Pending in Congress today is the proposed bill on the development and regulation of the Philippine midstream natural gas industry.
Strengthening the regulatory framework for the natural gas industry and other critical segments of the whole power sector is always a welcome move. In fact, a review of the regulatory framework should go hand in hand with a review of the 20-year-old Electric Power Industry Reform Act law, which has failed to deliver to the consuming public cheap or affordable electricity and efficient service for all. When Epira was enacted, neo-liberal economists proclaimed Epira as a “milestone” in power reform. Today, with Philippine electricity cost one of the highest in the world, majority look at Epira as a “millstone” hanging around the collective neck of the Filipino people.
But back to the natural gas issue. We would like to express our reservation to the “development” side of the proposed midstream natural gas industry. It appears that government energy planners and consultants are envisioning a bigger role for the midstream natural gas industry, with the proposal to incentivize the building of large terminals and distribution infrastructures. With the Malampaya power project nearing exhaustion (around 2024-2025) and with the alternative “mineable” seabed gas fields requiring expensive investments, the proposal to develop these terminals and distribution infrastructures can only mean one thing: increased importation of natural gas. This has serious implications on the country’s trade and economic position and commitment to the Paris Agreement of 2015 to reduce Philippine emission of GHG.
As it is, the Philippine power sector is heavily dependent on imports —coal, oil and gas. They constitute almost 10 percent a year of the total Philippine imports. In numerous studies on climate change, these fuels are the biggest contributors to global warming because they are carbon emitters.
And yet, ironically, studies of the US-based Institute for Economics and Financial Analysis show that the Philippines is in a very good position to be energy resilient and self-sufficient within a few years, if it intensifies the further development of clean sources of energy—hydro, geothermal, solar and wind. The Institute is even very definite: Philippine islands, especially those in the Visayas, can enjoy cheaper and more reliable electricity supply if the electric cooperatives source their power from the renewables instead of getting them from the expensive diesel-run power plants, which, incidentally and ironically, enjoy subsidies from the government.
Such a green shift will help the country fulfil its commitment to the global campaign against climate change. At the same time, the green shift will create more jobs and wealth at home.
Now back again to the issue of natural gas. Against the foregoing, the Climate Action Tracker in Berlin is puzzled. In their November 27, 2020 posting, analysts of the Tracker wrote on the Philippine situation as follows:
“Recent plans to expand the role of gas in the system building terminals to import natural gas do not contribute to the country’s energy independence and would lock in large-scale fossil fuel infrastructure. This would become a barrier to moving to zero emissions power generation.”
The argument that natural gas is cleaner compared to coal and oil is, of course, true. But it does not mean that natural gas is not an emitter. It produces methane, which also contributes to the phenomenon of global warming. Yes, it is less dirty but nonetheless, it is also dirty.
The point is that we are at a critical conjuncture in history: on one hand, the world wants us to be part of the global solution to the life-threatening phenomenon of global warming, and on the other, nature itself has bestowed on the Philippines renewable resources which can make the country resilient and self-sufficient energy-wise. Moreover, the technology of producing hydro, geothermal, solar and even wind is now fully accessible to the country at a cost lower compared to the use of imported and GHG-producing coal, oil and gas.
Hence, the challenge to the policy- makers, both in the executive and legislative, is to give utmost attention and support to a green energy development program. Yes, regulate the operations of those involved in the midstream natural gas industry and other sub-sectors of the power sector. But no, do not incentivize the development of terminals and infrastructures that will encourage the country’s dependence on imported natural gas, oil and coal. Build more and better jobs at home by going green energy.