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The Department of Energy shall

prepare, integrate, coordinate,


supervise, and control ALL plans,
programs, projects, and activities of the
Government relative to energy
exploration, development, utilization,
distribution, and conservation. (Sec.
4, R.A. No. 7638)

The Department of Energy


(DOE)
Classroom Presentation with concursos in the
SCS Issue

B. Distura 2017
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Contents
INTRODUCTION........................................................................................................................... 3
THE D.O.E. ..................................................................................................................................... 1
BUREAUS AND SERVICES ......................................................................................................... 7
OFFICE OF THE SECRETARY ................................................................................... 7
OFFICE OF THE UNDERSECRETARY ......................................................................... 7
OFFICE OF THE ASSISTANT SECRETARY ................................................................ 7
INVESTMENT PROMOTION OFFICE ...................................................................... 8
CONSUMER WELFARE AND PROMOTION OFFICE ........................................... 8
PUBLIC AFFAIRS OFFICE .......................................................................................... 9
INTERNAL AUDIT OFFICE ...................................................................................... 10
ADMINISTRATIVE SERVICES ................................................................................ 11
GENERAL SERVICES DIVISION ................................................................................ 12
TREASURY DIVISION .................................................................................................. 13
FINANCIAL SERVICES .............................................................................................. 14
BUDGET DIVISION....................................................................................................... 14
ACCOUNTING DIVISION ............................................................................................ 15
COMPLIANCE DIVISION ............................................................................................. 16
LEGAL SERVICES....................................................................................................... 19
HEARING DIVISION ..................................................................................................... 19
LEGAL COUNSELLING DIVISION ............................................................................. 19
CONTRACT DIVISION ................................................................................................. 20
INFORMATION TECHNOLOGY AND MANAGEMENT SERVICES ................ 21
ENERGY RESEARCH TESTING AND LABORATORY SERVICES .................. 22
GEOSCIENTIFIC RESEARCH AND FUEL TESTING LABORATORY DIVISION 22
LIGHTING AND APPLIANCE TESTING DIVISION ................................................. 24
ENERGY POLICY AND PLANNING BUREAU ...................................................... 27
PLANNING DIVISION .................................................................................................. 27
POLICY FORMULATION AND RESEARCH DIVISION ........................................... 28
ENERGY COOPERATION AND COORDINATION DIVISION ................................ 29
ENERGY RESOURCE DEVELOPMENT BUREAU ............................................... 31
PETROLEUM RESOURCES DEVELOPMENT DIVISION ........................................ 31
COAL AND NUCLEAR MINERALS DIVISION ......................................................... 32
ENERGY UTILIZATION AND MANAGEMENT BUREAU ................................. 33
ALTERNATIVE FUELS AND ENERGY TECHNOLOGY DIVISION....................... 33
OIL INDUSTRY MANAGEMENT BUREAU ........................................................... 33
OIL INDUSTRY STANDARDS AND MONITORING DIVISION ............................. 34

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OIL INDUSTRY COMPETITION AND MONITORING DIVISION .......................... 35


NATURAL GAS MANAGEMENT DIVISION ............................................................. 37
RETAIL MARKET MONITORING SPECIAL CONCERN DIVISION ...................... 37
ELECTRIC POWER INDUSTRY MANAGEMENT BUREAU.............................. 39
POWER PLANNING AND DEVELOPMENT DIVISION ........................................... 39
POWER MARKET DEVELOPMENT DIVISION ........................................................ 40
RURAL ELECTRIFICATION ADMINISTRATION AND MANAGEMENT DIVISION
.......................................................................................................................................... 41
RENEWABLE ENERGY MANAGEMENT BUREAU ............................................ 42
SOLAR WIND ENERGY MANAGEMENT DIVISION ............................................... 43
GEOTHERMAL ENERGY MANAGEMENT DIVISION ............................................ 44
BIOMASS ENERGY MANAGEMENT DIVISION ...................................................... 44
HYDROPOWER AND OCEAN ENERGY MANAGEMENT DIVISION ................... 45
NATIONAL RENEWABLE ENERGY BOARD - TECHNICAL SERVICES AND
MANAGEMENT DIVISION .......................................................................................... 46
LUZON FIELD OFFICE .............................................................................................. 46
ENERGY RESOURCE DEVELOPMENT AND UTILIZATION DIVISION .............. 47
ENERGY INDUSTRY MANAGEMENT DIVISION ................................................... 47
VISAYAS FIELD OFFICE........................................................................................... 48
ENERGY RESOURCE DEVELOPMENT AND UTILIZATION DIVISION .............. 49
ENERGY INDUSTRY MANAGEMENT DIVISION ................................................... 50
MINDANAO FIELD OFFICE ..................................................................................... 52
ENERGY RESOURCE DEVELOPMENT AND UTILIZATION DIVISION .............. 52
ENERGY INDUSTRY MANAGEMENT DIVISION ................................................... 53
PDP AND AMBISYON 2040 (ENERGY POLICY DIRECTION TOWARDS 2040) ........... 57
TRAIN and Energy and Oil Deregulation .............................................................................. 61
ENERGY AND SCS DISPUTE (PH-CH)................................................................................... 71

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INTRODUCTION
Energy as a natural resource is vital to the economic development of the Philippines and
any country for that matter. With sufficient supply of energy, a nation has one of the most
indispensable natural resources so that various activities can be implemented for the benefit of the
people. In particular, the people will benefit from a steady supply of energy in terms of
improved income due to economic activities, better literacy, improved health and healthcare
services, enhanced security and many more.

In this digital information era, access to energy means access to communication,


information and technology.

The present administration embarked on infrastructure development program throughout


the country dubbed as BUILD, BUILD, BUILD. A modern infrastructure is needed for an inclusive
and sustainable development. And energy plays an important role in infrastructure development.
Ergo, sustainable development requires steady and sustainable energy supply.

Under the 1987 Constitution, potential energy is one of the natural resources (NR). NRs are
owned by the State (jura regalia) and includes: (Art. XII, Section 2)

Lands of the public domain


Waters
Minerals
Coal
Petroleum and other mineral oils
All forces of potential energy
Fisheries
Forests or timber
Wildlife
Flora and fauna
Others.

For the purpose of this endeavor, we shall consider ENERGY RESOURCE the exploration,
development, utilization, distribution and conservation of which shall be under the full control and
supervision of the State. For a comprehensive lists of laws, regulations and issuances regarding the
energy sector see, Annex 1.

Energy Resource means any substance or phenomenon which by itself or in combination


with others, or after processing or refining or the application to it of technology, emanates, generates
or causes the emanation or generation of energy, such as but not limited to petroleum or petroleum
products, coal, march gas, methane gas, geothermal and hydroelectric sources of energy, uranium
and other similar radioactive minerals, solar energy, tidal power, as well as non-conventional
existing and potential resources.1

It is best to view it in a business perspective, after all, the thrust of the government is to
privatize the energy sector. Michael Porter of Harvard Business School discussed in his influential
1985 book "Competitive Advantage," the concept of the value chain. (Fig. 1) According to him,
value chain is a set of activities that an organization carries out to create value for its customers.

1
Sec. 3, EO No. 172

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Porter proposed a general-purpose value chain that companies can use to examine all of their
activities, and see how they're connected. Below is the generic value chain that Porter pioneered.
The model consists of Primary Activities2 and secondary activities3. We shall consider only the
primary activities.

Figure 1: Michael Porter's Value Chain. Competitive Advantage, 1985.

Inbound Outbound
Operations Marketing Sales Services
Logistics Logistics

Procurement (purchasing)

HR Mgt

Technological Devt

Infrastructure

The Supply Chain4 is nearer to the raw materials while the Demand Chain5 is nearer to
the customer. We shall make use of this conceptual model so that we can understand better the role
of DOE which is to manage the whole of energy sectors value chain. (See Figure 2)

It is worthy to note that the energy sector uses the concepts: UPSTREAM, MIDSTREAM
and DOWNSTREAM.

The upstream industry finds and produces crude oil and natural gas. The upstream is
sometimes known as the exploration and production (E&P) sector. The midstream industry
processes, stores, markets and transports commodities such as crude oil, natural gas, natural gas
liquids (NGLs, mainly ethane, propane and butane) and Sulphur. The midstream provides the vital
link between the far-flung petroleum producing areas and the population centers where most

2 Primary activities relate directly to the physical creation, sale, maintenance and support of a product or service. They

consist of the following:

Inbound logistics These are all the processes related to receiving, storing, and distributing inputs internally. Your
supplier relationships are a key factor in creating value here.
Operations These are the transformation activities that change inputs into outputs that are sold to customers. Here, your
operational systems create value.
Outbound logistics These activities deliver your product or service to your customer. These are things like collection,
storage, and distribution systems, and they may be internal or external to your organization.
Marketing and sales These are the processes you use to persuade clients to purchase from you instead of your
competitors. The benefits you offer, and how well you communicate them, are sources of value here.
Service These are the activities related to maintaining the value of your product or service to your customers, once it's
been purchased. (https://www.mindtools.com/pages/article/newSTR_66.htm)
3 Procurement (purchasing), Human resource management, Technological development, Infrastructure
4 Entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer.
It comprises of vendors that supply raw material, producers who convert the material into products, warehouses that store,
distribution centers that deliver to the retailers, and retailers who bring the product to the ultimate user. (businessdictionary.com)
5 The entity who chooses among competing products and services and, thus, controls the demand. (businessdictionary.com)

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consumers are located. The downstream industry includes oil refineries, petrochemical plants,
petroleum products distributors, retail outlets and natural gas distribution companies.6

FIGURE 2: THE CONCEPTUAL FRAMEWORK OF THE PRESENTATION

R
A VALUE CHAIN
(Demand)
W C
M U
A Supply Chain
S
T Explore and T
Manufacturing Distribution
Produce
E (Inbound)
(Operations) (Outbound)
Marketing Sales Service
O
R M
I UPSTREAM MIDSTREAM DOWNSTREAM E
A R
L PROCESSES, STORES, REFINES, SELLS,
S E&P MARKETS AND
DISTRIBUTES
TRANSPORTS

Hence, the UPSTREAM is nearer to the raw materials like the supply chain. The
DOWNSTREAM is nearer to the consumers like the DEMAND chain. The MIDSTREAM is what
connects the UPSTREAM to the DOWNSTREAM.

Here is a generic example of an energy supply chain that illustrates the three (3) industries,
upstream, midstream and downstream.

FIGURE 3: GENERIC ENERGY SUPPLY CHAIN7

Sec. 4 of RA No. 7638 outlines the responsibility the DOE shall assume, to wit:
The Department of Energy shall prepare, integrate, coordinate, supervise, and control ALL
plans, programs, projects, and activities of the Government relative to energy exploration,
development, utilization, distribution, and conservation8. It can be simplified by saying that the
DOE manages the energy value chain.

6 See, http://www.psac.ca/business/industry-overview/ (Last accessed, September 5, 2017)


7 Image source: http://www.mepc.org/sites/default/files/uploads/energy-supply-chain_opt.png
8 The law of conservation of energy is completely different from energy conservation. Energy conservation means saving

energy through such things as insulating your home or using public transportation; generally it saves you money and helps the planet.
The conservation of energy has nothing to do with saving energy: it's all about where energy comes from and where it goes.
(http://www.explainthatstuff.com/conservation-of-energy.html)

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SOURCES OF ENERGY IN THE PHILIPPINES


Energy and power are critical to industrialization. Without their huge coal resources,
countries like USA, England and Germany would not have been industrial giants. Unfortunately,
the Philippines has very limited fossil-fuel deposits and needs to import almost all of its fuel
requirements. Even Malampaya gas is about to run out. Unless we impose our claim on Reed Bank,
the chances of finding more natural gas deposits are slim. However, Philippines is blessed with
indigenous RE sources, which can power its energy needs well into the future. Even excluding solar
and ocean resources which have practically unlimited potential, the countrys RE potential is almost
100,000 megawatts, according to the Department of Energy. This is more than enough to support
our power demand for the rest of the century.9 Figure 4 enumerates the sources of energy in the
Philippines:

Figure 4: ENERGY SOURCES IN THE PHILIPPINES

9
Maniego, P. H. (October 1, 2016). Renewable energy can sustain PH industrialization. Philippine Daily
Inquirer. (http://opinion.inquirer.net/97799/renewable-energy-can-sustain-ph-industrialization)

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Energy Supply and Demand Situation of the PH10

The countrys energy self-sufficiency level of 53.5 percent fell short of the 60 percent target
in 2015. The countrys total primary energy supply was placed at 50.4 metric tons of oil equivalent
(MTOE) with local energy comprising 26.9 MTOE of the total. Oil remained the countrys major
energy source accounting for 32.2 percent of the energy mix. (See Figure 5)

FIGURE 5: PHILIPPINE ENERGY SUPPLY AS OF JUNE 2015

Image source: PDP 2017

The countrys total final energy consumption reached 29.8 MTOE with the transportation
sector accounting for 10.6 MTOE, and the residential sector for 8.7 MTOE.

Power generation has increased but is still insufficient to meet the growing demand, and the
situation is further exacerbated by feedstock security concerns. Policies have been initiated to
increase competition in power generation and support development in renewable energy. However,
power supply is still insufficient to meet the ever-increasing demand for electricity which, in turn,
contributes to the high cost of electricity.

The Philippines total installed capacity grew by 4.6 percent from 17,944 megawatts (MW)
in 2014 to 18,765 MW in 2015 (Table 1). Power generation grew by 6.7 percent with the addition
of 5,152 gigawatt-hour (GWh) from 2014 to 2015.

The Luzon grid had thin reserves up until September 2016 while the electricity supply in
the Visayas was critical in the second semester of 2016. On the other hand, Mindanao has sufficient
reserves until February 2017, with reserve capacity of more than 50 percent. While fiscal and
nonfiscal incentives were provided to encourage investments in the sector, the timely entry of the
private sector in power generation has been impeded by protracted red tape in the processing of
necessary permits.

10
Source: PDP 2017

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Despite the passage of the Renewable Energy Law in 2008 and the adoption of the National
Renewable Energy Program for 2012-2030, only 7,013.9 MW of renewable energy has been
installed out of the potential 14,499.8 MW.

Hydropower plants comprised 19.2 percent of the countrys total installed capacity, but
extremely hot or dry weather conditions, like the El Nio phenomenon, affected the adequacy and
reliability of energy supply. (More on the renewable energy below.)

Natural gas from Malampaya powers 23 percent of the Luzon dependable capacity. But the
depletion of the Malampaya Natural Gas Field, as well as the expiry of the Gas Supply Purchase
Agreement between Shell Philippines Exploration and its off-takers, threatens energy security.
Continued exploration works in existing petroleum service contracts failed to produce new
indigenous natural gas of commercial quantity. Disputes in the West Philippine Sea also contribute
to uncertainties in petroleum exploration. The lack of policies and backbone infrastructure hampers
the growth of the natural gas industry in the country.

Meanwhile, the private sector continued to invest in coal-fired power plants in view of
shorter gestation period and in response to the countrys baseload capacity requirement. Indonesia
supplies 70 percent of the Philippines coal import needs, but their moratorium on coal shipments
following the risk of kidnappings and piracy in the West Philippine Sea threatened the countrys
coal supply.

TABLE 1: INSTALLED CAPACITY (IN MW) (as of 2015)

GRID INSTALLED DEPENDABLE AVAILABLE NEWLY


INSTALLED
(1st HALF
2016)
Luzon 13,668 12,17 9 9,624 662
Visayas 2,683 2,228 2,001 281
Mindanao 2,414 2,025 1,563 328
Total 18,765 16,432 13,188 1,271
Source: DOE

FIGURE 6: RENEWABLE ENERGY SHARE IN PHILIPPINE INSTALLED CAPACITY:


2015

Image Source: PDP 2017

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Development of the transmission network and distribution facilities was hampered by issues
on right-of-way, security and resiliency to natural calamities. The lack of interconnection between
Mindanao and the Luzon-Visayas grid meant that surplus in the former could not be utilized in the
latter, and vice-versa. Likewise, there is still no established structured market in Mindanao similar
to the existing wholesale electricity spot market (WESM) in Luzon and Visayas. Aggravating the
issue of reliable supply is the concern on resiliency against natural calamities and the safety of
energy facilities against such issues as the sabotage of electricity transmission and distribution
facilities, especially in Mindanao.

In addition, the difficulty of acquiring right-of-way necessary for the National Grid
Corporation of the Philippines to implement transmission line projects is a constant obstacle to grid
expansion. This is especially true in urban areas and even in the rural areas with indigenous peoples.
Limited island-to-island interconnection is also seen as a hindrance to extending secure and reliable
electricity service.

Part of the Philippine commitments to the ASEAN are the ASEAN Power Grid (APG) and
the expansion of the Trans-ASEAN Gas Pipeline (TAGP). The Philippines has yet to develop its
domestic pipelines prior to connection with other ASEAN countries due to the absence of an
enabling legal and regulatory framework that will oversee and regulate the natural gas industry,
including incentives to prospective investors.

While there has been considerable effort in recent years to pursue nationwide distribution
of electricity, gaps in access especially in the rural and off-grid areas remain. The household
electrification level has reached 89.61 percent (20.36 million out of 22.72 million households) in
July 2016 through the provision of technical and financial support to electric cooperatives and the
implementation of missionary electrification programs, including the New Power Provider and
Qualified Third Party programs. However, much is still needed to achieve the 7th sustainable
development goal of universal energy access by 2030, particularly in Mindanao where household
electrification level stands only at 72.38 percent (see Table 2).

TABLE 2: HOUSEHOLD (HH) ELECTRIFICATION (as of December 2015)

ISLAND TOTAL HH SERVED HH UNSERVED ELECTRIFICATION


HH LEVEL (%)
Luzon 13,803,814 13,088,991 714,823 94.82
Visayas 4,076,310 3,767,391 308,919 92.42
Mindanao 4,841,306 3,503,952 1,337,354 72.38
Philippines 22,721,430 20,360,334 2,361,096 89.61

As of June 2016, the total rated capacity of the 285 National Power Corporation-Small
Power and Utilities Group power plants used in missionary electrification is 193.72 MW, with a
total dependable capacity of 136.75 MW. Most of the power plants operate for limited hours only
(i.e., 4, 8, or 12 hours). Generally, the distribution and provision of electricity has been hampered
by the following:

a. High costs of fuel and logistical support for diesel plants and the low capacity to
pay and low willingness to pay for the service of households especially in rural areas

b. Low technical and absorptive capacities of some electric cooperatives

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c. Increasing number of households and service demands (e.g., request from 8 hours
per day to 12 hours per day service)

d. More funds needed for missionary electrification to benefit more marginalized


communities in off-grid areas

e. Few private sector participants

f. Various institutional bottlenecks such as compliance requirements of LGUs, right-


of-way, and peace and order.

Gains in energy efficiency and conservation have been achieved but more work is needed
to optimize the benefits of demand-side management.

In 2015, the country was able to save energy amounting to 5,199.6 kiloton of oil equivalent
through the various programs under the National Energy Efficiency and Conservation Program.

Moreover, as of March 2016, DOE has accredited 15 energy service companies (ESCOs) to
accelerate the implementation of the governments energy efficiency and conservation (EEC)
initiatives. The initiatives will need to be expanded to include the development and promotion of
new technologies and programs. This is to encourage the practice of sensible energy habits in
government and private establishments, households and transportation to achieve greater energy
savings.

Even at full capacity, indigenous supply is still way below the local demand to meet the
increasing blending requirements of the local fuel industry. Due to the implementation of Republic
Act 9367 (Biofuels Act) in 2009, 249 million liters (ML) and 179 ML of fuel have been displaced
in 2015 through the mandated blending for bioethanol and biodiesel, respectively.

However, total bioethanol and biodiesel plant capacities in the country stand at 198 ML and
584.9 ML annually, respectively.

The Philippines electricity rates remain amongst the highest in Asia. Electricity rates in the
Philippines are high mainly because there is no state subsidy for the rates of privately-generated,
transmitted, and distributed power supply. Users are charged with the feed-in-tariff (FiT)-All,
universal charges, value-added taxes (VAT), and system losses in transmission and generation.
There were other problems like minimal competition in the energy market, the alleged market
manipulation, and other unforeseen disruptions in power supply.

While reducing the cost of electricity is vital to improving the competitiveness of industries
and encouraging private sector investments, there should be a balance between the rates, service
reliability, and the environmental implications of the different technologies utilized.

Too much intermittent renewable energy affects grid reliability, but reliance on cheaper
fuels, such as coal, increases greenhouse gas emissions. An optimal energy mix is needed to provide
maximum benefits at the most reasonable costs to consumers while safeguarding the sector from
external shocks.

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ON RENEWABLE ENERGY RESOURCES

Renewable Energy Resources (RE Resources) refer to energy resources that do not have an
upper limit on the total quantity to be used. Such resources are renewable on a regular basis, and
whose renewal rate is relatively rapid to consider availability over an indefinite period of time.
These include, among others, biomass, solar, wind, geothermal, ocean energy, and hydropower
conforming with internationally accepted norms and standards on dams, and other emerging
renewable energy technologies.11

WHAT ARE THE BENEFITS OF RENEWABLE ENERGY?

Sustainable as it is obtained from sources that are inexhaustible


It is clean energy and non-polluting.
Many forms do not emit any greenhouse gases or toxic waste in the process of
producing electricity.
It is a sustainable energy source which can be relied on for the long-term.

WHY RENEWABLE ENERGY?

RE is practically infinite if managed properly


It mitigates climate change & foster sustainable development
The Clean Development Mechanism provides carbon credits & the RE Law gives
incentives for RE sources to make RE projects attractive and viable

FIGURE 7: WORLD ENERGY CONSUMPTION, 1965-2015

Source: BP: Statistical Review of World Energy,


Workbook (xlsx), London, 2016

The energy consumption for the whole world reveals that oil, coal and gas remain most
consumed energy source (Figure 7). These three (3) are Fossil Fuels and Non-Renewable. These
will be depleted in the near future. Number 4 Nuclear is arguably controversial and Dangerous.
Renewable is the way forward but is way short of its desired levels of development &
consumption.12

11
RA 9513 (RE Act of 2008)
12
https://www.doe.gov.ph/sites/default/files/pdf/announcements/acd_01_re_malaysia.pdf

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In 2013 renewables accounted for almost 22% of global electricity generation. The
International Energy Agency (IEA) Medium-Term Renewable Energy Report 2015 foresees that
share reaching at least 26% increase in 2020.13

The Philippines enacted the Renewable Energy Act in 2008 wherein renewable energy
offers an alternative to traditional fossil fuels (e.g., coal, natural gas, and petroleum). The trend is
to shift to renewable energy, also known as green energy or clean energy.

