Energy Columns in BusinessWorld

* My column in  BusinessWorld  last January 17, 2017. An excise tax is defined by the Department of Finance (DoF) as “a tax on products that have a negative effect on health or the environment... on nonessentials and luxury items.” With this definition, the DoF therefore, should abolish the tax on oil products, not increase it. Here also are the 10 myths and alibi why the DoF and other sectors tend to demonize oil and are proposing oil tax to be as high as possible. MYTH 1 OIL IS BAD FOR THE ENVIRONMENT. Truth: Transportation of people and goods via cars, jeepneys, buses, and trucks that use oil is good for the environment because there will be no need for millions of cows, carabaos, or horses that produce tons of animal manure on the roads daily. Sure, there are particulates and other polluting gases but they are minor compared to tons of animal manure everywhere, more dirt, flies and worms in the environment. Also, cheaper LPG will encourage poor households to stop using firewood and

* My article in  BusinessWorld  last February 23, 2017. Rotational and scheduled brownouts for several hours about once a month, then unscheduled short brownouts from time to time, have become a regular experience in the two provinces of Negros island. Despite the installation of many huge solar plants in recent years.     I am currently in Sagay hospital in Negros Occidental to visit my seriously sick father. Last night, there was brownout for about 10 minutes, the hospital’s generator set immediately takes over to supply electricity to their patients and staff. The Facebook page of the Central Negros Electric Cooperative (CENECO) gives frequent advisory of power interruption that lasts for nine hours (8 a.m. to 5 p.m.) until this month. Stories and testimonies of frequent brownouts in many cities and municipalities of Negros Oriental in 2016 are also reported in dumagueteinfo.com. In June 2016, the Department of Energy (DoE) said that line congestion is building up in Negros Occident

* My column in  BusinessWorld  last February 08, 2017. Almost everything we do now requires energy and if we stay in non-mobile structures like buildings and houses, everything requires electricity. Energy precedes development so unstable and expensive energy means unstable and poor economy. Given the technological revolution the world has experienced in recent decades, it remains a tragedy that many countries still have low electrification rates and very low electricity consumption per capita. Unfortunately, the Philippines is among those countries with still not-so-high electrification rates until today and its electricity use is among the lowest in the ASEAN (see table). Electricity consumption in kWh per capita is high for the following developed and emerging Asian economies: Taiwan, 10,460; South Korea, 10,430; Brunei, 9,550; Singapore, 8,840; Hong Kong, 5,930; Malaysia, 4,470 (6.5x of PHL); China, 3,770; Thailand, 2,490 (3.6x of PHL). These countries and economies also have 100%

* My article in  BusinessWorld  last January 24, 2017. Cheaper electricity and stable energy supply are among the important components to have fast and sustainable economic growth. On Jan. 17, the Philippine Electricity Market Corp. (PEMC) sent a press release saying that “effective settlement spot prices (ESSPs) in the wholesale electricity spot market (WESM) plunged to P2.28/kWH for the December 2016 billing period which is the lowest since January 2011. ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.” That is good news as various players using fossil fuel sources like coal, natural gas, and oil, are fiercely competing with each other in generating electricity. WESM was created by EPIRA of 2001. On the same day, the Department of Energy (DoE) posted a “Request for comments on the draft Department Circular entitled ‘Declaring the launch of WESM in Mindanao’ (on Jan. 26, 2016) and providing for transition arrangements.” Another g

* My article in  BusinessWorld  last January 6, 2017. Here is my list of 5 international and 5 national or Philippine important energy issues last year. INTERNATIONAL 1. Donald Trump and his energy policies. US president-elect Donald Trump’s energy policies are summarized in his major campaign platform, “Seven actions to protect American workers” and these include: “FIFTH, I will lift the restrictions on the production of $50 trillion dollars’ worth of job-producing American energy reserves, including shale, oil, natural gas and clean coal... SEVENTH, cancel billions in payments to UN climate change programs and use the money to fix America’s water and environmental infrastructure.” So far some of Mr. Trump’s Cabinet Secretaries are his fellow skeptics of the anthropogenic or “man-made” climate change claim (climate change is largely cyclical and natural or “nature-made”), or simply pro-oil. These include: (a) Environmental Protection Agency (EPA) head is Scott Pruitt, former attorney

* This is my article in  BusinessWorld  last December 21, 2016. The holiday season, among others, is marked by the presence of so many lighted streets, buildings, malls, and houses. These sparkling and glittering Christmas lights and decors -- besides adding smiles and happiness -- also indicate continuing and rising material prosperity of the Philippines and its cities. The change in the energy mix policy by the Department of Energy (DoE) is better appreciated in this context. Not only do people want cheaper electricity, they also want 24/7 energy with no brownout even for one minute. Below is a summary of the policies under resigned Secretary Carlos Jericho Petilla (November 2012-June 2015) then Acting Secretary Zenaida Monsada (July 2015-June 2016), and present Secretary Alfonso Cusi (see Table 1). There are three important reasons why the Cusi formula of energy mix via system capacity makes more sense. First and foremost is the price impact to electricity consumers. Forcing and man

