The New Gwei Lo

Gwei (鬼) means "ghost". A lo (佬) is a regular guy, a chap or a bloke.  The term is a reference to skin color, as white skin is associated with ghosts. The term is sometimes translated into English as foreign devil. The term arose in the 16th century when European sailors appeared in southern China as they were associated with barbarians. Historically, Chinese people had the image of its borders continuously breached by "uncivilized tribes". (Wikipedia)

Fast forward to the present. At a time when humankind is supposed to be more evolved and only the lowest of the low-life persist in imposing themselves on others through the barrel of a gun, a new gwei lo has emerged on the world stage, pushing its weight around like a school yard bully preying on the most vulnerable that have no means or wherewithal to fight back.

No, I'm not talking about ISIS and their unspeakable acts of barbarism. At least ISIS has no pretensions. What you see is what you get--a pathetic clique of Islamic misfits with a gargantuan persecution complex wielding guns and rocket-propelled grenades . . . because they can't function in the real world.

I'm talking about the People's Republic of China, whose recent meteoric rise in economic status has led to the resurgence of a highly presumptuous and downright preposterous territorial claim, known as the "nine-dotted line" and illustrated in the following map.

China's 2009 Nine-Dotted Line Map Submission to the United Nations

The above map is the second page of a two-page document. The first page is a text addressed to the UN Secretary General, stating China's sovereignty claim to the "islands in the South China Sea and the adjacent waters". Click the following link to view the two-page document: China's 2009 Nine-Dotted Line Map Submission to the United Nations. (Wikipedia)

The nine-dotted line was originally an eleven-dotted-line first shown on a map published by the Kuomintang government of the Republic of China (1912–1949) in December 1947 to justify its claims in the South China Sea. After the Communist Party of China took over mainland China and formed the People's Republic of China in 1949, the line was adopted and revised to nine as endorsed by Zhou Enlai. (Wikipedia) In short, it is what it is because China says so. British journalist, Bill Hayton, describes it as "collective hallucination".

I suppose Greece could submit to the UN the following territorial map at the height of the Greek Empire and claim the said territory today.

Italy could also submit to the UN the following territorial map at the height of the Roman Empire and claim the said territory today.

Heck, Mongolia could submit to the UN the following territorial map at the height of the Mongol Empire and claim the said territory today.

Of course, Greece, Italy and Mongolia wouldn't bother with such antics, considered unacceptable (indeed uncivilized) by today's international conventions. In contrast, China, the new gwei lo (鬼佬), is unabashedly brandishing its brand of neo-barbarism by fist-pounding on the nine-dotted line, particularly towards certain ASEAN countries (not the least of which is the Philippines) that have legitimate claims under the United Nations Convention on the Law of the Sea (UNCLOS, to which China is a signatory) but are virtually defenseless against the military might of China.

The above map provides a snapshot of the South China Sea Dispute. Even in the absence of any explanation, one can objectively decipher that China's nine-dotted line claim is overreaching and way beyond the realm of reason, equity and good faith. For a brief discussion on the matter, click on the following link: South China Sea Dispute.


Adding insult to injury, China, like the shameless gwei lo bully that it is, has gone on the offensive, repeatedly broadcasting its baseless and illegal claims like a Communist-party slogan on a broken record while aggressively reclaiming environmentally sensitive reefs in the absence of any meaningful military opposition from the countries that have sovereign rights over the area. For more information, click on the following link: Asia Maritime Transparency Initiative.

This map shows the major outposts and facilities in the Spratly Islands. The four operational airfields at Swallow Reef (Malaysia), Itu Aba (Taiwan), Thitu Island (Philippines) and Spratly Island (Vietnam) are indicated. China is in the process of constructing a fifth airstrip on the reclaimed land atop Fiery Cross reef. The yellow dots indicate reefs that China has reclaimed or begun to reclaim: Fiery Cross, Cuarteron, Hughes, Johnson South, Mischief, Eldad, Gaven and Subi. It is notable that all eight of these reclaimed reefs fall within the claims of the Philippines. (Asia Maritime Transparency Initiative)

In a nutshell, China's offensive, particularly against the Philippines, can only be described as the mighty gwei lo's territorial rape and pillage of the defenseless (like a child preyed upon, traumatized and destroyed by a pedophile), as the rest of the world observes with indifference for fear of disrupting their economic ties with the all-powerful nouveau riche gwei lo.

