Seaoil's biofuel program seen as model for Southeast Asia

Seaoil Philippines Inc. has been recognized by its counterparts in the Southeast Asian region as a prime mover in implementing a model program for the development and commercial use of biofuels.

At the recent Ethanol and Biofuels Asia 2008 Conference in Singapore, Seaoil vice president for supply Bernadette Raymundo said participants cited the company’s role in “changing the landscape of the Philippine fuel industry” as it hurdled massive challenges in introducing the use of alternative fuels to motorists.

“Being the first to launch biofuel, Seaoil faced an enormous challenge, not only in converting and modifying its distribution system but also in complying with the stringent requirements of the implementing rules and regulation of the biofuels law, while addressing the resistance of motorists and their preference for conventional fuel,” she said.

She added that Seaoil is set to enter into an agreement with a huge Thailand-based oil firm for the development of biofuels technology in the Philippines.

“We will be exchanging technologies with them,” she said.

At the same time, Raymundo pointed out that among the biggest challenge in the development of biofuels is the lack of infrastructure due to land titling issues.

“We believe that biofuels is still the industry to go into... Many investors are willing to invest but land conflicts should be addressed,” she said.

Raymundo said potential investors may be turned off if the land titling concerns are not properly addressed by the government.

Department of Agriculture data showed that of the total 388,000 hectares planted to sugar cane, about 96,000 hectares could be allotted for biofuels use. If the government could only allocate 60,000 hectares of sugar cane plantation for biofuel use, it would be more than enough to cover five percent requirement under the biofuels law.

The Biofuels Act of 2006 - the first of its kind in Southeast Asia - mandates that within two years from the effectivity of the law, at least five percent bioethanol shall comprise the annual total volume of gasoline fuel actually sold and distributed by each and every gasoline company in the country. After four years, or by 2011, the law mandate the increase in blend to a minimum of 10 percent bioethanol.

“We have enough raw materials for supply if they can solve the infrastructure problem,” she added.

Aside from being a cleaner fuel, bioethanol blend is relatively cheaper by about 50 centavos to P1 per liter than regular gasoline.

Seaoil, for its part, has invested P13.9 million for pipeline upgrades to meet the requirements of biofuels use.

Being the first independent oil firm to open a retail station after the deregulation of the Philippine oil industry in 1997, Seaoil was the first to launch its ethanol-blended E10 gasoline in all of its filling stations nationwide in August 2005, more than a year before the Biofuels Act was signed into law.

“During that time, other multinational oil players deemed it impossible. Now, these fuel companies are taking Seaoil’s lead to duly implement the biofuels mandate,” Raymundo noted.

The Seaoil official said the company also addressed other issues raised against biofuels, including transport, handling, blending, storage and other operational concerns.

“At the stations level, Seaoil formulated an audit system to implement the highest standard for monitoring and cleaning of sites. An audit group was formed whose main objective is to regularly conduct a check of all stations at random to ensure that Seaoil standard procedures on customer service, calibration and product quality monitoring are implemented,” Raymundo said.

On operational issues, she said the company has been undertaking rigid quality control to ensure material compatibility, corrosivity, conductivity, phase separation in storage and  distribution system of its products.

Raymundo also underscored the need to harmonize vehicles and vehicle parts specifications.

“It’s time to upgrade distribution system in Asia to meet requirements of alternative fuels especially as blends of biofuels are increased to higher percentages,” she added.