* This is my article in  BusinessWorld  last December 06, 2016. A country’s manufacturing sector is a good indicator of its degree of industrialization and prosperity. The sector provides most of the basic needs of the people, from consumer items like bread, shoes, mobile phones, and cars, to capital goods like tractors and bulldozers. Aware of the sector’s important function, the Department of Trade and Industry (DTI), Board of Investments (BoI), with funding assistance from USAID and JICA, organized a big, two-day “Manufacturing Summit” last Nov. 28-29, at Shangri-La Makati. Besides DTI Secretary Ramon Lopez, high profile speakers included Diosdado Banatao of Tallwood Venture Capital, Jaime Zobel de Ayala of Ayala Corp. and IMI, Roberto Batungbacal of Dow Chemical Pacific, Alpesh Patel of McKinsey, Lawrence Qua of Ionics EMS, and many more. Currently, different sectors and groups conduct their own study of the degree of modernization and competitiveness of the Philippine manufacturin

* My column in  BusinessWorld  on Nov. 17, 2016. Planet Earth is estimated by geologists and other scientists to be 4.6 billion years old. In that period, the world has experienced a series of warming-cooling-warming-cooling cycles. So global warming and climate change (CC) have been there as natural (i.e., nature-made) and cyclical events. See dozens of paleo-climate data and charts that date back to thousands, millions and billions of years ago here:  https://wattsupwiththat.com/paleoclimate/ . Yet for decades now, we have been bombarded by the United Nations and other institutions and individuals who deny nature-made climate change and climate cycle, deny that global cooling can take place after a global warming phase. Owing to such denials, anthropogenic or “man-made” climate change can only be fought via man-made and UN-directed solutions like large-scale and endless subsidies to intermittent renewable sources. Such is the dominant global belief and being formalized during the ann

* My article in  BusinessWorld  last November 02, 2016. This question seems to have a “default” answer: the government and it is time to revisit the premise of government being the central planning body that sets the Philippines’ energy mix. The Energy Policy Development Program (EPDP) composed of mostly UP School of Economics (UPSE) faculty members as fellows and researchers produced their most recent paper, “Filipino 2040 Energy: Power Security and Competitiveness.” The 52-page long paper projects two scenarios for the Philippines until 2040, the strong/fast growth and slow/mediocre growth, and the projected energy demand and prices based on four policy options. Here are the projected cost of electricity by 2040 based on current technology and two Sensitivity Analysis (SA) that project the cost of variable renewable energy (VRE) on two scenarios. (see Table 1)  The numbers for policy #4 under the three scenarios above do not account yet for these two costs: (a) intermittency cost of

* My column in  BusinessWorld  last September 08, 2016. Last weekend, UN Secretary General Ban Ki-Moon declared during the G20 summit in China that “climate change scepticism is over.” This statement is wrong on two counts. First, the term climate change (CC) skepticism or “CC denial” is wrong because skeptics recognize climate change, having happened in the past and currently taking place in the present. However, skeptics only believe that climate change is natural and cyclical, or it is “nature-made” and not man-made. Thus, the appropriate term should be “anthropogenic/man-made skepticism” and not “CC skepticism.” Second, the debate is not over and was never settled. If the debate is “over,” then how come that the UN (UNEP, WMO, IPCC, FCCC, etc.) could not answer (a) how much of current CC was man-made and nature-made? Is it 100-0, or 90-10, or 75-25, or 51-49? And (b) what was it like before this “man-made” CC, less flood, no flood, or more flood? Less storms, no storm, or more stor

* This is my article in  BusinessWorld  last September 01, 2016. Expensive electricity via government price guarantee for 20 years is wrong. Business is about risks and returns, capitalism is about corporate expansion and bankruptcy, so there is no such thing as guaranteed price nor assured profit for many years in a competitive economy. Only politics and cronyism will try to negate the nature of competition and business reward and punishment. Last Aug. 17, 2016, it was reported here in BusinessWorld that Geothermal technologies sought to be included in FiT program. “The National Geothermal Association of the Philippines (NGAP) is asking the government to include emerging geothermal technologies in the feed-in-tariff (FiT) program to address the cost and risks encountered by developers,” the report said. This is wrong. Other renewables should also not aspire for FiT system. Granting FiT for intermittent renewables like wind and solar for 20 years was already wrong because it exposed co

* My article in  BusinessWorld  last August 17, 2016. Brownouts, actual and potential, have returned to some areas of Metro Manila and surrounding provinces in the Luzon grid over the past two weeks. This is unfortunate because electricity demand has somehow declined because of the colder, rainy season and more power plants have been added to the grid.   This rare event was caused by heavy stress in the Luzon grid as a result of the unscheduled outage of several coal-fired, hydroelectric, oil, and geothermal power plants in the grid, many of them are already ageing. Among these coal plants were (a) 382 M-W Pagbilao’s unit 2 (U2), (b) 122 M-W South Luzon Thermal’s U1, (c) 140 M-W Southwest Luzon’s U2, and (d) 60 M-W Limay Cogen Block 5. Among the hydro plants were (a) 50 M-W Angat Main U4 and (b) 180 M-W Kalayaan U1. Then 83 M-W from Makban Geothermal and 280 M-W from Malaya Thermal U1. Almost 1,300 MW of power went on unscheduled or unplanned outage, plus power plants on scheduled or p