Playing a powerful role
“QUALITY, reliable, secure, and affordable power throughout the entire archipelago will be the backbone of a vibrant and robust Philippine economy,” wrote Department of Energy (DoE) Director Cesar G. dela Fuente III in DoE’s annual report in 2017. Part of that power is the valuable output of the fuel industry, which is still seen as one of the most vital sources of energy.
Many of what we use and consume today mostly rely on fuels. Institute for Energy Research further explains: “All of our decisions depend in some way on energy and the price of energy — how we travel, what we eat, what temperature we keep our houses, and which jobs we work.”
Likewise, many industries are tapping this single source for its multiple uses. Oil and gas power vehicles, houses, and even businesses; that’s why they are seen as critical components of the global economy. In fact, subsea hydraulics engineer Ryan Carlyle wrote in Forbes.com back in 2013 that oil and gas combined covers over half of the world’s energy.
As one of the most widely used sources of energy, the fuel industry possesses an impact in both the local and global economy. True to the definition of energy, fuels — in various ways — fuel the world to keep it running. “Except for a minuscule number of electric-powered vehicles, you can’t move anything anywhere faster than about 25 mph without oil...and you can’t run a modern economy,” wrote Mr. Carlyle. “There is no doubt in my mind whatsoever that modern civilization would collapse in a matter of months if oil stopped f lowing.”
While estimates on the global contribution of the fuel industry are hardly found, some sources are giving a hint of how fuel’s share figure up globally. For instance, in a discussion from finance website Investopedia, the oil and gas drilling sector, which constitutes companies that explore gas fields and develop them for operation, earned total revenues totaling to $2 trillion in 2017. “Since the 2017 estimates for worldwide gross domestic product range between $75 trillion and $87.5 trillion, the oil and gas drilling sector currently makes up something between 2% and 3% of the global economy,” Investopedia wrote.
In the Philippines, oil and gas are doing a significant share in the economy. The DoE compiled statistics published in its 2017 Philippine Energy Situationer and 2017 Key Energy Statistics, both of which include economic indicators.
As shown by the 2017 Key Energy Statistics, alongside the gross domestic product (GDP) tallying a 6.7% growth two years ago, the total final energy consumption amounted to 57.9 million tons of oil equivalent (MTOE), increasing from 54.6 MTOE last 2016.
Presenting the supply and demand situation in the Philippines in 2017 visá-vis 2016, the Situationer provided economic indicators like energy intensity, energy elasticity, and energy per capita.
Energy intensity, according to energyeducation.ca, measures “how much a bit of energy benefits the economy.” The following data must have attested to how it fairly did. “The country’s economy-wide energy intensity was sustained at 6.7 tons of oil equivalent per million pesos of real GDP (TOE/MPhp) in 2017,” DoE wrote. It also indicated that oil intensity was also constant at 1.8 barrel per P100,000.
Energy-to-GDP elasticity was at 0.9 units that same year. Oil also tallied the same units, although it decreased from 2016’s 1.1. Being positive and less than one, these values conclude that the “primary energy demand was least affected by proportionate changes in economic output”.
Energy per capita jumped to 0.55 TOE per person in 2017 from the preceding year’s 0.53. Oil per capita grew by 4.4% to 1.47 barrels per person, reflecting “increased consumption of energy,” and therefore indicating “improved access of the country’s populace to energy services due to extensive promotional efforts of the government and stakeholders in the energy sector.”
With these notable data, it is worth anticipating to see what greater role the oil and gas industry can play in spurring economic growth. DoE recently stated that investors are keen on drilling for oil and gas, and several groups expressed their interest to begin explorations. These local explorations, according to DoE Secretary Alfonso G. Cusi, “will offer positive contributions to our economy as a direct result of exploration-related investment.”
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