by Daniel J. Graeber
Manila (UPI) Jul 15, 2015
The Asian Development Bank said Wednesday natural gas exports from Papua New Guinea are helping to boost short-term overall growth for Pacific economies.
"Cyclone Pam [in March] and Typhoon Maysak [in April] again highlight the vulnerability of Pacific economies to disaster risks, which are the highest in the world," Xianbin Yao, director general of ADB's Pacific department, said in a statement. "At the same time, the first full-year of natural gas exports from Papua New Guinea, along with strong tourism activity in Fiji and Palau, are seen to sustain growth across the Pacific at close to a double-digit rate in 2015."
The bank estimates Pacific economies will grow by an average rate of 9.9 percent this year, trumping the impact of recent natural disasters.
The bank, in an annual review of the Pacific energy regime, said the region's heavy reliance on imported fossil fuels leaves it particularly vulnerable to foreign markets. The bank said its regional investments of more than $500 million by next year will support a low-carbon transition.
Though crude oil prices have been depressed for a year, the bank said long term scenarios show an inevitable rise as oil is a finite resource, putting upward pressure on the market. At the same time, the costs associated with wind and solar power have declined 60 percent and 80 percent, respectively, over the last five years, the bank said in its review.
Wednesday's report from the ADB said weak global energy prices have increased the downside risk to Pacific economies, notably for the growth forecasts for Papua New Guinea.
A liquefied natural gas project in Papua New Guinea, led Exxon Mobil, marked a milestone with its 100th delivery in June. More than 7 million tons of LNG have been shipped from the facility since it opened last year.
The ADB cautioned, however, that Papua New Guinea's growth prospects dwindle by next year as the "one-off boost" for LNG exports fades from the country's economy.
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