Peace pipeline

At least the knowledgeable guys in the Aquino (Part II) administration know their priority when it comes to electricity: They want to lower the rates for our sake.

From what I gathered, the DoE, or the Department of Energy, wants to build another system of pipelines between Batangas and Manila to harness—fully—our natural gas in Malampaya for power generation.

According to Energy Undersecretary Jose Layug Jr., who talked recently to newsmen at the sidelines of a recent energy forum, the pipelines should be a sure way to reduce power rates.

Layug’s disclosure has a direct link to the offshore Malampaya gas field, which is at the northern part of Palawan, meaning, it is well within our territorial water, or outside the area being claimed by expansionary China for itself. Malampaya can feed power generators for up to 3,300 MW (megawatts) of electricity. This country in effect is utilizing the rich gas field for only 2,700 MW of power through three plants in Batangas. Based on the government’s Malampaya “master plan,” another 600-MW power plant should be built as anchor for the planned pipeline system.

This administration by itself plans to invest in the pipeline system, through state-owned Philippine National Oil Co., or PNOC, thus ditching some unsolicited advice for the project to take in some private investments.

From what I heard, a “strong recommendation” recently came from one of the main sources of cheap loans of the Philippine government: the Japan International Cooperation Agency, or JICA. What can I say: It seems that some Japanese conglomerates are also very much interested in the new pipeline. After all, from what I gathered, the “master plan” should cost more than $2 billion, including the pipeline system, the power plant and everything in between.

Any which way that the Aquino (Part II) administration intends to pursue the project, whether the government does it alone or invites private investors—i.e. the Japanese—the plan may thrill the business sector.

For one, electricity from natural gas is much cheaper than, say, electricity from bunker fuel used by the power barges in Mindanao. (Incidentally, the World Bank also came out with a study showing that natural gas could solve the power shortage in Mindanao, even resulting in much lower electricity rates with the use of pipeline running along industrial zones on the island).

To top it all, everybody else’s experience all over the world showed that pipelines are still the most efficient way of carrying oil and gas. Or any liquid for that matter!

Just imagine the level of air pollution here if we were to use trucks to deliver all the drinking water to each of the more than three million households in the metropolis!

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Now, the DoE is also preparing the basis for the entry of private investments into pipeline systems in other areas. It is seeking technical assistance from the World Bank to help the government formulate new regulations on oil and gas pipelines.

As we have noted years ago, we have no law whatsoever governing pipelines to cover their safety, for instance, or some technical specifications that for several decades have been the standard in industrialized countries.

The DoE fortunately is pushing in Congress the “Oil and Gas Pipeline Regulation Act,” which will create a “National Pipelines Board” to develop the government’s expertise in regulating the operation of pipelines.

Do we take it that, as a policy, the Aquino (Part II) administration prefers the efficient pipelines for transporting fuel and gas, and not other modes such as those terrifying monstrous trucks?

In fact, the DoE already recommended that the government should open again the so-called white oil pipeline, the one owned by First Philippine Industrial Corp. It runs between Manila and Batangas to carry fuel from the oil refineries in that province to the metropolis. FPIC reported to the DoE that various scientific tests confirmed the “structural integrity” of the pipeline. There were no more leaks.

To recall, in 2010, a teeny weeny segment of the 117-kilometer-long pipeline leaked fuel into the basement of West Tower condo in Makati City.

The Supreme Court subsequently issued a “writ of kalikasan” to stop the operation of the pipeline, although FPIC actually shut it down as soon as the company discovered the source of the leak—you know, way before the writ of kalikasan!

FPIC already spent a fortune to fix the damage from the pinhead-sized leak, including rehabilitation of the condo and surrounding areas. A group of condo unit owners nevertheless initiated court cases that prevented FPIC from completing the rehab.

The company also offered the condo unit owners reimbursement of their cost of relocation during the rehab. From what I gathered, the company offered P1.5 million for an owner of a 110-square-meter unit. It is in a way offering the unit owners to smoke the peace pipe. A number of owners actually accepted the FPIC offer, hoping they could go back to the condo after the rehab.

In other words, FPIC already more than complied with the repairs required by the Supreme Court, using standards and references from the US Environment Protection Agency, simply because the Philippines never had a law covering pipeline operation.

Now the DoE wants to reopen the FPIC pipeline because it is critical to the fuel supply in Metro Manila. The reopening perhaps can also serve as a signal to other investors in the other future pipelines all over the country.

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The FPIC pipeline can supply more than 50 percent of the volume of oil products in the Pandacan depot, which in turn accounts for the fuel sold in some 500 gas stations in Metro Manila and about 1,800 stations in northern Luzon. The depot supplies 70 percent of the fuel for the shipping industry and 75 percent of all aviation fuel. You just cannot imagine how many other industries and businesses are dependent on it.

Thus, quite understandably, the DoE is working hard on its reopening. For one, it will help oil companies reduce the cost of transporting fuel and oil products. Thank you.

Well, pipelines are always more advantageous than, say, barges because of sheer speed of carrying huge volume—minus the hijackings of delivery trucks. Pipelines are not even affected by typhoons and floods. They can ease the traffic, not to mention reduce the pollution from those hundreds of delivery trucks.

Come to think of it—the US has more than 200,000 miles of operating oil pipelines with hardly any problem. Why? Because they have the law setting the standards that pipeline operators must follow.

I just thought that the DoOE is on the right track.