By:
Dennis A. Uy - 05:10 AM August 23, 2019
Liquefied natural gas,
or LNG is an energy source that promises to play a large and important role in
evolving the energy landscape of the Philippines, for a number of key reasons.
Current geopolitical
developments have created an unpredictable oil market, which urgently
illustrates the dangers of being too dependent on conventional fuels. These are
traditionally sourced from the Middle East, and in instances when the supply
chain is cut off or made difficult due to geopolitical or other reasons, we are
left with inadequate supply and at the mercy of skyrocketing prices.
Natural gas, meanwhile,
is abundant in many countries and regions across the globe—in the United
States, Russia, Africa, Oceania and Southeast Asia. Having multiple sources
allows us the security of enjoying a steady supply, even if one or some should
become unavailable. Such sustainability has drawn many nations to the appeal of
LNG.
Locally, our very own
pioneering Malampaya gas field in Palawan has been powering our country for
more than two decades now and has brought in billions of revenues for our
government. However, supply from the Malampaya gas field is projected to
decline as the gas field further matures, with some estimates suggesting it
will start as early as 2022 or the latest by 2024. Proposals have been made to
extend the current consortium’s contract to allow it to reinvest and arrest the
anticipated decline in production, but as of now, it is slated to end by 2024.
Hence, it is time to
set our sights on the future and prepare for generations of Filipinos to
continue enjoying the benefits of using LNG as a fuel source.
Climate change is
another important development that is inspiring the global pivot toward cleaner
sources of energy. In the Philippines, coal currently comprises over half of
the country’s energy mix. As we introduce more renewable sources such as solar
and wind in the equation, LNG power plants that are relatively more efficient,
flexible and quick-starting provide much-needed stability and responsiveness to
our power grid.
LNG is even versatile
enough to serve many needs. Its cleaner-burning nature is useful not only for
power plants but even for vehicles. Many countries abroad are now reaping the benefits
of natural gas-fed cars, which contribute up to 34 percent fewer emissions
compared to diesel. When brought back to its gaseous state, natural gas can be
used as fuel for household cooking and even air-conditioning. In temperate
countries, natural gas is also widely used for home heating.
Finally, efficiency in
terms of costs and operations is another attractive proposition that LNG
presents. It is a game-changer in terms of the efficiency of transport. It is
odorless and colorless, as well as nontoxic and noncorrosive. The liquefaction
process reduces natural gas to as much as 1/600th of its original volume, and
almost half the density of water. Just imagine the possibilities of being able
to provide reliable and continuous power supply to the whole archipelago.
Natural gas is also the
prevalent fuel used in the manufacturing sector, which is responsible for
producing the items we depend on in our daily lives—from metal and paper to
glass and clothing. It is even used as raw material in everything from paints
and dyes to plastics. Across continents, LNG has proven to be a viable energy
source in varying industries.
The message is clear
that we need to recalibrate the energy mix of our country. The goal is for a
more balanced energy mix—one that could address our demands, while taking into
account the capacity of the global supply chain. We are far from achieving such
balance, but we could definitely make substantial changes now to move us closer
to a more sustainable energy future.
Dennis A. Uy is president
and chief executive of publicly listed Phoenix Petroleum.
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