Finally, just to drive the point home that China can have its way with the Philippines any time of day, China's Coast Guard vessels which now maintain a presence in the Spratly Islands take every opportunity to harass Filipino fishermen and military personnel within the Philippines' Exclusive Economic Zone. Imagine, the temerity of this gwei lo invader to intimidate Filipinos within the sovereign zone of the Philippines, and then to denounce the Philippines as a "pathetic cry baby" for filing a case against China with the United Nations--the only civilized course of action under international law and unfortunately the only course of action of a militarily inept country like the Philippines--read PMA stands for Philippine Magnanakaw Academy.

Let's face it. The chips are stacked against the Philippines (the term is monumentally screwed), particularly as China is wasting no time in building a massive and permanent military presence within Philippine areas in the South China Sea, in the guise of fulfilling "international responsibilities and expectations of the international community". In fact, the South China Sea is now governed by the simple rules of the new gwei lo goons in town: (1)  "Political power grows out of the barrel of a gun." (Mao Zedong) and (2) "He who has the gold makes the rules." In the end, China will have military control over one of the most important shipping lanes in the world, threaten massive volumes of regional and global trade and exploit abundant natural resources it does not rightfully own. Fair warning to all the apathetic nations out there . . . Today, the Philippines is first in line to be force-fed the rotten staple of the new Sinocentric Hegemonic World Order. Tomorrow, it's the turn of the rest of the world.

Postscript

What to do when a militarily inept country like the Philippines or, for that matter, any ASEAN country cannot confront China militarily and, therefore, cannot secure their own territorial waters from the likes of the new gwei lo?

The private sector throughout ASEAN should organize, train and equip a band of well-paid special forces that will raid the reclamation activities of China within their respective UNCLOS 200 nautical mile Exclusive Economic Zones. Each mission objective would be idiot proof: OBLITERATE THE GWEI LO . . . then withdraw, Vietcong guerrilla style--an appropriate response that might actually be understood by the barbaric gwei lo. Because it's not sanctioned by any of the ASEAN governments, which individually (or even collectively) cannot possibly engage China in a frontal military campaign (and expect to be victorious), then China cannot declare war on any of the ASEAN countries. These raids would be sustained indefinitely until China complies with UNCLOS. A violent tit for every gwei lo tat.

Click on the following links to view the Philippine government documentaries on the South China Sea dispute, the first of which was aired on June 12, 2015 (Philippine Independence Day):

Episode 1
Episode 2
Episode 3

Mindoro’s Role in the Burgeoning Philippine LNG Sector

Introduction

The above Figure 1 illustrates the existing infrastructure of the Malampaya Deep Water Gas-to-Power Project (the First Phase, if you will, of the Philippine Gas-to-Power Sector), which is one of the largest and most significant industrial endeavors in the Philippines to date. It is comprised of the:

(a)  proven gas reserves in Camago and Malampaya, Northern Palawan;

(b)  offshore gas platform, 504 kilometers subsea pipeline and onshore gas plant operated by Shell; and

(c)  three (3) combined-cycle gas turbine (CCGT) plants in Batangas—the 1,000 MW Sta. Rita power station, the 500 MW San Lorenzo power station and the 1,200 MW Ilijan power station—supplied with processed natural gas to generate a combined 2,700 MW of power for Luzon.

Unless additional and substantial proven natural gas reserves are discovered in the vicinity of Northern Palawan and/or Mindoro, the remaining proven natural gas reserves fuelling the three (3) CCGT plants in Batangas will be depleted in less than ten (10) years (before 2025)—even though the said downstream power stations could still operate efficiently for another twenty (20) years. Hence, it is only a matter of time before natural gas is imported into the Philippines to keep San Lorenzo, Santa Rita and Ilijan running. This can be done through a Liquified Natural Gas (LNG) receiving and regasification plant to receive imported natural gas from refrigerated LNG vessels, regasifying the LNG (from liquid to gas) and delivering the gas to the Batangas power stations through the existing pipeline infrastructure.

