subcommittee. Given the high administrative positions of the permanent members of the NEC, much of the NEC's preliminary evaluation work is carried out by working groups of a Technical Subcommittee. Membership in these working groups is not rigidly fixed but changes with the requirements of the situation. Technical Subcommittee members are recruited from the upper mid-level management staffs of the member agencies of the NEC, and it is these persons who formed the primary Liberian counterpart group for the U.S. energy planning assistance project team. Energy Assessment Team. Supporting the Technical Subcommittee and the NEC's Secretariat is an Energy Assessment Team which participates in gathering and analysis of data for energy assessments. U.S. project staff members worked closely on a daily basis with the Energy Assessment Team and served as advisers to the team. Recognizing that the original core group of three GOL assessment team members was too small for project requirements and wishing to increase the direct involvement of other agencies of the NEC, Neufvil1e and 8arron recruited additional GOL staff from the Liberia Electricity Corporation, the Liberian Petroleum Refinery, the Forest Development Authority, the Ministry of Planning and Economic Affairs, and the Ministry of Finance. The Liberian Energy Assessment Team eventually consisted of twelve persons from six agencies. Members of the Energy Assessment Team were professional GOL staff, most of whom worked for members of the Technical Subcommittee. Team members were assigned by their agencies to participate in the energy data gathering and analysis for a specified portion of their work time (15 to 70%). 69 For the most part, three to six of these GOl team members were actively engaged in project activities at anyone time, although all were involved in a significant way in at least one aspect of this initial phase of the National Energy Assessment. The U.S. project team consisted of ten persons. Generally, two to three U.S. team members worked with Liberian Energy Assessment Team members at a given time. Neufville and Barron acted as team co-leaders of the joint GOl/USAID project team, each having responsibilities with regard to activities of the entire team and not just with those of members from his country. The working relationships among Liberian and American project staff were excellent and highly productive. The less senior Liberian partici pants gained work experience and enhanced their ability to collect, analyze, and present energy data. The more senior Liberian participants increased their familiarity with analytical techniques used in energy assessments and their understanding of the energy situation in Liberia. The U.S. team members gained invaluable insights and understanding of local conditions through exchanges with their Liberian colleagues. All U.S. project staff performed part of their work in the United States. This arrangement had the advantage of allowing the Liberian team members to work on their own at regular intervals and also allowed project staff to interact with the larger research community at ORNL. 6.2 MAJOR ACCOMPLISHMENTS AND PROBLEMS FACING THE NEC Although the NEC had been in existence for about two years prior to the start of the joint GOL/USAID energy assessment project, it was the assessment process and the data base developed for the assessr. ,t which allowed the NEe to take a prominent role in energy planning in liberia. During 1982 the major accomplishments of the NEC were: 1. increased awareness on the part of government decision makers and private sector leaders of the nature of important energy issues facing liberia, 2. provision of valuable energy information to private sector organizations to aid decision making for investigations of possible industrial use of wood energy, and 70 3. policy evaluations and recommendations on energy conservation and energy technology demonstration options for liberia. The monthly or bimonthly formal meetings of the NEC served as a forum in which upper- and mid-level staffs from a cross section of government agencies discussed important energy issues facing the nation (e.g., the future role of large and mini hydro and energy sources for rural electric stations). Such exchanges also stimulated inquiries from individuals in the private sector and outside donor agencies seeking information on energy matters of immediate interest to them (e.g., legal issues associated with private hydro development and infor mation on wood gasifiers). For instance, the NEC has helped facilitate negotiations between private sector parties in the case of a request for bids by Bong Mining Company (BMC) for the purchase of wood to be used for process heat. Members of the Technical Subcommittee and U.S. project staff met with representatives of SMC and obtained detailed information on their interest in wood. Based on this information and the data contained in the energy assessment, the Technical Subcommittee members were able to provide important information to several private sector firms to help them determine if they could profitably respond to the proposal. The NEC believes