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Introduction
 
Energy is a necessary factor for industrialization and the Philippines is rich in a variety of fossil and renewable energy sources. But this potential is now up for sale, as the government fully opens the opportunity to foreign and private investors to explore, exploit and plunder our energy resources. In opening up the whole energy industry, the government provides generous incentives tax holidays, repatriation of profits, incentives in exporting materials for their use and many more.
 
Much like the privatization of the NAPOCOR through the Electric Power Industry Reform Act of2001 (EPIRA), the privatization and liberalization of investments in energy and energy resources has long term and strategic implications on our national development, and contrary to the claim of the Arroyo regime, will burden the Filipino people with ever increasing utility rates and long term energy insecurity.
 
Indigenous and Renewable Energy Sources of the Philippines
 
The Philippines sources its energy mainly from geothermal, hydro power, coal, oil, and natural
gas. It is also rich in renewable energy sources. Renewable Energy refers to energy sources that can be obtained from continuously recurring energy processes and cycles in the natural environment, including energy sources from waste materials and the technologies that utilize these energy sources.
 
Example of these are the following: energy that comes from flowing water (hydropower), the energy from the heat of the sun (solar energy), energy from waste materials(biomass energy), geothermal energy and energy coming from the wind (wind energy). Aside from these sources, we have also proven reserves of fossil fuels and other indigenous sources, such as coal, natural gas and oil.
 
 
With its extensive agriculture, livestock and forestry activities, the Philippines has a significant biomass energy potential. 1997 figures estimate that there are annual reserves of about 131 million barrels of oil equivalent (MMBFOE) of these resources. Contributors to this biomass potential are fuelwood, bagasse, coconut residues, ricehull, animal waste and municipal solid waste. Technologies range from the use of bagasse for co-generation, rice/coconut husks dryers for crop drying, biomass gasifiers for mechanical and electrical applications, fuelwood
and agri-wastes for oven, kiln, furnace, and cookstoves for cooking or heating purposes.
 
In the Philippines, the implementation of the Biofuels Act on May 6, 2007 requires the mandatory blending of coco bio-diesel with petroleum diesel initially at one percent in early May 2007 and increasing to two percent within two years. It also calls for 5% Ethanol with gasoline within the first 4 years. There are several companies in the Philippines producing coco-biodiesel. Chemrez, the largest, targets to produce 60 million liters of coco-biodiesel per year out of a total of 110 million liters of coco-biodiesel per year. Senbel produces 25 million liters and 10 million liters are produced by RI Chemicals.
 
Our future for sale: the rhetoric of energy independence and climate change
 
In its Philippine Energy Plan, the government is currently focused in the implementation of electric power reform and the energy independence program. Part of these programs is the restructuring of the power industry through the implementation of the EPIRA, from the sale of generation plants, the TRANSCO, and the downstream liberalization and deregulation of the power sector.
 
The energy independence package pursues the use of all the natural energy resources through continuous exploration, development and exploitation of NRE's including indigenous energy sources such as coal, natural gas and oil. According to the government, this promotion of NRE's would help in reducing our imports in oil from other countries, be environment-friendly and help in conserving fossil fuels due to the dwindling of oil sources globally.
 
Focus on biofuels
 
As biofuels have grown in importance in discussions about energy and climate change, the extent to which biofuels can play a beneficial role in replacing fossil fuels and reducing carbon emissions is still hotly debated. The Philippines has joined the bandwagon by the enactment of the Biofuels Act. The production for biofuels has been touted as a way for fuel independence.
 
However, biofuel production seems to benefit those who want to preserve ownership of large tracts of sugarcane and coconut land rather than genuinely sustaining domestic demand and lowering prices.
 
The large quantities of crops required to replace the small fraction of the huge volume of oil will have a large scale impact on the food security and self-sufficiency of our agricultural production. Even for high-yield crops, large tracts of land are necessary. According to one estimate, if all the country's coconut supply is to be turned into biodiesel, the country can only sustain up to a 20% blend of biodiesel.
 
Biofuels have limitations as a source of ‘clean’ energy. The expected carbon savings are low or even negative because it is highly energy intensive to grow crops and process of them into fuel. Furthermore, converting farmland for rice or food to biofuel cultivation or destroying forests to make way for fuel crops are controversial. For a country with a high hunger rate, as well as a large landless peasant base, conversion of farmland will not only reduce the land available for growing food but could possibly worsen the the state of landlessness affecting many people throughout the country. The clearing of natural forests would also affect water and soil quality and threaten biodiversity.
 
The Arroyo government has gone around the world in its efforts to sell our country's energy resources to foreign firms and interests. Even in the upcoming Energy Summit it has organized, it seeks to promote further private investment in the exploration and exploitation of our indigenous and renewable energy resources and to continue to implement its deregulation and liberalization policies in the energy sector.
 
