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Greater interest suffers



Public welfare, indeed, conflicts most of the time with the profit motive of companies, a scenario being perfectly played out in the strong lobby to frustrate the continued production of the Malampaya energy project.

Malampaya currently supplies around 30 percent of the electricity requirements of Luzon Island where the country’s growth centers are found.

The natural gas wells are expected to continue supplying fuel to about five high-capacity power plants until 2027, but forces are moving to have the license for the project, or Service Contract 38, terminated when it expires two years from now.

The rationale behind the well-funded push is the expensive liquefied natural gas (LNG) terminals being put up as an alternative to Malampaya.

Most of the biggest energy companies in the country are invested in a lineup of projects that will essentially import energy, specifically LNG.

LNG will be a necessary component of the energy mix with the depletion and eventual exhaustion of the Malampaya supply, which the Department of Energy (DoE) had anticipated.

The DoE’s Clean Energy Scenario under the 2018-2040 Philippine Energy Plan included expanding the use of natural gas, which can only be possible through LNG importation.

Since taking the DoE’s helm in 2016, Energy Secretary Alfonso Cusi pursued solutions to maintain energy security and disclosed a vision to transform the country into a regional LNG hub.

He advocated importation to optimize LNG supply that will require establishing the necessary infrastructure to help the sector progress from its current infancy stage.

While pushing for an LNG infrastructure buildup, Cusi, nonetheless, said the use of the remaining Malampaya reserves must be part of the equation to guarantee continuous supply and prevent electricity bills from increasing.

The current count is that P83 billion worth of projects related to LNG importation is being put up, which is a huge amount of capital that requires some assurance of return.

An extended run for Malampaya would mean strong competition in the natural gas trade, along with stretching out the period for reaping payback among the LNG importers and, most of all, prolonged anxiety for shareholders of the conglomerates.

Thus, the reason for the aggressive push among legislators in league with big business to prevent the Udenna takeover of the natural gas trade.

A preferable option for the LNG investors is for one or a group of them to take over Malampaya and run it in parallel with the LNG business.

Healthy competition, nevertheless, is always a guarantee of the best price for generating plants and eventually consumers.

Another main beneficiary for competition is energy security, as Filipinos are assured of supply from both local and foreign sources as the DoE envisioned.