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PBBM signs law promoting natural gas development

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President Ferdinand Marcos Jr. has signed into law Republic Act No. 12120 aimed at promoting the development of the country’s natural gas industry.

The legislation consolidates existing laws to establish a comprehensive framework for the exploration, development, and utilization of natural gas resources in the country.

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The new law, which was signed on January 8, seeks to enhance energy security, attract investments, and ensure environmental sustainability by streamlining regulatory processes and providing incentives for stakeholders in the natural gas sector.

It also emphasizes the importance of adhering to international safety and environmental standards in all industry operations.

The Department of Energy will oversee the implementation, including the regulation of the aggregation process—combining indigenous and imported natural gas for domestic and international use.

The law also encourages converting existing fossil-fuel facilities to natural gas, where feasible.

Republic Act No. 12120 is set to take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.

The enactment of this law underscores the government’s commitment to diversifying the country’s energy sources and promoting sustainable economic growth.

Principally authored and sponsored by Senate Energy Committee chairperson Senator Pia Cayetano, the Philippine Natural Gas Industry Development Act aims to enhance energy security for future generations by creating an investor-friendly environment that encourages the exploration of indigenous natural gas resources.

The new law positions natural gas as a transition fuel toward renewable energy while addressing the country’s long-term power supply challenges. It also includes provisions ensuring transparency and fair pricing for consumers, effectively balancing energy security and consumer welfare.

Citing the stability and generally lower prices of indigenous natural gas compared to the volatility of imported sources, Cayetano emphasized that securing a steadier, more reliable local supply will reduce our vulnerability to global disruptions and address future energy demands.

“With more than half of our energy requirements being imported, we are clearly vulnerable to geopolitical conflicts,” the senator said.

“Also based on the Energy Department’s 2022 Primary Energy Mix, 63.2% of our energy comes from oil and coal. As the country moves towards renewable energy sources, we need to find additional baseload resources, aside from oil and coal, which are less harmful to the environment.”

“That is the question we all must face right now: how important is energy security to us,” she added, noting the decline in natural gas exploration activities over the past decades – from more than 150 wells drilled in the 1970s to zero since 2019 – while neighboring countries like Indonesia continue to significantly produce more indigenous natural gas.

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