More concerns about pipeline integrity

We continue in this column the letter sent by Volney Ricafort on the continuing saga of the leaking pipeline owned First Philippine Industrial Corp., a company held jointly on a 60-40 basis by First Filipino Holdings Corp. and Shell Petroleum Co. Ltd.

In Monday’s column featuring the first part of Ricafort’s letter, he wrote about the possibility of FPIC starting to blame the unfortunate incident on others other than itself. First to be blamed, he wrote, was the foreign company that conducted the leak testing.

“Second to be blamed is DPWH, who, FPIC says, constructed the Magallanes Interchange over their pipeline. The stress caused by vehicles passing the Interchange, they say, caused vibrations which affected their pipeline’s integrity.

“But, it was FPIC’s responsibility to have coordinated with DPWH during the Interchange’s construction. Also, it is inconceivable that a structural column or beam had been laid on the pipeline’s cement casing; otherwise, the Interchange would have crashed down earlier on.

“The source of the fuel seepage into Bangkal has been found to be FPIC’s pipeline, though the exact location in the pipeline has yet to be pinpointed. However, I do not believe there is only one leak on the pipeline.

“Bobby Silva, a third generation pipeman from Silva Pipes, contends that if a leak in the pipeline is due to its age, we can be sure that there are other leaks in different segments of the entire pipeline, since the pipes are of the same age.”

CSR thrown out

“Your reader, phfesa, asked you, “What happened to Corporate Social Responsibility?” I think your answer is right on, and needs no further elaboration. FPIC’s admission of being the source of the leak did not come easy for them.

“Despite Dr. Arcilla’s identification of areas where there were strong readings of gasoline fumes and actual fuel flows, FPIC still did not admit the leak was theirs – they wanted to be shown the actual leak on their pipeline.

“Up to that point, their man-on-the-site, Eng. Efren Impresso, still maintained that the pools of fuel found came from car repair shops despite the fact that FPIC president Leonides Garde had already admitted earlier in the morning that the leak was theirs! I can understand Emma Toledo’s disgust in FPIC’s corporate strategy of deny, deny, deny.

“Phfesa must realize, however, that CSR goes out the window when pitted against corporate profits. In this case, CSR was up against FPIC’s earnings on a 43-year old, fully depreciated pipeline.

FPIC’s daily earnings

“FPIC transports daily 8,000,000 liters of eight types of fuel for Shell and Chevron from Batangas to Pandacan through its 117-km pipeline. Industry sources estimate FPIC’s transport fee billed to Shell and Chevron to be 20 to 25 centavos per liter. Thus, FPIC earnings amount to P1.6 million to P2 million DAILY.

“It is to FPIC’s interest, therefore, that the pipeline remains open and operational. DENR penalties of P200,000 daily can easily be covered by FPIC’s daily earnings.

“It is the protection of FPIC’s daily earnings which compels them to ‘scare’ the government with talks of fuel shortages and pump price increases in Metro Manila. This is just a threat, however, as Shell and Chevron can transport their stocks in Batangas through alternative carriers – tankers, coastal tankers, and barges.

“Coastal tankers and barges may, if necessary, be leased from among the numerous idle vessels docked in Singapore. Pump price increases are unlikely too, as there is no increase in world oil prices. Thus, Petron and other small players can be expected to maintain their current prices, not follow any Shell/Chevron price increase, and cash in on Shell/Chevron users, in the event of an increase in the latter’s prices.

“It must be pointed out, however, that DOE may be a possible ally of Shell/Chevron in the event of a price increase. In July DOE was quick to order the re-opening of the pipeline upon FPIC’s claim of no leaks in its pipeline. Now, DOE has been quick to say that they would approve a request for pump price increases by Shell/Chevron.

“In July, however, DOE may have been motivated to order the opening of the pipeline due to President Aquino’s scheduled State of the Nation speech later that month.

FPIC’S empty motto

“It is ironic that FPIC’s motto is ‘Safety Is Our Passion.’ After Dr. Arcilla located various areas where there were strong readings of gasoline fumes and actual fuel flows, FPIC asked its sister firm, Balfour, to excavate these areas. However, FPIC could not inform Balfour where to excavate, as they did not know where their pipeline was located!

“How can FPIC plug the leak in its pipeline when it could not even locate its pipeline? How can FPIC maintain its pipeline, when it could not even locate its pipeline?

“The recent damage to the Magallanes Interchange is the offshoot of FPIC’s attempt to locate its own pipeline. A source said the structural beam may have been weakened by Balfour’s digging under the beam in an attempt to locate its pipeline. Another source said Balfour may have thought the beam was the reinforced concrete casing of the pipeline and drilled into it to expose the pipeline.

Denial and diversion

“FPIC’s strategy of denial and diversion, coupled with its arrogant indifference to the fuel contamination of Brgy. Bangkal, has only made the situation worse. The intervening time, between the discovery of the fuel seepage into West Tower last July 9th and the discovery by Dr. Arcilla of the several fuel pools along the pipeline’s route, has only increased the extent of the underground contamination of the bedrock and the aquifer.

“We have not heard the last of this environmental catastrophe, potentially the largest in the country. It is certainly time to update our laws for the protection of the environment. Thank you for making the public aware of this problem.”

Collegiate basketball update

The Sweet 16 finalists of the PLDT-SMART sponsored Champions League (PCCL) 2010 Philippine Collegiate Championship is now complete. Top seeded in the elite group are the Ateneo Blue Eagles (UAAP champion) and the San Beda College Red Lions (NCAA champion).

The other automatic qualifiers are the FEU Tamaraws, SSC-R Golden Stags, Adamson U Soaring Falcons, JRU Heavy Bombers, DLSU Green Archers, Mapua Cardinals, U Cebu Webmasters and UV Green Lancers.

Completing the list are the following zonal qualifiers: the National U Bulldogs, Letran Knights, UE Warriors, Lyceum of the Phils. Pirates, University of San Carlos Warriors and the University of Iloilo Wildcats.

FEU and JRU are knocking each other out today at Cebu Coliseum in the 2 p.m. game, while the Overall Southern Islands Collegiate Championship will be disputed in the 4 p.m. game.

All Sweet 16 games are televised live by ABS-CBN on Studio 23.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.