PNG must celebrate its 3rd anniversary of LNG

PNG just celebrated the third anniversary of its LNG (liquefied natural gas) exports to the regional LNG market.
Despite this pride, whether the milestone achievement has sustainable benefits for the domestic economy remains a controversial issue.
In perspective, the sustainable use of our LNG stocks should be guided by market incentives, better government policies and a strong legal and institutional environment.
Firstly, efficiencies occur when the market has no official alteration or intervention.
In PNG, the Kutubu oil has spurted more crude well above Oil Search’s plate mark unlike before and shipments of LNG continue to make waves at Caution Bay very much in the pretext of keeping the developers afloat when prices for LNG and crude oil are low.
In 2014, the global crude oil price dived well over halfway to US$50 per barrel from a high of US$120 largely due to a supply glut but spontaneously, the output from PNG reserves has quadrupled.
Despite a price-taker, one would wonder why the PNG government would allow the developers to get out of their comfort zones and exert the global glut without the thought of downsizing their operations.
Revenue is the answer to this puzzle and it further speak for the resource dependence and perhaps the unsustainable growth of the PNG economy.
Secondly, if PNG has a higher natural resources dependence, is it on a transitional pathway to a sustainable future?
The policies of the government are the recipe to creating a sustainable economy.
Free education, free healthcare and vital infrastructure developments are a number of key policy areas that will put the economy on a transitional path.
On this front, the efforts in the last five years are commendable and they should not be overwritten and duplicated by the upcoming government.
However, any commitment to develop the indigenous sectors of the economy remains in the tunnel.
Thirdly, if transition from an unsustainable to a sustainable growth of the economy is a common faith, what are the works for that faith?
Be warned that faith by itself, if it does not have works is dead – James 2:17.

Mike H
Yagenebo Yamya