that successful private sector use of a domestic energy resource will greatly aid the nation. In December 19B2, the NEe responded in detail to a tentative list of proposals by the Peoples' Redemption Council Special Committee on Energy Conservation regarding emergency energy conservation measures. Members of the Technical Subcommittee, the Energy Assess~nt Team, and U.S. project staff used the assessment project's energy data base to estimate the likely impacts of each of the proposed actions. The NEC also proposed several additional measures. The most con troversial of these was a recommendation to close the government-owned oil refinery. This recommendation led to a decision by GOl to seek a thorough, independent evaluation of the refinery. Finally, the NEC is currently (early 1983) holdin9 discussions with USAIO on a proposal for a study design of a wood gasifier technology demonstration project in liberia. 71 The NEC, like most energy planning organizations in developing countries, faced the usual problems of an inadequate data base for energy planning, the lack of an adequately trained staff, and coordination prob lems among persons making important energy decisions. The NEC, in fact, was formed to deal with these problems. The energy assessment project, with its USAID-funded support for outside technical expertise, has permitted the NEC to begin to address the problems of inadequate data and the training of local talent in energy assessment. While there is still a long way to go, progress on both fronts has been noteworthy. These advances, in turn, have given the NEC enough prominence to begin to address the administrative prob1em$ noted above. The ability of the NEC to effectively carry out its role of recom mending energy policies depends in large part on the cooperation of other parts of government. Government agencies must be willing to inform the NEC of proposed actions with major energy use or supply implications and to pr~vide the NEC with the necessary information to evaluate the pro posals. In fact, the NEC is becoming much better known within the GOl, and the various agencies of government appear to have beco~ more com fortable with the NEC. They are beginning to recognize the val"e of the forum that the NEC provides for an open and frank discussion of energy related programs. Such discussions can help reveal potential weaknesses in program design and lead to a better understanding of a proposal's larger implications (e.g., its impact on other sec~~rs). 6.3 CONSiDERATIONS FOR THE ORGANIZATION OF FUTURE JOINT RESEARCH AND ASSESSMENT PROJECTS The major lessons in the Liberian energy planning assistance project are (1) that close working relationships between host and donor country project participants are worth considerable effort to achieve and (2) that the appropriate arrangements for these interactions are best determined after a trial period in which needs, interests, and capa bilities become clear. 72 A major factor in the success of the first phase of this National Energy Assessment for Liberia was the high level of motivation and compe tence of the Liberian members of the Energy Assessment Team and the Tech nical Subcommittee of the NEe. Only a few of these individuals were identified at the start of the project. These persons served as the core group. while the Liberian and American co-managers for the project identified and recruited individuals from other member agencies of the NEC. Unfortunately. while some of the persons recruited were well moti vated and trained. their other work responsibilities precluded a major contribution to the project. Despite occasional setbacks, a core of about twelve individuals (representing the majority of the member agencies of the NEC) was even tually f0rmed. Members from this group actively served on either the Energy Assessment Team or the Technical Subcommittee or on both. At least in the case at hand, such groups could not have been created at the outset. Time was required so that likely candidates could be identified and recruited and members of the Energy Assessment Team and the Technical Subcommittee could learn the type and level of commitment which was required to effectively participate in this project. Time was also required for the Liberian and American project participants to develop the type of working arrangements which made the most effective use of the talents of individuals in each group and permitted the level of professional development which was an important goal of the project. It is also useful to note that the relatively high level of effort over the course of a full year had benefits beyond that of a shorter project involving the same level of effort. The Liberian and American sides of the project team each contributed about 1-1/2 person-year" of effort. For several weeks to several months at a time. individuals from both countries formed small groups which worked closely on a daily basis. Typically, one American and one or two Liberian project participants would work on a single task (e.g., a sectoral demand analysis) several days a week for a period of several weeks. Over the course of this