The Philippine Online Chronicles

The Aquino administration is setting its sights on energy security, focusing on the prospect of building oil storage facilities in the country.

Energy Secretary Jose Rene Almendras said in a press briefing on Monday that the government may put up an oil stockpiling facility, continuing plans laid a decade ago. Details of the project have yet to be finalized, though, reported GMANews.tv.

"So far, we do not have facilities, no places to put it...who's [going to] pay for it?" GMANews.tv quoted Almendras.

The Philippines has two refineries. State-owned Petron Corp. has a 180,000-barrel per day (bpd) refinery in Bataan, while Royal Dutch Shell Plc subsidiary Pilipinas Shell Petroleum Corp. has a 110,000-bpd facility in Batangas.

However, the Philippines imports crude oil from abroad, mainly Saudi Arabia and Singapore, as there are few local producers, and oil exploration, particularly in Palawan, is still in its infancy. As of 2005, the DOE said that the country's petroleum reserves total 456 million barrels of fuel oil equivalent, which consists of 25 million barrels of oil, 2,135 billion cubic feet of gas and 54 million barrels of condensate.

According to the government's 2009 trade statistics, fuel is second to electronic products in the country's top imports, though the Philippines imported significantly less last year than in 2008. This is probably due in part to the implementation of a law requiring refiners to blend plant-derived ethanol in locally retailed fuel. The country currently requires a 10-percent ethanol mix.

Rollback

Meanwhile, fuel prices will be lowered effective Tuesday, which company executives said is due to last week's decline of petroleum rates in the international market. This, despite an increase of international prices this week, said Inquirer.net.

However, the rollback may be because fuel being sold this week was purchased by oil magnates when prices were low.

Shell and Petron today reduced prices of gasoline, diesel, and kerosene by P1, while Eastern petroleum lowered theirs by P0.75, said GMANews.tv.

Other oil firms have yet to announce price changes.

Goodbye supply

Energy security is important not only in the Philippines, but the rest of the world as well, if scientists are correct. London-based Oil Depletion Analysis Centre said in 2007 that the world may run out of oil "sooner than we think," in response to a report by British oil firm BP Plc.

There is a "peak oil" theory, noted independent.co.uk, which says that people's consumption of oil will soon catch up with existing supplies, then outstrip the discovery of known reserves.

ODAC head Colin Campbell told the UK-based paper, "It's quite a simple theory and one that any beer drinker understands. The glass starts full and ends empty and the faster you drink it the quicker it's gone."

Despite reassurances by oil firms, theorists argue that the world has only 40 years of oil supply left.