Tuesday, September 20, 2005

Inquirer Editorial

Editorial : Fuel of the future

AS THE PRICE of international crude oil inched closer to $70 a barrel last month, President Gloria Macapagal-Arroyo announced a number energy conservation measures to soften the impact of a developing oil crisis. "This is not a simple test of our resiliency but a real challenge to economic survival," she said.

Yet the crisis should not have come as a great surprise. Everyone who cared enough to give it a thought would have realize that the world's supply of fossil fuels could not last forever.

Neither was the crisis completely unpreventable. Conservation measures and environment-friendly, renewable, indigenous, alternative energy sources have been there for the tapping and the taking. Since the 1970s, there have been intermittent calls to lessen the country's dependence on oil. But no administration gave them serious consideration.

Even today, there still seems to be no real serious or orchestrated, high-impact program to address the crisis. For instance, while the administration has announced reductions in energy consumption in government offices and the fielding of a team to ensure compliance, the fleets of gas-guzzling cars that congressmen and other public officials ride to work or to ferry their families to malls and vacation resorts have not diminished.

The country has to come up with more than stopgap measures to address the crisis. And such an enterprise will entail the resolve and cooperation of all sectors, Congress not the least among them.

Car and planes in Brazil are now running on ethanol -- 100 percent or mixed with gasoline or diesel. Other fuel-hungry economies are following in Brazil's footsteps. According to Newsweek, the United States now uses 2 percent ethanol and wants to expand its use. The European Union is eyeing biofuels for 6 percent of its fuel needs. South Korea and Japan are importing ethanol from Brazil. Thailand is constructing over a dozen facilities to extract ethanol from sugar cane and rice husks. And China has joined more than 30 countries building ethanol facilities and growing crops from which ethanol can be extracted.

It is not just the dwindling reserves and the increasing prices of oil that have made the use of alternative fuels imperative and urgent. There are also environmental concerns over the extensive use of the highly polluting oil. Not only that, biofuels, which are extracted from plant oils or animal fats, can be produced by almost every country in the world (unlike oil which can only be produced by the few countries where it can be found), and thus can create jobs in economically lethargic agricultural areas. Brazil, the No. 1 producer of ethanol -- definitely a cleaner, renewable alternative fuel -- "is revolutionizing both the countryside and the auto industry," Newsweek says.

But as usual we are lagging behind, both in terms of promoting the use of ethanol and other biofuels and their local production. True, a couple of small oil companies have announced plans to import ethanol and market it locally. Also, one local company is setting up an ethanol plant in Negros. But these attempts to include biofuels in our energy mix amount to little more than a drop in the bucket.

The country consumes 345,000 barrels of oil per day. It has been estimated that for transportation alone, which accounts for 58 percent of our oil consumption, our annual oil bill amounts to P170 billion. That amount is nothing to sneeze at. If local ethanol producers can be assured of just 10 percent of that market, there may be a lot more interest in investing in ethanol plants and the crops that would supply their needs.

Bukidnon Rep. Miguel Zubiri is looking in that direction. Last month, he filed a bill that seeks to jump-start the ethanol develop program. He has been quoted as saying the program would seek to expand the use of ethanol to 10 percent of the transportation sector's fuel requirements within five years. He has also been talking about establishing at least 27 ethanol factories in different sites across the country, at a cost of P1 billion each.

The details of the Zubiri plan still need to be fleshed out. For instance: What incentives or assistance will an ethanol producer get? Will he be assured of a market even if oil prices go down? How can the welfare of consumers be balanced against the need to make investments in biofuels attractive? But at least someone in Congress is thinking about the oil crisis and proposing one very promising solution. It's time others contributed to the effort.

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