CLEAN AIR ACT & THE ENERGY SECTOR

Moving Towards Philippine Energy Independence

28 October 2004

Secretary Vincent S. Prez

Department of Energy

Energy Sector & the Clean Air Act

ENERGY SECTOR & THE CLEAN AIR ACT

Impact on the Philippine Downstream Oil Industry

Sec. 26 sets the specifications for all types of fuel and fuel-related products Sec. 27 regulates the use of any fuel or fuel additive Sec. 29 prohibits the manufacture, import, sell, offer for sale, introduce into commerce, convey or otherwise dispose of, in any manner leaded gasoline

ENERGY SECTOR & THE CLEAN AIR ACT

Philippine Downstream Oil Industry
Fuel
Unleaded

Property
Aromatics

Limit
45% max 35% max

Specifications
01 Jan. 2000 01 Jan. 2003

Benzene

4% max 2% max
87.5 min 9 psi max 0.20% max 0.05% max

01 Jan. 2000 01 Jan. 2003

01 Jan. 2001 01 Jan. 2001 01 Jan. 2001 01 Jan. 2004*

Anti-Knock Index Reid Vapor Pressure Sulfur

Automotive Diesel Fuel

Industrial Diesel Fuel

Cetane No. / Index Sulfur

48 min 0.30% ma

01 Jan. 2001 01 Jan. 2001

* Accelerated implementation to November 2003

Energy Independence Package

ENERGY INDEPENDENCE PACKAGE

5-Point Plan

1. 2.

3. 4. 5.

Increase oil and gas exploration Aggressively develop renewable energy potential such as biomass, solar, wind and ocean resources Increase the use of alternative fuels Form strategic alliances with other countries Strengthen & enhance energy efficiency and conservation programs

ENERGY INDEPENDENCE PACKAGE

(1) Increase Oil & Gas Exploration

Intensive promotion of oil & gas exploration

1st Philippine Contracting Round (PCR-1) launched in August 2003 offering 46 contract areas 2 blocks bidded by BHP Billiton, Amerada Hess & Occidental Petroleum PCR-2 to be launched in 2005

ENERGY INDEPENDENCE PACKAGE

(2) Renewable Energy Development

To be the worlds leader in geothermal energy

Active promotion of geothermal exploration through Geothermal Bid Round
10 prospective geo sites with

300 510 MW potential capacity Bidding due by November 2004

ENERGY INDEPENDENCE PACKAGE

Renewable Energy Development

To be the largest wind power producer in SEA

Launched the first ever wind investment kit for 16 wind power areas with 345 MW potential capacity in June 04 First commercial 1.1 MW winddiesel hybrid project in Batanes in Aug. 04 Northwinds 25MW Wind power project in Bangui, Ilocos Norte to come on stream by end-2004

Philippine Wind Energy Potential Map

ENERGY INDEPENDENCE PACKAGE

Renewable Energy Development

To be the regions solar manufacturing hub

Cypress Sunpowers $300-Mn solar manufacturing plant
Inaugurated in March 2004
Initially to produce some 8 million wafers equivalent to 25 MW Expected to increase to 150 MW by 2007

CEPALCOs 1,082 kWp PV Plant in Cagayan de Oro

Largest grid-connected PV plant in developing world In tandem with 7 MW hydro plant

ENERGY INDEPENDENCE PACKAGE

Renewable Energy Development
Biomass Potential

Estimated Biomass fuel potential of 131 MMBFOE annually from:

Bagasse Ricehull Forestry Products Coconut Animal Waste Municipal Waste

ENERGY INDEPENDENCE PACKAGE

Talisay Bioenergy

Cogeneration plant to utilize waste product of sugar cane

Host facility is First Farmers Holding Corporation (FFHC) Consists of 2 x 85 t/h boilers delivering steam at 65 bars and 480C and a single condensing steam turbine generator unit with a rating of 30 MW Commercial operations by August 2006

ENERGY INDEPENDENCE PACKAGE

(3) Alternative Transport Fuels

Push for the promotion & fast track commercialization of alternative transport fuels:
Natural Gas through the Natural Gas Program for Public Transport (NGVPPT) Ethanol as gasoline blend Coco Methyl Ester (CME) as diesel blend

ENERGY INDEPENDENCE PACKAGE

Alternative Transport Fuels: Nat Gas as the Fuel of Choice Infrastructure development
BatMan 1 & spur lines by 2007 LNG Terminal by 2010

Transport Sector
CNG buses to start plying major routes of Manila to Laguna by May 05

8 local bus operators signed purchase contracts for 160 units of CNG buses from China

ENERGY INDEPENDENCE PACKAGE

Alternative Transport Fuels: Ethanol & Coco Biodiesel
Acceleration of the Coco Bio-Diesel Program
Memo Circular 55 to utilize coco diesel on govt. vehicles signed in Feb. 04 PNOC-EDC launched on 27 October its Small-Scale CME Plant in UP Diliman

Development of Ethanol as gasoline blend

Cooperation with Thailand Sugar industry launched the Philippine Fuel Ethanol Alliance Petron to introduce pre-blended ethanol in the local market

ENERGY INDEPENDENCE PACKAGE

Alternative Transport Fuels: Hybrid Cars

DTI & DOE coordinating to promote assembly & importation of hybrid vehicles

Toyota Prius: First Hybrid Car in the Philippines

ENERGY INDEPENDENCE PACKAGE

(4) Forging Strategic Alliances

Cooperation with Thailand for biofuels Joint development efforts on upstream exploration with neighboring countries Russia as a new oil supplier Australia, China and Indonesia as primary coal suppliers

ENERGY INDEPENDENCE PACKAGE

(5) National Energy Efficiency Conservation Program (NEECP)

DOE to push for mandatory implementation of nationwide energy efficiency & conservation program
Fuel conservation through economy runs, anti-idling, carless day, etc. Expand scope of energy labeling to other appliances, vehicles, electrical devices & equipment Shift to energy-efficient lighting

ENERGY EFFICIENCY & CONSERVATION

2-Pronged Program

Launched on 24 August 2004 to make energy efficiency & conservation as a way of life
1. 2.

Fuel Efficiency & Conservation Program Electricity Efficiency & Conservation Program

ENERGY EFFICIENCY & CONSERVATION

Specific Goals

To cushion the impact of rising energy prices To reduce expenditures on fuel & electricity without sacrificing productivity (by 10% for government agencies) To contribute to the protection of the environment

Renewable Energy Policy Framework

RENEWABLE ENERGY
Overall Policy for RE Development Renewable Energy Policy Framework launched in August 2003 Policy bias towards the development and utilization of renewable energy
Promote more private sector participation in RE development

Encourage the use renewable energy in rural development & offgrid electrification RE projects priority for special incentives through the BOIs Investment Priorities Plan

RENEWABLE ENERGY POLICY FRAMEWORK

Long-Term Objective Increase RE-based capacity by 100% Be the No.1 geothermal energy producer in the world Be the No. 1 wind energy producer in SE Asia Double hydro capacity Be the solar cell manufacturing hub in ASEAN New contribution of biomass, solar and ocean by 100 MW

Increase non-power contribution of RE to the energy mix by 10 MMBFOE within the next ten years

RENEWABLE ENERGY POLICY FRAMEWORK

10 Year Targets, in MW Target Additional Capacity 1,200 2,950 417 131

Geothermal Hydro Wind Solar, Biomass, Ocean

2002 1,931 2,518 0 0

2012 3,131 5,468 417 131

TOTAL

4,449

4,698

9,147

Thank you!

If you wish to get a copy of this presentation, please visit the DOE website

www.doe.gov.ph