By John Victor D. Ordoñez, Reporter
THE NEWLY signed Philippine Natural Gas Industry Development Act, which seeks to promote natural and liquefied natural gas (LNG) as fuel sources to fast-track the country’s shift to renewable energy, would likely lure more investors, according to a Philippine senator.
“High energy cost is one of the stumbling blocks for foreign and local investors to do business in the country,” Senator Joseph Victor G. Ejercito told BusinessWorld in a Viber message.
“With this new law, we expect that there will be more investments in local gas resources and infrastructure, more employment opportunities and will attract more foreign investments,” he added.
Philippine President Ferdinand R. Marcos, Jr. on Jan. 15 signed into law a bill that seeks to develop the country’s natural gas (natgas) industry as the Philippines seeks to diversify its power mix and fast-track its transition to renewable energy (RE).
Republic Act (RA) No. 12120 or the Philippine Natural Gas Industry Development Act seeks to promote natural gas as a “cost-effective source of energy and an indispensable contributor to energy security.”
Under the law, an entity may hold an interest in upstream and downstream natural gas facilities as well as the supply of natural gas, but this will be subject to competition laws.
The Department of Energy will evaluate, approve and issue permits for natural gas facilities and craft a regulatory and legal framework for the downstream natural gas industry.
The law also seeks to make Manila an LNG trading and transshipment hub in the Asia-Pacific region.
The Malampaya gas field, the Philippines’ sole indigenous source of gas, is expected to run out of easily recoverable gas using current techniques by 2027.
The country is trying to raise the share of RE in the country’s energy mix to 35% by 2030 and to 50% by 2040 from 22% now.
“A more immediate question is why there is a need for a transition fuel before the full-blown adoption of renewable energy,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in a Facebook Messenger chat.
“Given the pressing need to address climate change, direct transitions to clean energy are often more aligned with global sustainability goals.”
Energy Undersecretary Sharon S. Garin earlier told senators the government wants more battery system companies to do business in the country to meet its RE goals.
She said battery technology is evolving quick enough to make the country’s 2050 RE goals feasible.
Last year, Mr. Marcos said his government might explore gas reserves in nonconflict areas within the country’s exclusive economic zone in the South China Sea to boost the country’s power generation capabilities.
PXP Energy Corp.’s exploration work at Reed Bank, another potential source of gas in disputed waters, remains suspended due to tensions with China.
China claims more than 80% of the South China Sea, seen as a substantial source of oil and gas deposits and where over $3 trillion worth of trade passes through each year.
“This new law will help ensure that gas and energy prices and supply will be stabilized in the event where there are international conflicts or war,” Mr. Ejercito said.
