Win and collect
Raising the bogey of an energy crisis, Senator Sherwin Gatchalian is pushing a bill that will grant incentives for the importation of liquefied natural gas (LNG) that goes against both the principles of self-reliance and the policy of the government to step away from splurging on tax incentives.
Senate Bill 2203 which aims to develop a midstream natural gas industry is betting on the Malampaya natural gas deposit to be depleted on schedule by around 2024.
“We could be facing a major energy crisis less than six years from now unless we find alternative sources to supply our country’s demand for natural gas,” Gatchalian said in sponsoring the bill.
This early, many in the energy sector are not happy with Gatchalian’s partiality to imported LNG when several local fuel resources are available, and along with that the senators’ aversion to an extension of the Malampaya operations.
Since the Udenna Group has indicated getting the nod of Chevron for the 45 percent stake in Malampaya and later on the same percentage of shares of project operator Shell Philippines Exploration BV, the Senator had sounded the alarm.
One veteran in the energy field said: “When you keep on bashing a good project, the next question is, who benefits when it falls apart?”
“Importing LNG exposes the supply to currency fluctuation. The better option is to rely on indigenous or tested supply portfolios of existing fuel resources,” the executive said.
The long-time official in the field also questioned Gatchalian’s bill’s rationale for granting incentives to LNG projects.
“What is the rationale for incentives? Numerous investors reportedly have pushed through the LNG import projects without the need for incentives. This demonstrates that such activity is commercially viable for them,” the executive noted.
He further asks: “Why should taxpayers subsidize private investors? The foregone taxes could be used for social programs like Covid vaccination, education, etc.”
The Duterte administration has made it a policy to grant universal incentives to ease doing business in the country instead of granting specific perks to particular undertakings which is a proven drain on public funds.
The policy is embodied in the Corporate Recovery and Tax Incentives for Enterprises Act which became a law last March.
The Senator, who is gunning for the top spot in the senatorial race next year and who had started a multimedia blitz this early, has put forward the rationale of energy security since the Malampaya supply is “running out” but the confidence of the local group that took over the project, that the resources can be extracted for at least seven more years puts his excuse off the mark.
The use of natural gas will also be in the equation as the country plans to drastically cut its dependence on coal or other fossil fuel in running power plants.
Timing the bill with all the incentives that it will provide to the dire need for campaign funds for 2022 indicates the measure’s real purpose.
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The Duterte administration has made it a policy to grant universal incentives to ease doing business in the country instead of granting specific perks to particular undertakings which is a proven drain on public funds.
“This
early, many in the energy sector are not happy about Gatchalian’s partiality to imported LNG when several local fuel resources are available, and along with that, the senators’ aversion to an extension of the Malampaya operations.