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Energy conservation takes center stage in the Philippines

(Second of 2 parts)

FOR MOST Filipinos, the virtue of frugality has been instilled since childhood. Much emphasis is placed on the importance of not wasting one's food, money and time. Now, more than ever, this virtue will be put to the ultimate test as the country faces a crisis that, if unchecked, can spell economic disaster.

Even acts as simple as turning off lights when not in use, shutting down air-conditioners earlier than usual and adopting better driving habits will do wonders in helping the country cope with the oil crisis that the whole world is now facing.

The Department of Energy has proposed several measures that will reduce the country's fuel consumption, based on different diesel price thresholds. Three scenarios have been used as basis for the measures, including the current situation with diesel retailing for an average of P29.76 a liter (at least during the time of the formulation of the measures last month), Scenario 1 with diesel at P40 a liter and Scenario 2 with diesel at P50 a liter.

Ten measures have even been recommended for accelerated implementation. These are expected to cut the country's fuel consumption by 1.34 million barrels of fuel oil equivalent or savings of close to P4.1 billion a year.

Among the measures being recommended for accelerated implementation are the setting of temperature levels of mall air-conditioning at 25 degrees, using neon signs only from 9 p.m. to 1 a.m., reducing mall hours by an hour a day, limiting the operating hours of gasoline stations, boosting the import tariff on gas-guzzlers, strictly implementing a speed limit of 80 kilometers an hour on highways, banning night golf, installing power capacitors in government buildings, conducting an energy audit of commercial and industrial establishments and enhancing the implementation of energy efficiency programs across all sectors.

Reducing mall hours by an hour a day, for example, would cut the country's fuel requirements by 49,000 barrels of fuel oil equivalent a year, resulting in a saving of P147 million. Setting the temperature level of mall air-conditioners at 25 degrees, on the other hand, will save 149,000 barrels of fuel oil equivalent or P450.8 million.

Enhancing the implementation of energy efficiency programs in the industrial, commercial and transport sectors, however, will result in the biggest savings among the 10 recommended measures at 881,000 barrels of fuel oil equivalent valued at P2.7 billion a year.

While these measures are still recommendatory in nature and are still subject for discussion and negotiation with the concerned parties, some have either gotten industry nod or are now being processed for possible implementation.

The DoE has signed a memorandum of agreement with oil firms on the shortened operating hours for their service stations. Gas stations not located in traffic-heavy thoroughfares will close from midnight to 4 a.m. to save on electricity and fuel.

Also, the DoE is working closely with Manila Electric Co. and other power distributors for the implementation of a Power Factor Improvement Program in government agencies. Under this program, power factor equipment or capacitors will be installed in government offices to boost electricity consumption efficiency.

Initial DoE estimates show that close to P34 million or 11,000 barrels of fuel oil equivalent in savings will be generated each year if the program will be adopted in 152 government agencies all over the country.

More drastic measures

But as world oil prices continue to soar, even the measures recommended for accelerated implementation do not seem to be enough for the government as the country's economic managers suggested that President Gloria Macapagal-Arroyo be given emergency powers similar to that given to President Fidel Ramos at the height of the energy crisis in the early 1990s.

Coupled with the granting of emergency powers is the proposed issuance of a law similar to Batas Pambansa 73, titled as "An Act to Further Promote Energy Conservation and for Other Purposes," which took effect from 1980 to 1985 during the tail end of the Ferdinand Marcos regime.

Taking its cue from this old law, the proposed new law will give government agencies the power to impose mandatory energy conservation measures, including fuel rationing during periods of tight supply. Other measures being considered include requiring industrial, commercial and transport firms to collect waste oil for recycling, as well as requiring the use of thermostats that will have to be set at specific temperature levels.

Also, the Department of Labor and Employment may impose staggered working hours in industrial and commercial establishments or fix the number of working days in a week for all businesses. The Department of Trade and Industry may restrict the number of hours that business and entertainment establishments may operate.

Lawmakers met this suggestion with mixed reactions. Senator Miriam Defensor-Santiago expressed support for such a law, provided that proper safeguards would be put in place and that it would not go beyond a specific period of implementation. Senator Joker Arroyo said President Arroyo did not deserve to be granted emergency powers and that there was no need for a Marcos issuance during his martial-law rule to be revived.

