What is the Philippine government doing about it . . . really?
The UK Government’s target to 100% clean electricity by 2035 (defined as electricity production that does not involve burning fossil fuels) is just another recent example of the massive global shift to renewable energy in an effort to address the existential threat of climate change. Noteworthy is the overwhelming support of the Britsh public and leading British companies.
The EU aims to be climate-neutral by 2050 – an economy with net-zero greenhouse gas emissions. This objective is at the heart of the European Green Deal and in line with the EU’s commitment to global climate action under the Paris Agreement.
President Biden has set a new target for the United States to achieve a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030, which is in line with the President’s existing goals to create a carbon pollution-free power sector by 2035 and net zero emissions economy by no later than 2050.
Even China announced its intention to become carbon neutral before 2060. Corollary to this is President Xi Jinping’s announcement in September 2021 at the UN General Assembly that China “will not build new coal-fired power projects abroad.”
In April 2021, the Philippine government revised its target to cut greenhouse gas emissions to a 75% reduction by 2030 under its commitment to the Paris Agreement on Climate Change, up from a target of 70% set four years ago. Perhaps the most concrete example of this commitment is the Duterte administration’s pronouncement of a moratorium on new coal power plant projects and the alleged fast-tracking of renewable power projects. That said, what is the Philippine government really doing to cut greenhouse gas emissions?
Diametrically opposed to the above April 2021 announcement of the Philippine government, in March 2021, the Department of Energy (DOE) promoted the Philippines as a Liquefied Natural Gas (LNG) hub that will ultimately serve not only the country’s energy needs, but also that of the Southeast Asian region as envisioned by Secretary Alfonso G. Cusi.
During the 2nd LNG and Clean Energy Investment Summit in the Philippines, DOE Assistant Secretary Pulido, who supervises the Natural Gas Management Division of the Oil Industry Management Bureau (NGMD-OIMB), presented an overview of the burgeoning LNG investments in the Philippines.
He explained that the Philippine natural gas sector essentially is all about the Malampaya Gas Power Project in the West Philippine Sea, which is being run by a consortium composed of Shell, Chevron, and the Philippine National Oil Company-Exploration Corporation (PNOC-EC). [As of May 2021, Udenna Corporation of Duterte crony, Dennis Uy, is buying Shell's 45% stake in the Malampaya gas field, bringing its operating interest to 90%. Udenna purchased Chevron’s 45% stake in the Malampaya gas field in 2019.]
He pointed out that natural gas currently provides for 3,200 megawatts of electricity and accounts for 21.1% in the 2019 Gross Generation of the country. But in Luzon alone, natural gas’ contribution last year (2020) was at 29.3%.
“With Malampaya’s depletion estimated to occur in the next few years, there is an urgent need to attract more investments in the downstream LNG industry,” Assistant Secretary Pulido stressed.
As such, the DOE has approved the permits of five proposed LNG Regasification Terminal Projects targeted for operation from 2022 to 2025. These include three proponents, namely Excelerate Energy L.P., Batangas Clean Energy Inc., and Atlantic Gulf & Pacific Company of Manila, Inc. which were issued with a Notice to Proceed (NTP); and two (2) proponents, namely FGEN LNG Corporation and Energy World Gas Operations Philippines Inc. both issued with Permit to Construct.
Broadly speaking, the bulk of greenhouse gases are emitted by five (5) sectors; namely,
power,
transportation,
industry,
buildings and
agriculture.
Further, the power and transportation sectors typically constitute over 50% of the emitted greenhouse gases. And because wind and solar power generation technologies are already available at scale, power would be the quickest sector to decarbonize, thereby representing the proverbial “low-hanging fruit.”
In short, the Philippines has the opportunity to “decarbonize” over 18,000 MW (coal, gas and oil) or over 70% of the power sector,” including 3,453 MW of gas generating capacity, over the course of the next two decades; yet, the government is going against (a) the overwhelming global tide of decarbonization and (b) its own target to cut greenhouse gas emissions, by encouraging the establishment of a currently non-existent LNG sector that (a) irresponsibly prolongs the operations of gas plants (which are mostly at the end of their life-cycle), (b) generates expensive electricity (using imported gas/LNG) and (c) emits greenhouse gases.
The Philippine government has declared a moratorium on new coal power projects. This should be a permanent moratorium on new coal power projects–period. To be fair to the private sector proponents that have already invested in existing coal power plants, these facilities should be permitted to complete their life-cycle of no more than 25 years (from start of commercial operations), then shut-down for good. Likewise, the private sector proponents that have already invested in existing gas power plants and, more recently, in Floating Storage and Regasification Units or FSRU (which are interim facilities to a more substantial land-based LNG storage and regassification plant), should also be permitted to complete their respective life-cycles (say 25 years for the gas plants and 10 years for the FSRU), then shut-down for good. Finally, a similar 10-year transition should apply to oil-based power plants. These gradual and fair transitions to shut-down coal, gas and oil-based power plants should give way to renewable energy power plants (mainly solar, wind and corresponding battery and non-battery energy storage facilities) all over the country and decarbonize the Philippine power sector by 2050. It is not only the responsible thing to do as a member of the global community, the same would result in (a) the tremendous growth of a local and sustainable renewable energy sector and (b) an independent and secure Philippine power sector that would also be insulated from the vagaries of the pricing of international energy commodities (i.e., coal, oil and gas), which have a direct and substantial impact on the price of electricity paid by consumers.
This insulation from international energy commodities would be strategically advantageous to the Philippine power sector (and ultimately the Philippine consumer) in light of the fact that the age of fossil-fuel abundance is dead. Because of the overwhelming pressures to decarbonize all over the world, investments in oil-wells, natural gas hubs and coal mines are slumping, resulting in the soaring prices of these commodities. The longer the prices stay high, the more likely the transition to clean energy ultimately buries the fossil-fuel industry. The writing is on the wall: decarbonize by transitioning to clean energy or suffer the consequence of soaring prices of fossil-fuels.
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| Decarbonization . . . dwindling investments in fossil fuels and soaring prices of the same . . . more decarbonization . . . and so on |
What about the alleged fast-tracking of renewable power projects? The reality is quite the opposite as articulated in the following article entitled “Moratorium on land conversion for solar projects sought.” The Department of Agrarian Reform or DAR, which has outlived its usefulness, is holding numerous solar farm projects hostage in the guise of the tired mantra of “social justice”--in reality, an established criminal syndicate within the DAR that charges the developer an under-the-table “DAR conversion fee per square meter” even in the context of a legitimate DAR Conversion or DAR Exemption Clearance. Similarly, rural Local Government Units or LGUs, in which solar farms are typically located in light of the relatively large tracts of agricultural land required for such facilities, usually have little appreciation for the strategic importance of solar farms in the country–other than an opportunity to extort bribes from the developers. Hence, the national government should, once and for all, defang the DAR and LGUs, particularly with respect to the development of renewable energy projects–so that these projects of strategic importance are finally permitted in a legal and timely manner to support the environmentally-responsible and sustainable economic development of the country.
What about the decarbonization of the Philippine transportation sector? That’s a topic for another discussion--read Part 2.
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