The Philippines is falling behind its Southeast Asian neighbors in terms of energy independence as the country continues to rely heavily on oil and gas imports while energy demand continues to increase.
This was the dominant sentiment of energy leaders from the Philippines and other Southeast Asian countries who gathered for an in-depth panel session called “Energy Independence: Indigenous is Energy Security” during this year’s Powertrends at the SMX Convention Center, Manila.
The energy experts who participated in the panel discussion were Dr. Arthur Saldivar-Sali, author of “Black Gold: The Search for Oil to Power a Nation” and former PNOC Chief Geologist; Anton Safronov, Chief Commercial Officer of Parami Energy (Myanmar); Atty. Kiril Caral, Managing Counsel of Shell Philippines B.V.; Ramon Clarete, Project Director of Gas Policy Development Project; Jeoffrey Caranto, President of National Geothermal Association of the Philippines; and Rob Fisher, Development Manager of Tamarind Resources (Malaysia).
According to Dr. Sali, the Philippines was on its way to energy independence during the Marcos era, when the government-owned Philippine National Oil Company was established.
Dr. Sali, who served as PNOC Chief Geologist, Technical Director of the Petroleum Board, and Deputy Director of the Bureau of Energy Department at the time, shared that the PNOC was “drilling 10 exploration wells a year and had one discovery every year from 1974 to 1986.” Their initiatives also pushed the Philippines to rank second in geothermal power just after the United States.
For 12 years, the efforts of the Ministry of Energy and the PNOC reduced the dependence of the country to global imports. At the time, the country’s energy supply went from zero percent indigenous to 50 percent indigenous. In other words, half of our energy requirements then were already supplied by indigenous energy sources.
“We came from very active to almost none. And that is the major reason why we are at the bottom of the South East Asian energy picture,” he added.
According to Dr. Sali, “The abolition of the Ministry of Energy and the removal of PNOC’s status as a government-owned private corporation (GOCC) resulted in the stoppage of all energy projects in the ensuing post-Marcos years.” This drove many of Dr. Sali’s colleagues to leave the government and the Philippines and be hired to manage the energy arms of foreign governments and private firms in New Zealand,
Australia, Japan, Indonesia, Singapore, and other countries.
The Power of Natural Gas Myanmar-based Russian energy expert and CCO of Parami Energy Anton Safronov looked into the high price of electricity in the country. Recalling his time working for French petroleum firm Total, Safronov said this is the reason why the company chose to look into the Philippines to invest in. He said what we are paying per kilowatt-hour is “almost the same amount of price that Singaporeans pay.”
Safronov believes that the Philippines’ long-time partnership with Shell is an opportunity to learn from one of the best technological leaders in natural gas. He hopes that the country can take this further to contribute to its self-sustaining production, so the Filipinos will ultimately be able to pay a low price per kilowatt-hour of electricity.
One of these partnerships is the groundbreaking Malampaya Deep Water Gas-to-Power Project that was established in 2001. Through a collaboration with the Philippine government, Chevron, and Shell Philippines Exploration BV (SPEX), this natural gas exploration project has supplied power to 40% of Luzon or 30% of the whole Philippines.
Atty Caral, for his part, declared that the success of natural gas exploration in the country has become the solution to the intermittent nature of renewable energy, as natural gas is considered not only indigenous but stable. “The Malampaya project was a huge success,”
Atty. Caral stressed. “Malampaya’s help in meeting a substantial part of the country’s energy demands merits new explorations in this area,” he added.
Atty. Caral also said that, to elevate the Philippines’ energy independence, the Department of Energy should continue pushing for more onshore and offshore explorations in the Philippines. “We need to have more Malampayas. We need to be able to replicate the success that Malampaya has achieved,” Atty. Caral stressed.
In line with this, Atty. Caral also mentioned the need to remove legal uncertainties and provide physical stability for investors, which are critical in times of low oil prices. “It is important for the government to strike the right balance between getting its rightful share but also making it attractive and competitive compared to other countries.”
The Needed Push for Energy Independence Cognizant of the country’s challenges in terms of energy supply, a group of energy advocates have banded together to form the Philippine Energy Independence Council (PEIC) whose main goal is to move the government and the private sector to explore new indigenous, renewable, and cleaner energy options for the country.
PEIC is composed of like-minded individuals who all believe that the country should no longer rely on global imports and tap more and cleaner local energy sources. The council aims to initiate and sustain public discourses on energy reserve issues with the specific goal of pushing for the eventual energy independence of the Philippines.
As Ramon Clarete, Project Director of Gas Policy Development Project (GPDP), said, “We cannot afford to not do anything. We don’t want to go back to the 90s where we were not ready to cope with the energy demands of the country.”