The Department of Energy, with the help of USAID, have long released the RE business Development Guide book to serve as a guidelines for private investors in renewables. There is the push to put into law the Renewables Act whose cornerstone is the liberalization of investment in renewable energy. The government justifies the privatization of NRE by saying that developing NRE’s is very risky and should be left to foreign investors
 
The role of foreign interests in the privatization of the energy industry
 
It was not a secret that President Arroyo railroaded the signing of the EPIRA due to the pressure by creditors on the Philippine government before they released the power reform program loans to finance the country’s power development program. Major creditors include the Japan Export-Import Bank, Asian Development Bank (ADB), and World Bank (WB). These power sector reforms and the sale of NPC to private business were long standing recommendations of the IMF. These recommendations were part of the structural reform program the country has to implement as a pre-condition for more loans.
 
The training of staff, and even the website, of the Energy Regulatory Commission (ERC), as well as its gamut of consultants, are courtesy of the AGILE, a USAID program that seeks to facilitate liberalization of our economy. The USAID has used energy efficiency and climate change to push legislation such as the EPIRA which had brought unending rate increases to consumers and the loss of energy security by putting into independent power producers (IPPs) our energy generation capacity.
 
According to US Department of Energy, “the Philippines is important to world energy markets because it is a growing consumer of energy, particularly electric power, and a major potential market for foreign energy firms.” Aside from importing from these foreign energy firms, the Philippines also buys from these foreign TNCs who own and control most of the private local energy generation capacity. The passage of the Power Act, which fully privatizes the NAPOCOR, further increases tour dependence on these foreign firms. We end up as a country that is a market of foreign firms who sell goods that are extracted from the country itself.
 
In oil and gas alone, we have the following firms who have bidded, availed or were awarded service contracts: Malampaya (Shell/Chevron Texaco), Exxon Mobil in Mindanao, a consortium of BHP Billiton (Australia), Amerada Hess Ltd. (US), Unocal Sulu (US) Ltd. and Sandakan Oil II, LLC in the Sulu Sea, a consortium of Alcorn Gold Resources Corp., Trans-Asia Oil and Energy Development Corp. and PetroEnergy Resources Corp. in the East Visayan basin off Leyte island, EF Durkee and Associates in the Cagayan Valley region (Piat-San Jose area), Laxmi Organic Industries Ltd. (India) in the Mindoro-Cuyo basin west of Mindoro island, in West Palawan (a consortium of Ottoman Energy Ltd., Australasian Energy Ltd. and Trans-Asia Oil and Energy Development Corp), Nido Petroleum Philippines Ltd. off-Palawan, off-Mindoro with Petronas Carigali and Philippine National Oil Co.-Exploration Corp., in the Cagayan basin : Aragorn Power Corp., in South Cebu : Phil-Mal Petroenergy Corp. and Ottoman Energy Ltd. in Northewest Palawan.
 
Particular to China and ethanol biofuel, there are three ethanol fuel plants will be set up by China in the Philippines,involving development of thousands of hectares of land for sugar cane,the main ingredient in ethanol production. Two are in Negros island by BSBM BiofuelsCorp. and Southern Negros Development Corp: one for 120,000 liters a dayin Murcia town in Negros Occidental province. There will be another with a capacity of 150,000 liters a day in Camugao and Camansi in Kabankalan City, using sugarcane molasses as feedstock. About 10,000-12,000 hectares of land will be developed for these projects. A third will be built in Zamboanga del Norte province by a joint venture with state-owned China Machineries Engineering, with a production capacity of 150,000 liters of ethanol daily.
 
Biofuels' climate change rhetoric
 
Much has been said about climate change and its impacts on the environment and the people. The trend of rapid environmental changes both at the global and national level, is expected to bring about massive devastation and loss of human lives. Already, this impending threat is seen in the way that temperatures and sea water levels have risen in the Philippines, along with extreme weather patterns.
 
There are risks associated to vulnerable ecological systems such as polar and high mountain
communities and ecosystems, biodiversity hotspots, corals, and small island communities. Extreme weather events such as droughts, heat waves, and floods are also expected to increase. Sea level rise can lead to loss of coastal area and associated impacts.
 
Management and adaptation to the impacts of weather and climate-related events is dependent on social and economic development. The most vulnerable to climate change are also those in the most vulnerable economic position in society: the poorest peoples in the poor countries.
 
These asymmetric climate change emissions indicate an inverse relationship between climate
change vulnerability and responsibility. Primary emitter countries must change their production
activities and consumption of energy and seek sustainable solutions.
 
Basic human needs, economic and social development need adequate energy and infrastructure.
Reducing poverty means providing adequate energy to developing countries while building capacity to withstand climate change impacts. We should avoid the extreme end of denying development to developing and poor countries just to meet carbon emission reduction targets for the world.
 
Carbon offset mechanisms should be rethought, especially GHG reduction and emissions trading projects that shift out carbon mitigation and reduction out of industrialized countries towards developing countries. These can distort development activities in these countries while keeping the consumption and production activities of industrialized countries. Clean Development Mechanisms (CDM) and carbon trading effectively marketize carbon emissions and essentially shuffles around responsibility to curb emissions.
 
