MANILA, APRIL 11, 2008
(STARweek) By Rey P. Galupo - The oil crisis of the 1970s taught us valuable lessons, but we seem not to have learned them well. The current challenges posed by our energy requirements vis a vis supply and cost have put us in a precarious situation that demands decisive and drastic solutions.

Energy Secretary Angelo Reyes paints a dire picture: “We know that the conventional and currently existing sources of energy have been oil and coal. The world is about 30 percent dependent on oil and coal for its energy needs. The demand for those products has been and will steadily increase because of growth in the economies of most countries particularly China and India. The growing population worldwide, which has now reached seven billion, and the fact that a lot of industries are energy intensive makes oil and coal the most sought after commodities,” he says, and adds, “We must learn to accept the fact that oil is not only an economic commodity but also a political commodity. The volatility of prices is subject to the mercy and vagaries of oil producing countries.”

Both resources are finite, and at the rate the world is extracting oil and coal, experts predict that the earth’s supply could only last anywhere from 30 to 50 years more. The scenario after that is frightening.

Faced with this consuming reality, the Department of Energy (DOE) has taken drastic steps to meet the challenge head on by tapping alternative sources of energy to meet the country’s requirements.

“It is natural for us to go this direction because we don’t have resources below the ground (oil). And since we are situated at the equator, we are better than those in the northern hemisphere. In this regard we have to make advances in science and technology research, and this will have to be pushed through funding. The challenge is to make a transition from traditional energy to alternative energy,” Reyes says.

The Alternative Fuels Program, which is a key component of the government’s Energy Independence Agenda, outlines the roadmap that will lead to the country’s attainment of 60 percent energy self-sufficiency by 2010.

DOE’s thrust is to implement a long-term program to reduce the country’s dependence on imported oil, and provide cheaper and more environment-friendly alternatives to fossil fuels.

The transition to alternative energy sources, however, includes efforts to increase infrastructure, which is crucial for its success.

Based on the 2006 Philippine Energy Plan Update, the alternative fuels program (biofuels and natural gas) contributes the equivalent of 14.02 million barrels of fuel oil in the total primary energy supply estimated at 302.50 million barrels of fuel oil equivalent.

Currently, our renewable energy capacities are as follows: geothermal energy at 2,027 MW; hydropower at 3,367 MW; wind power at 25.25 MW; and solar energy at 5.2 MW.

In accordance with the Renewable Energy Policy Framework, the government aims to double the capacity of renewable energy generation from the 2002 level of 4,550 megawatts (MW) to some 9,200 MW by 2013. This could be achieved by increasing the generation capacities of the following: geothermal energy by 1,200 MW; hydropower by 2,950 MW; wind energy by 415 MW; and ocean, solar and biomass energy by 250 MW.

At present the DOE is trying to upgrade its 19 wind turbines in Bangui, Ilocos Norte and Batanes. The target is to add five more turbines before the end of the year and increase generation capacity from 25 MW to 33 MW. Wind power generation in Batanes is in the form of a wind-diesel hybrid system consisting of 100 kilowatts (kW) of wind power and 1,200 kW of diesel generation or an 8.3 percent capacity mix.

As of September 2007, nine geothermal fields with a total installed capacity of 2,027 megawatts of electric energy (Mwe) were completed and the Energy Department is pushing to be the world’s largest producer of geothermal energy in the next ten years.

To date, there are nine geothermal service contracts, seven of which are already producing steam for power generation.

Currently, there are a total of 42 coal-operating contracts with a total production of 3,089,789.84 million metric tons and Reyes said the immediate aim is to reduce coal importation by 20 percent in ten years.

The DOE is likewise conducting an inventory of the total contribution from the biomass energy sector, which currently stands at 21 MW. Because of our agricultural inclination, biomass offers good prospects as fuel source.

Further to the development of renewable energy resources, additional discoveries through the ongoing exploration for indigenous natural gas would lessen our dependence on imported fossil fuels.

Meanwhile, clean coal technologies are being studied by the DOE in the hope of developing alternative fuels, such as liquefied and gasified coal, which have potentials for motor and vehicle use. Moreover, coal briquettes may likewise serve as an alternative household cooking fuel.

At present, the Malampaya Natural Gas deposit off Palawan contributes some 2,700 MW of power generation capacities and additional capacities of 300 to 500 MW are envisioned in the next five years.

Malampaya is targeted to increase its production of natural gas and is expected to fill 37 percent of the energy requirement of the Luzon grid. As of November 2007, a total of 1,361 electrification projects worth P1.14 billion have already been completed.

“We have to focus on infrastructure to support the input of the energy sector. You have to restructure everything,” Reyes points out.

But restructuring everything means more involvement not only of government but also of other stakeholders. Passage of laws that will strengthen DOE’s programs as well as government funding, which is solely dependent on Congress, is crucial.

The agency is not lacking as far as implementing laws are concerned. In fact, both Houses of Congress ratified the Biofuels Act of 2006, which mandates a minimum one percent biodiesel blend and five percent bioethanol blend by volume in all diesel and gasoline fuels, respectively, being distributed in the country.

But is this being done?

“Yes, we are implementing the Biofuels Act. All diesel fuels sold in the country already contain one percent biodiesel since May 6, 2007,” Reyes confirms.

Within two years from the effectivity of the act, the National Biofuels Board, according to law, shall determine the feasibility of increasing the blend and recommend to the DOE to mandate a minimum of two percent of biodiesel by volume subject to domestic supply and availability of locally sourced biodiesel component.

For bioethanol, within two years from effectivity of the act, at least five percent bioethanol shall comprise the annual total volume of gasoline fuel actually sold and distributed by every oil company in the country. This will become effective on February 6, 2009. However, all 105 Seaoil stations nationwide and 39 Shell stations in Metro Manila are already selling E10.

As far as private sector involvement is concerned, DOE had already accredited nine biodiesel plants with a total annual capacity of more than 287 million liters with a total investment of more than P10 billion.

It seems all fronts have already been covered at this point, but what is imperative is that DOE gets all the budgetary support it needs to be able to implement such high-profile projects.

In the 2008 P1.227-trillion national budget, the Energy Department received P274.16 million, hardly enough for the daunting tasks it faces.

“There’s no time for sulking. I guess we just have to make do with whatever we have. What’s important here is that we have the political will and the imagination to succeed,” Reyes insists.

“The energy problem is a very scary problem. We are feeling its effects now, and we are going to suffer in the future if we don’t act now.”

Chief News Editor: Sol Jose Vanzi

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