LNG and the future of energy
Liquefied natural gas, or LNG is an 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.
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 decline as the gas field further matures, with some estimates suggesting it will start as early as 2022 or the latest by 2024. Proposals have been made to extend the current consortium’s contract to allow it to reinvest and arrest the anticipated decline in production, 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.
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 introduce more 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 to 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 percent fewer 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.
Finally, efficiency in terms of costs and operations is another attractive proposition that LNG presents. It is a game-changer in terms of the efficiency of transport. It is odorless and colorless, as well as nontoxic and noncorrosive. 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, which is responsible for 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.
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.
Dennis A. Uy is president and chief executive of publicly listed Phoenix Petroleum.
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