QUESTIONS ON PIPELINE AND POWER SECTOR
The Philippine Star
01/17/11

Public concerns regarding the damaged oil pipeline owned by First Philippine Industrial Corp. and Shell continue to simmer. Below are more questions and comments from readers:

More questions on pipeline integrity

One of our readers, Harry King, sent this letter that just begs some answers from authorities in the know, including officials of FPIC. Dare we expect a reply? Here is King’s letter:

“How can FPIC claim that the pipeline is well maintained when it has to dig down and search for the leak(s)? How does FPIC maintain its pipeline? What types of protective maintenance is in place? Did FPIC disclose to the government its maintenance plans and schedule? Who are the cathodic protection specialists for FPIC?

“What is the nature and cause of the leak at West Tower? If the leak is due deterioration and corrosion of the pipe then the entire pipeline has to be shut down. It simply means that the pipeline has outlived its usefulness; further transport of oil and flammable materials through the pipe would only endanger the cities and its people along its path because other leaks are bound to occur. The costs for repair of the entire line would be prohibitive.

“It’s good if the leaks are always detected by smell. In Mexico, a pipe leak resulted in an inferno that devastated a city. I do not believe our government has the capability of putting out that kind of fire when oil is flowing in every direction, and all the streets and houses are on fire. The loss in terms of lives and properties would be catastrophic.

“FPIC should consider a new pipeline if it wants to continue its business; the landscape along the present route has changed radically over the years and a safer aboveground pipeline would mean better business future for FPIC.”

Gouging concern

From our online reader, page88, another set of queries. It seems that people are asking for a transparent discussion of the unfortunate incident involving the West Tower condominium and the FPIC pipeline. Here are a couple more questions from page88:

“Your quote from your reader: “They entail lower delivery costs which should mean lower retail prices for consumers in Metro Manila and parts of Bulacan, Laguna and Rizal who draw 60 percent of their fuel requirements from the FPIC pipeline.” is intriguing.

“If the customers of the pipeline, Shell mainly, have lower delivery costs, please explain the economics of why the fuel prices of Shell and Petron are the generally the same at the pump. Is there a suggestion that Shell is gouging the public?”

Powerlesss to ease power cost

It seems appropriate to air one of our readers’ views on the power industry in the light of the continued increase in fuel prices and subsequently, electricity rates. Here is what ercksar68 wrote reacting to our column, “Are We Prepared for the Rebound?” in The Philippine Star’s online version.

“I just want to give emphasis on the power sector privatization in our country, as what we are experiencing in the oil industry, the cost of fuel was not lowered as what was intended, and the government has no power over it.

“We know how the cost of this basic economic input affects and cascades to all other sectors. The power, and of course agriculture, sectors are two of the major sectors that have been affected.

“I was in India for a two-month training program on rural generation and distribution management. As part of the program, we were taught about the power scenario in that country.

“I learned that their government is also encouraging private participation in the power generation and distribution, but the private sector is only given up to 25 percent of the all-time capacity requirement, with another 25 percent for the state government, and the bulk of 50 percent in the central government.

“I just could see the logic: It is the government's responsibility to deliver this basic service to the people. But while the private sector is only given 25 percent, the government provided them with enough incentive for them to operate profitably.

Corruption issue

“Corruption is also an issue in India as in other countries, including ours of course. They also have a lot of poor in there, probably more by ratio, as compared to ours. Yet their country as a whole is more developed and richer than ours, thus they have more money in their disposal.

“What then gives them the advantage? My answer is: the Indian people love their country. They work for their country. They develop (or copy as the Chinese do) their own technologies. They have their own brand of automotive, power, textile, power testing, and agricultural equipment among others. All these they sell to their people and export. The government of India supported these industries.

“But what do we have? Nothing, nothing, but multinational brands being manufactured in our country. We build these things for them [multinational companies], not for the Philippines, not for Filipinos.

“Pride” to be best

“But we also have one good thing, although it is not helping us. We have the pride to be the best country (after Japan) in the Asian region. After the last World War, when the Japanese brand came to our country, we chose not to buy them. Instead, we chose American.

“Then came “Made in Taiwan,” but we didn't care for this. We wanted “Made in Japan.” Then now, here comes “Made in ROC,” and we put their products to shame, saying Taiwan-made is better.

“But what have we offered them? Our skilled and hospitable hands to build these gadgets, to take care for their oldies, not to mention the selling of the souls of some of our young women and men.

“Now, what do we need to do?”

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, SalcedoVillage, 1227 MakatiCity. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net