COAL continues to be the favored source of energy due to its reliability and economic efficiency. This is the case not only for developing countries but for many developed economies as well, not the least the US. And “coal emerged as the surprise winner” at the climate change summit, writes Jess Shankleman for Bloomberg (November 11) “with leaders of the host country (Germany) and neighboring Poland (next year’s host) joining Donald Trump in support of the dirtiest fossil fuel.”
That’s it. Coal may be the most reliable and the most efficient source of energy but it is also the dirtiest. It “contributes more to climate change on a pound per pound basis than any other common energy source,” quoting Justin Worland in Time (November 4). Coal’s celebrated reliability and efficiency exclude the environmental aspects, leaving this tab to be picked up sometime in the future, with interest and interest’s interest.
The world forges ahead powered by coal, the Philippines being no exception. Forty-eight percent of our power is generated by coal, 24 percent and 22 percent by renewables and natural gas, respectively (Department of Energy, 2016 figures). The share of coal will increase further in the years to come. Business World reports that nearly 80 percent of capacity of upcoming projects “comes from coal-fired generation” (August 8). The paper was quoting a Fitch Group BMI Research dated August 4, and further revealed that the country’s own coal reserves “meet just a fraction of requirements, hence, requiring power plants to import 70 percent of coal.”
Philippine coal is generally of poor quality so we have to import. Seventy percent of the imported coal is sourced from Indonesia, with Australia as the second biggest source (Rappler, June 5). The two countries are the world’s top coal exporters. Asia’s, especially China’s, appetite for coal has driven up prices “depriving (Australian) domestic power generators of fuel and driving electricity prices higher,” CNBC reported on September 13, noting that coal prices hit a high for the year.
The spike in the price of coal made another observer warn that “by locking themselves into 40-year life power plants fueled by imported coal,” the Philippines and other Southeast Asian nations are going down “a path to inflation, current account pressures, pollution and expensive, inflexible electricity supplies” (Tim Buckley for Asia Times, November 15). China is both the biggest importer and producer of coal. China’s share in world consumption is more than 50 percent, not least because of its steel and cement production, two industries that are “strongly dependent on coal” (International Energy Agency).
Electricity consumption in the Philippines increased 10 percent from 2015 to 2016. The DOE attributes this increase to various factors, including temperature increase due to a strong El Niño and corresponding increase in utilization of cooling equipment, and strong economic growth (“2016 Philippine Power Situation Report”). The new capacity introduced in 2016 was barely enough to cover this increase in consumption.
On the natural gas front—natural gas accounting for 22 percent of power generation—the Malampaya gas field has entered the end of its production cycle and is expected to be depleted in a few years (Business World, Aug. 9).
Obviously, if the country is to sustain economic growth, it needs to generate more power. The government has been banking on the “reliable and economically efficient” but also climate change-inducing coal. But what are the alternatives?
The government has for years been looking at the perceived abundant oil and natural gas reserves in the Recto Bank. But China has been frustrating the Philippines’ attempts to explore and utilize the rich resources of the Recto Bank located some 85 nautical miles off Palawan—hundreds of nautical miles from China. A service contract granted to Forum Energy was suspended three years ago because of Chinese objections and Beijing has made it clear to the Philippine government that it would not tolerate any drilling in the area by the Philippines.
PXP Energy Corp. – which owns a controlling share of Forum Energy – have been talking to “counterparts in China,” talks that according to PXP chairman Manuel Pangilinan are “very private discussions” that concerns the lifting of the moratorium on the exploration in the Recto Bank (Business World, August 16). China and the Philippines recently issued a joint statement that included the possibility of cooperation in the exploration and exploitation of maritime oil and gas.
China will not allow the Philippines to tap this natural resource that legally belongs to us, unless we do it together. The government is caught between the devil and the deep blue sea and seems ready to embrace both. But maybe this is the time for a complete overhaul of our energy security strategy, a time to put real serious thought, commitment and action into developing a visionary, self-reliant, sustainable and clean energy security strategy fit for the 21st century.