An infrastructure-oriented think-tank is calling on the Duterte administration to prioritize the use of local energy sources instead of relying on the long-term importation of liquefied natural gas (LNG) for the country’s energy requirements.
“It bears stressing that indigenous sources of energy such as the Malampaya gas field should continue to be the main components of the country’s energy mix.”
This was the statement of Terry Ridon, Infrawatch PH conveyor and former member of the House committee on energy.
Malampaya to last until 2029
Malampaya Platform
Ridon noted that Shell Philippines itself has stated that Malampaya’s supply can last between 2026 and 2029, such that there is no need to rush giving imported LNG a significant role as among the country’s sources of energy.
“Correspondingly, government should go slow in supporting the proposed LNG terminal as indigenous sources remain available in the years to come.
LNG imports costlier than local sources
Ridon also noted that importation increases the country’s exposure to higher prices, including exchange rate risks and the volatility of fuel prices in the world market.
“In November 2018, the price of gas from Malampaya is about $9.37/MMBTU. If gas will be imported, the price would be around $12.8/MMBTU or 37% higher due to exposure in fuel price volatility in the regional market and the additional costs for shipping and regasification.”
LNG imports discourage energy exploration
Ridon further said that reliance on LNG importation discourages continuing exploration of still undiscovered energy deposits, particularly in the West Philippine Sea and the Philippine Rise.
“We may lose the current imperative to look for new sources of energy within the country’s territorial waters and exclusive economic zone if we allow LNG importation to be a major component of our energy mix.”
Ridon said that by exploring new indigenous sources, the country would limit its exposure to exchange rate risks and volatility of fuel prices in the world market.
Geopolitical risks threaten long-term LNG supply
“As a result, we are exposing the nation to unexpected supply issues due to geopolitical risks, not only in sourcing energy products but also in terms of logistics.”
Ridon said a large chunk of the world’s LNG supply is sourced from geopolitically risky countries such as Qatar, Russia, Nigeria, among others.
Developing new local energy sources will create jobs, benefit communities
“Developing new local sources of energy would also allow Filipinos to benefit from job creation, skills training and more business for local communities.”
Ridon said the development of local industries, including local energy development has always been the priority of President Rodrigo Duterte, as it provides wider socio-economic benefits to Filipinos.
-30-