The personal/individual reduction of carbon emissions, shifts to compact fluorescent light bulbs to curb the effects of climate change and switches to biodegradable products are more effective if these individual actions become more widespread and are incorporated into state policy.
 
Campaigns to use energy efficient lighting, to conduct energy audits and household reductions of carbon emissions can be undertaken but these should also be framed within larger political and economic conditions which have vastly accelerated the rate of global warming. Incentives and support for poor communities to engage in these initiatives should be done because the poor usually can only provide for their short term day-to-day needs and would not have the capacity to buy new technologies.
 
Biodiversity, health, poverty, rural livelihoods and food security are affected by global warming primarily in underdeveloped and developing countries where mitigation is not affordable. Fuel wood and biomass are still the primary fuel for around 2 billion people without access to adequate energy to meet their basic needs.
 
The use of alternative fuels with low or no carbon dioxide emissions should be encouraged and
made accessible. However, the policies of privatization and investment liberalization of these alternative fuels would make these unaffordable and inaccessible. Reversing these liberalization policies, nationalization of energy production and subsidizing these alternative energy resources to make them accessible to the poor should be considered. Fuel production should be secondary to food production and security.
 
 
Energy for the Filipino People
 
The experience of EPIRA and the oil deregulation law has only resulted into ever increasing utility prices, the plunder of our natural resources and the intensification of the control of foreign TNCs over our power industry and our economic development as a whole.
 
Furthermore, it has shown the vulnerability of the government to pressure and dictates of huge foreign banks and financial institutions. It is indeed an ironic situation that the Philippines’ rich energy sources does not translate to economic prosperity for the Filipino people.
 
Under the Aquino to the Macapagal-Arroyo administrations, we are steadily losing control over our energy resources through the privatization and sale of power plants, hydroelectric dams, oil and natural gas wells and geothermal sites under laws such as the Electric Power Industry Reform Act or the EPIRA and the oil deregulation law. It was Gloria Arroyo, who only a few months into her term, railroaded the approval of EPIRA in Congress in 2001. It is clear that we will have no respite from this with the Arroyo administration's mega-sale of our energy resources.
 
While privatization purports to relieve the government from indebtedness and the “unnecessary” burden of providing subsidies to vital public utilities, privatization actually facilitates the entry and control of national economies by foreign transnationals who, at present, are the dominant players among the independent power producers or IPPs and are the investors in oil and gas exploration and exploitation. Furthermore, these firms enjoy tax exemptions and preferential treatment which result to long-term government losses.
 
Indigenous and renewable energy sources can help a lot in the growth of our country and in building local industry and developing our agriculture in rural areas but even the much touted renewable energy bill pins its hopes in foreign investments to develop the biofuels and renewable energy industry. The parts and machinery necessary for the exploitation of biofuels, solar and wind energy are still going to be imported from other countries.
 
Oil importation can be done through centralized procurement from friendly countries and those who would sell at advantageous prices. Strategically distributed and state controlled central storage in Luzon, major Visayan Islands and Mindanao can be done to ensure supply to other areas in the country.
 
We should build our own capacity to refine crude oil and build basic downstream oil industries to make our own plastics, petrochemicals and fertilizers, energy. Research and development to reduce dependence on oil as the primary fuel for industry should be supported. The nationalized oil industry should hand-in-hand develop agriculture by providing fuel for tractors and fertilizers from petrochemicals. A nationwide distribution system for refined petroleum products should be built to provide access to cheap products for all.
 
Local generation of biofuels cannot and should not be divorced from land reform. For example, current large scale production of crops is almost always connected to large landowners. In Bukidnon, small landowners have opted to rent out their lands to sugar planters where an estimated 55,732 hectares are devoted to sugarlands, increasing in mono-cropping. Food production should be the primary concern of our agricultural output.
 
Biodiesel and other alternative fuels should be developed in view of the long term problems and concerns of the country. The current oil monopoly and control of a few companies, the current land monopoly and control of a few landlords, and the mainly export oriented nature of production in our country are major stumbling blocks to the benefits of these alternatives.
 
Public utilities are services that are used by the people in their daily activities and economic production. These are power, water, fuel, transportation and telecommunications services. Limited access to these services would introduce additional difficulties that can be eased or facilitated by the use of the services provided by said utilities.
 
The nationalization of public utilities is important since it these public utilities are strategic in nature to the development of the country. It provides the necessary infrastructure and support to the people’s daily activities and industrial growth. If these industries are left to foreign monopoly capital, whose interest is to recoup their investment and rake in profits--- we would lose quality of service, an unending increase in utility costs and our national interest will not be addressed.
 
A government serious in developing our economy and desirous to ensure the welfare of the people should provide the necessary infrastructure and affordable services for them. It ensures that public utilities are part of the basic industries it builds and not hope for foreign investors to do it for the government.
 
Sadly, these will not be carried out by a government that wants to sell our national patrimony, allows foreign control of vital utilities, and is uninterested in genuine industrial development such as the current one in Malacanang.##