WEDNESDAY |JANUARY 30, 2008| PHILIPPINES

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‘Is Shell deliberately stalling the use of CNG by buses for public transport?’

Compressed natural gas (CNG)


During the recent 5th Bi-ennial Convention and 10th Anniversary celebration of the Chinese Filipino Business Club, Inc., Ms. Gloria Arroyo said she is determined to wean the country away from its dependence on imported crude oil by developing the country’s natural sources of energy that include, among others, natural gas.

She needn’t look very far. We have sufficient natural gas produced by the Malampaya gas field that, if properly utilized, could substantially reduce our need for imported fossil fuel.

Pursuant to R.A. 7368, the Energy Act of 1992, Executive Order 66 was issued in January 2001 that tied in the Malampaya gas-to-power project with the DOE mandated as the lead agency in developing the Philippine Natural Gas Industry.

Three major oil companies, namely, Shell Exploration, Chevron and PNOC formed a consortium and invested in the development of Malampaya gas field and in the building of the appropriate infrastructure. Their corporate vehicle is SPEX, with Shell and Chevron owning 45 percent each and PNOC, 10 percent.

Three years later, in February 2004, Executive Order 290 was issued formally creating the Natural Gas Vehicle Program for Public Transport (NGVPPT), specifically outlining the general framework for its implementation.

To implement the NGVPPT, SPEX appointed Pilipinas Shell to produce compressed natural gas (CNG) and to build a mother station at Shell-Tabangao in Ba-tangas and a daughter station at Mam-plasan on South Luzon Expressway where CNG-fed buses were supposed to fill up. That was three years ago.

In October last year, Pilipinas SHELL inaugurated the daughter station at Mamplasan with no less than Ms. Arroyo officiating.

The initial target of the NGVPPT was 200 CNG-fed buses to be imported by bus operators to service Metro Manila and southern Luzon.

The DOE allocated the 200 units to five bus operators, namely, RRCG Transport System Co., Inc., HM Transport, CNG Vehicles Corp., KL CNG Bus Corp. and Paradise Transport.

With the tax incentives granted by the government, these operators decided to cooperate and participate in the NGVPPT by importing CNG-fed buses. Nineteen have been in the country for nearly three years. They are lying idle.

The reason: Pilipinas Shell, which was mandated by SPEX to put up the mother and daughter stations, kept postponing the operation of the stations. It claims that there are still some technical issues to be resolved, but it has never bothered to explain what they are.

In the meantime, the bus operators who borrowed money to import the CNG-fed buses are stuck with them. To minimize their loss, SPEX has been paying each of them quarterly sums to cover only the cost of money. The amounts vary, depending on the number of buses each bought. The payments, however, have stopped coming since June last year.

The one big question begging for an answer is why Pilipinas Shell appears to be stalling the operation of the mother and daughter stations, thus derailing the NGVPPT.

The other question is why the government has not followed up on the NGVPPT. Its advantages are plain to see: it will reduce our dependence on imported crude; the cost of operating public buses will be reduced by more than one half – diesel now costs P37.50 per liter while CNG will cost only P14.50 per liter (industry sources, however, say the cost of compressing one liter of natural gas will cost roughly P6 only); the bus companies will no longer demand fare increases; and most importantly, the bus riding public will be paying less.

It is environmentally safe and sound too.

Industry sources also say that the following are worth noting:

First Gas, one of the three power plants being supplied with natural gas by SPEX, has previously proposed to convert the excess gas supplied to them into CNG and to retail it. SPEX rejected the proposal.

Some multinational companies engaged in CNG supply and distribution have offered to set up the infrastructure related to the operation of CNG distribution. SPEX rejected their offers as well.

Incidentally, SPEX has agreed to pay the Philippine Government sixty percent of its profit. According to industry sources, the government reportedly received approximately $500 million and $600 million in 2006 and 2007, respectively.

Industry sources also allege that SPEX’ production exceeds the present requirements of the three power plants to whom it supplies natural gas. So what does SPEX do with the excess? Again, according to the same sources, SPEX burns it.

We hope the Energy Summit that Ms. Arroyo asked to be convened shortly will take this matter up.

***

"This is not a junket. We’re working," said Ms. Arroyo’s brother-in-law Congressman Ignacio "I am Jose Pidal" Arroyo.

He was referring to some fourteen congressmen, including him, and Senator Miriam Defensor-Santiago who are part of the reported 90-member entourage of Ms. Arroyo to the World Economic Forum (WEF) in Davos, Switzerland.

Go tell that to the Swiss gnomes!

***

The annual WEF is bruited about as a gathering of the world’s leaders. Does Ms. Arroyo qualify as one? Just asking.

***

Again, authoritative sources say Ms. Arroyo chartered a PAL Airbus A320 her trip to Switzerland and the United Arab Emirates. That’s a cool $1 million or P41 million at the very least. If you add up the cost of accommodations and per diems and representation allowances of the entourage, the whole trip could easily cost Juan de la Cruz up to $2 million or a whopping P82 million!

Can you imagine how many low-cost houses that amount can build for some of the former residents of Tatalon River in Quezon City who were recently kicked out of their shanties?

***

In previous columns, I kept referring to Ambassador Marciano Paynor Jr. as the chief of the presidential protocol office. I was wrong.

Paynor has been the Philippine Consul General in San Francisco since July last year. As such, he receives the pay and allowances of a consul general in US dollars which could easily come to around P300,000 to P400,000 a month.

So, what is he doing being the chief presidential protocol officer at the same time? How much time does he spend in Malacañang as such? When does he report for work in San Francisco? Isn’t there a breach of the law somewhere here?

Is there some kind of confidential arrangement between him on the one hand, and Ms. Arroyo and the (unwitting?) Foreign Secretary, Alberto Romulo, on the other? If so, could it be lawful?

***

Two weeks ago, I wrote about the command responsibility of our ambassador to Japan in the wake of passport tampering in the embassy. (I wonder what action, if any, Secretary Romulo will take or has taken against the ambassador. Or is he too feeble to do anything?)

The Tokyo embassy incident is no different from the fiasco that led to the downgrading of our airport operations by the US Federal Aviation Administration (FAA). DOTC Secretary Leandro Men-doza cannot escape responsibility for what happened since the Air Transportation Office (ATO) is directly under him. He should have resigned right then and there, but I guess that is too much to expect of Mendoza. He did not even resign when the ZTE-NBN scandal broke out.

Come to think of it, his boss Ms. Arroyo should have also resigned then – because of command responsibility, if for nothing else.

***

A minister in the cabinet of British Prime Minister Gordon Brown quit over a campaign financing scandal.

The chief executive officer of Societe General offered to resign after the French bank was defrauded by a midlevel bank official of $7.2 billion.

Here? Forget it. Dito, pakapalan ng mukha.

***

Today is the 277th day of Jonas Burgos’ disappearance.

I can see that the judicial branch is capable of standing up to the military establishment. I therefore feel confident that the Court of Appeals will eventually subpoena, as requested by Ms. Edita Burgos, Jonas’ mother, AFP chief of staff General Hermogenes Esperon Jr., Army chief Lt. Gen. Alexander Yano and 56th Infantry Battalion Commanding Officer Lt. Col. Melquiades Feliciano to testify in the next hearing of the case.

***

Email address: roacrosshairs@yahoo.com

 




















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