That said, keeping the three (3) CCGT plants in Batangas running post 2025 would fulfil only the first and most obvious objective of the LNG complex. Less apparent but far more strategic for all stakeholders is the need for the LNG complex to expand with ease to address the growing electricity demand in Luzon. This would include the development of CCGT plants in efficient increments of 500 MW adjacent to or co-located within the LNG complex.

The master plan of this Second Phase of the Philippine Gas-to-Power Sector utilizing imported LNG (the First Phase being the Malampaya Deep Water Gas-to-Power Project) will require an expansive area, which is no longer readily available in Batangas Bay or in the vicinity of the Shell Tabangao Refinery due to the industrial congestion in the area.

The LNG Complex Site—Mansalay, Oriental Mindoro

The solution is a greenfield site adjacent to Mansalay Bay, Oriental Mindoro, which features:

(a)  a naturally safe and deep harbour approximately twenty (20) kilometers west of the existing subsea pipeline that currently delivers gas to the Batangas power stations (and can continue to do so after 2025 in the context of the LNG Complex);

(b)  plenty of land for the LNG + CCGT Complex and future expansions;

(c)  the Batangas-Mindoro Interconnection Project (BMIP), currently under review and pending approval of the Energy Regulatory Commission (ERC), which will enable CCGT plants in Mansalay, Oriental Mindoro to “export” power to Luzon;

(d)  close proximity to major tourist attractions like Puerto Galera and Boracay (including a major eco-tourism complex under development in Mansalay);

(e)  a local airfield (Wasig) for light aircrafts and only 1.5 hour from San Jose Airport, Occidental Mindoro;

(f)   a highly receptive local (municipal and provincial) government in attracting strategic energy infrastructure as evidenced by the thrust of the Mindoro Energy City (www.mindoroenergycity.com/) and the proposed measure recently filed in the House of Representatives by Oriental Mindoro Representative Reynaldo Umali that seeks to create a special economic zone and free port in Mansalay, Oriental Mindoro.

When the said measure becomes law, the government can offer the most compelling package of fiscal and non-fiscal incentives to attract Shell, among other major energy investors, to establish the first and definitive LNG/CCGT Complex in the Philippines (in Mansalay, Oriental Mindoro).

 The LNG Complex Site—Mansalay, Oriental Mindoro

Other Advantages of Mansalay

Reduces Cost of Delivered LNG. Because an LNG complex thrives on economy of scale, the additional co-located CCGT plants adjacent to the LNG infrastructure in Mansalay (versus a stand-alone LNG facility in Batangas supplying gas to the Batangas power stations only) would lower the unit cost of delivered LNG into the country, which would ultimately benefit the electricity consumer.

Fulfils Mindoro’s Electrical Demand. Because the current electrical demand of the entire Island of Mindoro (approximately 50 MW) is practically a rounding error of the electrical demand of Luzon (approximately 8,800 MW), the first 500 MW CCGT plant co-located at the LNG Complex in Mansalay would (a) “export” most of its power to Luzon via the BMIP and (b) also satisfy Mindoro’s electrical demand in the foreseeable future, thereby allowing Mindoro’s economy to grow to its fullest potential—unimpeded by its inadequate and substandard electricity supply today.

Gas-to-Power to Palawan. The LNG Complex in Mansalay (versus an LNG plant in Batangas) can also deliver gas more efficiently to another CCGT plant in Culion Island (approximately 10 kilometers from the existing subsea pipeline), which could, in turn, provide clean, efficient and reliable electricity to the entire group of islands in Palawan, from the northern tip of Busuanga Island to the southern tip of Rio Tuba. Although this would require additional investments in the electrical transmission infrastructure in the Palawan region by the National Grid Corporation of the Philippines (NGCP), the same would catalyse and improve the virtually unlimited tourism potential in the region, which continues to be plagued by inadequate and substandard electricity services—a particularly ironic situation considering a significant portion of the national government’s share in the natural gas proceeds (which is ongoing and very substantial) should be allocated to energy-related projects and infrastructure for the benefit of the Palawan region.

