26 OCTOBER 2012
Country Faces Gas, Coal Woes By 2015
Current energy indicators show that the Philippines must come up with alternative sources of fuel and fast.
Department of Energy (DOE) Undersecretary Jose Layug Jr., in a recent media briefing, revealed that the country may have to deal with two major headaches in the supply front by the year 2015, specifically on natural gas and coal.
Layug noted that while native sources account for a good chunk of the country’s energy mix, these sources would eventually run out. “While we are indigenous to the extent of 60 percent, the problem is these conventional fuels will deplete,” the official said.
Up to 30 percent of the Philippines’ power mix comes from natural gas—all from the Malampaya natural gas field. Data released by the DOE earlier this year warned that gas production from Malampaya would begin to decline in 2015 and run out by 2024 if no further activities are done on the natural gas field.
“In fact, Malampaya natural gas will start to deplete by 2015. The problem with that is if we don’t find another gas reservoir in the Philippines then we have a big problem,” Layug pointed out.
The Luzon grid in particular is heavily dependent on Malampaya, which provides fuel to three power plants in the region. The DOE said these plants account for 36 percent of the power generation capacity of Luzon, equivalent to 2,700 megawatts (mW).
In the event that gas production at Malampaya falls, these power plants would have to utilize more expensive fuels.
There are, however, expansion activities currently being undertaken at the natural gas field in the form of Malampaya Phase 2 and Phase 3, which are due for completion in 2013 and 2015, respectively. The additional investments were made by SC 38 (Service Contract 38) Consortium, which operates Malampaya.
“The reason for Malampaya Phases 2 and 3 is to prolong the same volume of gas production until 2024,” the DOE said. The combined costs of the projects amount to $950 million.
Meanwhile, Layug said the Philippines must also find a new source for coal since Indonesia, which accounts for 95 percent of the country’s coal requirements, announced last August that it will cease exporting the natural resource by 2015.
“Why? Because they (Indonesia) need more coal. That’s the problem for us; we don’t have too much production. If they don’t allow us to buy coal anymore, where do we source our coal from?”
Layug said the Philippines imports all its coal demands for its coal-fired power plants. The country’s production of coal, mainly from Semirara, are sold to China — the world’s top coal producer.
He said the country’s dependence on coal is akin to its dependence on crude. “Whenever bad incident happens in the Middle East, we are affected because we import all our oil requirements. The same thing goes for coal. Because oil and coal are fossil fuel, they will eventually deplete.”
Read article source in Manila Bulletin