Shell forms new subsidiary to focus on alternative fuels

Pilipinas Shell Petroleum Corp., a member of the Royal Dutch Shell Group, has created a new division to focus on the oil company’s alternative fuels program.

The Shell group has a similar advocacy for cleaner fuels through corporate vehicle Shell Renewables Inc., which promotes the use of renewable energy sources.

In a related development, Energy Secretary Raphael Lotilla said Pilipinas Shell has signified its keen interest to import ethanol.

"The company is committed to a bigger use of ethanol-based products this year," Lotilla said.

Lotilla added there would be a lot of progress in the use of alternative fuels, including ethanol and coco-methyl ester, in the next two months.

Similarly, Petron Corp. has also committed to use indigenous and environment-friendly fuels when it joined the Philippine Fuel Ethanol Alliance (PFEA) yesterday, becoming the first oil company to become a full-fledged member of the alliance.

The PFEA is a partnership between the private and public sectors aimed at establishing a local bio-ethanol industry and promote the use of ethanol as an alternative fuel. Its members include the Sugar Regulatory Administration, Philippine Sugar Millers Association, Sugar Master Plan Foundation, and Center for Alcohol Research and Development.

Ethanol is an indigenous, renewable and bio-degradable fuel expected to reduce the country’s dependence on imported fuel.

In May last year, Petron marked an industry first as it signed a memorandum of understanding with San Carlos Bioenergy Inc. (SCBI) expressing its intention to offtake SCBI’s entire ethanol production. SCBI will construct, own and, operate an integrated sugar mill, cogeneration plant and distillery complex for ethanol production in San Carlos, Negros Occidental.

The facility will be capable of producing 100,000 liters of anhydrous ethanol (99.5-percent purity) daily while producing nine megawatts of electricity. The plant will be fueled entirely from biomass resources particularly sugarcane which is grown in the area. The plant is expected to be operational by 2007.

Petron said the PFEA is instrumental in implementing the government’s National Bioethanol Program.

Ethanol is a high-octane, water-free alcohol produced from the fermentation of sugar and converted starch (corn, potato etc.). It is traditionally used as a blending component at five- to 10-percent concentrations in gasoline.

Unlike fossil fuels, ethanol is virtually inexhaustible since agricultural products can be grown and harvested continually under a sustainable system.

Congress has earlier sought to promote the necessary framework for the promotion and use of ethyl alcohol or ethanol as alternative transport fuel. This will prescribe the use of five- percent blend of ethanol in the second year of implementation and eventually increase this to 10 percent in the fourth year and 100 percent in the fifth year.

The legislation will provide for the institutionalization of the National Fuel Ethanol Program to reduce the country’s dependence on imported petroleum products through commercial use of ethanol in the transport sector. To ensure the success of this endeavor, the government will revive the National Alcogas Program, a past initiative of the government in line with the production of non-conventional and renewable sources of fuel.

The program, which will introduce nationwide production of ethanol from sugarcane, corn and cassava, is seen to positively impact on the agriculture sector as this will generate employment and open another window of opportunity for the advancement of the country in agricultural engineering and technology.