RE RESOURCE POTENTIAL IN THE PHILIPPINES14

Biomass

Based on information from the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR), the Philippines could generate substantial volumes
of residues which can be utilized as energy fuel. Latest estimates reveal that biomass supply
potential is more than 500MW. (Table 3) Based on geographical consideration on biomass supply,
there is an abundant supply of bagasse in Regions III, IV, VI and VII. Coconut residues abound in
Regions IV, VIII, IX and XI while ricehull is abundant in Regions II, III, IV and VI.

Wind

The Philippines, being situated on the fringes of the Asia-Pacific monsoon belt, exhibits a
promising potential for wind energy. Data from the Philippine Geophysical Astronomical Services
Administration (PAG-ASA) shows that the country has a mean average of about 31 watts per square
meter (W/m2) of wind power density. In addition, a study conducted by the US-NREL in 1999
shows over 10,000 sq. km. of windy land areas estimated to exist with a good-to-excellent wind
resource potential. Using conservative assumptions of about 7 MW per sq. km., this windy land
could theoretically support over 70,000 MW of potential installed capacity. (Table 3)

Solar

The same study also conducted a resource assessment of solar power potential. Results of
previous ground-based measurements of the daily total number of hours of sunshine duration were
combined with US-NREL's Climatological Solar Radiation (CSR) Model. The model converts
information on satellite and surfaced-derived data to estimate the monthly average daily total global
horizontal solar resource. The study showed that the country has an annual potential average of 5.1
kilowatt-hour (kWh)/m2/day. (Table 3)

Ocean

The country's ocean resource area consists of 1,000 sq. km. attributed mainly to its
archipelagic nature. Based on a study conducted by the Mindanao State University (MSU), the
potential theoretical capacity for this resource is estimated to be about 170,000 MW. (Table 3)
Although there is little available information on the potential of ocean energy, navigational
experiences hypothesized that these systems present significant resource options. Initial ocean

13
Ibid

14
DOE Website

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energy potential sites identified include the Hinatuan Passage, Camarines, Northeastern Samar,
Surigao, Batan Island, Catanduanes, Tacloban, San Bernardino Strait, Babuyan Island, Ilocos
Norte, Siargao Island and Davao Oriental.

TABLE 3: ESTIMATES OF RE RESOURCE POTENTIAL IN THE PHILIPPINES15

Wind energy >70,000 MW


Geothermal >4,000 MW
Solar energy >5 kWh/m2/day (annual potential average)
Biomass resources >500 MW
Ocean energy resource 170,000 MW
Hydropower >10,500 MW
Largest producer of coconut oil
Ranks 10th in world sugarcane production

The Philippines could be considered one of the world leaders in renewable energy because
of its abundant renewable energy sources such as solar, wind, biomass, ocean, small hydro and
geothermal (World Resources Institute). According to the Department of Energy (DOE), the
Philippines is the world's second largest generator of geothermal energy next to the United States.

TABLE 4: RENEWABLE ENERGY SUPPLY, TOTAL


ENERGY SUPPLY AND SHARE OF RENEWABLE ENERGY
IN THE PHILIPPINES, 2000-2012

15
http://www.irena.org/eventdocs/Philippines%20presentation.pdf

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of America. It is also the first among the members of the Association of Southeast Asian Nations
(ASEAN) to invest in large-scale solar and wind technologies.16

FIGURE 8: PERCENTAGE DISTRIBUTION OF ENERGY


SUPPLY IN THE ASEAN-6 IN 2011 (%)

The Philippines registered an average renewable energy supply of 16.47 million tons of oil
equivalent (MTOE) from 2000 to 2012, with an average share of 43.21 percent to the total energy
supply17 (Table 4). Based on the latest data of the International Energy Agency (IEA), the
Philippines ranked first in terms of the contribution of renewable energy to total energy supply
among the ASEAN countries (Figure 8).

RENEWABLE ENERGY COMPOSITION


On the average, geothermal energy accounted for the biggest share of 53.89 percent of the
total renewable energy supply from 2000-2012, followed by biomass with 32.99 percent and hydro
with 13.10 percent. The remaining shares were divided between solar and wind energies (Figure
9). At present, the country is not generating energy from the ocean. According to the DOE, while
the country is endowed with vast ocean resource potential, there have been very limited activities
in this sector primarily because of the high investment cost for its development. The DOE, however,
expects the Philippines first ocean energy facility to start commercial operations by 2018.18

16
The following are lifted from Senate Economic Planning office, Renewable Energy At a Glance
(https://www.senate.gov.ph/publications/AAG%20on%20Renewable%20Energy_June%2030_FINAL.pdf)
17
Total energy supply refers to the total amount of energy generated domestically and imported abroad by the
country while renewable energy supply is the total amount of renewable energy generated by the country from its
natural resources such as solar, wind, geothermal, hydro, ocean and biomass.
18
Accordingly, the first project to go into operation will be the 10-MW Cabangan Ocean Energy Thermal
Conversion (OTEC) Project in Zambales.

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FIGURE 9: AVERAGE PERCENTAGE


DISTRIBUTION OF RENEWABLE ENERGY IN
THE PHILIPPINES, 2000-2012

CONTRIBUTION OF RENEWABLE ENERGY TO ELECTRICITY GENERATION

Renewable energy resources are tapped for motor fuels, water/space heating, rural (off-grid)
energy services, and more importantly, electricity generation. Renewable energy constitutes a
significant share of electricity generation in the Philippines. In 2012, its installed capacity19 from
renewable energy stood at 5,521.20 megawatts (MW) from 61 plants/facilities located nationwide.
Of the total renewable energy plants, hydropower (large and small) contributed the biggest share
(63.77% of total renewable energy capacity mix) with installed capacity of 3,520.80 MW, followed
by geothermal (33.46%) with 1,847.70 MW. Total dependable capacity from renewable energy
resources stood at 4,539.50 MW (Table 2).

Table 5: Renewable Energy Installed Capacity,


2012

Gross power generation20 from these plants in 2012 amounted to 20,761 gigawatt-hours
(GWh), which contributed 28 percent to the countrys total power generation. Coal-powered plants
remained the top producer of electricity since 2010, accounting for 39 percent. On the hand, natural
19
Installed capacity is the maximum capacity that a given plant/facility can generate while dependable
capacity is the capacity of a plant/facility that can be relied upon to carry system load for a specified time interval and
period.
20
Power generation is the amount of electricity a generator produces over a specific period of time. Many
generators do not operate at their full capacity all the time, hence they may produce little. They may vary their output
according to conditions at the power plant, fuel costs, or as instructed from the electric power grid operator.

15
B. Distura

gas had a contribution of 27 percent of the total power generation while oil-based generation only
accounted 6 percent (Figure 9).

Figure 9: Power Generation by Source in the


Philippines 2012

PHILIPPINES RENEWABLE ENERGY PLAN

On June 14, 2011, the government through the DOE launched the National Renewable
Energy Program (NREP) to steer the country in achieving the goals laid down under the Renewable
Energy Act of 2008. The NREP sets targets for each renewable energy source including solar, wind,
geothermal, hydro and ocean technologies within the timeframe 2011 to 2030. It targets to more
than triple the countrys renewable energy-based installed capacity to 15,234.30 MW by 2030 from
5,439 MW in 2010 (Table 6). Moreover, it contains a framework for action, existing and future
measures, and instruments and policies for the promotion of renewable energy. It also includes a
roadmap that will guide efforts towards actualizing the market penetration targets of each renewable
energy source as well as the feed-in-tariffs (FIT)21 for sustainable energy generation.

Table 6: National Renewable Energy Program (Installation Targets)

21
FIT refers to a renewable energy policy that offers guaranteed payments on a fixed rate per kilowatthour
(kWh) for renewable energy generation, excluding any generation for own use. The Energy Regulatory Commission
(ERC) approved the initial FITs on July 27, 2012 which shall apply to generation from renewable energy sources,
particularly to run-of-river hydro (PhP5.90/kWh), biomass (PhP6.63/kWh), wind (PhP8.53), and solar (PhP9.68/kWh)
renewable energy projects.

16
B. Distura

PHILIPPINE ENERGY CONTRACTING ROUND FOR PETROLEUM AND COAL

THE PHILIPPINES 16 SEDIMENTARY BASINS


1. Ilocos Shelf
2. Cagayan Basin
3. Central Luzon
Basin
2
4. Bicol Shelf 1
5. Southeast Luzon
Basin
6. Mindoro-Cuyo
Basin
7. West Masbate-
Iloilo Basin
8. Visayan Basin 3 4
9. Agusan-Davao
Basin
10. Cotabato Basin
11. Sulu Sea Basin 16
5
12. East Palawan
Basin
13. Southwest
15
Palawan Basin
14. Reed Bank Basin 6
15. Northwest 14
Palawan Basin
16. West Luzon 7
Image source: DOE Website
Trough 8

13

12 9

10
11

Source: PhilPRA 2002

The Philippine basins are rich in Oil and Gas (Table 5). The Visayas and Mindoro-Cuyo
Basins have nearly 2M barrels of undiscovered oil. The basins near the South China Sea have so
much potential as can be seen below.

However, the Philippines is only 6th in the ranking among ASEAN countries in terms of Oil
and Natural Gas Proved Reserved based on U.S. Energy Information Administration despite the
potential of Philippines in oil and natural gas (Table 6). The solution is to increase exploration
efforts on our basins.

17
B. Distura

TABLE 7: PETROLEUM RESOURCES OF THE PHILIPPINES

Source: DOE Website

Table 8: Philippine Ranking on Proved Reserves

OIL NATURAL GAS


Volume Volume
Rank Country Rank Country
(billion barrels) (trillion cubic feet)
1 Vietnam 4.40 1 Indonesia 105.00
2 Malaysia 4.00 2 Malaysia 83.00
3 Indonesia 3.70 3 Vietnam 25.00
4 Brunei 1.10 4 Brunei 14.00
5 Thailand 0.40 5 Thailand 9.00
6 Philippines 0.17 6 Philippines 3.80
Source: U.S. Energy Information Administration

18
B. Distura

So the DOE launched in May 2014 the fifth PECR (PECR5) for petroleum.

Under this bid, 11 petroleum blocks, with a total of more than 4.7 million hectares in West
Luzon, Southeast Luzon, West Masbate/Iloilo, East Palawan and Recto Bank, were offered for
exploration and development. (Figure 8)

FIGURE 10: PETROLEUM SERCIVE CONTRACT MAP

Image Source: DOE website

The areas for petroleum exploration include

Area 1 in Southeast Luzon;


Areas 2 and 3 in Masbate-Iloilo;
Areas 4 and 5 in Northeast Palawan;
Area 6 in Southeast Palawan;
Area 7 in West Palawan;
Areas 8 to 11 in West Luzon.

19
B. Distura

Two of the blocks are close to the Spratly Islands, of which a portion is being claimed by
the Philippine government, which are areas under territorial dispute with China.22

Under PECR 5, only two exploration companies passed the qualifying stage for three areas.
Israel-based Ratio Oil Exploration submitted bids and qualified for Area 4, a 416,000-hectare area
in East Palawan, while local company Colossal Petroleum qualified for the 576,000-hectare Area 5
in East Palawan and the 468,000-hectare Area 7 in Recto Bank.

A petroleum service contract has seven-year exploration period, which could be extended
up to 10 years.

However, the DOE has not yet awarded the contracts to the qualified bidders following legal
impediments in the oil and gas exploration industry such as Commission on Audit (COA) and Japan
Petroleum Exploration Co. Ltd. (JAPEX) issues.

In 2015, COA upheld its 2009 findings that P53.14 billion in taxes were uncollected from
the Malampaya project operated by Shell Philippines Exploration B.V., Chevron Malampaya LLC
and the Philippine National Oil Co. Exploration Corp. (PNOC-EC).

Meanwhile, the Supreme Court declared SC 46 between the government and JAPEX as
unconstitutional, raising concerns over the legality of service contracts.23

According to news reports, DOE will conduct PECR 6 in December.

PECR5 Areas offered for Coal projects24

As for coal, 15 areas were opened for coal contracting projects, namely:

Area 1 - Surigao Del Sur


Area 2 - Surigao Del Sur
Area 3 - Surigao Del Sur
Area 4 - Agusan Del Sur and Agusan Del Norte
Area 5 - Agusan Del Sur and Agusan Del Norte
Area 6 - Agusan Del Sur
Area 7 - Agusan Del Sur
Area 8 - Agusan del Sur and Surigao Del Sur
Area 9 - Surigao Del Sur
Area 10 - Zamboanga Del Norte and Zamboanga Sibugay
Area 11 - Zamboanga Del Norte and Zamboanga Sibugay
Area 12 - Zamboanga Del Norte
Area 13 - Zamboanga Sibugay
Area 14 Zamboanga Sibugay
Area 15 - Sarangani

22
http://www.businessmirror.com.ph/doe-sets-offering-of-some-areas-near-disputed-west-philippine-sea-
for-petroleum-exploration/
23
http://www.philstar.com:8080/business/2017/07/13/1718941/doe-targets-launch-new-oil-gas-contracting-
round-december
24
Source, DOE Website

20
COAL PRODUCTION

SEMIARA is the leading coal producer in the country with 97% share of total coal
production in the Philippines.

FIGURE 11: COAL PRODUCTION (IN RUN-OF-MINE), 201325

SEMIRARA - 7,570,003.00 or 96.53%


Others 3.5%

COAL CONSUMPTION26
Coal consumption has been increasing trend worldwide since 1977 up to 2013 based
on historical data. The Philippines has similar trend despite the thrust of the government
towards RE.

25
Source, DOE Website
26
Source, DOE Website
B. Distura

THE D.O.E.
History27

Electricity was known to have reached the country in 1890. Sociedad Mercantil which
became La Electricista provided electricity in Manila and nearby provinces. La Electricista was
established in 1892 in association with the Compania de Tabacos de Filipinas
(TABACALERA). The Municipal Council of Manila signed a 20-year contract with Sociedad
Mercantil Millat, Marti y Mitjans to provide electric lighting for city streets, parks and other
public places originally illuminated by oil lamps. The contract also allowed Sociedad to enter
into arrangements with private customers to have their homes and establishments lighted by
incandescent lamps. La Electricista was given rights to Sociedads 20-year contract.
MERALCO was established in 1903 and bought La Electricista the following year. By early
1905, some 40,129 incandescent lights, 495 arc lamps were installed in both public and private
areas (Cabrera, 1992).28

In 1925, MERALCO expanded services to the municipalities of Rizal and other parts
of Luzon by purchasing the franchises and plants of the small provincial electric companies. It
began retrenching its provincial operations after the Second World War to concentrate on
rehabilitation and expansion of its Manila facilities. By 1953, MERALCO had disposed all its
provincial facilities, and in 1961 it became Filipino-owned when a group of Filipino
businessmen led by Eugenio Lopez, Sr. bought MERALCO from General Public Utilities
Corporation of New York.29

On November 3, 1936, Commonwealth Act 120 (See Annex 1) was enacted creating
the NATIONAL POWER CORPORATION for the purpose of undertaking the development
of hydraulic power and the production of power from other sources. Among its functions
include:

To take water from any public stream, river, creek, lake spring or waterfall
in the Philippines, for the purposes specified in this Act;

To intercept and divert the flow of waters from lands of riparian owners and
from persons owning or interested in waters which are or may be necessary
for said purposes, upon payment of due compensation therefor;

To alter, straighten, obstruct or increase the flow of water in streams or


water channels intersecting or connecting therewith or contiguous to its
works or any part thereof;

To construct, operate and maintain power plants, auxiliary plants, dams,


reservoirs, pipes, mains, transmission lines, power stations and substations,
and other works for the purpose of developing hydraulic power from any

27
Tracing the History of the Department of Energy (DOE website)
28
Epictetus E. Patalinghug, An Analysis of the Philippine Electric Power Industry, University of the
Philippines. Diliman, Quezon City, October 2003.
29
Ibid

1
B. Distura

river, creek, lake, spring and waterfall in the Philippines and supplying such
power to the inhabitants thereof;

To acquire, construct, install, maintain, operate and improve gas, oil, or


steam engines, and/or other prime movers, generators and other machinery
in plants and/or auxiliary plants for the production of electric power;

To establish, develop, operate, maintain and administer power and lighting


system for the use of the Government and the general public;

To sell electric power and to fix the rates and provide for the collection of
the charges for any service rendered (the rates of charges shall not be subject
to revision by the Public Service Commission)

The National Power Corporation (NPC) has, since its establishment in 1936, controlled
and monopolized both the transmission and generation sectors. But legislations and presidential
decrees have been put in place to put an end to the monopoly.

On April 30, 1971, R.A. No. 6173 was passed creating the Oil Industry Commission
(OIC), which was tasked to regulate the oil industry and to ensure the adequate supply of
petroleum products at reasonable prices.30

On September 24, 1972 then President Ferdinand E. Marcos issued Presidential Decree
(P.D.) No. 1 which ordered the preparation of the Integrated Reorganization Plan by the
Commission on Reorganization. The Plan abolished the Public Service Commission (PSC) and
transferred the regulatory and adjudicatory functions pertaining to the electricity industry and
water resources to then Board of Power and Waterworks (BOPW).31

The Petroleum Board32


The predecessor office of the Department of Energy was the Petroleum Board which
was created under Section 17 by P.D. 8, dated October 2, 1972 which decreed the law to govern
oil exploration and development in the Philippines. The Board was composed of the Secretary
of Agriculture and Natural Resources, as Chairman, and the Undersecretaries of Finance and
Justice, the Chairman of the Board of Investments, and the Director of Mines as members. The
Director of Mines was the Executive Officer of the Board.

P.D. 8 was amended by P.D. 87, other-wise known as The Oil Exploration and
Development Act of 1972, which was issued on December 31,1972. Under P.D. 87, the Board
was composed of the Philippine National Oil Company as Chairman, and the Secretary of
National Defense, the Executive Secretary, the Secretary of Natural Resources, the Secretary
of Finance, the Secretary of Justice, the Secretary of Industry, the Governor of the Central Bank
and the Director of Mines as members.

The Energy Development Board33

30
Tracing the History of the Department of Energy (DOE website)
31
Ibid
32
Ibid

2
B. Distura

However, P.D. 910, issued on March 22, 1976, abolished the Petroleum Board and its
powers and functions were transferred to the Energy Development Board which was composed
of the Secretary of Finance, Secretary of Industry, Secretary of Justice, Secretary of National
Defense, Secretary of Economic Planning, Secretary of Natural Resources, and the Chairman
of the Philippine National Oil Company. The President of the Philippines designated the
Chairman of the Board from among its members.

The officials next in rank to the members of the Board, as designated by them, served
as alternate members. They attended the meetings of the Board whenever their principals were
absent or their positions were vacant.

Thus, while the Petroleum Board was tasked to regulate the exploration, development,
production and exploitation of indigenous petroleum and natural gas through the Service
Contract system, the Energy Development Board had wider powers and functions in the sense
that it regulated not only petroleum and natural gas but also coal, geothermal and natural re-
sources and other less conventional forms of indigenous energy resources.

Under PD No. 1206 (Oct. 6, 1977) creating the Ministry of Energy (later Department
of Energy), the Energy Development Board is abolished and its powers and functions are
transferred to the Department except those that are specifically transferred to the Bureau of
Energy Development under Section 12 of this decree.

The Philippine Atomic Energy Commission (PAEC) was transferred to the control and
supervision of the MOE from the Office of the President. Presidential Decree No. 1206 attached
the National Electrification Administration (NEA) to the Ministry of Energy in 1978.

Under Presidential Decree No. 1206, the National Power Corporation (NPC) was
attached to the new ministry for purposes of policy coordination and integration with sectoral
programs.

The government created the Department of Energy (DOE) and consequently abolished
the Oil Industry Commission (OIC), which was replaced by the creation of the Board of Energy
(BOE) through PD No. 1206. It was later replaced by the Energy Regulatory Board (ERB) now
Energy Regulatory Commission (ERC), which was responsible for overseeing and regulating
pricing activities of the industry. This included determining wholesale and retail prices, dealer
and hauler margins, the revenue of refiners, and the contribution to or claims that resulted from
the fluctuation of oil prices in the world market and the adjustments in the peso-dollar exchange
rate.

On May 8, 1987, the Board of Energy was reconstituted into the Energy Regulatory
Board (ERB), pursuant to Executive Order No. 172 issued by then President Corazon C.
Aquino34 as part of her governments reorganization program. The rationale was to consolidate

33
Ibid
34
It is noteworthy that the DOE was once under the DE(E)NR during Pres. Aquino in 1987. (See, Annex
1). REORGANIZING THE MINISTRY OF NATURAL RESOURCES AND RENAMING IT AS THE
DEPARTMENT OF ENVIRONMENT, ENERGY AND NATURAL RESOURCES ABOLISHING THE
MINISTRY OF ENERGY INTEGRATING ALL OFFICES AND AGENCIES WHOSE FUNCTIONS RELATE
TO ENERGY AND NATURAL RESOURCES INTO THE MINISTRY DEFINING ITS POWERS AND
FUNCTIONS AND FOR OTHER PURPOSES (EXECUTIVE ORDER NO. 131 (January 30, 1987))

3
B. Distura

and entrust into a single body all the regulatory and adjudicatory functions pertaining to the
energy sector. Thus, the power to fix and regulate the power rates of private electric utilities
was transferred to the ERB.

With the issuance of Executive Order No. 193 on June 10, 1987 reorganizing the
Department of Energy into the Office of Energy Affairs (OEA), the ERB was vested with other
powers. The directive transferred to the Board the regulatory and adjudicatory functions
exercised by the National Coal Authority relating to the coal industry.

In 1987, the Aquino administration passed Executive Order No. 215 to encourage
private sector participation. In 1990, Republic Act No. 6957, more popularly known as the
Build-Operate-Transfer Law (BOT Law) was enacted which permitted private contractors
under a build-operate-transfer or build-and-transfer (BAT) scheme to construct and operate
power generations facilities. But despite the enactment of these laws, the increase in demand
for energy wasnt met and the factors that contributed to it was the suspension of the expected
operations of the Bataan Nuclear Powerplant (BNPP) and the fact that investors were said to
be discouraged from investing since they were forced to negotiate power supply contracts
exclusively with NPC.35

December 28, 1992 R.A. No. 7638 was enacted creating the Department of Energy and
to rationalize the organization and functions of government agencies related to energy.