President Arroyo last week ordered government agencies, state-run corporations and universities to implement a gas-rationing scheme to enable them to reduce their monthly fuel consumption by 10 percent. Under this mandate, the use of government vehicles would be restricted to essential activities and weekend travel on them would also be banned.

Outside of those emergency measures, the DoE's current scenario measures include the possibility of having number-coding schemes that ban motor vehicles from the streets on specified days beyond Metro Manila and even "carless" days. These measures would not be compulsory.

Mandatory measures under this scenario are mostly targeted at government agencies, especially National Power Corp. President Arroyo's order last week is one of the mandatory measures under this scenario.

According to the DoE, implementing all the voluntary and mandatory measures under the current price scenario will result in a fuel consumption reduction of 25.05 million barrels of fuel oil equivalent or savings of P75.14 billion a year.

When diesel prices reach P40 a liter, additional and even more drastic measures will be implemented, expanding all location-specific energy conservation measures under the current scenario will be expanded to nationwide coverage.

Additional measures under this stage of the government's energy conservation program include the provision of a carpooling express lane, support for the use of "FX" taxi vans as an alternative to limited-occupancy cabs, encouragement of the use of liquefied petroleum gas and other alternative fuels as transport fuels, suspension of the 10 a.m.-3 p.m. "open window" provision in the number-coding scheme, and the implementation of a nine-day work cycle for government agencies and public schools.

If all 28 measures under this stage of the government's energy conservation plan are implemented, the country will be able to save 35.91 million barrels of fuel oil equivalent and P107.83 billion a year.

Should world prices continue their ascent and local diesel prices spike to as much as P50 a liter, more measures will be made mandatory, many of them requiring a drastic departure from some already established practices.

Government agencies and public schools will have to follow a four-day work cycle, similar to the scheme implemented last summer. In addition, an odd-even license plate fueling restriction system will take effect, color-coding scheme restrictions will be extended from just one day to two days, and power generation agencies will be required to use alternative and cheaper fuels.

Apart from these, interruptible power supply will be implemented in the Visayas and Mindanao grids and, like government agencies, industrial and commercial establishments will be required to implement measures that will enable them to achieve a 10-percent reduction in electricity consumption.

These measures are expected to generate savings of 42.23 million barrels of fuel oil equivalent or P126.78 billion in a year.

Beyond energey conservation

While these energy conservation measures are expected to ease the impact of soaring world oil prices on the country's economy, Energy Undersecretary Peter Anthony Abaya says these are not enough. Long-term solutions are necessary.

For one, he says the country should put in place a National Petroleum Strategic Reserve by 2010 through one or a combination of the following: discovery of more oil reserves, investing in oil stockpiling infrastructure with a capacity of 30-45 days, granting concessions to a company that will convert the country's coal into fuels and extracting and developing the oil reserves of the Malampaya gas and oil field off the western island of Palawan.

A team from the US Department of Energy recommended an in-country oil stockpile with a capacity based on the International Energy Agency (IEA) criteria of 90 days of net imports, an accepted standard among Asia-Pacific Economic Cooperation member-economies.

Looking at the country's oil imports and exports over the last five years, the US DOE team said the total size of the national stockpile should come up to 30 million barrels to achieve the IEA reserve criteria.

The composition of the Philippines Strategic Oil Stockpile should be as follows: 23.5 million barrels of crude oil, 5 million barrels of diesel fuel and 1.5 million barrels of liquefied petroleum gas.

But establishing a national oil stockpile will entail a huge investment: about $1 billion for a 30-million-barrel storage capacity. These are Investments are not being made and not even being committed right now, Abaya says.

"The problem of rising world oil prices and its crippling effect on our economy is far larger and disastrous than we ever expected. The programs presently in place are not responsive enough to solving the problems that lie ahead," Abaya says. "The present political activities have not helped at all. The biggest national threat is before us now. Nothing less than acting as one nation can we tame the cancer of oil and avert an economic crash come 2008." With INQ7.net

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