CONFLICTING POLICIES ON ENERGY DEVELOPMENT

By Philip M. Lustre Jr.

HAD the government followed consistently its energy policies and programs, the Philippines would not have any looming energy crisis. It would secure its energy requirements. But it has been flip-flopping on its energy policies.

Overall, the state policy has been to develop as nontraditional sources the so-called “renewable” like sunlight, wind, rain, tides and geothermal heat. The intention is to wean the country away from the traditional sources, largely the fossil-based fuels.

But this is not done overnight. Less polluting fossil-based fuel like liquefied natural gas could be the bridge between traditional and nontraditional sources of energy. This is an area, where the government does not seem attuned.

Consider the following:

Recently, President Rodrigo Duterte inaugurated the 420-megawatt (MW) Pagbilao power plant, a coal-fired facility seeking to boost energy supply in the Luzon grid. Duterte lauded the $976-million power facility which, saying the steady power supply would enhance the country’s business climate. It would generate billions of pesos in revenues for the national and local governments.

The project proponent, Pagbilao Energy Corp. (PEC), is a joint venture between TPEC Holdings Corp. and Therma Power Inc., both subsidiaries of Team Energy and Aboitiz Power, respectively. Although the plant is fueled by coal, which environmentalists consider as harmful, it is nonetheless “cost effective and complies with environmental standards.” It is claimed the plant has a flue-gas desulfurizer to ensure compliance with environmental regulations.

The government has given the green light to the coal-based energy plant even though the global clamor is to develop environment-friendly energy sources that leave little or no carbon footprint. In fairness, the Duterte government has not turned its back on nontraditional sources such as wind, solar, and geothermal, among others.

In August last year, the President inaugurated the Solar Philippines factory in Santo Tomas, Batangas. This would ensure availability of affordable solar panels to average Filipino consumers. It would place the Philippines as a major player in the global renewable energy revolution.

Solar panels have been getting more competitive in recent years to the detriment of traditional sources of energy. The cost issue is getting resolved, as the solar panel costs have fallen 90 percent over the last decade, and 50 percent over the last three years alone. It encourages big countries like China and India to get the majority of their new power requirements from the renewables.

Because of the new economics of solar prices, a number of soon-to-be constructed coal plants worldwide faces cancellation. They are not just commercially viable; they are also causing pollution to the environment. The two faces of Philippine energy development policy appear obvious on the two projects.

These are not all.

The energy policy environment has become more complicated by the flip-flopping policy stance on liquefied natural gas (LNG). The Duterte administration does not seem to understand how it would take LNG as a fuel alternative, or bridge between the traditional and nontraditional energy sources.

Let’s discuss the issue. The Liquified Natural Gas (LNG) Hub Receiving Terminal, a 650MW combined cycle gas fired power plant, is another energy project, which is in the pipeline in Pagbilao, Quezon. Australian-based Energy World Corp. (EWC) said its liquefied natural gas terminal, now 90 percent complete, is to become a hub of LNG distribution nationwide once it becomes fully operational.

A disclosure report to the Australian Securities Exchange, EWC said the facility could handle yearly three million metric tons of LNG. Its first tank could support 3,000 megawatts of gas-fired power plants. “This will support our adjacent 650MW combined cycle gas fired power plant, and provide expansion options for both EWC and its third-party gas clients,” EWC said explained.

Natural gas is called “clean” because of its ability to emit 50 percent less carbon dioxide than coal when burning. It is seen as the bridge fuel until the zero-carbon-producing renewables can take over. Natural gas is also a fossil fuel, but cleaner and more efficient than other traditional fuels. It produces less pollution and greenhouse gases than its counterparts, according to the Center for Liquefied Natural Gas.

The terminal’s deep water jetty could handle all sizes of LNG vessels. EWC received an approval from the Energy Regulatory Commission (ERC) to develop a point-to-point transmission facility to connect its 650-MW combined cycle gas plant to the power grid. The ERC has allowed EWC to develop the P694-million transmission facility to connect its power plant to the New Pagbilao Station of the National Grid Corp. of the Philippines.

The LNG Hub Terminal and the Power Station have both reached advanced stage of construction. The LNG Hub Terminal, the first to be constructed here, can process three million tons of LNG every year to generate up to 3,000MW of power. The second tank, which is also under construction, could provide up to 6,000MW of power.