Republic Act No. 7718 amended the BOT law to include Rehabilitate-own-and-operate
(ROO) schemes, as well as the concept of unsolicited proposals.36

Republic Act No. 7468, otherwise known as the Electric Power Crisis Act of 1993
gave the president the power to enter into and negotiated contracts for the construction, repair,
rehabilitation, improvement or maintenance of power plants, projects and facilities. This in turn
resulted in an increase of investments made by Independent Power Producers (IPP). Despite
this, NPC remained in debt. In 2001, NPC owed approximately US$ 16.39 billion to
creditors.37

EPIRA38
The Electric Power Industry Reform Act (R.A. 9136, 2001), also known as EPIRA
Law was created in order to bring down electricity rates and to improve delivery of power
supply to end users by encouraging competition and efficiency in the electricity industry. After
being in place the NPC will undergo restructuring and there will be a separation of the different
components of the power sector, namely, generation, transmission, distribution and supply.
NPCs privatization is also included in the said reforms. The state-owned power firms
generation and transmission assets (e.g. power plants and transmission facilities) were put on
sale to private investors.

35
PHILIPPINE ENERGY SECTOR, Overview and Business Opportunities (www.mzv.cz/manila),
hereafter, PES
36
PES, p.2.
37
Ibid.
38
Ibid.

4
B. Distura

A quasi-judicial regulatory body, the Energy Regulatory Commission is also created


to replace the Energy Regulatory Board to promote competition in the power sector, encourage
market development and consumer choice.

Another change introduced by EPIRA Law is the creation of a wholesale electricity


spot market (WESM), through which competitive market forces would establish generation
tariffs and make costs more transparent. Effects of this scheme were more visible in later years,
around 2006. Implementation of EPIRA was severely delayed.

PSALM39
In the end of 2012, the Power Sector Assets and Liabilities Management (PSALM),
a government-owned and controlled corporation tasked to undertake the privatization of the
assets of the National Power Corporation (NPC) and the National Transmission Corporation
(Transco) as well as the privatization of the management of NPC's IPP (Independent Power
Producer) contracts, had managed to privatize 70% of the total capacity of generating assets of
NPC in Luzon and Visayas and more than 70% of the total energy output of power plants under
contract with NPC to the IPP administrations.

The EPIRA also introduced the concept of Retail Competition and Open Access. Retail
Competition means that eligible electricity customers or retail customers may themselves
contract for the supply of electricity with authorized suppliers, rather than through the
franchised distribution utility. Open Access on the other hand is the means by which the Retail
Competition is achieved. It means that the retail electricity customers and suppliers of
electricity may also contract with the transmission company and the distribution company for
the wheeling or delivery of energy/electricity through the transmission of distribution ware.

Upon implementation of EPIRA, the government is no longer allowed to build power


plants, and it is the private sector that builds power plants. The DOE only assists/facilitates in
the timely implementation of the power projects by providing endorsements to other
government agencies in securing the documentary/ regulatory requirements.

In the event that there are emergency cases of power outage and there is a need for the
production of more energy, it is only then that the government may request for emergency
powers to address the immediate need.

MANDATE, MISSION AND VISION40

The Department is mandated to prepare, integrate, coordinate, supervise and control all
plans, programs, projects and activities of the Government relative to energy exploration,
development, utilization, distribution and conservation.

MISSION41
We at the Department of Energy, in partnership with our stakeholders, shall improve
the quality of life of the Filipino by formulating and implementing policies and

39
Ibid.
40
DOE website
41
Ibid

5
B. Distura

programs to ensure sustainable, stable, secure, sufficient, accessible and reasonably-


priced energy.
In pursuit of this mission, we commit to render efficient service with utmost integrity
and professionalism.

VISION42
A globally-competitive DOE powering up Filipino communities through clean,
efficient, robust and sustainable energy systems that will create wealth, propel industries and
transform the lives of men and women and the generations to come.

PERFORMANCE PLEDGE43

We, at the Department of Energy, commit to :


S E R V E right the first time and every time thereafter
L I S T E N with utmost courtesy, respect and understanding
R E S P O N D promptly, efficiently, and effectively
E X C EL to exceed the needs and expectations of the general public.

CORE VALUES44 (CORINTE)

In support of the DOE PERFORMANCE PLEDGE, we adhere to these CORE


VALUES:
Commitment to Service Basta Enerhiya, Sagot Kita
Respect for People Kapwa at sarili, Igalang sa bawat sandali
Integrity Sa publiko, Serbisyong marangal at totoo
Teamwork Gawain ay kayang-kaya, kung tayo ay sama-sama

42
Ibid
43
Ibid
44
Ibid

6
B. Distura

For detailed functions of DOEs bureaus and attached agencies and corporations, see Annex 2.
(Click the drop down arrow to reveal the functions of each bureau and service.)
See also Annex 6 for DOEs Organizational Chart.

BUREAUS AND SERVICES


OFFICE OF THE SECRETARY

Establishes policies, plans, programs and standards for the effective, efficient and economic operation
of the Department of Energy and its attached agencies, and exercises direct supervision and control over
all functions and activities

establishes polices, plans, programs and standards for the effective, efficient and economic
operation of the Department and its attached agencies in accordance with the programs of the
Government
exercises direct supervision and control over all functions, activities and personnel of the
Department and its attached agencies
ensures the implementation of policies, plans, programs and standards relative to the
Department's mandates
creates regional offices and such other service units and divisions as may be necessary
performs such other functions as may be necessary

OFFICE OF THE UNDERSECRETARY

Advises and assists the Secretary in the formulation and implementation of the
Department's Policies, Plans, Programs and Standards, and serves as the secretary's
deputy in all matters relating to the operations of the Department

advises and assists the Secretary in the formulation and implementation of the
department's policies, plans, programs and standards
serves as deputy to the secretary in all matters relating to the operations of the
Department
oversees and coordinates the operational activities of the office's areas of
responsibility
temporarily discharges the duties of the secretary in the latter's absence or
inability to discharge duties for any cause or in case of vacancy of said office
performs such other functions as may be assigned

OFFICE OF THE ASSISTANT SECRETARY


Assists the Secretary and the Undersecretaries on operations, policy and programs and
administrative services
advises the Secretary and the undersecretaries on matters relative to the promulgation
of administrative orders and other issuances of the Department
recommends the promulgation of rules and regulations consistent with the policies of
the Department
coordinates the functions and activities of the Bureaus/Services/Units under
supervision/authority
exercises delegated authority by the Secretary and the Undersecretaries on matters
pertaining to the operations of the Department
7
B. Distura

performs such other functions as may be assigned

INVESTMENT PROMOTION OFFICE

Implements the Department Policies, Plans and Programs relative to promotion of


Investments in Energy Resource Exploration, Technology and Infrastructure, among
others

Investment Promotion Planning

undertakes preparations for investment promotion activities (e.g., logistical


arrangement for outbound investment missions)
conducts pre-investment studies relative to the aforementioned functions
evaluates market potentials and prioritizes investment promotion initiatives
coordinates with various DOE units and concerned government agencies,
embassies, consulates, industry participants, and other stakeholders on matters
related to the above-enumerated functions
performs ad hoc functions as may be assigned

Investment Marketing

undertakes investment marketing and missions


conducts marketing seminars on investment opportunities in the Philippine
Energy Sector
coordinates with various DOE units and concerned government agencies,
embassies, consulates, industry participants, and other stakeholders on matters
related to the above-enumerated functions
performs ad hoc functions as may be assigned

Investor Assistance and Support

undertakes investor assistance activities (e.g., logistical arrangements for


business matching)
coordinates the preparation of investment promotional materials and exhibits
maintains database of current and prospective investors
coordinates with various DOE units and concerned government agencies,
embassies, consulates, industry participants, and other stakeholders on matters
related to the above-enumerated functions
performs ad hoc functions as may be assigned

CONSUMER WELFARE AND PROMOTION OFFICE

Formulates and implements the department policies, plans and programs relative to
consumer information, welfare promotion, empowerment and protection.

Power

8
B. Distura

o Formulates policy recommendations on consumer information, welfare


promotion, empowerment and protection relative to power industry;
o Implements policies, plans and programs thereon;
o Conducts relevant advocacy programs;
o Conducts research and studies relative to the aforementioned functions;
o Coordinates with various DOE units and concerned government agencies,
industry participants, academe and other stakeholders on matters related to the
above enumerated functions; and
o Performs AdHoc functions as maybe assigned.

Oil and Gas

PUBLIC AFFAIRS OFFICE

Prepares and implements plans and programs for media and public relations as well as
coordinates activities for special events of the Department

Media and Public Relations Section

develops and implements communication plans and programs designed to


inform clients, employees and the General Public of initiatives and policies of
the Department and its attached agencies
gathers, reasearches and prepares communication materials for internal and
external audiences
conducts public opinion and attitude surveys to identify the interests and
concerns of key groups served by the Department
prepares and oversees preparation of papers, reports, briefs, speeches,
presentations and press releases as required
establishes editorial policies on print and broadcast media
establishes and maintains linkages with the tri-media
coordinates conduct of interviews and news conferences
acts as spokesperson for the Department
coordinates with various DOE units, concerned government agencies, tri-media
and other stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

Special Events and Publications Section

coordinates the organization and promotion of special events and energy exhibits
acts as the focal point for the National Energy Week Celebration
plans and supervises production of special publications, films, broadcasts and
videos
prepares educational and publicity programs and informational materials to
increase awareness of the developments in the energy secto
assists in the preparation of brochures, reports, newsletters and other materials
(e.g., promotional collaterals, investment kits, frequently asked questions, annual
reports, etc.)

9
B. Distura

coordinates with various DOE units, concerned government agencies, tr-media


and other stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

INTERNAL AUDIT OFFICE

Monitors, audits and reviews the implementation of existing Internal Control Systems,
Work Processes and Policies, and recommends improvements and corrective actions
thereto

Financial Audit

ensures compliance with policies, plans and programs on financial internal


control systems, including periodic audit of compliance with contract obligations
relative to procurements, maintenance and other utilities-related contracts
evaluates and recommends improvements and corrective actions on the
Department's financial systems and procedures
coordinates with various DOE units, concerned government agencies and other
stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

Management Audit

ensures compliance with policies, plans and programs on management internal


control systems, including periodic audit of compliance with contract obligations
relative to procurements, maintenance and other utilities-related contracts
evaluates and recommends improvements and corrective actions on the
Department's management systems and procedures
coordinates with various DOE units, concerned government agencies and other
stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

10
B. Distura

ADMINISTRATIVE SERVICES

Formulates and implements policies, plans, programs and regulations on human


resource, treasury and fund management, and general administrative

Human Resource Division

o Personnel Actions and Services Section


o Training and Development Section
o Personnel Welfare and Performance Management Section

General Services Division

o Procurement and Property Management Section


o Administrative Section
o Engineering and Maintenance Section

Treasury Division

o Collection Section
o Disbursement Section
o Fund Management Section

Formulates policies, plans and programs related to the department's human resource
management and ensures effective implementation thereof and compliance with government
regulations and standards

Personnel Actions and Services

o Develops and maintains a sound recruitment, selection and placement system


o Establishes and maintains HR integrated systems and 201 files
o Handles leave administration
o Handles employee services (E.G., Medical, Loan assistance, service records,
certificates of employment and compensation and actual duties, rice
procurement,canteen,uniform,socio-cultural, ETC)
o Provides personnel counseling and other services to the department
o Handles volunteerism programs
o Coordinates with DBM, CSC and other Gov't agencies on HRM-Related matters (E.G.,
Step increment, notice of salary increases, plantilla of personne, ETC.)
o Provides secretariat support to various intra-agency committees E.G., personnel
selection board, provident fund committee sports committee, uniform committee, ETC.
o Performs AD HOC functions as may be assigned

Training and Development

o Assesses and evaluates training needs and skills development requirements


o Designs and implements training and development programs
o Maintains and updates organizational development programs and activities

11
B. Distura

o Processes HRD opportunities and activities I.E., local and foreign study and non-study
programs
o Handles gender and development (GAD) related activities,day care center and other
development programs that would enhance employee performance and well-being
o Coordinates with OP,CSC,NEDA,DFA and other agencies on HR development matters
o Provides secretariat support to the personnel development and GAD committees
o Performs AD HOC functions as may be assigned

Personnel Welfare and Performance Management

o Formulates and implements policies on:


o Performance evaluation and improvement
o Total quality management (TQM) programs
o Grievance
o Administrative disciplinary rules on sexual harassment cases
o Conducts organizational and manpower review
o Conducts research to improve HR management policies and adopts best HR practices
as well as employee welfare and benefits
o Coordinates with OP, DBM, CSC and other agencies on employee performance and
welfare
o Provides secretariat support to the performance evaluation review committee, program
on awards and incentives for excellence committee, grievance committee, committee
on decorum and investigation of sexual harassment cases, ETC.
o Performs Ad HOC functions as may be assigned

GENERAL SERVICES DIVISION

Formulates policies, plans and programs related to the department's procurement,


property management, engineering, maintenance and other general administrative
services and ensures effective implementation thereof and compliance with government
regulations and standards

Procurement and Property Management

o Administers procurement, allocation, storage and distribution of


equipment,supplies and materials
o Coordinates the bidding process for the bids and awards committee for the
acquisition of equipment, fixed assets, supplies,materials and services (eg.,
Consultancy, Janitorial, Security, Electrical,Air Con, Specialty trades,Painting,
Repairs and maintenance of buildings, etc.)
o Conducts periodic inventory of equipment, fixed assets, supplies and materials
and maintains inventory records thereof
o Prepares Annual Procurement Management Program (APMP) and project
procurement management programs (PPMP) and monitors its implementation
o Handles insurance of DOE properties
o Handles disposal of unserviceable properties
o Prepares contracts and purchase orders

12
B. Distura

o Provides secretariat support to the bids and awards committee and disposal
committee
o Performs AD HOC functions as may be assigned

General Administration

o Processes and monitors payments for utilities and services


o Prepares contracts and related documents for contracted-out services, eg.,
Janitorial,Security,Electrical,Air con,Reproduction,Specialty trades, etc.
o Supervises implementation of contracted-out services to ensure maintenance of
good housekeeping and security of premises
o Handles messengerial, mailing and other communications (eg., PABX) services
o Handles distribution of newspapers and periodicals
o Handles registration, dispatching and fuelling of shuttle service vehicles and
ancillary driver's assignments
o Liaiseswith various government agencies and service providers to facilitate
delivery of required services (eg., LTO, GSIS, PNP, MMDA, MERALCO,
PLDT, etc.)
o Provides secretariat support to the unified security task force, national disaster
control group, etc.)
o Performs AD HOC functions as may be assigned

Engineering and Maintenance

o Administers the delivery of basic utilities (water,light,telecommunications,air


con, etc.)
o Ensures maintenance and repair of equipment and fixed assets (eg.,
buildings,vehicles,facilities, etc.) including the preparation of engineering
designs, agency estimates, and job orders for necessary
construction,maintenance,renovation and repair of facilities, etc. and implements
actual execution thereof
o Prepares and processes payments for job orders and actual awards
o Prepares and issues the necessary documentary requirements to certify
completion and acceptance of job undertaken for maintenance and repair
o Assists in the preparation for special events (eg., Construction of exhibit booths
for the national energy week, etc.)
o Coordinates with various government agencies and service providers to ensure
maintenance of facilities (eg., DPWH, DILG, LGUS, FBDC, BCDA, MMDA,
MERALCO, PLDT, etc.)
o Performs AD HOC functions as may be assigned

TREASURY DIVISION

13
B. Distura

FINANCIAL SERVICES

Formulates and implements fiscal policies, programs and regulations, including those
on indigenous energy resource service contractors; monitors the utilization of
government-administered energy funds; and provides staff support services pertaining
to budget and accounting

Accounting Division

o Financial Reporting Section


o Payable Section
o Special Concerns/Sundries Section

Budget Division

o Administration and Support Service


Section
o Operations Section
o Projects Section

Compliance Division

o Petroleum Section
o Coal and Ocena, Solar & Wind (OSW) Section
o Geothermal Section
o Special Compliance Concerns Sections

BUDGET DIVISION

Formulates plans and programs related to the department`s budgetary requirements and
obligations and ensures effective implementation thereof and compliance with
government rules and regulations

Administration and Support Services

o Develops and formulates policy recommendations on budget systems and


controls for the following:

o Executive Offices
o Administrative Services
o Financial Services
o Legal Services
o Energy Policy and Planning Bureau
o Energy Research and Testing Laboratory Services
o Information Technology and Management Services
o Prepares, reviews and submits budget proposals and related requirements of the
above- enumerated offices/units

14
B. Distura

o Allocates approved budget to the above-enumerated offices/units


o Prepares budgetary reports as required
o Coordinates with concerned DOE units and government agencies (E.G., DBM,
Legislature) on the above- enumerated functions
o Performs AD HOC functions as may be assigned.

Operations

o Develops and formulates policy recommendations on budget systems and


controls for the following:

o Energy Resource Development Bureau


o Energy Utilization Management Bureau
o Oil industry Management Bureau
o Electric Power Industry Administration Bureau
o Natural Gas Office
o Consumer Welfare and Protection Office
o Field Offices
o Prepares, reviews and submits budget proposals and related requirements of the
above- enumerated offices/units
o Allocates approved budget to the above-enumerated offices/units
o Prepares budgetary reports as required
o Coordinates with concerned DOE units and government agencies (E.G., DBM,
Legislature) on the above- enumerated functions
o Performs AD HOC functions as may be assigned.

Projects

o Develops and formulates policy recommendations on budget systems and


controls for foreign-assisted and locally funded projects
o Evaluates budget proposals and related requirements for said projects
o Allocates approved budget for said projects
o prepares budgetary reports as required
o Coordinates with concerned DOE units and government agencies (E.G., DBM,
Legislature) on the above- enumerated functions
o Performs AD HOC functions as may be assigned.

ACCOUNTING DIVISION

Formulates policies, plans and programs related to the department`s general accounting
services and ensures effective implementation thereof and compliance with government
rules and regulations

Financial Reporting

o Prepares and timely submits to management and fiscal agencies financial and
other special reports

15
B. Distura

o Prepares and maintains adequate and reliable books of accounts


o Reviews and ensures correctness of charges against allotments
o Monitors cash programs, releases and utilizations
o Coordinates with concerned DOE units and other government agencies on
financial reporting
o Performs AD HOC functions as may be assigned

Payables

o Ensures timely processing and payment of claims


o Ensures compliance with the requirements of concerned government agencies on
mandatory deductions from employees and creditors, remittances and reports
o Prepares and issues certificates of payment
o Coordinates with concerned government agencies as well as services providers
on payables
o Performs AD HOC functions as may be assigned

Special Accounting Concerns/Sundries

o Formulates policy recommendations on general accounting services


o Verifies liquidation reports and other documentary requirements for cash
advantages of officers, employees and project implementors
o Reviews purchase and job orders, contracts and memoranda of agreement prior
to issuance of allotment and obligation slips (ALOBS)
o Evaluates and coordinates settlement of dormant accounts
o Validates and reconciles fixed assets accounts against physical inventory reports
o Coordinates settlement of COA audit observations, suspensions and
disallowances
o Coordinates with concerned DOE units and other government agencies on the
above-enumerated functions
o Performs AD HOC functions as may be assigned

COMPLIANCE DIVISION

Formulates policies, plans and programs related to the compliance of service contractors
with their financial obligations as provided for in their service contracts,and ensures
effective implementation thereof and compliance with government regulations and
standards, evaluates financial qualifications of prospective contractors, as well as
monitors the utilization of DOE-administered energy funds.

Petroleum

o Formulates fiscal policy recommendations relative to petroleum service


contracts
o Evaluates the financial aspects of prospective petroleum service contracts
o Conducts detailed audit of petroleum service contractors books of accounts

16
B. Distura

o Evaluates service contractors compliance with their financial and other


contractual obligations
o Prepares and maintains database on government shares service contractors
revenues
expenditures and performance bonds
o Conducts physical inventory of assets of petroleum service contractors
o Remits to the department's treasury division all monies due from petroleum
service contractors
o Registers subcontracts entered into by petroleum service contractors pursuant to
P.D. 1354 and circular no. 78-07-04
o Prepares and update petroleum revenue projections
o Coordinates with various DOE units and concerned government agencies on
petroleum service contracts
o Performs AD HOC functions as may be assigned

Coal & Ocean,Solar and wind (OSW)

o formulates fiscal policy recommendations relative to coal and OSW service


contracts
o Evaluates the financial aspects of prospective coal and OSW service contracts
o Conducts detailed audit of coal and OSW service contractors books of accounts
o Evaluates service contractors compliance with their financial and other
contractual obligations
o Recommends necessary administrative and legal actions relative to their
contractual obligations
o Prepares and maintains database on government shares, service
contractors,revenues, expenditures and performance bonds
o Conducts physical inventory of assets of coal and OSW service contractors
o Remits to the Department's treasury division all monies due from coal and OSW
service contractors
o Registers subcontracts entered into by coal service contractors pursuant to
circular no. 82-09-09A
o Evaluates financial qualifications of bonding companies for accreditation with
the department
o Prepares and updates coal and OSW revenue projections
o Coordinates with various DOE units and concerned government agencies on coal
and OSW service contracts
o Performs AD HOC functions as may be assigned

Geothermal

o Formulates fiscal policy recommendations relative to geothermal service


contracts
o Evaluates the financial aspects of prospective geothermal service contracts
o Conducts detailed audit of geothermal service contractors' books of accounts

17
B. Distura

o Evaluates service contractors' compliance with their financial and other


contractual obligations
o Recommends necessary administrative and legal actions relative to their
contractual obligations
o Prepares and maintains database on government shares, service contractors'
revenues, expenditures and performance bonds
o Conducts physical inventory of assets of geothermal service contractors
o Remits to the departments treasury division all monies due from geothermal
service contractors
o Registers subcontracts entered into by geothermal service contractors pursuant
to circular no.95-04-002
o Prepares the division's budget proposals and monitors the utilization of allocated
budget
o Consolidates and synthesizes the division's accomplishment reports
o Prepares and updates geothermal revenue projections
o Coordinates with various DOE units and concerned government agencies on
geothermal service contracts
o Performs AD HOC functions as may be assigned

Special Compliance Concerns

o Formulates policy recommendations relative to DOE-administered energy funds


o Allocates LGU shares on national wealth taxes from service contractors
o Assists in the interpretation of pertinent government fiscal policies relative to the
national wealth taxes, benefits to host communities and other DOE-administered
energy funds
o Conducts periodic audit of electricity sales of power producers/energy resource
developers and expenses source from the ER 1-94 fund and other DOE-
administered energy funds
o Prepares and maintains database on national wealth taxes, benefits to host
communities and other DOE-administered energy funds
o Monitors reports submission by the LGUS on receipts and utilization of the
national wealth taxes
o Coordinates projections of government shares on production of the indigenous
hydroelectric resources and consolidates government shares projections for the
energy sector
o Coordinates with various DOE units and concerned government agencies on
national wealth taxes, ER 1-94 and other DOE-administered energy funds
o Performs AD HOC functions as may be assigned

