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OTHER INTERESTING ARTICLES |
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During the 1970s and 1980s, the Philippines sought growth and
self-sufficiency in energy production. In 1972 the government altered the
legal arrangements for oil exploration from concessions to a service
contracts, and serious oil exploration began in the mid- and late 1970s. As
a result of exploration in the Palawan-Sulu seabed, oil was discovered in
the Nido oil field in 1976. Commercial production began in 1979 and yielded
8.8 million barrels. Successful wells also were drilled in the Cadlao and
Matinloc fields off Palawan in 1981 and 1982, but the fields were relatively
small. The level of production varied during the 1980s but never exceeded 5
million barrels in any one year. In 1988 local production--2.2 million
barrels--accounted for only 3 percent of domestic oil use (see table 11,
Appendix). A study released in early 1990, indicating that the geology of
the Philippines was a favorable indicator of possible additional petroleum
deposits, was used by the government to encourage oil exploration firms.
Production-sharing arrangements allowed a firm first to recover the cost of
its investment, after which 60 percent of profits would go to the
government. In December 1990, there were new discoveries of oil and natural
gas off the northwest coast of Palawan Island. Tests showed that the oil
well could have a flow rate of 6,000 barrels per day, with potential
reserves of about 1 billion barrels.
Between 1973 and 1983, power generation increased at an annual rate of 7.0
percent, two percentage points above the growth rate of real gross domestic
product (GDP--see Glossary). In 1988 the National Power Corporation, which
produced approximately 90 percent of the country's electricity, had a
generating capacity of 5,772 megawatts. Of that, 42 percent was from
oil-burning plants and 7 percent from dual oil-coal facilities. An
additional 37 percent was from hydroelectric plants, and just under 15
percent was from geothermal plants.
The Philippines had a wealth of potential energy resources. It ranked second
behind the United States in production of electricity from geothermal
sources. Installed capacity in 1988 was 828 megawatts; estimated potential
was 35,000 megawatts. Undeveloped hydroelectric potential of 3,771 megawatts
also was identified. Coal resources, estimated to be 1.2 billion tons, also
were plentiful, although of a rather poor grade for electrical generation.
In addition to these sources, solar, animal waste, agriwaste, and other
nonconventional sources were utilized for generating small amounts of
electricity and other energy needs in rural areas. Together they accounted
for about 15 percent of energy consumption.
In 1990 the Philippines was confronted with a crisis of insufficient
electrical generating capacity. Metro Manila and the thirty-three provinces
in the Luzon power grid experienced brownouts of up to four hours per day,
with the grid averaging a daily deficiency of 262 megawatts. At the root of
the problem was the decision by the Marcos regime to build a 620 megawatt
nuclear-power plant on the Bataan Peninsula. The Aquino government decided
not to use the facility because it was located on a seismic fault. As a
result, a badly needed expansion of generating capacity in Luzon, which
accounted for 75 percent of national electric consumption, did not come on
line. The problem was compounded by inadequate planning and bureaucratic
delays. There were delays in the building of a facility capable of
generating 110 megawatts of geothermal power in Albay Province and a 300
megawatt coal-fired plant in Batangas Province. The short-term solution was
to put up a series of gas-turbine plants with a combined rating of 500
megawatts. Only 245 megawatts came on stream between 1987 and 1989.
Economists estimated that to achieve a 5.6 percent growth rate in real GNP,
the country would need an additional 300 megawatts of generating capacity
yearly.
Efforts also were being made to expand the country's rural electrification
program. In 1985 it covered the franchise area of some 120 electrical
cooperatives, reaching around 2.7 million households. The government planned
to expand the coverage to some 4 million households by 1992.
Data as of June 1991
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