Biofuels Act: Will it lessen foreign firms’ grip on Philippines’s energy sector?
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Japanese firms are also very active in investing in biofuels; conglomerate Marubeni was reported as among the companies in ‘exploratory stage of venturing into ethanol projects.’ For coco-biodiesel production, Toyo Engineering Corporation (TEC) intends to develop 600,000 hectares of coconut lands with an investment range of P0.10 to P1 million per hectare.
Most recently, Filipino and Chinese companies recently forged memorandums of agreement to develop bioethanol plants.
All these pave the way for the foreign control over the country’s natural resources, like what has been prevailing in the oil industry. In fact, past Philippine governments have systematically placed the country’s energy resources in the hands of foreign business interests, at the expense of Filipino consumers and the national economy. Examples include former president Marcos’ integrated energy program in the 1970s and the Ramos government’s program to liberalize the local energy sector.
Governments have failed to exert substantial control over the country’s energy resources because of the foreign firms’ tight grip over the sector. One result of this is the endless rounds of oil price hikes that local consumers continue to suffer from.
Although local oil firms are quick to blame high global oil prices for the hikes, in fact exorbitant and unreasonable oil prices may be traced to the global cartel of the largest transnational corporations that manipulate international prices and domestic pump prices through transfer pricing.
Minimal Effects on Pump Prices
It should also be noted that the Biofuels Act by itself will not have any consequential impact on high and escalating local pump prices.
During the Senate deliberation on the biofuels bill, Energy Secretary Raphael Lotilla admitted that even a mandatory 10% biodiesel blend with regular diesel may result in a price reduction of only P0.50 per liter– already a small amount that may even be easily offset by frequent oil price hikes under deregulation.
DOE projects that the full implementation of the 10% bioethanol program would displace 536 million liters of imported gasoline (which is equivalent to around P15.33 million in foreign exchange savings) while a 5% biodiesel blend would reduce diesel importation by 271 million liters per year (worth around P5.99 billion).
These amounts become insignificant when the high volume of gasoline and diesel imports and increasing global prices are considered. Based on 2005 import figures, this would displace only some 34% of gasoline and 10% of diesel importation.
Nationalize the Industry
The commanding position oil TNCs enjoy in the local oil industry enables them to dictate not only the prices of petroleum products but also the exploitation and control of the country’s oil reserves and other energy resources. And such will also happen to biofuels if government allows the nascent sector to fall under the monopoly control of transnational corporations.
Biofuels development is taking place in the context of a privatized and profit-oriented energy sector. However effective and responsible state control of the energy sector is the only way to ensure that the national interest is protected and that the development of energy resources is integrated with the thrusts and priorities of economic development. Otherwise, as is happening today, the legitimate need to develop alternative energy sources with an eye towards energy independence will be exploited as just another profit-making venture by big private interests.
Real public ownership, control and regulation of the country’s energy sector are vital for this to be truly oriented towards the needs of Filipino consumers. This includes responsible state control over resources such as biofuels. This underscores yet another challenge: to ensure that the government in place is one that is fully and genuinely accountable to the people. IBON Features
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Davao firms to issue warning on closures, retrenchments
June 11th, 2007 at 9:57 am
Parochial Mindset on Natural resources
An elegant rendition but like a cry for help from Planet Zorg in the Melphian Galaxy.
Listen; watch my lips closely: things will not change. Read Shakespeare’s; “all men have history etc etc by which we learn”. But do we learn in the Philippines. No chance. Just look at the international paper company from Santa Rosa that uprooted and exited the country on a ‘natural resources’ issue… and that was merely water. We all know the story of how a certain Senator attempted to blackmail the company and ‘make public’ the use by a foreign company of natural resource issue; ie water and that foreign company called his bluff. Now that same company provide employment for a thousand Thais whereas those jobs previously resided with Filipinos.
These cries are reminiscent of Russia in 1918; of Cuba in 1959. Common’ folks, which planet are we living on? Admittedly we are seeing an incipient re-make of a Cuban 1960’s nationalising in Venezuela with Chavez but there the people are firmly behind him. He is taking on the feudal families that have held an iron grip on the country for hundreds of years; and seemingly winning. And that’s the issue. Like Latin America, the feudal families of pre-Spanish colonialism are the one and only threat to economical enhancement for the Philippines, not ‘foreign devils’.