18
B. Distura

LEGAL SERVICES

Provides legal advice, legal counselling and legal support to service contract
negotiations and hearings:serves as the official legislative liaison to the congress of the
philippines

Legal Counselling

Contracts Division

Hearing Division

HEARING DIVISION

Conducts hearing of cases arising from complaints pertaining to violations of laws, rules
and regulations on the downstream oil industry, and on applications for petitions on the
construction, operation and maintenance of pipeline systems

o Issues notifications, orders, resolutions and / or decisions pertaining to the


aforementioned cases
o Evaluates inspection reports submitted by concerned DOE units preparatory to
probable filing of appropriate cases
o Represents legal services in the various task forces/committees created to
monitor the downstream oil industry
o Coordinates with various DOE units and concerned government agencies
relative to the aforementioned functions
o Performs AD HOC functions as may be assigned

LEGAL COUNSELLING DIVISION

Issues legal opinions, prepares draft orders/ resolutions/ decisions and other issuances
and handles employee-related cases and other cases affecting the department

o Issuances and/or renders opinions on the interpretation of laws, rules and


regulations affecting the department
o Prepares appropriate draft orders, resolutions and/or decisions and other
issuances
o Reviews house/senate bills and proposed department issuances and submits
comments and recommendations relative thereto
o Coordinates with the office of the solicitor general in the handling of cases
including preparation and filling of appropriate pleadings and appearances in
such cases
o Handles administrative cases invo0lving employees of the department including
the conduct of investigations, filling of appropriate charges and hearing of such
cgarges as warranted

19
B. Distura

CONTRACT DIVISION

Handles the preparation, drafting, review, negotiations, finalization, interpretation,


filing and monitoring of compliance relative to all contracts involving the department

o Prepares, drafts, finalizes, and files contracts involving the DOE


o Reviews, evaluates and interprets contracts and submits comments, opinions and
recommendations therefor
o Participates in negotiations to finalize service contracts and other agreements
entered into by the DOE
o Takes appropriate measures to enforce compliance with the terms and conditions
of all contracts entered by the DOE
o Maintains appropriate database related to the aforementioned functions
o Reviews the legal aspects of applications for tax-exempt
importations/exportations of service contract-related equipment and materials
o Coordinates with various DOE units and concerned government agencies
relative to the aforementioned functions
o Performs AD HOC functions as may be assigned

20
B. Distura

INFORMATION TECHNOLOGY AND MANAGEMENT SERVICES

Formulates policies, plans and programs relative to information and communications


technology, geo-informatics, and data and information management, and ensures
effective implementation thereof and compliance with government rules, regulations
and standards

Information Technology Division

formulates and implements the Department's policies, programs and government


regulations and standards on information and communications technology

Information Services Division

formulates and implements the Department's policies, programs and government


regulations and standards on ICT services, geomatics and information packaging

Information and Data Management Division

formulates and implements the Department's policies, programs and government


regulations and standards on data and information resource management

21
B. Distura

ENERGY RESEARCH TESTING AND LABORATORY SERVICES

Formulates policies, plans and programs in support of exploration and development of


indigenous energy resources as well as to promote energy efficiency through research
and scientific, physical and calibration testings

Geoscientific Research and Testing Laboratory Division

Petrology Section
Palentology Section
Coal Section
Geothermal Section
Petroleum Section

Appliance Testing and Laboratory Division

Appliance/Equipment Section
Lighting and Other Electrical Devices Section
Calibration, Instrumentation and Control Section

GEOSCIENTIFIC RESEARCH AND FUEL TESTING LABORATORY DIVISION

Processes and analyzes rocks,petroleum, coal, processed fuels, waters and


environmental samples as well synthesizes, correlates and interprets data emanating
therefrom, re3lative to the exploration and development of indigenous resources.

A. GEOLOGICAL UNITS

PETROLOGY SECTION

o Processes and analyzes surface and subsurface rock samples in accordance with
international standards
o Synthesizes, correlates and interprets petrological data
o Conducts research and correlation studies on Philippine rock samples
o Establishes and maintains Philippine petrological database and rock type
collection
o Conducts field investigations
o Conducts on-the-job training/orientation programs in support of the academe and
the energy industry
o Coordinates with various DOE units and concerned agencies, academe, energy
industry and other stakeholders on matters related to the above enumerated
functions
o Performs AD HOC functions as may be assigned

Paleontology Section

22
B. Distura

o Processes and analyzes surface and subsurface rock samples for faunal fossil
content in accordance with international standards
o Synthesizes, correlates and interprets micropaleontological data
o Conducts micropaleontological/biostratigraphical research on Philippine rock
samples
o Establishes and maintains Philippine biostratigraphical and bathmetry database
and faunal type collection
o Conducts field investigations
o Conducts on-the-job training/orientation programs in support of the academe and
the energy industry
o Coordinates with various DOE units and concerned government agencies,
academe, energy industry and other stakeholders on matters related to the above
enumerated functions
o Performs AD HOC functions as may be assigned

Palynology Section

o Processes and analyzes surface and subsurface rock samples for floral fossil
content in accordance with international standards
o Synthesizes, correlates and interprets palynological data
o Conducts palynological research on Philippine samples
o Establishes and maintains palynological database and floral type collection
o Conducts field investigations
o Conducts on-the-job training/orientation programs in support of the academe and
the energy industry
o Coordinates with various DOE units and concerned government agencies,
academe, energy industry and other stakeholders on matters related to the above
enumerated functions
o Performs AD HOC functions as may be assigned

B. GEOCHEMICAL UNITS

Coal Section

o Processes and analyzes coal & other solid fuels as well as environmental samples
in accordance with international standards
o Synthesizes, correlates and interprets analytical data
o Conducts research and methods studies on coal geochemistry
o Conducts fields investigations
o Conducts on-the-job training/orientation programs in support of the academe and
the energy industry
o Coordinates with DOE units and concerned government agencies, academe,
energy industry and other stakeholders on matters related to the above
enumerated functions
o Performs AD HOC functions as may be assigned

Geothermal Section
23
B. Distura

o Processes and analyzes waters, geothermal gases, soil, pocks and related
materials as well as environmental samples in accordance with international
standards
o Synthesizes, correlates and interprets analytical data
o Conducts research and methods studies on geothermal geochemistry
o Conducts fields investigations
o Conducts on-the-job training/orientation programs in support of the academe and
the energy industry
o Coordinates with DOE units and concerned government agencies, academe,
energy industry and other stakeholders on matters related to the above
enumerated functions
o Performs AD HOC functions as may be assigned

Petroleum Section

o Processes and analyzes oil, gas, source rocks samples as well as environmental
samples in accordance with international standards
o Synthesizes, correlates and interprets analytical data
o Conducts research and methods studies on petroleum and natural gas
geochemistry
o Conducts fields investigations
o Conducts on-the-job training/orientation programs in support of the academe and
the energy industry
o Coordinates with DOE units and concerned government agencies, academe,
energy industry and other stakeholders on matters related to the above
enumerated functions
o Performs AD HOC functions as may be assigned

Processed Fuels Section

o Analyzes petroleum products collected from refineries, bulk storage/terminals


and retail outlets nationwide in accordance with the Philippine national
Standards (PNS) as well as from the academe and the industry sector
o Synthesizes, correlates and interprets analytical data
o Assists in the conduct of field sampling and inspection of petroleum products on
bulk supply points and gasoline stations
o Conducts research and methods studies on fuel geochemistry
o Conducts fields investigations
o Conducts on-the-job training/orientation programs in support of the academe and
the energy industry
o Coordinates with DOE units and concerned government agencies, academe,
energy industry and other stakeholders on matters related to the above
enumerated functions
o Performs AD HOC functions as may be assigned

LIGHTING AND APPLIANCE TESTING DIVISION

24
B. Distura

Develops product energy efficiency programs, formulates and oversees implementation


of energy standards, and conducts research and testing in support of National Energy
Efficiency Program

Appliance/Equipment Section

formulates energy standards for appliances and equipment


undertakes testing of appliances, equipment and other energy-consuming
devices to:
o provide database on energy performance of appliance and equipment for
policy recommendations
o implement energy efficiency standards
conducts research and studies to improve efficiency of consuming appliances
and equipment
provides consultancy and technical assistance on energy performance testing
conducts on-the-job training/orientation programs in support of the academe and
the energy industry
coordinates with various DOE units and concerned government agencies,
academe, energy industry and other stakeholders on matters related to the above
enumerated functions
performs ad hoc functions as may be assigned

Lighting and Other Electrical Devices Section

formulates energy standards for lighting and other household electrica; products
undertakes testing of lighting componenets and related products to:
o provide database on energy performance in aid of formulating policy
recommendations
o implement energy standards and labelling
conducts research and studies to improve efficiency of lighting and other
household electrical products
provides consultancy and technical assistance on lighting and related products
conducts on-the-job training/orientation programs in support of the academe and
the energy sector
coordinates with various DOE units and concerned government agencies,
academe, energy industry and other stakeholders on matters related to the above-
enumerated functions
performs ad hoc functions as may be assigned

Calibration, Instrumentation and Control Section

maintains a set of standards for in-house calibration of DOE instruments


calibrates energy monitoring instruments
conducts research and studies to improve overall plans efficiency through proper
application of measurements and calibration principles including boiler
operation

25
B. Distura

provides consultancy and technical assistance in the designs of calibration and


measurement systems as well as instrumentation and control on energy
monitoring instruments
conducts on-the-job training/orientation programs in support of the academe and
the energy industry
coordinates with various DOE units and concerned government agencies,
academe, energy industry and other stakeholders on matters related to the above
enumerated functions
performs ad hoc functions as may be assigned

26
B. Distura

ENERGY POLICY AND PLANNING BUREAU

Formulates, updates, monitors and evaluates national and local energy plans, policies, programs and
projects, and provides a comprehensive assessment of demand scenarios and supply options as well as
studies the impacts of international commitments on energy policies, economy and impacts of
international commitments on energy policies, economy and environment

Planning Division

o National Energy Planning Section


o Regional Planning Section

Policy Formulation and Research Division

o Policy Research and Analysis Section


o Energy Modelling and Information Section
o Sectoral Evaluation and Survey Management Section

Energy Cooperation and Coordination Division

o Project Evaluation and Monitoring Section


o International Cooperation and Other External Concerns
o Environmental Cooperation and Coordination Section

PLANNING DIVISION

Formulates and updates national and regional energy plans and programs consistent
with the medium-term Philippine development and investment plans

National Energy Planning

o Formulates and updates the Philippine energy plan (PEP)


o Evaluates and monitors implementation of the PEP and related programs
o Evaluates overall energy balance table and energy mix
o Conducts research and studies related to national energy palnning
o Monitors performance commitments of DOE to OP/SONA
o Prepares energy sector accomplishment reports
o Provide inputs for and integrate the agency performance measures for budgetary
allocation
o Coordinates with concerned DOE units, various government agencies, industry
participants , LGU's, NGO's, ETC. (E.G.., NEDA-RDC's, IPPs,ECS,ETC.) on
matters related to the above-enumerated functions
o Conducts public consultations and briefings relative to the above functions
o Performs AD HOC functions as may be assigned

Regional Planning Section

o Formulates and updates regional energy plans


o Evaluates and monitors regional energy plans and programs
o Conducts research and studies related to regional energy planning
27
B. Distura

o Provides technical assistance to local government units and other concerned


agencies in the formulation of regional energy plans and programs
o Updates and maintains regional energy database
o Prepares project proposals on regional energy plans and programs
o Coordinates with concerned DOE units, various government agencies, industry
participants , LGU's, NGO's, ETC. (E.G.., NEDA-RDC's, IPPs,ECS,ETC.) on
matters related to the above-enumerated functions
o Conducts public consultations and briefings relative to the above functions
o Performs AD HOC functions as may be assigned

POLICY FORMULATION AND RESEARCH DIVISION

Formulates policy recommendations and course of action of current and emerging


issues based on energy models, surveys, research and studies for the short, medium and
long-term national energy plans, programs and targets

Policy Research and Analysis

o Conducts research and studies on current issues, developments and emerging


trends necessary in the formulation of national energy policies, plans and
programs
o Conducts policy impact analyses of energy-related legislative and institutional
initiatives as well as the impact of relevant socio-economic variables on the
energy sector
o Formulates policy recommendations based on the results of above-enumerated
functions
o Undertakes studies and recommends courses of action to improve investment
opportunities in the energy sector (E.G., improvement of service contract
systems, Etc.)
o Develops and maintains a repository of energy policy research information and
other related activities
o Performs AD HOC functions as may be assigned

Energy Modelling and Information

o Prepared energy demand and supply models in support of pep formulation and
other energy policy studies
o Undertakes studies with the view to developing and maintaining in the long term
applicable energy models for the philippines
o Conducts research and data collection on energy sector developments to be used
as inputs to the above-enumerated activities
o Analyzes and synthesizes modelling results with the view to generating energy
forecasts, targets and projections to support policy thrusts and directions
o Coordinates with various government agencies, industry participants, consumers
ETC. (E.G., PNOC, NEDA, NEA, ERC, NPC, PSALM, TRANSCO, VARIOUS
IPPs, MERALCO, ECs) to facilitate the exchange of pertinent information
necessary in the execution of the sections`s functions
28
B. Distura

o Performs AD HOC functions as may be assigned

Sectoral Evaluation and Survey Management

o Designs and undertakes periodic and special surveys in aid of energy policy
formulation and planning purposes
o Monitors and analyzes the changing patterns in primary energy consumption

By FUEL
By SECTOR
By END-USE
o Processes and evaluates results of surveys undertaken
o Undertakes short-term sectoral energy supply and demand forecasts consistent
with national growth targets and policies
o Prepares DOE`s statistical programs for submission to NSCB & other gov`t.
agencies, academe and professional groups
o Prepares and updates reports on annual energy balance and energy mix
o Develops and updates techno-economic and sectoral energy database and energy
related information
o Coordinates with various government agencies, industry participants, consumers
ETC. (E.G., DOF, NEDA, NEA, ERC, NPC, PSALM, TRANSCO, VARIOUS
IPPs, MERALCO, ECs) to facilitate the exchange of pertinent information
necessary in the execution of the sections`s functions
o Establishes institutional linkages to strengthen information/data exchange
between and among government agencies necessary in the execution of the
department`s mandate
o Performs AD HOC functions as may be assigned

ENERGY COOPERATION AND COORDINATION DIVISION

Coordinates the department`s international and other external cooperation commitment


and activities, conducts project evaluation and monitoring, ensures compliance with
government environmental policies and standards, and undertakes research and studies
thereon

Project Evaluation and Monitoring

o Evaluates and monitors ongoing and proposed projects both foreign and locally
funded
o Conducts research on projects areas/facilities/ guidelines in support of the
department`s policies, plans and programs
o Develops criteria and guidelines in the preparation of projects proposals,
evaluation and management
o Recommends prioritization of energy projects for funding purposes
o Assists in the negotiation of terms and conditions of loans and grants for the
department with foreign funding institutions

29
B. Distura

o Maintains and updates a repository of all completed, ongoing and proposed


foreign-assisted projects and locally funded projects
o Coordinates with various DOE units, concerned government offices, funding
agencies and oversight committee (PRC)
o Performs AD HOC functions as may be assigned

International Cooperation and Other External Concerns

o Coordinates the department`s international commitments and cooperation


activities (I.E., ASEAN, APEC, UNDP-ESCAP, BIMP-EAGA, MULTI-
LATERAL/BILATERAL) including the preparation of country position papers
and other technical requirements for international meetings/for a/conferences
o Provides technical and secretariat support to the departments hosting of
international conferences and other events arising from international
commitments and obligations
o Provides technical and secretariat support to the department's
representatives/focal points in inter-agency fora external relations such as but not
limited to the Philippine council for APEC,ASEAN,ASEM cooperation
(PCAAC)-cabinet and technical board levels,permanent interagency for escap
matters (PITCEM) and other multi-lateral/bilateral AD HOC groupings and task
forces
o Monitors and evaluates the performance of the department VIS-A-VIS the
commitments made in international for a
o Prepares periodic reports on the status of the department's external cooperation
activities for submission to relevant international and national agencies
o Performs AD HOC functions as may be assigned

Environmental Cooperation and Coordination

o Coordinates the department's activities relating to the scoping, review and


evaluation of environmental impact assessment (EIS)/initial environmental
examination (IEE) and IEE checklist of energy projects
o Coordinates with project proponents,DENR, LGU's and other concerned
agencies and institutions in the establishment and operationalization of the
environmental guarantee fund (EGF), Environmental monitoring fund (EMF)
and multipartite monitoring team (MMT)
o Facilitated and assists proponents in their application for certificate of non-
coverage (CNC)/environmental compliance certificate (ECC) of energy projects
in coordination with other agencies (E.G., DENR-EMB,HLURB,ETC.)
o assists in and helps facilitate the conduct of investigations in response to public
complaints regarding environmental problems related to energy exploration,
development and utilization
o Conducts environmental management monitoring to ensure compliance of
project proponents with ECC conditionalities and other internationally accepted
environmental standards

30
B. Distura

o Conducts trainings/seminar/workshops/conferences on energy-related


environment concerns
o Coordinates with DOE units and other concerned agencies on the energy sector's
compliance with the clean air act and other environmental policies (E.G., climate
change, agenda 21,ETC.) with the view to recommending compliance measures
o Provides secretariat support to energy-related environment concerns
o Performs AD HOC functions as may be assigned

ENERGY RESOURCE DEVELOPMENT BUREAU

Formulates and implements government policies, programs and regulations relating to the exploration,
development and production of indigenous petroleum, coal and geothermal energy resources, and
related product and market development thereof

Petroleum Division

Petroleum Geology Section


Petroleum Geophysics Section
Petroleum Engineering Section

Geothermal and Coal Division

Exploration and Geosciences Section


Development and Exploitation Management Section
Market Development Section

PETROLEUM RESOURCES DEVELOPMENT DIVISION

Formulates and implements policies, plans, programs and regulations relating to the exploration and
development of petroleum resources

Petroleum Geology

formulates policy recommendation, plans and programs on geological exploration of petroleum


resources
implements plans and programs on geological exploration of petroleum resources
conducts research and studies on geological exploration of petroleum resources
conducts resource evaluation of existing and potential oil and gas fields
evaluates merits of proposed geological work programs and related technical qualifications of
service contract/permit applicants
ensures compliance of service contractors and permitees with regulations and geological work
commitments
coordinates with various DOE units and concerned government agencies, industry participants,
academe and other stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

Petroleum Geophysics

formulates policy recommendations, plans and programs on geophysical exploration of


petroleum resources
implements plans and programs on geophysical exploration of petroleum resources
gathers and updates petroleum data and provides inputs to the Energy Data Center

31
B. Distura

conducts research and studies on geophysical exploration of petroleum resources


evaluates merits of proposed geophysical work programs and related technical qualifications of
service contract/permit applicants
ensures compliance of service contractors and permitees with regulations and geophysical work
commitments
coordinates with various DOE units and concern ed government agencies, industry participants,
academe and other stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

Petroleum Engineering

formulates policy recommendations, plans and programs on drilling, development and


production of petroleum resources
implements plans and programs on drilling development and production of petroleum resources
conducts research and studies on drilling, development and production of petroleum resources
ensures compliance with internationally accepted petroleum industry standards for all drilling
and production operations with due consideration to health, safety, environment and security
evaluates merits of proposed drilling programs, plans for development and production
operations and related technical qualifications of service contractors
ensures compliance of service contractors with regulations on drilling, development and
production and work commitments
coordinates with various DOE units and concerned government agencies, industry participants,
academe and other stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

COAL AND NUCLEAR MINERALS DIVISION

Formulates and implements policies, plans, programs and regulations relating to exploration,
development, exploitation and market development of geothermal and coal resources

Exploration and Geosciences Section

formulates policy recommendations, plans and programs on geothermal and coal resource
exploration
implements policies, plans and programs on geothermal and coal resources
conducts research and studies on geothermal and coal resources
evaluates service contract/permit applications relative to the merits of work programs and other
technical qualifications relating to exploration
evaluates and ensures compliance with regulations and work commitments of service
contractors and permitees relating to geoscientific activities with due regard to safety, health,
environment and security
maintains a computerized database on geothermal and coal resources
coordinates with various DOE units and concerned government agencies, industry participants,
academe and other stakeholders on matters related to the above-enumerated functions
performs ad hoc functions as may be assigned

Development and Exploitation Management Section

formulates policy recommendations, plans and programs on development and exploitation of


geothermal and coal resources
implements policies, plans and programs on the development and exploitation of geothermal
and coal resources
conducts research and studies on the development and exploitation of geothermal and coal
resources

32
B. Distura

evaluates service contract/permit applications relative to the merits of work programs and other
technical qualifications relating to development and exploitation of geothermal and coal
resources
ensures compliance of service contractors/permitees with work regulations and commitments
relating to development and exploitation of geothermal and coal resources
coordinates with varios DOE units and concerned government agencies, industry participants,
academe an dother stakeholders on matters related the above-enumerated functions
performs ad hoc functions as may be assigned
ENERGY UTILIZATION AND MANAGEMENT BUREAU

Formulates and implements policies, plans, programs and regulations on new energy technologies,
alternative fuels and the efficient, economical transformation, marketing and distribution of
conventional and renewable energy resources, and ensures efficient and judicious utilization of
conventional and renewable energy resources

Energy Efficiency and Conservation Division

EE&C program development and evaluation section


energy management advisory section
EE&C technology promotion and advocacy section

Alternative Fuels and Energy Technology Division

alternative fuels and energy technology program development and management section
alternative fuels and energy technology evaluation and promotion section

ALTERNATIVE FUELS AND ENERGY TECHNOLOGY DIVISION

Formulates policies, plans and programs related to alternative fuels and new and advanced energy
technologies (NAETs) development towards a socially and environmentally responsive and effective
utilization of energy resources

Alternative Fuels and Energy Technology Program development and Management

conducts studies, develops and implements policies, palsn and programs for the effective utilization

OIL INDUSTRY MANAGEMENT BUREAU

Formulates and Implements polices, plans, programs and regulations on the downstream oil industry,
including the importation, exportation, stockpiling, storage, shipping, transportation, refining,
processing, marketing and distribution of petroleum crude oils, products and by products, and monitors
developments in the downstream oil industry

Oil Industry Competition and monitoring division

o Oil supply monitoring and evaluation section


o Oil demand and market competition monitoring section
o Oil price monitoring and evaluation section

Oil Industry Standards and Monitoring Division

o Petroleum products standards section


o Facilities and processes standards section

33
B. Distura

o Downstream oil industry environmental standards section

Retail Market Monitoring and Special Concerns Section

o Liquid fuels section


o LPG section
o Special concerns section

OIL INDUSTRY STANDARDS AND MONITORING DIVISION

Formulates policies, plans and programs related to national standards and environmental regulations
affecting quality of fuel and fuel additives, and facilities in the downstream oil industry and ensures
effective implementation thereof

Petroleum Products Standards

Formulates policy recommendations and implements policies, plans and programs relating to
standards for petroleum products
Reviews, formulates, and develops standards for petroleum fuels and petroleum related
products
Evaluates application for fuel additive registration for endorsement to DENR
Issues recommendation for registration of fuel additives
Conducts research and studies relating to fuel quality and its impact on oil supply security,
environment ETC.
Undertakes product sampling and marker dye testing at bulk facilities to ensure compliance to
national fuel quality standards.
Recommends the initiation of legal proceedings against violators of pertinent provisions of
R.As. 8479 and 8749
Coordinates the conduct of information and education campaign relative to the quality and
standards of petroleum products
Coordinates with various DOE Units and concerned government agencies and other entities,
(E.G., DENR, DOST, BPS, OIL Companies, vehicle manufacturer, ETC.) relative to fuel
quality and standards
Provides secretariat support to the technical committee on petroleum products and additives
Performs AD HOC functions as may be assigned

Facilities and Processes Standards

Formulates policy recommendations and implements policies, plans and programs relating to
standards for facilities, processes and technology application
Reviews, formulates, and develops standards for facilities & processes with emphasis with
clean and safe technologies.
Conducts research and studies relating to standards for facilities and processes and their
impacts on oil supply security, environment, etc.
Undertakes inspection of downstream oil facilities to ensure compliance with national and/or
internationally accepted standards
Provides inputs in the preparation of the Philippine energy plan
Recommends the initiation of legal proceeding against violators of pertinent provisions of R.As.
8479 and 8749
Coordinates the conduct of information and education campaign relating to facilities and
processes standards
Coordinates with various DOE Units and concerned government agencies and other entities
(E.G., DENR.DOST, BPS, OIL COMPANIES, OIL PROCESSING COMPANIES Etc.)
Provides secretariat support to the technical committee on petroleum facilities and processes.

