At first glance, the Biofuels Act seems like a promising start on the road towards national energy independence and weaning away from dependence on imported energy sources. But a closer look reveals how the law ultimately promotes foreign control over the Philippiness natural resources, which is already the present state of the oil industry.
By Arnold Padilla
Ibon Features
MANILA — The search for indigenous energy sources is a vital one for the Philippines, given its dependence on imported oil. In the wake of recent record-high oil price levels, the Arroyo government has been actively promoting the search for alternative energy sources.
In her 2005 State of the Nation Address, President Gloria Arroyo had asked Congress to pass legislation on renewable and indigenous energy. She also actively promoted the Alternative Fuels Program of her Medium-Term Philippine Development Plan (MTPDP) 2004-2010 as one of the long-term solutions to high oil prices.
The passage of the Biofuels Act seems to be one answer to this search for indigenous energy sources. It calls for the use of biofuels such as bioethanol, biodiesel, and other fuels made from biomass (i.e. any organic matter which is renewable).
Bioethanol refers to ethanol produced from feedstock and other biomass suitably denatured for use as motor fuel while biodiesel refers to fatty acid methyl ester derived from vegetable oils or animal fats technically proven and approved by the Department of Energy (DoE) for use in diesel engines.
The law prescribes that a minimum 1% biodiesel be blended into all diesel engine fuels within three months of the implementation of the law, while bioethanol should comprise 5% of the annual total volume of gasoline fuel actually sold and distributed by all oil companies in the country within two years of the Acts effectivity. Further, the Department of Energy is mandated by the Act to determine the feasibility of bioethanol increasing to a minimum of 10% of the total volume of gasoline fuel within four years and 2% for biodiesel within two years from the effectivity of the law.
Indigenous materials would be used to produce biofuels locally. Coconut would be used as feedstock for biodiesel. To ensure the programs sustainability, the DOE is also studying other possible biodiesel feedstocks such as Jathropa Curcas or tuba-tuba. For bioethanol production, government aims to utilize sugar cane, corn, cassava, and nipa.
Thus, at first glance, the Biofuels Act seems like a promising start on the road towards national energy independence and weaning away from dependence on imported energy sources. But a closer look reveals how the law ultimately promotes foreign control over the countrys natural resources that is already the present state of the countrys oil industry.
Foreign Investors Cash In
It is expensive to set up an ethanol plant; one estimate pegged the cost at P2 billion for a plant with a capacity of 100,000 liters daily. The Acts principal author, Miguel Zubiri, has said that the country needs to set up at least 25 ethanol plants in order for the Philippines to meet the prescribed ethanol-gasoline mix.
This high expense is why foreign corporations are behind most of the ethanol projects launched in the wake of the law.
For example, Saudi Aramco, 40% owner of Petron Corporation, expressed its plan to build an ethanol distillery or a jathropa processing plant in Mindanao as part of its commitment to invest $300 million in new investments from 2007 to 2010 to expand its refinery.
Meanwhile, the countrys first ethanol plant– the P2.28-billion San Carlos Bioenergy Inc. (SCBI) in San Carlos City, Negros Occidental with a production capacity of 27.3 million liters per year– was built by Bronzeoak Philippines, a local unit of British firm Bronzeoak Ltd. (60% ownership), together with the National Development Corporation.
