MANILA, Philippines - More bad news: things are going to get worse before they get any better for Filipinos. First, there is the oil crisis; the price of crude oil is going through the roof in the world market. Then there is the rice crisis; price of the grain is rising and there is an impending shortage. And now comes an impending power crisis; we cannot generate enough electricity because there is a worldwide shortage of coal. With the coal-powered generating plants unable to produce enough electricity the other plants using hydro, thermal, diesel and wind won’t be able to cover up the shortage, especially now in summer when there is a big demand for cooling from air conditioners. So expect frequent brownouts.
Of course the administration has a ready answer for any problem of shortage: Use less. If there is a rice crisis, eat less rice. Already, the government has ordered fast-food chains to serve only half orders of rice. Which serves the restaurants just fine. If customers cannot eat enough rice, it means they would have to eat more hamburgers, chicken, spaghetti and hot dogs.
But what about the poor Filipinos who eat only rice without viands because they cannot afford the latter? Believe it or not, there are many families in this land who eat only rice sprinkled with a little salt. (My grandfather used to do that; we children did a little better by mixing “patis,” fish sauce, or brown sugar with our rice.) “Bigas na nga lang kinakain namin, tapos binawasan pa [we eat only rice, but they have reduced even the servings],” complained a squatter.
Eat less. Not exactly like Marie Antoinette’s advice to let the poor eat cake if they don’t have enough bread, but Gloria Macapagal-Arroyo’s advice is even better: Eat less. It saves the cake, too.
So now you can be sure that GMA’s solution to the impending power shortage is: Use less electricity. So it is hot? Turn off the air conditioners and electric fans to save on electricity and take off your shirts and loll in your undershorts outside where there is fresh air. No television? Watch a movie in the mall; air conditioned pa. No electric lights at night? Use candles and kerosene. Of course there will be an increase in fires but that cannot be helped. Look at the bright side: while the fire is raging, the surrounding neighborhoods will be lighted up for free.
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But why is there a world shortage of coal? Because of a confluence of events, man-made and natural. As in the rice crisis, because of increased demand and short supply. There is an increased demand from Japan, Korea and China. Indonesian coal (bituminous) reserves are being depleted at an alarming rate. China, once one of the major coal exporters, has now become a net importer. India has also increased its demand for bituminous fuel. We have coal in Semirara but it is of low quality and has to be mixed with imported coal.
Adding to the demand are the logistical problems due to a disparity between rail capacity and port development in Australia. The resulting imbalance led to long queues of up to 79 vessels in the port of Newcastle.
A worldwide increase in demand for commodities has not helped the situation. Freight market volatility has gone up due to lack of available vessels to transport goods around the world. Freighters formerly used exclusively for fuel deliveries are now being used to transport other products such as iron ore, nickel and grain. As a result, coal freight costs have gone up considerably in the last 12 months.
Then there is Mother Nature. Global weather has wreaked havoc in coal-exporting countries. Indonesia experienced incessant rains in one area and searing temperatures in another, drying up rivers and hindering coal mining and delivery operations. Australia storms, particularly in the Newcastle and Hunter Valley regions, have similarly caused flooding in mines and affected railways and loading ports. As a result, numerous Indonesian, Australian and South African mines have already declared force majeure for their scheduled deliveries in 2007 and 2008.
In short, the world supply of coal is tight. The price of coal has skyrocketed to more than $100 per metric ton, FOB, and is nearing $150 per metric ton. The cost of freight to the Philippines is steadily rising; it now makes up about 30 percent of the total cost to deliver coal to Philippine power plants. According to the National Power Corp., the reduction in coal deliveries to NPC plants/IPPs has been aggravated by the fast use of contracted and delivered coal shipments because of the following:
1. Inability of certain NPC plants/IPPs (Iligan, Tiwi, Makban, Calaca and Masinloc) to deliver target generation due to unscheduled outages and extended maintenance;
2. NPC had to cover the shortages of non-NPC plants/IPPs (last week, one of the Meralco IPPs shut down operation for unknown reasons; NPC was forced to step into the picture to solve the supply problem);
3. Unexpected delays in the turnover of NPC plants sold by PSALM; and
4. Failure of scheduled coal biddings and delays in coal delivery due to unpredictable spikes of coal prices.
So what is the power outlook? It’s going to get worse, said NPC. Coal and freight costs are not expected to stabilize within the year but rather continue to rise as other countries affected by the export halt in China and South Africa will scout for other coal sources in the Asian region.
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TODAY’S JOKE: Filipinos now have to obey only nine commandments. GMA has abolished “Thou shalt not steal.” She may also soon abolish “Thou shalt not kill” for her military men and policemen.