34
B. Distura

Performs AD HOC functions as may be assigned

Downstream Oil industry Environmental Standards

Formulates policy recommendations and implements policies, plans and programs relating to
downstream oil industry environmental standards and coordinates with the DENR thereon
Conducts research and studies relating to environmental practices for fuel handling,
distribution, storage and utilization with the view to adopting best industry practices
Participates in the investigation of oil spills and similar incidences in the downstream oil
industry
Prepares and updates DOE oil spill contingency plan for the downstream oil industry
Provides inputs as requested by the civil liability convention (CLC) and the international oil
pollution convention (IOPC)
Monitors the collection and recycling of used oil
provides inputs in the preparation of the Philppine energy plan
Coordinates the conduct of information and education campaign relating to environmental
concerns of the downstream oil industry
Coordinates with various DOE units and concerned goverment agencies and other entities,
(E.G., DENR, PCG, BPS, OIL Companies, NGOs, ETC.) to determine sector's compliance to
the CAA and other environmental regulations and recommends appropriate action
Performs AD HOC functions as may be assigned.

OIL INDUSTRY COMPETITION AND MONITORING DIVISION

Formulates and implements policies, plans and programs to encourage activities relating to the
downstream oil industry particularly on supply, logistics, marketing, distribution & pricing

Oil Supply Monitoring and Evaluation

o Formulates policy recommendations and implements policies, plans and programs relating to
oil supply
o Monitoring compliance of industry players on prior notice and reportorial requirements on
importation and exportation of crude oil and petroleum products including lubes/ specialty
products as mandated under R.A. 8479
o Monitors submission of periodic reports on importation, exportation, inventory, crude run and
refinery production of crude oil and petroleum products including lubes/specialty products, as
well as refinery process facilities and shutdowns/turnarounds
o Recommends the initiation of legal proceedings against noncompliance to the pertinent
reportorial requirements
o Evaluates notices filed by downstream oil industry players particularly on importation/
exportation of crude oil and petroleum products including lubes/specialty products, and issues
acknowledgements thereof
o Evaluates applications for availment of petroleum products export incentives for endorsement
of the DOE
o Conducts inspection of petroleum product supply storage facilities, and product sampling
o Assists in the development of as well as maintains and updates database relative to crude
oil and petroleum products including lubes/specialty products importation, exportation,
inventory, production, & crude run including refinery process facilities and
shutdowns/turnarounds
o Evaluates refinery operations and their implications on oil supply
o Conducts research and studies relative to oil supply
o Provides inputs in the preparation of the Philippine Energy Plan, particularly on the oil supply
aspect
o Coordinates the conducts of information and education campaign relative to oil supply

35
B. Distura

o Coordinates with various DOE units and concerned government agencies and other entities,
(E.G., BOC, BIR, SEC, OIL Companies, special Economics Zones) on crude oil/petroleum
product importation/exportation, inventory and oil refinery production
o Performs AD HOC functions as may be assigned

Oil Demand and Market Competition Monitoring

Formulates policy recommendations and implements policies, plans and programs relating to
oil demand and market competition
Monitoring compliance of industry players on prior notice and reportorial requirements as
mandated under R.A. 8479
Monitors submission of sales reports on petroleum products as inputs to oil demand and market
competition analysis
Recommends the initiation of legal proceedings against noncompliance to the pertinent
reportorial requirements
Evaluates notices filed by downstream oil industry players on their engagement in the
downstream oil industry (bulk supply/marketing) and issues acknowledgements thereof
Evaluates applications for petroleum tanker chartering/utilization, importation, local
construction and conversion of service for endorsement to maritime industry authority
(MARINA).
Evaluates applications for registration & availment of incentives of downstream oil industry
players for endorsement to the board of investments (BOI)
Conducts inspection of petroleum product marketing and distribution facilities and undertakes
product sampling
Maintains a computerized database relative to oil industry sales and market share of players,
investments of all players, thruput of bulkplants, oil distribution facilities and tanker utilization
Conducts research and studies relative to storage, marketing and distribution of oil products
(E.G., oil depot relocation, logistics, de-bottlenecking, ETC.)
Provides inputs in the preparation of the Philippine Energy Plan, particularly on marketing and
distribution activities of the downstream oil industry players
Assists in the conduct of information and education campaigns relative to the downstream oil
industry players.
Coordinates with various DOE units and concerned government agencies and other entities,
(E.G. MARINA, BOI, SEC, OIL Companies) particularly on downstream oil industry
investments and activities.
Performs AD HOC functions as may be assigned

Oil Price Monitoring and Evaluation

o Formulates policy recommendations and implements policies, plans and programs relating to
oil pricing (E.G., TAXATION REVIEW, IPO, ETC.)
o Monitors international prices of crude oil and petroleum products.
o Simulates the impact of international petroleum products pricing on domestic pricing of
petroleum products
o Determines the reasonableness of price adjustments in local market VIS-A-VIS global market
conditions
o Conducts research and studies relative to the downstream oil industry affecting pricing of
petroleum products
o Maintains and updates database relative to oil pricing
o Conducts inspection of petroleum product supply, marketing and distribution facilities.
o Provides technical support to the DOE-DOJ task force on anti-trust safeguards
o Provides inputs in the preparation of the Philippine energy plan, particularly on the pricing
aspect
o Coordinates the conduct of information and education campaign relative to oil pricing

36
B. Distura

o Coordinates with various DOE units and concerned government agencies and other entities,
(E.G., DOE, BIR, BOC, SEC, OIL Companies, ETC.) relative to petroleum product pricing,
taxation, among others
o Perfoms AD HOC functions as may be assigned

NATURAL GAS MANAGEMENT DIVISION

Formulates and Implements Policies, Plans, Programs and Regulations on the Development and
Promotion of Downstream Natural Gas as well as Undertakes Product and Market Development
Activities

Natural Gas Market Development and Monitoring Section

o Formulates policy recommendations and implements policies, plans and programs on natural
gas market development
o Promotes and monitors the use of natural gas in power and other demand sectors
o Evaluates emerging trends in the use of natural gas and its impact on other fuels and the
economy
o Evaluates available and emerging technologies for end-use in the natural gas industry
o Reviews and updates natural gas industry performance, trends and developments
o Maintains computerized database on natural gas utilization, market development, etc.
o Coordinates with various DOE units, concerned government agencies, private sector and other
stakeholders on matters related to the above-enumerated functions
o Performs Ad Hoc functions as may be assigned

Natural Gas Industry and Infrastructure Development and Administration Section

o Formulates policy recommendations and implements policies, plans, programs and standards
on the development of natural gas infrastructure
o Formulates, reviews and implements the natural gas infrastructure development program
o Prepares and updates the natural gas pipeline and facilities development plan and programs
o Evaluates potential sites for natural gas pipelines and other natural gas facilities
o Performs licensing/permitting functions
o Monitors and ensures compliance with applicable rules and regulations on standards on
pipelines, facilities, gas plants, etc.
o Conducts inspections and investigations of natural gas facilities, with due regard to production,
safety, health, environment and security
o Coordinates with various DOE units, concerned government agencies, private sector and other
stakeholders on matters related to the above-enumerated functions
o Performs Ad Hoc functions as may be assigned

RETAIL MARKET MONITORING SPECIAL CONCERN DIVISION

Formulates policies, plans and programs related to the oil retail market and other special concerns
affecting oil industry administration and ensures effective implementation thereof

Liquid Fuels

o Formulates policy recommendations and implements policies, plans and programs relating to
the retail marketing and hauling of liquid fuels
o Monitors compliance of industry players on prior notice and reportorial requirements on the
retail marketing and hauling of liquid fuels as mandated under R.A.8479
o Monitors submission of periodic reports on the retail marketing and hauling of liquid fuels

37
B. Distura

o Conducts routine and on-the-spot inspection of gasoline stations and liquid fuels haulers to
ensure compliance with DOE regulations
o Conducts investigations on consumer complaints relative to liquid fuels with the view to
recommend measures
o Conducts preliminary random testing on the quality of liquid fuels sold in gasoline station/retail
outlets (E.G., Marker Dye Test, Adulteration Test)
o Recommends the initiation of legal proceedings against violators of regulations on liquid fuels
o Monitors wholesale and retail prices of liquid fuels and provides inputs to the price monitoring
and evaluation section
o Maintains a computerized database relative to industry players engaged in the liquid fuels
retailing and hauling
o Conducts research and studies relative to the retailing of liquid fuels in aid of policy formulation
o Coordinates with various DOE units and concerned government agencies (E.G., DTI, DOST
LGU) relative to the above-enumerated functions
o Coordinates the conduct of information and education campaign relative to the liquid fuels
sector
o Provides inputs in the preparation of the Philippine energy plan
o Represents the department in the liquid fuels task force
o Provides secretariat support to the technical committees in this regards
o Performs AD HOC functions as may be assigned

LPG

o Formulates policy recommendations and implements policies, plans and programs relating to
the retail marketing and hauling of liquefied petroleum gas (LPG)
o Monitors compliance of industry players on prior notice and reportorial requirements on the
retail marketing and hauling of LPG as mandated under R.A. 8479
o Monitors submission of periodic reports on the retail marketing and hauling of LPG
o Conducts routine and on-the-spot inspection of LPG refillers, haulers, marketers, dealers and
retail outlets to ensure compliance with DOE regulations
o Conducts investigations on consumer complaints relative to LPG with the view to recommend
measures thereon
o Recommends the initiation of legal proceeding against violators of regulations on LPG
o Monitors retail prices of retail LPG and provides inputs to the price monitoring and evaluation
section
o Maintains a computerized database relative to industry players engaged in the LPG refilling,
retailing and hauling
o Coordinates with various DOE units and concerned government agencies (E.G., DTI, DOST,
LGU) relative to the above-enumerated functions
o Coordinates the conduct of information and education campaign relative to the liquid fuels
sector
o Conducts studies and research relative to the refilling, hauling and retailing of LPG
o Provides inputs in the preparation of the Philippine energy plan
o Represents the department in the LPG task force
o Provide secretariats support to the technical committees in this regard
o Performs AD HOC functions as may be assigned

Special Concerns

o Coordinates the conduct of skills and management training funded under the gasoline station
training and loan fund (GSTLF) program for the establishment and operation of new and
expansion of existing gasoline stations of new players
o Evaluates loan applications under the GSTLF program for endorsement to the government
financing institutions (GFis) and recommends approval thereof

38
B. Distura

o Monitors progress of projects funded under the GSTLF program


o Maintains a computerized database relative to the above program
o Coordinates with various DOE units and concerned government agencies (E.G., DTI, DOST,
LGU) relative to the above-enumerated functions
o Coordinates the conduct of information and education campaign relative to GSTFL program
o Provides inputs in the preparation of the Philippine energy plan
o Provides technical support to the energy contingency task force (ECTF) relative to the oil sector
o Provides technical and secretariat support to the inter-agency technical staff for the oil
contingency plan implementation
o Performs AD HOC functions as may be assigned

ELECTRIC POWER INDUSTRY MANAGEMENT BUREAU

Supervises the implementation of electric power industry restructuring to establish a competitive,


market-based environment, and encourage private-sector participation; ensures adequate, efficient and
reliable supply of electricity, and formulates plans, programs and strategies relative to rural
electrification

Power Market Development Division

o Power Market Researcy and Development Section


o Epira Monitoring and Coordination Section

Power Planning and Development Division

o Power Development Planning Section


o Transmission Development Planning Section
o Missionary Electrification Development Planning Section

Rural Electrification Administration and Management Division

o Rural Electrification Systems Administration Section


o Rural Electrification Project Management Section
o Non-electrification Project Management and Administration Section

POWER PLANNING AND DEVELOPMENT DIVISION

Formulates policies, plans and programs related to generation, transmission, distribution and supply of
electricity and ensures effective implementation thereof.

Power Development Planning

o Prepares and updates annually the Philippine Power Development Plan (PDP).
o Evaluates individual plans of

Generation companies
National transmission company or its buyer/concessionaire
Distribution utilities
Suppliers of electricity; and
Other entities engaged in the delivery of electricity services
o Prepares indicative supply and demand options based on economics and technologies with the
view to ensuring greater private sector participation.
o Undertakes long-term national, regional and sectoral electricity demand forecasts.

39
B. Distura

o Ensures sufficient reserve capacities through the formulation of necessary policy


recommendations in this regard.
o Provides power sector inputs to the Philippine Energy Plan (PEP), Regional Energy Plans
(REPs) and Sectoral Energy Plans (SEPs).
o Monitors and assesses system development and performance in the market.
o Coordinates with various government agencies, electric power industry participants, consumer
groups, etc. (e.g. DOF, NEDA, NEA, ERC, NPC, PSALM, TRANSCO, various IPPs, Meralco,
ECs) on matters related to the above-enumerated functions.
o Assists in the PEP, REP and SEP consultations.
o Provides secretariat support to various activities relating to the power sector.
o Performs Ad Hoc functions as may be assigned.

Transmission Development Planning

o Evaluates and recommends approval of the Transmission Development Plan (TDP) of Transco
or its buyer/concessionaire.
o Formulates policy recommendations on transmission expansions.
o Represents the department in the following:

Grid Management Committee (Grid Code)


Distribution Management Committee (Distribution Code)
Transco Board Technical Working Group
NP-Contracts Awards Committee
o Consolidates regional and sectoral inputs relating to the transmission plan.
o Monitors and assesses the transmission operations, system development and performance in the
market.
o Coordinates with various government agencies, electric power industry participants, consumer
groups, etc. (e.g. DOF, NEDA, ERC, NPC, PSALM, Transco, various IPPs, Meralco, ECs) on
matters related to the above-enumerated functions.
o Performs AdHoc functions as may be assigned.

Missionary Electrification Development Planning

o Evaluates and updates annually the Missionary Electrification Development Plan (MEDP).
o Formulates policy recommendations on sufficiency of supply of electricity in off-grid areas.
o Prepares indicative supply and demand options based on economics and technologies in off-
grid areas.
o Formulates policy recommendations on missionary electrification and off-grid connections.
o Coordinates the planning of missionary electrification projects.
o Evaluates the missionary electrification projects of NPC-Small Power Utilities Group (NPC-
SPUG) and other parties operating in off-grid areas.
o Provides power sector inputs to the Philippine Energy Plan (PEP), Regional Energy Plans
(REPs) and Sectoral Energy Plans (SEPs).
o Coordinates with various government agencies, electric power industry participants, consumer
groups, etc. (e.g. DOF, NEDA, NEA, ERC, NPC, PSALM, Transco, various IPPs, Meralco,
ECs) on matters related to the above-enumerated functions.
o Provides secretariat support to various activities relating to missionary electrification.
o Performs AdHoc functions as may be assigned.

POWER MARKET DEVELOPMENT DIVISION

Formulates Policies, plans and programs related to the development of Philippine power market and
ensures the effective and sustainable operation of a competitive national and regional electricity markets

40
B. Distura

Power Marketing Research and Development

o Oversees and implements the Philippine Wholesale electricity spot market (WESM)
o Formulates policy recommendations relating to sustainable electricity market transformation
o Evaluates and monitors performance of the electricity market
o Undertakes research and studies to further develop and strengthen the Philippine electricity
market
o Implements and facilitates technical assistance projects related to the WESM
o Represents the department in the ff. inter- agency committees:
1. WESM technical working groups
2. NEDA technical working committees relating to power (NEED BASIS)
o Provides secretariat support to the WESM technical working groups
o Coordinates with various government agencies, electric power industry participants, consumer
groups, ETC. (E.G., DOF, NEDA, NEA, ERC, NPC, PSALM, TRANSCO, VARIOUS IPPs,
MERALCO, ECs) on matters related to the above enumerated functions
o Performs AD HOC functions as may be assigned

EPIRA Monitoring and Coordination

o Evaluates and monitors EPIRA implementation and compliance of electric power industry
participants (government and private sector entities)
o Evaluates submissions of various agencies relating to the reportorial requirements of the joint
congressional power commission (JCPC)
o Prepares BI-annual reports to the JCPC on EPIRA implementation and compliance
o Formulates policy recommendations to ensure effective implementation of the restructuring
objectives
o Implements and facilitates technical assistance projects related to EPIRA
o Coordinates with various government agencies, electric power industry participants, consumer
groups, ETC. (E.G., DOF, NEDA, NEA, ERC, NPC, PSALM, TRANSCO, VARIOUS IPPs,
MERALCO, ECs) on matters related to the above enumerated functions
o Provides secretariat support to the EPIRA implementation steering committee and JCPC
meetings
o Performs AD HOC functions as may be assigned

RURAL ELECTRIFICATION ADMINISTRATION AND MANAGEMENT DIVISION

Formulates policies, plans and programs related to the department's thrust to total energization of the
country and provision of financial benefits to host communities and ensures effective implementation
thereof.

Rural Electrification Systems Administration

o Formulates policy recommendations on the rural electrification thrust of the department


including the enhancement of private sector participation in off-grid areas.
o Prepares integrated rural electrification plans and programs including missionary
electrification.
o Assists in the preparation of PDP and MEDP
o Evaluated the annual distribution plan of National Electrification Administration (NEA).
o Undertakes policy research and studies relating to rural electrification.
o Coordinates with the concerned DOE units in the promotion and implementation of renewable
energy projects for rural electrification.
o Formulates criteria for Qualified Third Parties (QTPs)
o Coordinates and cooperates with the concerned DOE units in implementing rural electrification
nationwide.

41
B. Distura

o Performs AdHoc functions as may be assigned.

Rural Electrification Project Management

o Oversees the implementation and management of rural electrification/missionary electrification


projects funded through Rule 29 of EPIRA Implementing Rules and Regulations (ER 1-94) and
DOE electrification budget.
o Evaluates proposals for electrification projects funded through Rule 29 of EPIRA
Implementing Rules and Regulations (ER 1-94) and DOE electrification budget.
o Conducts technical inspections of all rural electrification projects for funding under ER 1-94
o Undertakes Information and Education Campaigns on Rule 29 of EPIRA Implementing Rules
and Regulations (ER 1-94) relating to electrification.
o Coordinates with generation companies and/or energy resource developers for the effective
implementation and compliance with Rule 29 of EPIRA Implementing Rules and Regulations
(ER 1-94).
o Coordinates with various government agencies, electric power industry participants, consumer
groups, etc. (e.g. NEA, ERC, NPC-SPUG, PSALM, TRANSCO, various IPPs and their
Community Relations (COMRELs) Officers, Meralco, ECs) on matters related to the above-
enumerated functions.
o Performs AdHoc functions as may be assigned.

Nonelectrification Project Mangement and Administration

o Formulates policy recommendations on the implementation of Rule 29 of EPIRA Implementing


Rules and Regulations (ER 1-94) relating to developmental, livelihood, watershed
management, health and environment enhancement projects (Non-Electrification Projects).
o Oversees the implementation and management of nonelectrification projects.
o Evaluates proposals for nonelectrification projects funded through Rule 29 of EPIRA
Implementing Rules and Regulations (ER 1-94).
o Conducts technical inspections of all nonelectrification projects for funding under ER 1-94.
o Undertakes information and education campaigns on Rule 29 of EPIRA Implementing Rules
and Regulations (ER 1-94) relating to nonelectrification projects.
o Provides inputs in the preparation of PEP/PDP.
o Coordinates with various government agencies, electric power industry participants, consumer
groups, etc. (e.g. NEA, ERC, NGOs, Legislators, LGUs, various IPPs and their community
relations (COMRELs) Officers, etc.) on matters related to the above-enumerated functions.
o Performs AdHoc functions as may be assigned

RENEWABLE ENERGY MANAGEMENT BUREAU

Formulate and implement policies, plans and programs related to the accelerated development,
transformation, utilization and commercialization of renewable energy resources including emerging
energy technologies

NREB Technical Services and Management Division

Provide support to the operations of the national renewable energy board and will serve as a one-step
shop for RE

Biomass Energy Management Division

Formulate and implement policies, plans and programs related to the accelerated development,
transformation, utilization and commercialization of biomass energy resources including emerging
energy technologies

42
B. Distura

Hydropower & Ocean Energy Management Division

Formulate and implement policies, plans and programs related to the accelerated development,
transformation, utilization and commercialization of hydropower and ocean energy resources including
emerging energy technologies

Geothermal Energy Management Division

Formulate and implement policies, plans and programs related to the accelerated development,
transformation, utilization and commercialization of geothermal energy resources

Solar & Wind Energy Management Division

Formulate and implement policies, plans and programs related to the accelerated development,
transformation, utilization and commercialization of solar and wind energy resources

SOLAR WIND ENERGY MANAGEMENT DIVISION

Policy and Technology Section

o Develop, formulate and implement solar and wind (S & W) policies, plans and programs, as
part of the NREP, to accelerate the development, transformation, utilization and
commercialization of SW resources and technologies;
o Monitors and evaluates the implementation of the S & W plans, programs, projects, activities,
laws, regulations and similar issuances;
o Assists in administering the implementation of existing S & W laws, regulations and similar
issuances;
o Coordinates with various government agencies, LGUs, academe, NGOs, private sector and
other stakeholders on matters related to the development and implementation of S & W policy,
plans and programs;
o Conduct energy technology and policy research and development activities for the development
of sustainable S & W systems;
o Develops and spearheads the implementation of local and/or foreign-assisted S & W projects
and activities;
o Operates and maintains a computerized national S & W energy database;
o Conducts S & W energy resource assessment and mapping; and
o Performs AdHoc functions as maybe assigned.

