TRANS-ASIA OIL AND ENERGY DEVELOPMENT

CORPORATION
A member of the
PHINMA Energy Group
o  Energy produced and used in ways that support
human development over the long term, in all its
social, economic, and environmental dimensions
o  Does not refer simply to a continuing supply of
energy, but includes production and use of energy
resources in ways that are compatible with long-
term human well being and ecological balance
o  Accessibility to modern energy in terms of
price, factoring in affordability and
sustainability
o  Availability of modern energy in adequate
quantity and acceptable quality on a long-
term basis
o  Acceptability of energy sector activities in
terms of their environmental and social
impacts
  Major challenges
  Price
  Energy Security
  Environmental issues
  Social issues
  Poverty Alleviation
  Critical inputs – influenced by and vulnerable
to global and regional developments
  Policies
  Technology
  Capital

  Critical players
  Government – local & national
  Industry
  Society
  Regional & international coalitions
o  Availability of commercial form of energy for all (e.g.,
100% electrification)
o  Clean energy

o  Security and self-sufficiency

o  Economic and competitive costs of energy (power and fuel)
as opposed to “popular” costs of energy
o  Deregulated, highly competitive energy industry
  Privatization
  Deregulation
  PD 87, PD 1442
  RA 7156 – Mini-hydro Act
  RA 9637 – Philippine Biofuel Act of 2006
  RA 9513 - Renewable Energy Act 0f 2008
  Mobilize private sector investments – privatization, incentives
  Energy efficiency
  RA 8749 - Clean Air Act of 1999
  Social programs – DOE 1-94; royalties
  Standby rationing plan for emergency
  Market-based structures and competition
  Strengthening oversight over deregulated sectors of the industry
  Price regulation – price-setting methodology
  Energy efficiency
  Domestic Capital – there is limited domestic capital; needs to
mobilize foreign investments; dependence on foreign capital
increases security risks
  Development of indigenous resources
  Mass transportation
  Provision of Energy Services to Rural Areas - make commercial
energy available to increase income-generating opportunities
  Decentralized solutions
  Appropriate technologies
  Innovative credit arrangements
  Local involvement in decision-making
  Subsidies – structure and source of funds
  Subsidies to address affordability by the poor and competitiveness
of industries - transparent & targeted subsidy to industries we
want to encourage for value addition to the national economy
facilitating competitiveness; and, to meet the needs of the
vulnerable group (poor)
  Structure – life-line rates; universal charges; cross-product
subsidies; promotes energy conservation; discount on diesel for
public transport
  Sources – royalties; DOE 1-94; EVAT
  Competition Law (Anti-trust)
  To address pricing mechanism for indigenous resources with
attendant impact of imported technology and high capital costs
  Policies to manage the environment towards a market-based
structures and competition
  Diversify energy mix & sourcing of imports – what will be used to
drive desired energy mix, free market or light handed regulation?
  Technology innovations and deployment
  Build domestic R&D capability to support specially indigenous
resource development
  Deployment of technology for domestic manufacturing, specially for
rural applications
  Human resource development
o  Resources
  Self-sufficiency in terms of indigenous
resources
  Diversification in terms of energy mix
o  Downstream Facilities
o  Technology
  Domestic technology
o  Capital
  Mobilizing domestic investments
o  Indigenous resources
  Deregulation - is it enough to attract investments in
indigenous resource development?
  Pricing mechanism
  Renewable energy
  Bio-fuels
  Do we have the technology? Does not support long-term security if
import dependent for technology
  Do we have manufacturing facilities for equipment & engineering
services? Import dependent too?
o  Information campaign on oil and electricity
deregulation
o  Predictable and transparent regulation
o  Competition governance
o  Regulatory rules for monopoly businesses
o  Consumer protection
o  Investment climate – peace & order; taxation;
bureaucracy; corruption; policies
o  R&D
o  Diversification
  Diversify energy mix & sourcing of imports
  Limited to oil, coal, gas, indigenous like geothermal & hydro
  Nuclear
  NRE
  Alternative transport fuels (LPG, CNG)
  Alternative transport systems (e-vehicles)
  Energy efficiency & demand management – lessens
requirements, postpones capacity additions
  Two significant drivers
  Costs
–  increasing costs of inputs to the domestic energy
industry (crude, coal, technology, capital)
  Technology
–  energy is technology-based
–  technology influences policies in developing countries
–  country is import-dependent for technology
o  Global resources are abundant – technology
& investments required
o  Shipping lanes
o  Geo-political
o  High prices to developing countries
o  Supply & price stability
o  Infrastructures
  Two refineries
  No LNG facilities
  CNG stations?
  Power Grid
o  Support industries & services
  Do
we have manufacturing facilities for equipment &
engineering services? Import dependent too?
o  Domestic infrastructures
  Technology
  Capital
  Support industries & services
DOWNSTREAM – Natural Gas
o  Technology
  Do we have the technology?
  Does
not guarantee long-term security if we are import
dependent for technology
»  Domestic technology
»  Domestic R&D capability

o  Capital
  How large is our domestic financial capital?
  Appropriate technology for rural application
  Mitigation of environmental impacts – emissions
  Control systems
  Biofuel feedstocks
  CFL
  Nuclear safety – waste disposal
  Cleaning fossil fuel
  Energy and carbon balance issues
  Reliable commercial legislation and jurisdiction, incentives,
defray risks associated with investments, ODA
  Political and economic stability, provide reasonable
predictability, efficient bureaucracy
  Regulatory regime that promotes competition and efficiency and
protected from arbitrary political intervention
  Consistent regulatory and policy signals which can be used as a
basis for orderly decision-making . Confusion about the thrust
and impact of government policies on incentives, regulations
and competition have to be eliminated
  Necessary physical structure
o  Strategic reserves of oil products -mandatory
inventory for oil products
o  Refineries or imports – tariff differential?
o  Development of indigenous resources – renewable
energy; technology; investments; incentives
o  Mandatory energy savings – policies, incentives
(avoid excessive dependence on imports)
o  Regional & International Cooperation
o  Technology Transfers
o  Domestic R&D capability
o  Markets must sustain energy security
o  Long-term nature of energy systems requires long
-term energy planning; 25 years to 50 years
o  Forecasting techniques – GDP, population
o  Err on the excess when planning future capacities?
Costs of excess versus costs of shortages