The project means over $750 million of direct investments; it has created over 800 direct jobs during the construction period. It signifies that the country will now be able to gain access to clean and affordable fuel for power generation and further develop its gas infrastructure.

It can commission the first 200MW unit of its gas-fired power station in six months after the drawdown of funds from the firm’s bank lenders - the Development Bank of the Philippines, Land Bank of the Philippines and Asia United Bank, with the 400MW and 650MW at three-month intervals thereafter.

But it appears the Australian-based Energy World Corp.’s (EWC) Liquefied Natural Gas (LNG) Hub Receiving Terminal project in Pagbilao, Quezon, has either been trapped in a bureaucratic quagmire, or stymied by a group that may be inimically affected by its implementation.

Although the project has been reported to have been 90 percent, it has grounded to a halt to the chagrin and disbelief of its stakeholders. But that is another story.

Next topic: The bureaucratic quagmire

LENI ROBREDO'S GAMBIT

By Philip M. Lustre Jr.

VICE President Leni Robredo's announcement that she would assume the mantle of leadership of the disparate opposition forces in the country was not a spur-of-the-moment initiative to project her relevance in the political spectrum.

It was part of a well- conceived, carefully laid down plan to present herself as the democratic alternative, even as President Rodrigo Duterte continues to take moves to plunge the nation into another political experiment in authoritarianism.

She has several audience on this initiative: first, the country's democratic forces, which continue to oppose Duterte's counterrevolution to the 1986 EDSA People Power Revolution; and second, the international community, which has been strongly opposing the spate of extrajudicial killings (EJKs) and other human rights violations under his government.

The men and women in uniform in the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), constitute the third audience. They have the monopoly of arms and could be decisive to stem the tide of authoritarianism.

Although perceived as the laid back leader from the laid back Naga City, the Vice President was reluctant to lead the democratic forces, until it has become clear that Duterte would do every means - fair or foul - to install dictatorship in the country.

Moreover, it has been made clear that Duterte would continue his appeasement policy even to the point of surrendering the country's territories in the contested West Philippine Sea to China. The Vice President has been strongly against the pro-China stance of the Duterte government.

Two developments could have propelled the Vice President's decision to go all out against Duterte. The first is the multinational initiative to neutralize and stop finally China's inroads in the South China Sea.

The multinational forces led by the United States and composed of Japan, France, Great Britain, and South Korea, have assumed a more visible and tougher presence in South China, indicating they would enforce the 2012 decision of the United Nations Permanent Arbitral Commission rejecting China's claim over the contested waters. They have sent their naval warships to counter China's naval presence in the area.

The Vice President could have sense that the U.S.-led multinational forces are not abandoning South China Sea; they are willing to safeguard the vital sea lanes to ensure a free flow of commerce. About $5 trillion worth of commerce passes through the South China Sea. Hence, the country or group of nations that controls South China Sea controls world trade.

The Vice President has understood that Philippine politics could be somehow dovetailed to the strategic objectives of the U.S.-led multinational coalition in the South China Sea. When she sensed that the multinational coalition would not leave South China Sea, she knew that China would have very limited way to prop up the Duterte government. The Duterte government is lameduck to say the least.

The Vice President's decision to lead the opposition and present a democratic alternative is also an impetus for the AFP and PNP to ignore Duterte's overtures for the two institutions to join him in his anti-democratic initiatives. The 32 years of restored democracy could have injected democratic values and ideals into the two institutions.

Her move would allow the leaders of the two institutions to pause and take notice of the democatic alternative. In fact, several AFP leaders have been pushing her and the democratic forces to show a critical mass of adherents to strengthen opposition to the Duterte government. Any withdrawal of their support to the Duterte government is largely a function of a strong democratic alternative. 

Very recently, the AFP leadership has taken a strong position against the removal of the AFP as "protector of the people" provision in the new constitution, which Duterte's minions have conceived to replace the 1987 Constitution.

Of course, the democratic forces composed of the alphabet soup of civil society organizations that oppose the authoritarian tendencies of the current government have been asking the Vice President to lead them. She could not fail them.