Savings

The good news is that oil prices are falling rapidly. The bad news is that this is happening because of increasing signs of an impending global recession as well as an unusually strong dollar.

The running estimates now is that oil could eventually settle in the vicinity of $60 per barrel. That implies that domestic pump prices could climb down to the vicinity of a little over P30 per liter — depending, of course, on how the currency exchange works out in the near term.

It is hard to pin down numbers at the moment. The world’s stock markets, our own included, have gone through yet another roller-coaster week. There were rousing rallies and depressing downturns.

While urgent, massive and concerted actions by the world’s governments appear to have put the global financial system on the path to healing, the reality of a looming recession weighs heavily on the markets. The bears would not return to their caves and the bulls are trapped in their pens.

But while the unfolding story of the global financial crisis keeps us riveted, let us not overlook the things we have to do at home to weather the current economic storm.

With energy prices dictating how our economy would perform and the privatization of energy assets determining our fiscal bottom-line this year, Energy Secretary Angelo Reyes has been a busy man. He has to be. Much of our future wellbeing depends on how competent our energy policy is managed.

Earlier, Reyes pushed for the activation of the mothballed Galoc oil well off Palawan. The oil well was capped when the cost of extracting oil exceeded the market price for the product. As oil prices rose sharply, the well became commercially viable.

Today, Galoc is up and running. The well is capable of producing 20,000 barrels of light crude for the domestic market. The oil deposits underneath is expected to be productive for six years at optimal extraction levels.

That well’s production represents 6% of domestic oil consumption. Because of that, we will be able to raise our energy self-sufficiency from 56.6% to well over 60%.

This might not sound like much. But then again, this is only one well. We expect several other wells to be productive in the future.

While expanding and diversifying our domestic sources of energy, including such renewable energy sources as biofuels and geothermal plants, we also need to increase efficiency of current consumption. One major effort in this regard is the DOE-led campaign to switch from traditional incandescent bulbs to CFLs.

The massive campaign to switch lighting use is called, well, SWITCH. The campaign seeks to switch millions of incandescent bulbs to CFLs.

Switching light bulbs is no small matter. One million 13-watt CFLs will consume 47 megawatts less of electricity for the same lighting effect. That spares us the need to build yet another 50-MW power plant that costs $50 million. Along with that, we will be saving millions more in the cost of imported fuel to run that extra plant.

At the initiative of the DOE, Congress recently passed the Renewable Energy Bill. By providing incentives to investments in renewable energy generation, we will lessen our dependence on imported fuel and create numerous jobs in the local economy.

The DOE estimates the renewable energy program could produce an additional 2,500 megawatts for domestic use. That will enhance our energy independence, lessen fuel importation and enable our economy to literally run on its own steam.

Angelo Reyes has been more visible of late jumping on the backs of the oil companies, badgering them to lower pump prices as quickly as possible, tracking the decline in world crude prices. He calls the activity “moral suasion.”

That is the best that could be done under the circumstances.

Given the framework of deregulation governing the oil industry, government cannot dictate prices. Nor can it second-guess the costs incurred by the oil companies, which vary from one operation to another.

There are inventory issues involved as well. For instance, when oil prices were marked down once more this week, one of the larger companies was reported to be holding large stocks of the product purchased when world crude was trading at $130 per barrel.

But that is not an excuse to keep the Energy Secretary from badgering the oil companies to quicken the pace of markdowns. Angelo Reyes performs the role of spokesman for the weary consumer in his tireless badgering about pump prices.

There are ten thousand things to be done to improve our energy savings and reduce our dependence on imported fossil fuels. We have to substitute hydrocarbons with biofuels, expand our domestic oil production capacity, attract investments into more efficient power plants, increase our hydroelectric and geothermal capacity and advance the privatization program.

When Angelo Reyes was moved to the Energy Department, not a few had misgivings about the choice. They questioned his training and familiarity with the job. He was, to be sure, not one of the old boys’ club at the energy sector.

Those misgivings should have been soothed by now. The Energy Department has been, well, energized with Reyes at the helm. The man has been relentless at the job.

More significant, I suppose, he has put as much emphasis on savings and efficiency in our energy use as on increasing capacity and attracting investments. That is, for the longer term, an important dimension to enhance.