Wake up and smell the coffee… simply look at the power companies in the Philippines. Who owns them? The Lopez family has the iron grip on Luzon power market whereby the Aboitiz family retain the Vasayas and Mindanao regions. So similar to how New York is calved up by “the families”. How more feudal can you get and just like Europe 700 years ago. So hang in there and in 5 to 700 years the situation may have resolved itself. Meanwhile, even Chavez is sagacious enough to realize he needs the international players.
But the Animal Farm Syndrome appears to be good rhetorical food for the pseudo-patriotism, as long as it is Filipinos exploiting Filipinos we are happy. A brave concept but one which held onto will see the Philippines demise deeper and deeper into global economical oblivion. Once number two after Japan we are now in a position that is off the rating league table. I can smell the coffee… foreign investment and foreign use of natural resources to jointly create wealth is the only way forward. Have you never read Adam Smith? Don’t you really know how it works? Let go of the false patriotism and re-join the world.
October 16th, 2008 at 6:51 pm
Oct. 16,.2008
Because Of Biofuel Production Filipinos Will Go Hungry?
By Quirico M. Gorpido, Jr.
Because of biofuel production Filipinos will go hungry? This question is just the reverse of the title of an article I ’ ve read in a Metro Manila tabloid issue during the fourth quarter of last year. The title itself has projected a worrisome connotation which tends to infer that the mass production of biofuel crops in the country will make a great percentage of Filipino families go hungry. This is just a rush and illogical conclusion of Mr. Clemente Bautista, Jr. of Kalikasan People’s Network for Environment. Of course, with no offense to Mr. Bautista, Sir.
He said: “ It ’ s ironic that millions of Filipino families have literally nothing to eat while millions of hectares are being cordoned off by the government to grow crops. for fuel. ” How true then is the statement of Mr. Bautista when he said that? He also said that the government has an agreement with China for bioethanol production that needs thousands and thousands of hectares to grow crops for biofuel production. Even if it ’ s true that China needs thousands and thousands of hectares for the production of bioethanol crops, our government must also think of the welfare of its people and not just focus its attention to the giving in to the demands of China. This means that our government must control in the giving of hectarages ask by the Chinese investors. There should be a prevailing desire and compassion by our government of having our own farmers and agriculturists provided with ample lands for agricultural production that will feed millions of Filipino families.
The Philippine Government should not be one-sided in looking for the potential benefits that biofuel crops production will offer, like the reduction of pollution particularly in big metropolis and in the provinces. Let the goal of achieving a great percentage of bioethanol blend be realized with the application of standard policy in the mixture of gasoline and diesel fuel without making the millions of Filipino families go hungry. Concerned environmentalists should likewise assist government panelists in the negotiating table with the foreign investors who are interested to establish businesses here in the production of biofuel crops. Their support and presentation of their ideas and rationalities helpful to the ecology and the millions of Filipinos, would serve as a balancing springboard in the government’s final decisions.
To limit the Chinese land needs and other foreign investors for their biofuel crops production which should be much lesser than what is urgently needed by Filipino farmers in planting agricultural crops for the consumption of the entire 80M plus Filipinos. Since a huge percentage of our vast tract of land is practically agricultural, only an infinitesimal fraction of Filipinos will go hungry if ever, as feared by Mr, Bautista. However, if our jobless people particularly in the rural areas will be encouraged and persuaded to plant food crops like corn,. rice, fruits, vegetables and rootcrops on vacant lots, going hungry is impossibility.
In fact in various rural areas in the country there are plenty of idle lands that are good for agricultural production. The only defect or difference is that many of our barangay folks prefer to work in the cities for quick bucks rather than plant saleable crops. Elected Barangay Captains should lead in educating the barrio folks the importance of planting food crops on vacant lots for family consumption and for sale in the markets. Nevertheless, we heard reports that there are people in different rural areas of the country where stealing of planted crops in their neighborhood have been occurring. These people who have this kind of bad habit could be helped if elected leader in various municipalities and barangays have the political will to advice/educate their respective constituents to be industrious and avoid stealing.
If the millions of jobless Filipinos would learn the value of work, labor, and refrain from stealing, but be industrious and resourceful in earning a decent and true Christian living, then not a single Filipino family will go hungry. This could be achieve if all our people would be properly educated on the aspect of how every man should live his life without stepping the toes or taking advantage on the weaknesses of their respective neighbors. Our elected leaders themselves above all must set as good models.
