Energy insecurity

How many times have much-needed and sound projects been scrapped simply because they were the brainchild of a different administration? This fixation on legacy attribution is a bane to what’s in the best interest of the public and the country.

Take, for instance, a Strategic Petroleum Reserve (SPR) program, which really only attracts the executive and legislative branches’ attention whenever geopolitical tensions erupt involving oil-producing countries.

In 2019, the government considered investing in an SPR project when geopolitical tensions between the US and Iran resulted in the skyrocketing of oil prices, putting countries like the Philippines, which is wholly dependent on imported oil, at the mercy of the global market. But as soon as tensions eased, the project was shelved.

Marcos Sr.’s legacy in terms of energy security has a lot to be proud of. Not only were we once at the forefront of renewable energy development with our geothermal energy projects but also with the establishment of the Philippine National Oil Company (PNOC), Petron and, despite its mismanagement, the OPSF (the Oil Price Stabilization Fund)

Why Marcos Jr. has not made any effort to take off from or revive his father’s roadmap for energy security is puzzling, especially when many of our present problems could have been mitigated, if not altogether resolved, by lower power rates and fuel costs.

While we helplessly watch from the sidelines as a new war unfolds in the Middle East, our government is left scrambling not only to find ways to repatriate our millions of OFWs deployed in the war-affected countries, but also find feasible ways to cushion the public from what will certainly be staggering effects of an inevitable increase in pump prices and other petroleum products. All while the country’s economy is still reeling from the negative effects of the massive flood control corruption scandal.

Marcos Sr.’s establishment of a fully integrated oil company in PNOC and its crown jewel, Petron, was perhaps one of the most brilliant ideas of the late dictator. Had the government opted to live out his vision instead of breaking it apart and selling it, we would not be in the quandary we find ourselves in each time war or tensions erupt in the Middle East or other oil-producing nations.

Our country’s lack of a strategic petroleum reserve program will surely be highlighted again since we only have two to three months’ worth of oil products in stock. With many countries negatively impacted by the war in the Middle East, everyone will be holding on to or building up their own reserves.

Meanwhile, the Philippines is back to square one with no oil supply (or price buffer mechanism) contingency plan in place, precisely the situation we find ourselves in today. And it will take years to develop and build a sustainable SRP given the limited resources, the complete privatization of Petron, and the full deregulation of the oil and gas industry.

So if it comes to it, the Marcos Jr. administration might have to resort to the extraordinary remedy of taking over or acquiring essential private oil industry businesses under reasonable terms and subject to just compensation once it’s determined as necessary for the national welfare or for a declaration of a state of national emergency due to the escalating Middle East crisis.

Food for thought: how many more times should Filipinos suffer from extreme vulnerability as an oil-importing country in times of geopolitical conflicts before the government prioritizes and invests in long-term energy security?