LNG: The Power To Rise To A Brighter Future

By: Dennis A. Uy

Never has energy security been a more pressing issue than now, given our increasing energy demand to meet the upward trajectory of our developing economy. Sustainability, environmental impact, operational economics, and a clearer appreciation of the role of each energy source are what we need to take into consideration in the planning of our energy mix.

Liquefied natural gas or LNG is one such energy source that promises to play a large and important role in evolving the energy landscape of the Philippines for a number of key reasons.

A Matter of Sustainability

Based on DOE statistics, more than 50% of power generated in the country is made through coal and oil-based resources. Natural gas, however, is far from being maximized, accounting for only about 15% of our energy mix. This dependence on conventional resources posts a risk in sustaining our increasing energy demands amid volatile markets. Meanwhile, an opportunity to diversify our energy mix remains under-utilized.

There are several probable circumstances in the industry that could pull the carpet from under our feet. For instance, current geopolitical developments have created an unpredictable oil market, which urgently illustrates the dangers of being too dependent on conventional fuels. These are traditionally sourced from the Middle East, and in instances when the supply chain is cut off or made difficult due to geopolitical or other reasons, we are left with inadequate supply and at the mercy of skyrocketing prices.

Natural gas, meanwhile, is abundant in many countries and regions across the globe—in the United States, Russia, Africa, Oceania, and Southeast Asia. Having multiple sources allows us the security of enjoying a steady supply, even if one or some should become unavailable. Such sustainability has drawn many nations to the appeal of LNG.

Locally, our very own pioneering Malampaya gas field in Palawan has been powering our country for more than two decades now, and has brought in billions of revenues for our government. However, supply from the Malampaya gas field is projected to start declining by 2022. Plans have been made to extend the current consortium’s contract until around 2026 to 2029, but as of now, it is slated to end by 2024. Hence, it is time to set our sights on the future and prepare for generations of Filipinos to continue enjoying the benefits of using LNG as a fuel source.

A Cleaner Alternative

Climate change is another important development that is inspiring the global pivot toward cleaner sources of energy. In the Philippines, coal currently comprises over half of the country’s energy mix. As we incorporate renewable sources such as solar and wind in the equation, LNG power plants that are relatively more efficient, flexible, and quick-starting provide much-needed stability and responsiveness in our power grid.

LNG is even versatile enough to serve many needs. Its cleaner-burning nature is useful not only for power plants but even for vehicles. Many countries abroad are now reaping the benefits of natural gas-fed cars, which contribute up to 34% less emissions compared to diesel. When brought back to its gaseous state, natural gas can be used as fuel for household cooking and even air conditioning. In temperate countries, natural gas is also widely used for home heating.

An Enabler of Healthy Economics

Finally, efficiency in terms of costs and operations is another attractive proposition that LNG presents. It is a game-changer in terms of efficiency of transport. It is odorless and colorless, as well as non-toxic and non-corrosive. The liquefaction process reduces natural gas to as much as 1/600th of its original volume, and almost half the density of water. Just imagine the possibilities of being able to provide reliable and continuous power supply to the whole archipelago.

Natural gas is also the prevalent fuel used in the manufacturing sector responsible in producing the items we depend on in our daily lives—from metal and paper to glass and clothing. It is even used as raw material in everything from paints and dyes to plastics. Across continents, LNG has proven to be a viable energy source in varying industries.

A Step Forward

The message is clear that we need to recalibrate the energy mix of our country. The goal is for a more balanced energy mix; one that could address our demands, while taking into account the capacity of the global supply chain. We are far from achieving such balance, but we could definitely make substantial changes now to move us closer to a more sustainable energy future.

It is heartening that more and more Filipinos are sharing in this vision of a more secure energy future for the Philippines by expanding and fortifying LNG operations in the country. A number of consortia and enterprises have taken concrete steps in supporting the call of the Department of Energy to ensure the place of natural gas in diversifying the country’s energy mix.

We at Phoenix Petroleum are one of those who are especially optimistic and excited to bring the full benefits of LNG to our countrymen. We see nothing but immense potential in making LNG an inextricable part of the economic activity in the country.

From imagining a nation with a secure, cleaner, and economically sound energy source, we are taking steps to turn this vision into reality. Just like a phoenix, a brighter energy future is rising with LNG.

The author is president and chief executive of publicly listed Phoenix Petroleum.