However, 1993 Nobel Prize Winner in Chemistry Dr. Hartmut Michel, during his recent visit in Manila, admonished the Philippine Government not to invest in biofuel crop production ‘because it is counterproductive” to the boosting of the economy. “When you invest into biofuel development” , he said, “ you add fertilizer and then harvest the plants. There ’ s no real energy in biofuel…biofuel plants can only store less than one percent of the sun ’ s energy ” . He also pointed out that “producing biofuel would sometimes entail cleaning of the forest, a process that destroys biodiversity and emits more carbon dioxide in the atmosphere, which you can ’t save in the next several hundred years ” .. “ Burning will also destroy many nature compounds in forests, which could be remedy for new kind of cancer ” . Instead Dr. Michel exhorted the Philippine Government and that of other countries whose climate condition is similar to the Philippines to tap wind power and hydro power that are environment-friendly to generate electricity. (Copyright 2008 by Quirico M. Gorpido, Jr.)
Biofuel Blend Should Start AT 5%
(By: Quirico M. Gorpido, Jr.)
The initial one percent biofuel blend for diesel as reported by the Manila papers is very insignificant considering the bulk of pollution that we have in the country particularly in the Metropolitan cities where pitchblack smoke-emitting factories and pitchblack-belching countless cars and vehicles abound. Like the 5% initial ethanol blend for gasoline, similar percentage should likewise be implemented on biofuel blend on crude oil. This fuel is mostly use in passenger buses, cargo trucks, cranes, bulldozers, loaders, forklifters and other heavy equipments for various infrastructure projects and constructions.
This initial percentage of 5% biofuel blend be likewise increased by 5% yearly on both the diesel and the gasoline. This means that 5% would then raise to 10% next year and then 15% the following year and so on until we can achieve a 50-50 biofuel blend for crude oil. The biofuel blend for gasoline will also follow the same pattern of yearly increase until we can gradually reach a 95%-5% blend for ethanol on gasoline just like what Brazil have achieved.
If the 95-5 ratio of ethanol and gasoline blend is achievable, as could be seen from the Brazil experience,. then most probably an 85-15 ratio on bio-oil and crude oil blend might also be achievable with the help of our experts and scientists.
In case there are still loopholes found in the provisions of the Biofuel Act then it should be amended. We want to have a free wheeling implementation of the law, which is badly needed now that the threat of global warming in our Planet Earth is imminent. Global warming is the result of accumulative years of heavy pollution in our environment that remains unchecked until it reaches its threatening height which uncontrollably affect the normal condition of our weather. How can we restore the weather back to its normal trend? It’s a tall order, indeed.. And one of the things that we should do now is the application of sustainable reduction of our environmental pollution starting with the blending of organic fuel. to fossil fuels. The people should also be educated on garbage segregation and to let them understand that plastic burning is bad. Its bad smell when burning is equally bad for ones health. That it’s better for them to bury the waste plastics on the ground and to cut their inveterate habit of burning it. Thanks to now US-based Southern Leyteño scientist Dr. Rico Cruz who discover that coco oil and other indigenous oil from other plants can be blended with fossil fuels to reduce its black-belch emission. on motor vehicles and thus reducing pollution in our surroundings. This was proven from his laboratory experiments and demonstrations he had given to the seminars’ attendees during his several visits in Maasin, his hometown in the province of Southern Leyte.
The heavy pollution in our environment especially in big cities of the country really poses as health hazard for all of us. Now that the law on the Biofuel Act has been approved and has started its implementation last May 2007, there should be no hindrance now in our pursuit to have a much lesser pollution, if not a pollution-free environment, although it will take many many years to achieve this goal.
The Government should lead in this effort and the private sector like the NGOs who have the capabilities must give their full support to realize the objective of the program. Likewise fossil fuels factories and all gasoline stations throughout the country must be mandated .to start selling the biofuel mixtures.. Those who will violate the order must be fined. Or order to close shops if they continue to disobey the law. We need to seriously and strictly implement the law on Biofuel Act because our problem now on environmental pollution and the global warming that we have all experienced is indeed very serious as it affects our life on earth.
In addition, a continuous study, research and development of the biofuel is now a must for our experts and scientists to improve its usage and to discover its other functions. (Quirico M. Gorpido, Jr.)