Sunk Cost to Strategic Utilization of Subsea Pipeline. In the absence of additional and substantial proven natural gas reserves in the vicinity of Northern Palawan and/or Mindoro, an LNG plant in Batangas would practically render the entire upstream gas infrastructure, including the offshore gas platform and the 504 kilometers of subsea pipeline, a sunk cost; whereas, the LNG Complex in Mansalay would continue to utilize most of the subsea pipeline infrastructure for the strategic growth of the Philippine Gas-to-Power Sector (i.e., serving Luzon, Mindoro and the Palawan region) and the overall energy security of the country.

Complements Discovery of Future Reserves. Because the LNG Complex in Mansalay would continue to utilize most of the subsea pipeline infrastructure, then if additional and substantial proven natural gas reserves are discovered in the future in the vicinity of Northern Palawan and/or Mindoro, there is less upstream infrastructure to reactivate from a mothballed state (i.e., a significant portion continues to be used productively), thereby facilitating the use of future discoveries of gas reserves in the country.

The above Figure 2 illustrates the future or the Second Phase of the Philippine Gas-to-Power Sector, after the limited natural gas reserves in Northern Palawan have been depleted (estimated before 2025).

What to Expect

At the outset of its development, the LNG + CCGT Complex in Mansalay will be designed to service at least 3,200 MW of baseload capacity (2,700 MW in Batangas and 500 MW adjacent to the LNG facility) with plenty of room for future expansions. By the time the Complex is in commercial operations in 2025 (or sooner), the 3,200 MW of baseload capacity would constitute between 25 to 30 percent of the peak demand of Luzon, which would be reasonable in the context of the overall energy mix of the country (i.e., also utilizing coal, geothermal, hydro, wind, solar and oil for power generation).

After another ten (10) years or around 2035 when the Complex is substantially built-up (fuelling 5,200 MW of baseload capacity, including 2,700 MW in Batangas) with 500 MW x 4 CCGT power stations or 2,000 MW of baseload capacity adjacent to the LNG facilities plus another 500 MW CCGT power station at Culion Island (incrementally built-up over the same period of time to satisfy the growing electricity demand in the Palawan region), then it would be similar to the Futtsu LNG and CCGT Complex today (2015) providing Tokyo Electric Power Company (TEPCO) a baseload capacity of 5,040 MW—see picture below.

Futtsu LNG/CCGT Complex today (2015) providing TEPCO 5,040 MW of baseload capacity.

Conclusion

The natural gas reserves in Northern Palawan are expected to be depleted before 2025. Unless additional and substantial proven natural gas reserves are discovered in the vicinity of Northern Palawan and/or Mindoro, natural gas would need to be imported into the Philippines through an LNG complex to continue to fuel three (3) critical combined-cycle gas turbine (CCGT) power stations in Batangas, providing 2,700 MW of baseload capacity to the National Grid.

Due to the strategic implications of an LNG complex to the energy security of the Philippines, it should be located at a site that offers ease of expansion over the long-term, which is no longer readily available in Batangas Bay or in the vicinity of the Shell Tabangao Refinery due to the industrial congestion in the area; hence, Mansalay, Oriental Mindoro as the site of the first and definitive LNG and CCGT Complex in the Philippines that will serve the electricity consumers of Luzon, Mindoro and the Palawan region, and ensure the energy security of the country.

Postscript

As of this writing, Shell has maximized the extraction of the natural gas reserves in Camago-Malampaya to the extent that the said reserves will probably be adequate to fuel the Batangas power stations (2,700 MW of baseload capacity) until 2030. This means the government and the private sector have about 15 years to plan and execute the best LNG sector scenario for the country.