Promotion and Commercialization Section

o Develop and implement an SW promotion and commercialization policies, plans and sub-
programs, as part of the SW program, to promote the commercialization/application of SW
resources and technologies;
o Monitors and evaluates the commercial operation of S & W power and non-power facilities and
projects;
o Spearheads in administering the implementation of existing S & W laws, regulations and
similar issuances;
o Coordinates with various government agencies, LGUs, academe, NGOs, private sector and
other stakeholders on matters related to the S & W promotion and commercialization program;
o Conduct research and development activities on the economic and financial efficiencies and
effectiveness of SW systems;
o Assists in the implementation of local and/or foreign-assisted S & W projects and activities;
o Operates and maintains a computerized national S & W energy database; and

43
B. Distura

o Perform AdHoc functions as maybe assigned.

GEOTHERMAL ENERGY MANAGEMENT DIVISION

Resource and Technology development & Evaluation Section

o Formulate, develop and evaluate programs and policies that will enhance the technical and
economic competitiveness of geothermal technologies including technology innovations;
o Conduct hydrologic, geological, topographic, oceanographic and economic survey, feasibility
studies and research programs to assess the country's geothermal resource potentials;
o Maintain a database inventory of geothermal potential and update regularly for
commercialization and utilization purposes (e.g. maps, matrix and ranking of ocean and
hydropower sites);
o Conduct socio-economic and environmental impact studies on geothermal development and
recommend mitigating measures to lessen harmful effects to the environment;
o Provide technical assistance and sustainable solutions in relation to development and operation
of geothermal facilities;
o Conduct seminars, training courses, technical briefing, fora, workshops, focus group
discussions and tri-media campaigns to facilitate information dissemination and capacity
building to geothermal technologies; and
o Perform ADHOC functions as maybe assigned.

Evaluation, Registration and Monitoring Section

o Formulate policies and oversee the implementation of policies, guidelines and standards that
will govern the geothermal development thrust of the government including enhancement of
private sector participation;
o Supervise and monitor activities of government and private institutions on geothermal projects
and provide guidance for better understanding of government's regulatory functions, policies
and programs in relation to utilization and commercialization of geothermal resources;
o Maintain a database inventory of geothermal facilities for monitoring and developing
geothermal generation statistics (e.g. energy mix, generation mix, etc.);
o Conduct socio-economic and environmental impact studies on operation of geothermal system
and recommend mitigating measures to lessen harmful effects to the environment;
o Issue registration and accreditation of RE equipment manufacturers, fabricators and suppliers;
o Coordinate with various government agencies, LGUs, Academe, NGOs, private sector and
other stakeholders on matters related to the above enumerated functions;
o Conduct seminars, training courses, technical briefings, fora, workshops, focus group
discussions and tri-media campaigns to facilitate information dissemination and capacity
building to geothermal technologies; and
o Perform ADHOC functions as maybe assigned.

BIOMASS ENERGY MANAGEMENT DIVISION

Technology Development Section

o Formulate policy recommendations and implement plans and programs for the effective
utilization, promotion and commercialization of biomass including biofuels energy
technologies;
o Undertake policy research and studies for the development and application of new and
emerging biomass/biofuels energy technologies;
o Design, recommend and implement institutional, legislative and economic incentive packages
to support sustainability of biomass/biofuels programs;

44
B. Distura

o Establish international linkages with various entities involved in the implementation of


biomass/biofuels energy programs;
o Develop and spearhead the implementation of local and/or foreign-assisted projects and
activities;
o Coordinate with concerned government agencies, LGUs, academe, NGOs, private sector and
other stakeholders on matters related to the development and implementation of
biomass/biofuels policy, plans and programs;
o Conduct seminars, training courses, technical briefings, fora, workshops, focus group
discussions and tri-media campaigns to facilitate information dissemination and capacity
building to biomass/biofuels resources and technologies;
o Provide inputs in the preparation of the PEP; and
o Perform ADHOC functions as maybe assigned.

Evaluation, Registration and Monitoring Section

o Conduct technical and economic evaluation of biomass/biofuels' energy technologies including


new and emerging technologies for local application;
o Develop project proposals on biomass/biolfuels' new and emerging energy technologies for
local application;
o Evaluate/grant service contract agreements and/or accreditation of biomass/biofuels' projects
and facilities, suppliers, fabricators and manufacturers;
o Implement, monitor, and promote the commercial and technical operation of biomass power,
fuel and non-power facilities and projects;
o Provide technical and extension advice in the form of project evaluation, project packaging and
fund sourcing and access to technical information on bionass/biofuels' energy technologies;
o Coordinate the development of standards for the local adaption of biomass-derived fuels with
concerned government agencies and private sectors;
o Coordinate the pilot testing of emerging biomass/biofuels energy technologies with interested
private sector/potential investor;
o Develop and maintains information system on biomass/biofuels energy resources and
technologies;
o Provide technical/secretariat support for inter-agency committees undertaking the above-
mentioned activities; and
o Perform ADHOC functions as may be assigned.

HYDROPOWER AND OCEAN ENERGY MANAGEMENT DIVISION

Resource and Technology Development Section

o Formulate, develop and evaluate programs and policies that will enhance the technical and
economic competitiveness of ocean and hydropower technologies including technology
innovations;
o Conduct hydrologic, geological, topographic, oceanographic and economic surveys, feasibility
studies and research programs to assess the country's ocean and hydropower resource
potentials;
o Maintain a database inventory of ocean and hydropower potential and update regularly for
commercialization and utilization purposes (e.g. maps, matrix and ranking of ocean and
hydropower sites);
o Conducts socio-economic and environmental impact studies on ocean and hydropower
development and recommend mitigating measures to lessen harmful effects to the environment;
o Provide technical assistance and sustainable solutions in relation to development and operation
of ocean and hydropower facilities;

45
B. Distura

o Conduct seminars, training courses, technical briefing, fora, workshops, focus group
discussions and tri0-media campaigns to facilitate information dissemination and capacity
building to ocean and hydropower technologies; and
o Perform ADHOC functions as maybe assigned;

Evaluation, Registration and Monitoring

o Formulate policies and oversee the implementation of policies, guidelines and standards that
will govern the ocean and hydropower development thrust of the government including
enhancement of private sector participation;
o Supervise and monitor activities of government and private institutions on ocean and
hydropower projects and provide guidance for better understanding of government's regulatory
functions, policies and programs in relation to utilization and commercialization of ocean and
hydropower resources;
o Maintain a database inventory of ocean and hydropower facilities for monitoring and
developing ocean and hydropower generation statistics (e.g. energy mix, generation mix, etc.);
o Conduct socio-economic and environmental impact studies on operation of ocean and
hydropower system and recommend mitigating measures to lessen harmful effects to the
environment;
o Issue registration and accreditation of RE equipment manufacturers, fabricators ans suppliers;
o Coordinate with various government agencies, LGUs, Academe, NGOs, private sector and
other stakeholders on matters related to the above enumerated functions;
o Conducts seminars, training courses, technical briefings, fora, workshops, focus group
discussions and tri-media campaigns to facilitate information dissemination and capacity
building to ocean and hydropower technologies; and
o Perform ADHOC functions as maybe assigned;

NATIONAL RENEWABLE ENERGY BOARD - TECHNICAL SERVICES AND MANAGEMENT


DIVISION

Administrative Section

Arrange special and/or periodic meetings of the National Renewable Energy Board (NREB) by
sending invitations to NREB members, resource persons and parties concerned to ensure
quorum and/or attendance.
Prepare minutes and proceedings including the recording of documents and various issues
raised during board deliberation for reference and information;

Information and Technical Research Section

Conduct research activities on advance technological and market development applications


through internet and/or information exchange systems to enhance technical information which
could be used by the Board;
Provide technical support to the operation of the RE One-Stop-Shop Center to accelerate the
approval of RE Service Contract and hasten project development;

Renewable Energy Registrar Section

Review of RPS Rules and makes appropriate recommendations in line with the objectives of
R.A. 9513;
Monitor the implementation of and compliance by industry participants with RPS Rules
promulgated by the DOE;

LUZON FIELD OFFICE

46
B. Distura

Implements regional policies, plans, programs, and regulations of the department relating to energy
resources exploration and development, its judicious and efficient utilization, ensures adequate,
efficient, and reliable supply of electricity and monitors the development in the downstream oil industry,
development and utilization of renewable energy (RE) resources such as geothermal, hydro, ocean,
biomass, solar, and wind with due regard to the environment and sustainable development in Luzon.

Energy Resource Development and Utilization Division (ERDUD)

Energy Industry Management Division (EIMD)

ENERGY RESOURCE DEVELOPMENT AND UTILIZATION DIVISION

Implements policies, plans, programs, and regulations relative to the development and utilization of
energy resources in Luzon.

o Conducts initial / preliminary inspection and investigation on oil, natural gas, coal, geothermal,
hydro, ocean, biomass, solar, and wind operations as appropriate, with due regard to production,
safety, health, environment and security
o Conducts preliminary investigation of reported occurences on oil, natural gas, coal, and re
resources.
o Conducts resource assessment and mapping of renewable energy resources in the region
o Develops and maintains regional database on oil, natural gas, coal, geothermal, hydro, ocean,
biomass, solar, and wind energy resources, energy conservation programs, alternative fuels,
and the development and application of new and advanced energy technologies (naets) for
planning purposes
o Provides technical assistance and energy advisory services to the various stakeholders and the
public on coal, oil, natural gas, renewable energy, efficient utilization of energy, alternative
fuels and naets
o Implements programs and regulations on geothermal, hydro, ocean, biomass, solar, and wind
energy resources, energy conservation, alternative fuels and naets
o Conducts the following activities in coordination with the DOE head office:

a. Researches and studies on oil, natural gas, coal, geothermal, hydro, ocean, biomass,
solar, wind energy resources, energy conservation, alternative fuels and naets
b. Implements government projects on non-renewable and renewable energy resources
c. Develops and implements projects on oil, natural gas, coal, geothermal, hydro, ocean,
biomass, solar, and wind energy resources, alternative fuels, energy conservation, and
naets
d. Monitors project of service contractors / permitees on renewable and non-renewable
energy resources exploration, development, and utilization
e. Facilitates in the field evaluation of non-renewable and renewable energy resources
o Coordinates with the various doe units and concerned government agencies, local government
units, the academe, and other stakeholders on the above-enumerated functions
o Performs ad hoc functions as may be assigned

ENERGY INDUSTRY MANAGEMENT DIVISION

Implements policies, plans, programs, and regulations relative to the electric power and downstream oil
industries in Luzon

o Implements policies, plans, programs, and regulations relative to downstream oil and electric
power industries including its environmental concerns
o Conducts preliminary random testing on the quality of liquid fuels sold in gasoline stations/
retail outlets (e.g.market dye/ adulteration tests)

47
B. Distura

o Conducts routine and on-the-spot inspection on oil depots, gasoline stations, liquid fuels
haulers, lpg refillers, marketers, dealers, and retail outlets to ensure compliance with doe
regulations
o Conducts preliminary inspection on the proposed projects for funding under rule 29 of R.A
9136 implementing rules and regulations (ER 1-94)
o Monitors implementation of projects funded under rule 29 of R.A 9136 implementing rules and
regulations (ER 1-94)
o Conducts investigation on consumer complaints relative to liquid fuels and LPG and
recommends appropriate action thereon
o Recommends initiation of legal action involving violators of regulations on liquid fuels and
LPG, and non-compliance with R.A. 8479 and R.A. 8749
o Participates in the investigation of oil spills and other environment-related incidents in the
downstream oil industry
o Maintains a computerized database relative to downstream oil and electric power industries
o Organizes the following activities in coordination with the doe head office:
a. Researches and studies relative to the downstream oil industry (i.e. supply, distribution,
marketing, logistics, storage, etc.) And electric power industry
b. Monitors industry players compliance pursuant to R.A. 8479 and R.A. 8749 (e.g. prior notice,
reportorial requirements, regional retail prices, etc) and performances of the electricity power
industry
c. Performs product sampling, preliminary quality testing, facility inspection and marker dye
testing of bulk facilities to ensure compliance with national standards
d. Conducts information, education campaign relative to the activities on downstream oil industry
and electricity power industry reform act of 2001 (R.A. 9136)
e. Administers activities relative to the gasoline station training and loan funds (GSLTF)

Skills and management training


Evaluation of load applications
Monitoring of project progress

VISAYAS FIELD OFFICE

Implements regional policies, plans, programs and regulations of the department relating to energy
resource exploration and development, judicious and efficient utilization of energy resource ensures
adequate, efficient and reliable supply of electricity, and monitors development in the downstream oil
industry with due regard to the environment and sustainable energy development in the visayas

ENERGY RESOURCE DEVELOPMENT & UTILIZATION DIVISION (ERDUD)

ENERGY RESOURCE DEVELOPMENT SECTION

o Petroleum unit
o Geothermal Coal unit

ENERGY UTILIZATION SECTION

o Renewable unit
o Energy Efficiency & Alternative fuels unit

ENERGY INDUSTRY MANAGEMENT DIVISION (EIMD)

ELECTRICITY POWER INDUSTRY SECTION

o Electricity unit

48
B. Distura

o Rural Electrification unit

OIL INDUSTRY ADMINISTRATION SECTION

o LPG unit
o Gasoline unit

ENERGY RESOURCE DEVELOPMENT AND UTILIZATION DIVISION

Formulates and Implements policies, plans, programs and regulation relative to energy resource
development and utilization in the Visayas

Energy Resource Development Section

o Formulates policy recommendations on geothermal, coal, oil and natural gas resources in the
Visayas
o Conducts initial/preliminary inspection and investigation of geothermal, coal, oil and natural
gas operations as appropriate, with due regard to production, safety, health, environment and
security in the Visayas
o Conducts preliminary investigation of reported occurences of geothermal, coal, oil and natural
gas resources
o Develops and Maintains regional database on geothermal, coal, oil and natural gas resources
for planning purposes
o Provides technical assistance and energy advisory services to the various stakeholders and the
public on geothermal, coal, oil and natural gas resources
o Conducts the following in coordination with the doe head office:

o Research and studies on geothermal, coal, oil and natural gas resource exploration and
development including market development of geothermal and coal resource
o Implementation of government projects on geothermal, coal, oil and natural gas
resources
o Development and Implementation of project proposals on geothermal, coal, oil and
natural gas resources
o Monitoring of projects of service contractors/permitees on geothermal, coal, oil and
natural gas resource exploration and development
o Field evaluation of geothermal, coal, oil and natural gas resources
o Coordinates with the various DOE Units and concerned government agencies, local
government units, the academe, and other stakeholders on the above-enumerated fuctions
o Performs AD HOC functions as may be assigned

Energy Utilization Management Section

o Formulates policy recommendations on the application of renewable energy, alternative fuels


and new and advanced energy technologies (NAETs), energy efficiency and conservations in
the Visayas
o Develops regional energy utilization indices for the various sectors in the Visayas
o Conducts preliminary resource assessment and mapping of renewable energy resources
o Develops and implements project proposals on renewable energy systems, alternative fuels and
NAETs for local application
o Develops and maintains regional data base on NAETs, energy utilization, including natural gas,
renewable energy, alternative fuels, ETC. for planning purposes
o Provides technical assistance and energy advisory services to the various stakeholders and the
public on the renewable energy, efficient utilization of energy and alternative fuels and NAETs

49
B. Distura

o Conducts the following in coordination with the DOE Head office:

o technical and economics evaluation of alternative fuels and NAETs for local
applications
o Research and development studies for the effective utilization and commercialization
of renewable system, energy efficiency and conservation technologies, alternative fuels
and NAETs
o Implementation of government projects on renewable energy technologies and
resource, alternative fuels and NAETs, and energy efficiency and conservation in the
Visayas
o Monitoring of projects on renewable energy, energy efficiency and conservation,
alternative fuels and NAETs
o Coordinates with the various DOE units and concerned governments agencies, local
government units, the academe, and other stakeholders on the above enumerated functions
o Performs AD HOC functions as may be assigned
ENERGY INDUSTRY MANAGEMENT DIVISION
o Formulates policy recommendations and implements policies,plans and programs relating to
the electric power industry activities in the Visayas
o Provides inputs in the preparation of the Philippine Energy Plan (PEP), Philippine Power
Development Plan (PDP), Transmission Development Plan (TDP), Missionary Electrification
Development Plan (MEDP), Regional Energy Plans (REPs) and sectoral energy plans (SEPs)
o Maintains a computerized regional database relative to the electric power industry in the
Visayas
o conducts preliminary inspection of proposed projects for funding under rule 29 of R.A. 9136
implementing rules and regulations (ER 1-94)
o Monitors implementation of projects funded under rule 29 of R.A. 9136 implementing rules
and regulations (ER- 1-94)
o Conducts the following activities in coordination with the DOE Head Office

*Information Education campaign relative to the electric power industry reform act 2001 (R.A. 9136)

*Evaluation and Endorsement of qualified Non-Electrification projects (E.G., Development,livelihood


projects, reforestation,watershed management, health and/or environment enhancement projects)
pursuant to rule 29 of R.A. 9136 implementing rules and regulations (ER 1-94)

*Monitoring of performance of the electricity market and compliance with the provision of R.A. 9136
by the electric power industry stakeholders

*Implementation of foreign-assisted and locally-funded electrification projects in the Visayas

*Evaluation of the individual plans of generation companies, Transco and its buyer/concessionaire,
distribution utilities, suppliers of electricity services

o Coordinates with various DOE units and concerned government agencies, electric power
industry participants, consumer groups, etc. on matters related to the above-enumerated
functions
o Performs AD HOC functions as may be assigned

OIL INDUSTRY ADMINISTRATION SECTION

o Formulates policy recommendations and implements policies, plans and programs relating to
downstream oil industry activities in the Visayas including environmental concerns
o Conducts preliminary random testing on the quality of liquid fuels sold in Gasoline
stations/retail outlets (E.G., Market Dye Test, Adulteration Test)

50
B. Distura

o Conducts routine and on-the-spot inspections of depots, Gasoline stations, liquid fuels haulers
and LPG Refillers, marketers, dealers and retail outlets to ensure compliance with DOE
regulations.
o Conducts investigations on consumers complaints relative to liquid FUELS and LPG and
recommends appropriate actions thereon
o Recommends initiation of legal action involving violators of regulations on liquid FUELS and
LPG, and non-compliance with R.A. 8479 and R.A. 8749
o Participates in the investigation of OIL spill and other environment-related incidents in the
downstream oil industry
o Maintains a computerized database relative to downstream oil industry activities
o Conducts the following in coordination with the DOE Head Office:

*Research and studies relative to downstream oil industry activities (E.G., Supply, Distribution,
Marketing, Logistics, Storage, ETC.)

*Monitoring of industry players compliance pursuant to R.A. 8479 and R.A. 8749 (E.G., Prior notice,
Reportorial requirements, regional retail prices, ETC.)