effort, participants came to know each other and learned to work productively together. Much of the professional development on both the American and Liberian sides occurred as a result of opportunities 73 for this extended ooe-to-one interaction. Here again, flexibility was important. The most productive mat~hing of project members from the Liberian and American sides required time to determine and, in some cases, make mid-course changes to reflect schedule changes and personal interests. U.S. and Liberian staff members benefited from the large technical and professional resource base available at ORNL. Staff members not assigned to the project were able to contribute their expertise on matters of specific interest (e.g., vegetable oil fuel technology), and the technical library facilities helped in the rapid and thorough development of background information as special needs arose. 6.4 ESTABLISHMENT OF AN ENERGY LIBRARY* One goal of the Liberian National Energy Assessment was the estab lishment of an energy library for use by the NEe, its Tec~nical Subcom mittee, the assessment team, and others interested in ene)~y problems. Its purpose is to provide a convenient and accessible collection of reference materials on the Liberian economy, analytical methods, energy problems in £eneral, and descriptions of specific energy sources and technologies. The library as it now exists is only a start; it is expected that new items will be added as they become available and as the energy planning process focuses on more specific topics. The library now contains well over three hundred items, including books, technical reports, journal articles, and pamphlets. They fall into the following general categories: 1. liberian reference materials, 2. background materials on economic development issues, 3. energy (general), 4. energy use, conservation, and conversion technologies, and 5. energy sources. *A more detailed description and inventory of the 1ibrary is contained in Appendix 1~. 74 A large number of the present items belong to the fourth category. Most of these materials emphasize the conversion and use of biomass and hydroelectric resources. although other renewable sources are also well represented. In addition to materials on particular energy problems and sources, there are also several bibliographies. In the future, additional materials should be acquired for sever·al topics which are now represented to only a limited degree. The most important such categories are fossil fuel conversion and energy conservation technologies. The collection of references on woody biomass development and use should also be expanded because of the considerable potential of this option for Liberia. 75 REFERENCES 1. Charles T. Main, Inc., FeasibiUty Study for the Hydroeleotric DeveLopment of the St. Paut River, Liberia, Boston, October 1982. 2. Earl Burrows, "Memorandum to Jack Anderson, General Manager, Regarding Crude Oil Selection 1982 through 1986," Liberia Petroleum Refining Company, August 25, 1981. 3. Ministry of Planning and Economic Affairs, Annuat Report to the People's RedB11TptWn Councit for the Periad Januory I-December 31, 1981, Monrovla, January 1982. 4. James Guseh, Ministry of Finance, personal communication, January 1983. 5. The LEC Current, No. -6 Special Issue, April 12. 1982. 6. United Nations, Yearbook of Naticno.t A""ounts, Statist",. 1980: Votume 1, Individuat Country Data; VOLume 2, Intemo.tionat Tables, New York, 1981 (and antecedent years). 7. These references include Ref. 3 and the following documents by the Ministry of Planning and Economic Affairs: Ertsrnat Trade of Liberia 1981 (and antecedent years); "The Liberian Economy in Perspective," December 1978. 77 ORNL-5989 INTERNAL DISTRIBUTION 1. R. W. Barnes 48. W. R. Mixon 2-6. W. F. Barron 49. J. S. Olson 7. D. J. Bjornstad 50. D. C. Parzyck 8. R. B. Brai d 51-52. R. D. Per1ack 9. R. S. Car1smith 53. C. H. Petrich 10-11. Center for Energy and 54-55. G. D. Pine Environmental Information 56-57. G. Samuels 12-21. R. M. Davis 58. J. W. Sims 22. R. H. Dilworth 59. A. H. Voelker 23-27. J. E. Dobson 60. P. J. Walsh 28. R. C. Durfee 61-65. T. J. Wilbanks 29. W. Fulkerson 66-67. Central Research Library 30. D. L. Greene 68. Document Reference Section 31-37. L. J. Hill 69-70. Laboratory Records 38. E. L. Hillsman 71. Laboratory Records (RC) 39-45. B. F. Hobbs 72. ORNL Patent Office 46. S. V. Kaye 73-102. Energy Division Office 47. J. W. Michel EXTERNAL DISTRIBUTION 103. Office of Assistant Manager for Energy Research and Development, Department of Energy, Oak Ridge Operations Office, Oak Ridge, TN 37831. 104-108. Energy Oivision Advisory Committee Distribution. 109-111. United Nations Distribution, II United Nations Plaza, Rm. DCl/876, New York, NY 10017. 112-122. World Bank Distribution - World Bank, 1818 H St NW, Washington, D.C. 20433. 123-202. Liberia Distribution, c/o James Pagano, U.S. AID Liberia, APO, New York, NY 09155. 203-225. Resource Analysis Group Distribution, Energy Division. 226-254. Regional and Urban Studies Oistribution. Energy Division. 255-281. Technical Information Center, U.S. Department of Energy. P.O. Box 62, Oak Riqge, TN 37831.