*Product sampling, preliminary quality testing, facility inspection and Marker Dye Testing at bulk
facilities to ensure compliance with national standards

*Information education campaign relative to downstream oil industry activities

*Activities related to the Gasoline station training and loan fund (GSTLF)

-Skills and management training

-Evaluation of loan applications

-monitoring of project progress

o Coordinates with various DOE units and concerned government agencies (E.G., DTI, DOST,
LGUs)
o Performs AD HOC functions as may be Assigned

51
B. Distura

MINDANAO FIELD OFFICE

Implements regional policies, plans, programs and regulations of the department relating to energy
resource exploration and development, judicious and efficient utilization of energy resource, ensures
adequate, efficient and reliable supply of electricity, and monitors development in the downstream oil
industry with due regard to the environment and sustainable energy development in Mindanao

Energy Resource Development and Utilization Division (ERDUD)

Energy Resource Development Section

o Petroleum Unit
o Geothermal Unit

Energy Utilization Section

o Renewable Unit
o Energy Efficiency & Alternative Fuels Unit

Energy Industry Management Division (EIMD)

Electric Power Industry Section

o Electricity Unit
o Rural Electrification Unit

Oil Industry Administration Section

o LPG Unit
o Gasoline Unit

ENERGY RESOURCE DEVELOPMENT AND UTILIZATION DIVISION

Formulates and implements policies, plans, programs and regulations relative to energy resource
development and utilization in Mindanao

Energy Resource Development Section

o Formulates policy recommendations on geothermal, oil and natural gas resources in Mindanao
o Conducts initial/preliminary inspection and investigation of geothermal, oil and natural gas
operations as appropriate, with due regard to production, safety, health, environment and
security in Mindanao
o Conducts preliminary investigation of reported occurences of geothermal, oil and natural gas
resources
o Develops and maintains regional database on geothermal, oil and natural gas resources for
planning purposes
o Provides technical assistance and energy advisory services to the various stakeholders and the
public on geothermal, oil and natural gas resources
o Conducts the following in coordination with the DOE Head Office:

o Research and studies on geothermal, oil and natural gas resource exploration and
development including market development of geothermal and coal resources
o Implementation of government projects on geothermal, oil and natural gas resources

52
B. Distura

o Development and implementation of projects proposals on geothermal, oil and natural


gas resources
o Monitoring of projects of service contractors/permitees on geothermal, oil and natural
gas resource exploration and development
o Field evaluation of geothermal, oil and natural gas resources
o Coordinates with the various DOE Units and concerned government agencies, local
government units, the academe, and other stakeholders on the above enumerated functions
o Performs AD HOC functions as may be assigned

Energy Utilization Management Section

o Formulates policy recommendations on the application of renewable energy, alternative fuels


and new and advanced energy technologies (NAETs), energy efficiency and conservation in
Mindanao
o Develops regional energy utilization incides for the various sectors in Mindanao
o Conducts preliminary resource assessment and mapping of renewable energy resources
o Develops and implements projects proposals on renewable energy systems, alternative fuels
and NAETs for local application
o Develops and maintains regional database on NAETs, energy utilization, including natural gas,
renewable energy, alternative fuels, ETC. for planning purposes
o Provides technical assistance and energy advisory services to the various stakeholders and the
public on renewable energy, efficient utilization of energy and alternative fuels and NAETs
o Conducts the following in coordination with the DOE Head Office:

o Technical and economic evaluation of alternative fuels and NAETs for local
applications
o Research and development studies for the effective utilization and commercialization
of renewable systems, energy efficiency and conservations technologies, alternative
fuels and NAETs
o Implementation of government projects on renewable energytechnologies and
resources, alternative fuels and NAETs, and energy efficiency and conservation in
Mindanao
o Monitoring of projects on renewable energy, energy efficiency and conservation,
alternative fuels and NAETs
o Coordinates with the various DOE units and concerned government agencies, local
governments units,the academe, and other stakeholders on the above enumerated functions
o Performs AD HOC functions as may be assigned

ENERGY INDUSTRY MANAGEMENT DIVISION

Electric Power Industry Administration Section

o Formulates policy recommendations and implements policies, plans and programs relating to
the electric power industry activities in Mindanao
o Provides inputs in the preparation of the Philippine Energy Plan (PEP), Philippine Power
Development Plan (PDP), Transmission Development Plan (TDP),
Missionary Electrification Development Plan (MEDP), Regional Energy Plans (REPs)
and Sectoral Energy Plans (SEPs)
o Maintains a computerized regional database relative to the electric power industry in Mindanao
o Conducts preliminary inspection of proposed projects for funding under rule 29 of R.A. 9136
Implementing Rules and Regulations (ER 1-94)
o Monitors implementing of projects funded under rule 29 of R.A. 9136 Implementing Rules and
Regulations (ER 1-94)

53
B. Distura

o Conducts the following activities in coordination with the DOE head office

o Information Education campaign relative to the electric power industry reform act 2001
(R.A. 9136)
o Evaluation and Endorsement of qualified Non-Electrification projects (E.G.,
Development,livelihood projects, reforestation,watershed management, health and/or
environment enhancement projects) pursuant to rule 29 of R.A. 9136 implementing
rules and regulations (ER 1-94)
o Monitoring of performance of the electricity market and compliance with the provision
of R.A. 9136 by the electric power industry stakeholders
o Implementation of foreign-assisted and locally-funded electrification projects in the
Visayas
o Evaluation of the individual plans of generation companies, Transco and its
buyer/concessionaire, distribution utilities, suppliers of electricity services
o Coordinates with various DOE units and concerned government agencies, electric power
industry participants, consumer groups, etc. on matters related to the above-enumerated
functions
o Performs AD HOC functions as may be assigned

OIL INDUSTRY ADMINISTRATION SECTION

o Formulates policy recommendations and implements policies, plans and programs relating to
downstream oil industry activities in the Visayas including environmental concerns
o Conducts preliminary random testing on the quality of liquid fuels sold in Gasoline
stations/retail outlets (E.G., Market Dye Test, Adulteration Test)
o Conducts routine and on-the-spot inspections of depots, Gasoline stations, liquid fuels haulers
and LPG Refillers, marketers, dealers and retail outlets to ensure compliance with DOE
regulations.
o Conducts investigations on consumers complaints relative to liquid FUELS and LPG and
recommends appropriate actions thereon
o Recommends initiation of legal action involving violators of regulations on liquid FUELS and
LPG, and non-compliance with R.A. 8479 and R.A. 8749
o Participates in the investigation of OIL spill and other environment-related incidents in the
downstream oil industry
o Maintains a computerized database relative to downstream oil industry activities
o Conducts the following in coordination with the DOE Head Office:

o Research and studies relative to downstream oil industry activities (E.G., Supply,
Distribution, Marketing, Logistics, Storage, ETC.)
o Monitoring of industry players compliance pursuant to R.A. 8479 and R.A. 8749 (E.G.,
Prior notice, Reportorial requirements, regional retail prices, ETC.)
o Product sampling, preliminary quality testing, facility inspection and Marker Dye
Testing at bulk facilities to ensure compliance with national standards
o Information education campaign relative to downstream oil industry activities
o Activities related to the Gasoline station training and loan fund (GSTLF)

-Skills and management training

-Evaluation of loan applications

-monitoring of project progress

o Coordinates with various DOE units and concerned government agencies (E.G., DTI, DOST,
LGUs)

54
B. Distura

o Performs AD HOC functions as may be Assigned

55
B. Distura

SERVICES OFFERED OF SOME BUREAUS45

Energy Resource Development Bureau (ERDB)


Processing of applications for:
Nonexclusive Geothermal Exploration Permit
Coal Reconnaissance Permit
Small-scale Coal Mining Permit
Registration / Renewal of Safety Engineers and Inspectors Permit
Service / Operating Contract (Geothermal, Petroleum and Coal)
Tax-exemption Certificate (TEC)
Possession of explosives
Purchase / Transfer of explosives
Blaster Foremans License / Renewal
Explosive Purchasers License / Amendment to License

Energy Utilization Management Bureau (EUMB)


Processing of applications for:
- Certificate of Authority to Import
- Certificate of Accreditation
- Mini-hydro Nonexclusive Reconnaissance Permit
- Mini-hydroelectric Power Development Operating Contract (MPDOC)
- Tax-exemption Certificate (TEC)
- Ocean, Solar and Wind (OSW) Contract applications in public domain
Energy audit services: Preliminary audit
Energy audit services: Detailed audit
Technology Transfer for Energy Management project selection and approval

Energy Policy and Planning Bureau (EPPB)


Provision of Philippine Energy Plan (PEP) data / statistics / information to
various public clients

Electric Power Industry Management Bureau (EPIMB)


Granting of financial benefits to host communities under ER 1-94, as amended
Issuance of Certificate of Endorsement

Oil Industry Management Bureau (OIMB)


Processing of applications for:
- Certificate of Compliance for Coal Importation
- Certificate of Availing of Export Incentives
- DOE endorsement for BOI registration of projects under RA 8479
- DOE endorsement to avail of incentives for BOI-registered projects under RA 8497
- DOE endorsement to MARINA for chartering, importation, local construction,
conversion of service
- Permit for the construction, expansion, operation, maintenance and modification of
pipelines, transmission- and distribution-related facilities for the supply of natural gas
- Registration of fuel additives with Interim Status Permit (ISP)

45
Service Guide Manual
(https://www.doe.gov.ph/sites/default/files/pdf/downloads/service_guide_manual.pdf)

56
B. Distura

- Registration of fuel additives with Pre-manufacturing and Preimportation Notification


(PMPIN)

Issuance of acknowledgement letter for:


- Notice to Import/Export crude oil, finished petroleum products, lubes and specialty
products
- Notice prior to engagement in the downstream oil industry
Conduct of complaint-related inspections for all petroleum products of retail outlets (LPG and
gasoline stations)

Provision of oil industry data / statistics / information to various public clients


Implementation of the Gasoline Station Loan and Financial Assistance Program (GSLFAP)

Energy Research and Testing Laboratory Services (ERTLS)


Geological and chemical laboratory analysis and testing
Testing of compact fluorescent lamps, lamp ballast and other energy-saving devices
Calibration of energy-monitoring instruments for the energy and industrial sectors, government
agencies, academe and the general public

Energy performance certification testing of appliances and equipment (for DTI-Bureau of


Product Standards and appliance industry)

PDP AND AMBISYON 2040 (ENERGY POLICY


DIRECTION TOWARDS 2040)46
Among the most promising and potentially disruptive emerging technologies are the
Internet of Things, big data analytics, artificial intelligence, neurotechnologies, nano- or
microsatellites, nanomaterials, additive manufacturing, advanced energy storage technologies,
synthetic biology, and blockchain.47

Energy storage technology is a system that absorbs energy and stores it for a period of
time before releasing it to supply energy or power services. Advances in this technology are
important to optimize energy systems and allow the integration of renewable energy systems.
As the materials, technologies, and deployment applications for storing energy are created,
ensuring safety and minimizing the risk of failure and losses become crucial.48

BUILD, BUILD, BUILD


One of the foundations for sustainable development is thru Accelerating Infrastructure
Development.

Based on the strategic framework, there are four major strategies for the infrastructure
sector: (a) increase spending on public infrastructure; (b) implement strategic infrastructure
for the various infrastructure subsectors; (c) ensure asset preservation; and (d) intensify
R&D on technologies that are cost-effective over the whole project life-cycle. These strategies
46
PHILIPPINE ENERGY PLAN (https://www.doe.gov.ph/pep/)
47
PDP, 2017-2022, p. 25
48
OECD. Science, Technology and Innovation Outlook 2016

57
B. Distura

are vital towards achieving the overall sectoral objective for the infrastructure sector and the
corresponding targets set over the medium-term.49

Energy50
The government will support the required massive investments and fast track the
implementation of infrastructure projects to improve power generation. In particular, it will:

a. Accelerate and streamline the business processes for energy projects

b. Revisit roles, particularly of government, in the power industry

c. Expedite the implementation of remaining policy mechanisms under the Renewable


Energy Act of 2008 (e.g., renewable energy market, renewable portfolio standards) to
further encourage development

d. Declare energy projects as projects of national significance to expedite the timely


completion of energy projects

e. Strictly monitor compliance to the DOE Department Circular DC2015-07-014,


Guidelines for Maintaining the Share of Renewable Energy in the Country and
Department Circular DC2015-03-0001, Promulgating the Framework for the
Implementation of Must Dispatch and Priority Dispatch of Renewable Energy
Resources in the WESM to address the intermittence of renewable energy

f. Harmonize the transmission development plan with renewable energy targets, and
address potential grid reliability concerns with the scaling of variable renewable energy
resources

g. Support smart grid development

h. Conduct technical audit of power plants in collaboration with professional engineering


associations

i. Establish the commercial operations of the WESM in Mindanao

An optimal energy mix will be studied based on appropriate allocation of capacities


(i.e., baseload, intermediate, peaking) and technologies (i.e., renewable energy, nuclear, coal,
oil, gas, etc.). The study will propose a fuel mix policy for power generation that takes into
consideration the resulting electricity cost, externalities, and technical limitations. Said optimal
mix is expected to address the challenge of securing greater system stability and security of
supply to meet power systems demand, as well as to increase the countrys system reserve
requirement to 25 percent of peak demand (from the current 17 percent).

Competition will be encouraged to drive down electricity costs. Thus, the government
will:
a. Accelerate the evaluation of retail electricity supplier license application to broaden the
list of suppliers in the market

49
PDP, 2017-2022, p. 299
50
Ibid, pp. 305-308

58
B. Distura

b. Accelerate the privatization of the power plant assets of the Power Sector Assets and
Liabilities Management Corporation, which include the contracted capacity of
generating plants and independent power producer plants

c. Strictly monitor compliance to or refinement of the following resolutions of the Energy


Regulatory Commission:

Resolution No. 17, s. 2013 adopting and approving the rules and procedures to
govern the monitoring of reliability performance of generating units and the
transmission system

Resolution No. 20, s. 2014 adopting and establishing a pre-emptive mitigation


measure in the WESM

Resolution No. 04, s. 2015 adopting the procedure in the reporting by generation
companies of outage events affecting their generating facilities

Joint Resolution No. 03, s. 2015 setting the offer price cap and offer floor price
in the WESM

d. Rationalize charges and taxes for electricity consumption

The government will also explore the expanded utilization of the Malampaya funds to
cover universal charges for stranded contract cost and stranded debts, rehabilitation of
government energy infrastructure, aside from financing the energy resource development
programs and projects of the government.

The government will pursue the development of the natural gas industry. The creation
of an enabling legal and regulatory framework for the natural gas industry will be prioritized
to set the directions for the formulation of a natural gas development plan to guide investments
in the sector. In pursuit of the APG and TAGP, the 121 km Batangas-to-Manila gas pipeline
project is proposed to be the first natural gas pipeline in the country. It is expected to supply
natural gas to targeted market areas situated in the high growth areas of Batangas, Laguna,
Cavite, and Metro Manila. Moreover, liquefied natural gas terminals will be constructed in
Quezon, Batangas, and Bataan. New oil and gas fields to replace the depleting Malampaya
natural gas reservoir will be explored.

The government will ensure that the needed transmission facilities are implemented on
time to efficiently transmit electricity to various load centers and interconnect the entire grid.
For Luzon, the transmission network will be improved to support power generation capacity
additions in the Quezon, Bataan, and Zambales areas. They will complement the establishment
of a transmission loop with additional drawdown substations within Metro Manila.
Furthermore, the power grid in the island of Mindoro will be interconnected to the Luzon grid
through Batangas. For Visayas, the three-stage implementation of transmission backbone from
Cebu to Panay Island will ensure full dispatch of both conventional and renewable energy-
based power plants. In addition, the interconnection of the Cebu-Bohol grids will increase the
transmission capacity as well as improve the reliability of supply to Bohol Island. For
Mindanao, the 230 kilovolt Mindanao backbone from Lanao del Sur in the north to Davao del
Sur in the south will be fast-tracked. The Visayas-Mindanao interconnection will be prioritized

59
B. Distura

to increase the reliability of the Mindanao power systems and harness and enable capacity
sharing of reserves and exchange or delivery of energy during periods of shortfall or surplus in
power supply between grids.

The government will prioritize the provision of electricity services to the remaining
unelectrified off-grid, island, remote, and last-mile communities to achieve total household
electrification by 2022. To achieve universal access to electricity, the government will
endeavor to:

a. Ensure the appropriateness, feasibility, and sustainability of projects involving new or


emerging technologies for missionary electrification

b. Tap electric cooperative regional technical evaluators to complement the manpower of


the National Electrification Administration (NEA) in facilitating the evaluation of
electrification projects

c. Provide technical and financial support to NEA and electric cooperatives in total
electrification

To reduce electricity rates, the government will:

a. Strengthen the competitive selection process in securing bilateral power supply


contracts

b. Remove VAT on system loss charges

c. Revisit the rules and regulations on cross-ownership between retail electricity suppliers
and generation companies or distribution utilities to foster transparency and promote
fair competition in the implementation of the retail competition and open access

d. Restudy Section 43(f) of Republic Act 9136 (Electric Power Industry Reform Act) on
the pricing methodology

e. Encourage renewable energy development in missionary areas to shift away from


expensive diesel fuel and reduce universal charge for missionary electrification

f. Foster a more conducive business and regulatory environment to allow the entry of
more power generation investors

g. Revisit governments role in the sector, particularly in the provision of reserves

To improve energy efficiency, the government will continue the implementation of the
EEC program that is aimed to support economic growth and environment protection. To
achieve this, the government needs to do the following:

a. Push for the enactment of the EEC bill to promote demand-side management and
incentivize energy efficiency projects

b. Impose minimum energy performance standards for energy-intensive industries and


energy-consuming products

60
B. Distura

c. Implement policy allowing government agencies to engage the services of ESCOs

d. Implement the 2016-2020 EEC Action Plan and the Alternative Fuels Roadmap to
provide incentives for the implementation of energy efficiency projects

The mandated biofuels blending will be reviewed with due consideration to the impact
on prices, farmer incomes and environmental protection. Several undertakings under the
Alternative Fuels Program, (such as the Auto-LPG Program and the Natural Gas Vehicle
Program for Public Transport), will also be continued.

TRAIN and Energy and Oil Deregulation

There are problems in the OIL INDUSTRY. One is oil smuggling and second, fuel
fraud. And these two are intimately connected so much so that criminals smuggle adulterated
and diluted fuels.

1. OIL SMUGGLING

According to ADB report, he Philippines, due to fuel smuggling, has adulterated fuel
products in its supply chain. According to experts, this costs the country as much as $750
million annually in tax revenue.51

The report further disclosed that oil smuggling is a global phenomenon and the global
financial losses are significant amounting to tens of billions of dollars every year.52

How is this oil smuggling done? Countries that subsidize their fuels are susceptible to
losses due to their low-priced fuels exiting to other countries with fuel prices aligned with
international market prices.53

For example:
1. Countries with fuel subsidies such as Bangladesh, Indonesia, and Malaysia are
particularly vulnerable to financial losses due to their relatively low diesel prices.
Their low-priced fuels are smuggled to countries that charge international market
prices, depriving governments of the intended benefits of providing subsidized
fuel.54
2. The Kingdom of Saudi Arabia, where diesel sells for approximately $0.06 per
liter, compared to more than 15 times that price in the neighboring United Arab
Emirates (UAE). Smugglers cross the Saudi border into the UAE with documents
showing they are carrying legal loads of hydraulics and used oil. However, their
fuel tankers are often loaded with a mixture of legal oil products and illicit diesel,

51
ADB, Fuel-Marking Programs: Helping Governments Raise Revenue, Combat Smuggling, and
Improve the Environment, Governance Brief, Issue 24, 2015, p. 1.
52
Ibid.
53
Ibid.
54
Ibid.

61
B. Distura

frequently in proportions of up to 26 tons of illicit diesel mixed with up to 4 tons


of legal oil products.55
3. In Venezuela, diesel retails for approximately $0.05 per litersignificantly
below the average South American price of $0.85 per liter. As a result, Venezuela
also loses significant amounts of fuel that is smuggled into neighboring countries
such as Columbia, Ecuador, Guyana, and Honduras.56
4. In 2002, BBC reported that fuel fraud is one of the fastest growing parts of the
black market - costing UK taxpayers up to a billion pounds a year. Now it has
become one of the major sources of money for the paramilitaries in Northern
Ireland. Illegal fuel is all about evading duty, and most of the fraud is on diesel.57
5. In the same report, BBC also revealed that it is in Northern Ireland that the
problem of fuel fraud is most acute because there are around two thirds of
garages are selling illegal fuel.58 In another report regarding the largest fuel-
laundering plant ever uncovered in County Armagh in Northern Ireland, John
Whiting of HMRC in Northern Ireland said the diesel-laundering plant had the
potential "to evade almost 3.2m in revenue every year".59

2. FUEL FRAUD
Another problem faced by the oil industry is what we FUEL FRAUD. What
Constitutes Fuel Fraud? There are two: 1) Fuel adulteration, and 2) Fuel dilution.

How is FUEL ADULTERATION DONE? Fuel adulteration is done by adding


subsidized or tax-exempt fuel to the same type of unsubsidized fuel or mixing with less
expensive smuggled fuel.60 On the other hand, fuel dilution is done by mixing lower grade
fuels or solvents with domestic fuels.61

Adulteration62is also a common problem in countries that offer significant arbitrage


opportunities due to varying tax rates and/or subsidies for one type of fuel or solvent compared
to other oil products. Unfortunately, this subsidization provides the opportunity to use the
lower-priced kerosene as an adulterant in more costly, nonsubsidized diesel and gasoline
products, creating problems.63 Criminals have devised methods to remove the dyes and markers
and divert the "laundered" fuel back into normal supply chains. 64 In Northern Ireland for

55
Id. p. 2.
56
Ibid.
57
http://news.bbc.co.uk/2/hi/business/3086941.stm
58
Ibid.
59
http://news.bbc.co.uk/2/hi/uk_news/northern_ireland/8389523.stm
60
http://oceanoptics.com/authentication-fuel/
61
Ibid.
62
The process of making impure by adding inferior materials or elements.
(http://www.dictionary.com/browse/adulterate)
63
ADB, Fuel-Marking Programs, p. 2.
64
http://www.tracerco.com/product-assurance/fuel

62
B. Distura

example, fuel launderers evade taxes by removing dye from red diesel, which is cheaper than
regular diesel and is intended only for off-road agricultural use.65Launderers become smugglers
also by transporting adulterated fuels across national borders into countries with less favorable
subsidization programs.66

Problems caused by fuel adulteration

i. Governments are deprived of a percentage of tax revenue on the higher-priced fuels in


proportion to the adulteration rate.67

Estimated Annual Tax Loss by Country from Fuel Laundering


Greece68 1 billion Euro
UK 69
750 million GBP
Poland 70
$1 billion USD equivalent
Ireland71 150 million Euro

ii. The diversion of the subsidized fuel benefits criminals, rather than the targeted beneficiaries,
resulting in wasted government spending.72
iii. Causes harm to the environment by replacing quality fuel with adulterants or waste
byproducts, resulting in73:
1. Increased fuel consumption hence increased fuel emissions
2. Increased greenhouse gas emissions that worsen air pollution.
3. Illegal fuel-laundering plants often indiscriminately dump waste products in the countryside,
causing additional environmental damage.74
iv. Diminishing engine performance and lifespan, leading to increased spending on vehicle
maintenance.75 Substandard fuels even have the potential to reduce engine efficiency and

65
http://www.bbc.com/news/uk-northern-ireland-30104476
66
http://www.tracerco.com/product-assurance/fuel
67
ADB, Fuel-Marking Programs, p. 2.
68
2015 Deputy Finance Minister of Greece Policy Statement
69
2013 Bloomberg Report
70
2014 Polish Organization of Industry & Trade Report
71
2013 Grant Thornton Illicit Trade in Ireland Study
72
ADB, Fuel-Marking Programs, p. 2.
73
Ibid.
74
Fuel laundering not only results in lost revenue for the state, but also damages the environment, as
toxic waste is often dumped in rural areas, leaving local authorities to pick up the bill for waste removal.
(http://www.bbc.com/news/uk-northern-ireland-30104476). "Indiscriminate dumping of the by-products from the
laundering process can cause severe damage to arable land and our water systems, as well as taxpayers and local
ratepayers having to pay for the cleanup and disposal costs."
(http://news.bbc.co.uk/2/hi/uk_news/northern_ireland/8389523.stm)
75
ADB, Fuel-Marking Programs, p. 2.

63
B. Distura

cause engine damage.76 For instance, when launderers filter the fuel through chemicals or
acids to remove the government marker, the chemicals and acids remain in the fuel and
damage fuel pumps in diesel cars.77
v. Oil and gas companies also feel the effects of fuel fraud and smuggling in the form of reduced
profits, increased liability issues and brand erosion.78

THE SOLUTION
Given those identified problems that beset the oil industry, what solution/s can be put
in order to remedy such challenge.

1. WHAT: COMPREHENSIVE FUEL-MARKING PROGRAM

a. To combat fuel fraud, governments use a variety of fuel markers and dyes to
differentiate subsidized or tax-exempt fuel. Many countries require the addition
of specific dyes to subsidized fuels by law, allowing questionable fuel to be
rapidly tested for adulteration or dilution with subsidized fuel. The test often
involves extraction with an acidic aqueous solution resulting in a characteristic
color change, and is effective down to concentrations of a few percent.

Fluorescent dyes are also used as a more covert method of fuel marking. They
are not obvious to the human eye, can be added in even lower concentrations,
and often require a specialized spectrophotometric detection system.

While these methods may prevent the amateur from committing fuel fraud, they
do not deter the more serious criminal. Fuel dyes can be removed or degraded
through chemical processing, heating or the addition of an adsorbent material.
The laundered fuel is then sold on the black market or via mobile pumps at a
significant profit.

Laundered fuel may not show a color change that is obvious to the human eye,
but measurement with a spectrometer can often detect residual dyes. The greater
sensitivity of spectroscopic detection also enables the use of lower
concentrations of markers, reducing the cost to government and increasing the
difficulty of effective fuel laundering.79

Traditional fuel dyes offer a front-line defense against fuel fraud, but better
techniques are needed to assist governments in pinpointing its origin. Thats
where fuel markers come in., fuel marking technology has been developed.
Once the markers are added to the fuel, the markers are highly resistant to
removal by criminals and they can be detected using analyser technology like
the gas chromatographymass spectrometry (GCMS). By using this advanced
technology of molecular markers and sophisticated management systems, it will

76
http://oceanoptics.com/authentication-fuel/
77
https://www.gov.uk/government/news/new-marker-to-tackle-fuel-fraud
78
Ibid.
79
http://oceanoptics.com/authentication-fuel/

64
B. Distura

result in timely, actionable intelligence, allowing governments to mitigate tax


evasion and subsidy abuse, minimize financial losses, and raise revenues.80
Fuel markers are chemicals that can be added to fuel at its point of origin, each
with a unique signature that can be sensed only by proprietary readers capable
of detecting multiple markers within the same sample. This allows fuel of
different grades, taxation status, or supply origin to each be identified with its
own marker. Fuel suppliers often team with governments in establishing fuel
marking programs as a method of ensuring brand protection and supply chain
security.

If added at the refinery and tested at multiple points on its route to the consumer
within a comprehensive fuel monitoring system, fuel markers can be used to
trace the movement of fuel and pinpoint the location within the supply chain at
which fuel fraud occurs. When fuel retailers are held accountable for the
authenticity of the fuel they sell through litigation or de-branding, the rate of
fraud drops and illegal traders can begin to be identified. When border officials
have an effective means of validating the authenticity and integrity of non-
subsidized fuels, they can reduce the prevalence of smuggling.

SENATE BILL 1408 (17th Congress) (Senate Version of CTRP/TRAIN authored by Sen.
Pimentel) provides for the mandatory marking, to wit:

SEC. 27. A new section designated as Section 148-A under Chapter V


of the NIRC is hereby inserted to read as follows:
SECTION 148-A. MANDATORY MARKING OF ALL
PETROLEUM PRODUCTS. - ALL PETROLEUM
PRODUCTS, (MANUFACTURED OIL AND OTHER
FUEL) REFINED, MANUFACTURED AND/OR
IMPORTED INTO THE PHILIPPINES, W HETHER
THE SAME WERE EXEMPT FROM THE PAYMENT
OF TAXES AND DUTIES, OR ENTERED INTO A
FREE ZONE SHALL BE MARKED WITH THE
OFFICIAL IMARKING AGENT DESIGNATED BY
THE DEPARTMENT OF FINANCE (DOF) IN
ACCORDANCE WITH EXISTING RULES: xxx xxx xxx

2. HOW TO PROCEED WITH THE SOLUTION

a. Reveal the quality and condition of the downstream fuel supply chain by
examining its every stage, beginning with81
i. the countrys refineries or fuel depots
ii. wholesale depots
iii. the transport network (including trucking firms and pipelines)
iv. how petroleum products are sold at the retail level.

80
ADB, Fuel-Marking Programs
81
ADB, Fuel-Marking Programs

65
B. Distura

b. Provide safeguards into every phase of the process.82 How?


i. By putting security measures directly into the different types of fuels.
This requires marker83 and analyzer technologies.
1. Marker technologies done by blending an invisible marker
with the fuel at very low concentrationsoften measured in
parts per billion.
a. Kinds of Fuel Markers
i. simple colored dyes
ii. unique covert markers
1. e.g. putting a second layer of security by
adding an additional molecular marker
2. analyzer technologies
a. gas chromatographymass spectrometry (GCMS)
technology84

ii. How to secure the fuel marking programs integrity? 85


1. Regular audits for process compliance to ensure the program is
being managed transparently thereby keeping programs
integrity
2. Efficiently and effectively linking these elements into a
comprehensive operational program guarantees overall program
integrity.
3. long-term commitment by multiple government agencies,
including key executives from the departments of energy,
finance, customs, transportation, and law enforcement.
4. support from both state-owned and independent oil companies
5. should be administered as a management system by an
independent organization
6. certified to international process integrity standards such as those
of the International Organization for Standardization
7. Provide a national operating infrastructure for a full chain of
custody, complete traceability, and quality assurance of the
marker from storage in a bonded warehouse, to secure
distribution, and on-site storage at each distribution terminal
8. Proper management of fuel samples to assure the integrity of the
chain of custody for all samples taken
9. deployment of a laboratory information management system
assures that all samples are properly and uniquely labeled,
tracked, and processed in a consistent and repeatable controlled

82
ADB, Fuel-Marking Programs
83
NB. every fuel-marking program is different e.g. a country may choose to deploy a national marker
program, indicating that all taxes have been fully paid on fuels. Fuel marker serves as a chemical tax stamp. But
how secure is the marker to be resistant launder?
84
In the event of a failed field screening, this allows for a subsequent sample to be taken to a laboratory
for further forensic analysis, which can definitively identify the existence of the fuel marker. This assures full
compliance with the higher standards of admissible evidence required by most legal systems.
85
ADB, Fuel-Marking Programs

66
B. Distura

environment, providing greater confidence in the integrity of the


program

3. HOW MUCH? (COST)


a. 0.7-0.9 centavos/liter
According to Joel Fischl, Asia Managing Director for Authentix, one of the
global leaders in the fuel marking business, their best estimate for the cost of a
program in the Philippines is approximately 7-9 centavos a liter based on the
work they did in the past for the Philippine Government, and on their experience
in many other countries providing fuel marking programs.86

i. Fuel marking will increase the fuel cost

ii. Plus, the Finance Department recommended in its comprehensive


tax reform package an increase in excise tax on fuel from the
current P4.35 to P10 per liter of gasoline and P6 for diesel products

iii. What should be done to cushion the impact of this price hike? Offset by
targeted subsidy programs especially the poor.

1. The government is studying a plan to provide fuel subsidies


(Pantawid Pasada) to the poor to reduce the impact of higher
excise tax on petroleum products. The Finance Secretary of
Finance cited data showing that of the 20 million families in the
Philippines, about 2 million families or 10 percent were
consuming 60 percent of the oil. He said 200,000 of the top
income families in the Philippines were consuming 20 percent
of oil supply in the country.

Dominguez said the proposed tax reform would involve granting


targeted subsidies, similar to the cash allowance given to 4Ps
[Pantawid Pamilyang Pilipino Program], to the people who
needed support to offset the possible increase in value added tax
and excise tax on oil products.87

4. THE BENEFITS OF FUEL MARKING


a. Bring down smuggling and deterring illegal trade in fuel and fuel adulteration
with substandard products
b. Bring up revenue and ensuring that government bodies and regulators are able
to collect the appropriate amount of revenue from excise taxes on fuel
c. Protecting vehicles by ensuring the correct quality of fuel resulting in efficient
fuel consumption and optimal engine performance
d. Mitigate environmental pollution and facilitating environmental protection
measures

86
Email sent by Mr. Fischl to the author.
87
http://thestandard.com.ph/business/214056/govt-studying-plan-to-give-fuel-subsidy.html

67
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OIL DEREGULATION (DONT SUBSIDIZE88 OIL PRICE: WHY?)

Prior to RA 847989, the Energy Regulatory Board took into account the dollar cost of
imported crude oil and the foreign exchange rate, and fixed prices of petroleum products. A
budgetary allocation maintained by the national government called the Oil Price Stabilization
Fund (OPSF) automatically absorbed any price change incurred by the oil companies in
importing crude oil, which is not reflected in the selling price.90

The effects of a regulated oil industry were:91


1. Changes in the world prices of oil and foreign exchange rate were not immediately
reflected in the domestic prices. Any large adjustment in oil prices made it difficult for
businesses and consumers to adjust quickly, thereby causing disruptions.
2. Cross product subsidization92created imbalances in the demand and supply of
petroleum products. Diesel was priced significantly lower, encouraging higher
consumption and resulting in a shift in the use from gasoline to diesel.
3. Oil companies experienced delays in margin recoveries since any price adjustments
would still require public hearings.
4. Entry of new investors was discouraged, thereby minimizing competition

(Other effects of a regulated oil industry)93

1. OPSF deficit bloated the public sector deficit and public debt
2. Government provided P17.6B in subsidies to OPSF from 1990 to 1997
3. Oil subsidy displaced more important government expenditures which could have been
spent equivalent to:

a. Free rice for 17.6 months to the poorest 30% of the population below poverty
line
b. 62,241 schoolhouses
c. 5,280 kms of rural roads
d. 146,080 deep wells for drinking water or
e. 2 light rail transit lines

88
Oil Price Stabilization Fund (OPSF) for the purpose of minimizing frequent price changes brought
about by exchange rate adjustments and/or changes in the world market prices of crude oil and imported petroleum
products. The Fund herein created shall be used for the following: 1) To reimburse the oil companies for costs
increases in crude oil and imported petroleum products resulting from exchange rate adjustment and/or increase
in world market prices of crude oil; 2) To reimburse the oil companies for possible cost underrecovery incurred
as a result of the reduction of domestic prices of petroleum products. (EXECUTIVE ORDER NO. 137, January
24, 1986)
89
An Act Deregulating the Downstream Oil Industry and for Other Purposes (February 10, 1998)
90
Ms. Ma. Teresa D. Caparas, Oil Deregulation, PIDS, Economic Issue of the Day, Feb. 2000, issue no.
2. http://dirp4.pids.gov.ph/ris/pdf/pidseid0002-feb.pdf
91
Ibid
92
Cross product subsidization means that the price of premium gasoline was higher than warranted in
order to keep the price of diesel lower. Implicitly, regulation favors diesel product over gasoline
93
USec. Gil S. Beltran, Petroleum subsidies in the Philippines [PowerPoint Presentation]
https://www.iisd.org/gsi/sites/default/files/ffs_gsibali_sess3_beltran.pdf

68
B. Distura

4. Shifted petroleum price increases from direct heavy consumers to ordinary taxpayers
5. Provided more subsidy to the highest income groups and middle class with cars and air
conditioning (92.8%) compared with lowest quintile (7.2%)
6. Poorest of the poor who walked to work got none
7. From 1991 to 1995, contributed to:
a. 26% of the 60% rise in traffic volume
b. 33 M liters increase in gasoline consumption annually (Pushed up imports of
crude oil by 15% equivalent to an estimated 7M barrels amounting to
US$100M. This amount should have been used to purchase capital goods for
new factories that would have generated 34,650 new jobs)
c. Additional 78,000 tons of carbon dioxide emissions annually
d. Additional 1,100 tons of nitrogen oxide emissions annually
e. Congestion and slow traffic in Manila streets

HENCE the DOWNSTREAM PETROLEUM INDUSTRY DEREGULATION94 in


1998 which brought about the abolition of petroleum product subsidies, liberalization of
imports and entry of refiners & importers; restructuring of petroleum taxes to tax less products
consumed by the low-income groups.95

The deregulation of the local oil industry was done in two phases: partial and full
deregulation.

In the partial deregulation phase, oil importation was liberalized and the automatic
pricing mechanism was implemented. In the full deregulation phase, controls on oil price
setting were similarly lifted, the foreign exchange cover was removed, and the OPSF was
abolished.

There are four major reasons why the oil industry was deregulated:96
1. To stabilize and provide reasonable prices,
2. To encourage competition,
3. To encourage investments, and
4. To remove cross product subsidies.

RESULTS OF PETROLEUM INDUSTRY DEREGULATION97


1. More competitive pricing (selling margins dropped)
2. More players (from 3 to 16)
3. Petroleum consumption growth (3.1%) dropped below real GDP growth (3.3%) from
1997-2012 (vs 7.9% & 3.4%, respectively, from 1984 to 1997)

94
Republic Act 8479 entitled Downstream Oil Industry Deregulation Act of 1998 approved on
February 10, 1998, the Philippine government effectively reduced its control on oil-related pricing activity and
trade restrictions.
95
http://dirp4.pids.gov.ph/ris/pdf/pidseid0002-feb.pdf
96
Ibid.
97
USec. Gil S. Beltran, Petroleum subsidies in the Philippines [PowerPoint Presentation]
https://www.iisd.org/gsi/sites/default/files/ffs_gsibali_sess3_beltran.pdf

69
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4. Had favorable impact on conservation, development of alternative fuels, and


environmental protection

What do we do whenever there are steep increases in petroleum prices (50% or so), we
adopt:98
- Targeted, temporary subsidies for public utilities & lifeline users of electricity
- Subsidies funded by excess revenue collection

98
Ibid.

70
B. Distura

ENERGY AND SCS DISPUTE (PH-CH)


There are different angles in every dispute using different theories. Some view it on
using the concept of space. Others look at the conflict through different interests, and
aspirations of the SCS claimants. This view on the SCS dispute is angled on resource conflict.
However, some may say that this resource conflict narrative overlooks the complex and
dynamic geopolitical and strategic drivers at play, and misplaces the role of hydrocarbons. 99

Dispute arising from Chinas NINE-DASH LINE ( claim submitted to the United
Nations on May 07, 2009 without explanation as to its legal basis nor to its fixed coordinates
and whether the waters enclosed by it can encroach in the 200-nautical mile Exclusive
Economic Zone (EEZ) of the Philippines in the West Philippine Sea.100

FIGURE 12: SOUTH CHINA SEA CLAIMS MAP101

Based on a 1947 map by the then Kuomintang government, the vaguely defined nine-
dash line encompasses around 90 percent of the South China Sea. It spans an area the size of
Mexico extending more than one thousand kilometers from China, and which encompasses
territory claimed by Malaysia, the Philippines, Taiwan and Vietnam.102
Sea-Trade
An estimated $5 trillion worth of goods are transported through South China Sea
shipping lanes each year, including more than half the worlds annual merchant fleet tonnage
and a third of all maritime traffic worldwide.103

99
https://www.forbes.com/sites/jeremymaxie/2016/04/25/the-south-china-sea-dispute-isnt-about-oil-at-
least-not-how-you-think/#4da6d6085c69
100
Justice Antonio T. Carpio, The South China Sea/ West Philippine Sea Dispute. Published by
Musictablet on November 04, 2015 at www.scribd.com

Quoted from Stuck in the Territorial Trap, Sassot 5 THINGS ABOUT FISHING IN THE SOUTH
101

CHINA SEA by Trefor Moss (The Wall Street Journal; The Wall Street Journal, 19 Jul. 2016; Web; 11 Dec.
2016)
102
http://nationalinterest.org/blog/5-trillion-meltdown-what-if-china-shuts-down-the-south-china-
16996

71
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Here is the "density map" displaying aggregate movements along the busiest shipping
routes (green lines) and in the busiest ports (red blobs) in and around the South China Sea:

Image source: http://apjjf.org/2016/06/Lee.html

Oil transported through the Malacca Strait from the Indian Ocean, en route to East Asia
via the South China Sea, is triple the amount that passes through the Suez Canal and fifteen
times the volume that transits the Panama Canal.104

According to Robert D. Kaplan105, some two-thirds of South Koreas energy supplies,


nearly 60 percent of Japans and Taiwans, and 80 percent of Chinas crude oil imports flow
through the South China Sea.

Analysts estimate the cost of rerouting oil tankers via the Lombok Strait and east of the
Philippines at $600 million per annum for Japan, and $270 million per annum for South
Korea.106

The majority of Australian cargo travelling through the South China Sea is destined for
China; however, were China to obstruct shipping routes in the South China Sea between
Australia and its other trading partners, it could force a costly reroute of some $20 billion worth
of cargo per annum.

Food Resource
According to the United Nations Environmental Program, the fisheries in the South
China Sea account for roughly one tenth of the worlds global fish stocks. With a quarter of the
worlds population living in the surrounding littoral states, the region is a crucial foodstuff
resource.107

Oil and Gas Wealth108

103
Ibid
104
Ibid
105
https://www.businessinsider.com.au/why-the-south-china-sea-is-so-crucial-2015-2
106
http://apjjf.org/2016/06/Lee.html
107
http://thediplomat.com/2015/08/diplomacy-and-the-south-china-sea/

72
B. Distura

Aside from sea trade, the South China Sea has proven oil reserves of seven (7) billion
barrels, and an estimated 900 trillion cubic feet of natural gas.

If Chinese calculations are correct that the South China Sea will ultimately yield 130
billion barrels of oil (and there is some serious doubt about these estimates), then the South
China Sea contains more oil than any area of the globe except Saudi Arabia. Some Chinese
observers have called the South China Sea the second Persian Gulf.

Effect of the Chinas Claim


Chinas national boundaries under the NINE-
DASH LINE will cause the following countries
to lose:109

Malaysia about 80% of its EEZ in Sabah


and Sarawak facing the South China Sea;

Vietnam about 50% of its total EEZ;

Indonesia about 30% of its EEZ facing


the South China Sea in Natura Islands
whose surrounding waters comprise the
largest gas field in Southeast Asia;

Philippines about 80% of its EEZ facing


the West Philippine Sea, including the
entire Reed Bank (Recto Bank) and part
of the Malampaya Gas Field.

WPS ACTIVE PETROLEUM SERVICE CONTRACTS (SCs)


Exploration Phase (10)
SCs 50, 54, 55, 57, 58, 59, 63,72, 74 & 75
Production Phase (5)
SCs 6, 6A, 6B, 14 & 38

WPS AREAS OFFERED IN THE 5th PHILIPPINE ENERGY CONTRACTING


ROUND (PECR5)

Area 7 (Recto Bank)

Areas 8, 9, 10 & 11 (West Luzon)

CHINAS INTENTIONS IDENTIFIED THROUGH ITS ACTIONS

Chinas 2009 Note Verbale explaining the NINE-DASH LINE map: China has
indisputable sovereignty over the islands in the South China Sea and the adjacent waters and

108
https://www.businessinsider.com.au/why-the-south-china-sea-is-so-crucial-2015-2
109
Ibid

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B. Distura

enjoys sovereign rights and jurisdiction over the relevant waters as well as the seabed and
subsoil thereof.110

Chinas claims and reclamation affecting the Philippine claim under the UNCLOS111:

Seven reefs in Spratlys


Reed (Recto) Bank;
Scarborough (Panatag) Shoal

Chinas continuous interference on Philippine upstream petroleum activities:112

SC 72 (Recto Bank) - On 02 March 2011, the Seismic Survey was temporarily


stopped when two Chinese patrol vessels moved into the survey area;

SC 14C1 (Northwest Palawan) - On 11 and 20 April 2014: a Chinese Vessel


XIANGYANGOHONG approached almost (1.5) nautical miles of the
Rubicon Intrepid (FPSO) Ship operating in the area;

SC 55 (West Palawan) - On 07 August 2015, a gray Chinese Warship with ID


No. 571 approached to approximately one (1) nautical mile of the Maersk
Venturer Drill Ship operating in the area

CH ENERGY NEEDS

Chinas total primary energy consumption reached 4.26 billion tonnes of coal
equivalent (tce), up 2.1% over 2013, and accounting for 23 percent of global energy
consumption. Since 2000, Chinas natural gas
consumption grew at a rate of 15.3 percent per
year.113 Roughly a third of Chinas
consumption was imported depending on
supplies from unstable regions such as the
Middle East and sub-Saharan Africa. In order
to reduce dependence on politically unstable
countries, states, especially China, are
beginning to look closer to home for new
reserves particularly in offshore zones in the
South China Sea, where there are predicted to
be up to 213 billion barrels of oil according to
some estimates, along with extensive natural
gas reserves. 114

110
Ibid
111
Ibid
112
Energy Resource Development Bureau - DOE
113
https://eta.lbl.gov/publications/key-china-energy-statistics-2016
114
http://thediplomat.com/2016/07/east-asias-state-led-search-for-energy-security/

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B. Distura

PH ENERGY NEEDS

Malampaya Gas reserve has been depleted (supra). The DOE said Malampaya, which
provides fuel to major power plants in Luzon, might run out of gas by 2024.115 The ambitious
infrastructure program under BUILD BUILD BUILD needs more energy resources.

WHY IS THE KALAYAAN ISLAND GROUP (KIG) IMPORTANT TO THE


PHILIPPINES?116
The KIG and its waters off Palawan are vital to the national security
and economic survival of the Philippines. xxx xxx xxx The KIG is important
to energy security since it is known to have largely untapped petroleum
reserves as well as mineral deposits. Geological studies show that the
Spratlys (also known as Dangerous Grounds), Palawan, the Reed Bank,
and the Calamian block all form part of a single micro-continent. The
nature and characteristics of the seabed underneath the KIG are similar to
those of the seabed elsewhere in the Philippine continental shelf, according
to studies conducted in 1988 and 1989, showing that KIG is a submerged
natural prolongation of Palawan. Under UNCLOS, the Philippines is
entitled to the areas petroleum, mineral and other non-living resources.
xxx xxx xxx Of the Philippines 16 sedimentary basins, or potential areas
where hydrocarbon deposits could be found, 3 are located in the West
Philippine Sea: Northwest Palawan, Southwest Palawan and Reed Bank.38
The area of Northwest Palawan, including Reed Bank, is where significant
discoveries have already been made and where we are most likely to find
petroleum resources, especially natural gas, in the near future.39 Due to
the absence of data on verifiable reserves, there are few available estimates
of the potential economic value of oil and gas resources in the KIG. But
according to one expert, it may be possible for the combined oil and gas
resources in the WPS to cover the total fuel demand of the country for the
next twenty years.40 Offshore energy resources can have a potentially
transformative impact for a developing country like the Philippines,
providing not only energy security but revenues from oil and gas exports.
For example, the Malampaya Deepwater Gas to Power Project alone
contributed about US$1 billion/year at current gas prices to the national
coffers, at the same time resulting in foreign exchange savings from
foregone energy importation estimated at US$500 million/year.41 It also
led to the emergence of a local natural gas industry.

115
http://globalnation.inquirer.net/158794/energy-department-awaits-go-ahead-oil-drilling-west-
philippine-sea
116
Aileen S.P. Baviera and Jay Batongbacal, The West Philippine Sea, The Territorial and Maritime
Jurisdiction Disputes from a Filipino Perspective: A Primer, UP Diliman, 2013.

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