Why LNG in the Philippines Is More of a Problem Than a Solution


Why LNG in the Philippines Is More of a Problem Than a Solution

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The Philippines’ LNG import ambitions could increase its dependence on one of the most expensive fuels available, according to the Institute for Energy Economics and Financial Analysis (IEEFA). The country is focusing on Batangas for many of its LNG developments. New LNG terminals mean more vessels passing, docking and unloading along the coast, threatening marine ecosystems and affecting the livelihoods of communities who depend on it.

25 October 2023 – by Heba Hashem   Comments (0)

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LNG in the Philippines is more of a problem than a solution. Years of LNG activity near the Verde Island Passage (VIP) are threatening to wipe out shoreline communities’ ecosystems and livelihoods. The passage is part of the Coral Triangle in the western Pacific Ocean, where marine biodiversity is comparable to the Amazon.

With the highest concentration of marine species on the planet, the VIP provides food and livelihoods to over 2 million people. Yet, the Philippines has not declared this crucial marine corridor a protected area.

Batangas City, at the heart of the VIP, is also the epicentre of gas expansion in the Philippines. The city is home to five of the country’s operating gas-fired power plants. The area’s fragile ecosystem is in great danger, with two more gas power plants and five LNG terminal projects in the pipeline to expand LNG usage.

The Impact of Developing LNG Power Plants in the Philippines

Liza Osorio, legal and policy director of Oceana Philippines, said that LNG development is affecting the region’s water quality. This is because the Philippines’ LNG terminals and gas-fired power plants have reclaimed the coastline and are located there.

“There are already impacts created by these LNG facilities. And that’s with only one or two LNG gas facilities [under construction]. What about the next batch of LNG projects that are proposed to be sited in the same area? It’s going to create a man-made disaster,” Osorio said in a podcast interview with Energy Tracker Asia.

“The gas projects have affected the biodiversity, corals and other habitats near these areas. They’ve also affected the fisherfolk who are directly dependent on fishing there for generations. They can no longer fish around VIP because there’s no more fish to catch.”

Osorio, an environmental lawyer, has been involved in several cases in the Philippines, including campaigns to protect the VIP. She said that while the Philippines has strong laws to protect the environment, the self-reporting mechanism in place is a concern.

For instance, power plant operators have claimed that the wastewater they discharge into the ocean is clean. However, residents have claimed that marine life is dying from warmer waters or chemical waste entering nearby rivers.

“With self-reporting, [corporations] can always report that they’re not causing any impact. But if the government does not monitor them properly, they cannot debunk these reports. When you look at the area, if you’re assessing and diving underwater, you can see it’s telling a much grimmer reality than what they’ve reported.”

Why the Philippines Is Building LNG Terminals

Natural gas accounted for 6% of the Philippines’ primary energy supply mix in 2022, down from 22% in 2020. The rest came from coal (30.2%), renewable energy (35.5%) and oil (28.3%).

However, the country faces a mounting energy crisis, as its Malampaya natural gas field is expected to dry by 2024. Malampaya is the only source of domestic gas. It supplies more than a quarter of the energy consumption in Luzon, the Philippines’ largest and most populous island.

To cover Malampaya’s supply shortfall, the country plans to import LNG and utilize imported LNG. It sees liquefied natural gas as a “transition fuel” while it builds renewable energy facilities. It also expects LNG to help the country meet its pledge of a 75% reduction in greenhouse gas emissions by 2030.

Ultimately, the government’s vision is to turn the Philippines into a regional LNG import hub. And it is focusing on Batangas for many of the LNG developments. This is due to the existing infrastructure networks and pipelines for natural gas and the presence of a major seaport.

Does the Philippines Import Natural Gas?

The Philippines’ LNG import ambitions could increase its dependence on natural gas, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

“The Philippines spent nearly USD 90 million on its first two shipments of liquefied natural gas. The price tag for just two cargoes should be a warning sign for the exorbitant LNG imports bills to come,” the IEEFA said.

The latest gas projects include an LNG import terminal facility by the AG&P subsidiary, Linseed Field Power Corp. The facility started supplying a power plant in Batangas province in June. There is also a 1.75-GW LNG power plant by SMC-subsidiary Excellent Energy Resources. Both projects are just over a kilometre away from the Ilijan Fishery Refuge and Sanctuary.

The Growing Opposition to LNG in the Philippines

New LNG terminals mean more vessels passing, docking and unloading in the area. This threatens to put the VIP at further risk and affects the livelihoods of communities who depend on it.

In 2022, environmental advocacy group Protect VIP filed a complaint against the developers of the two projects before the Environmental Management Bureau.

Calls have been growing for more to be done to protect the VIP following an oil spill last February. The oil slick from the sunken MT Princess Empress fuel tanker stretched across kilometres of sea and spread to the VIP.

“The beaches were black. And fisherfolk communities had no livelihood, so they couldn’t send their children to school. It was a disaster, and the government took some time to deal with it,” said Osorio.

In August, a fishing vessel carrying 70,000 L of diesel sank off the coast of Batangas, posing another oil spill threat. “This is a preview of what’s going to happen tenfold, twenty-fold or a hundred-fold. If you’re picturing it as a Southeast Asian LNG hub, a lot more ships will be coming in,” said Osorio.

Liquefied Natural Gas (LNG) Affecting the Health of Thousands

In addition to its impact on marine ecosystems and livelihoods, LNG activity also harms residents’ health. The Philippines’ health department recently started investigating the rising cases of respiratory and cardiovascular disease due to exposure from LNG power plants in Batangas City.

This was nearly seven months after climate groups raised concerns over the health situation in five districts. Around 4,000 people in these locations were ill with severe respiratory illnesses.

Renewables Waiting To Be Activated in the Philippines

Considering the wide-ranging impacts of LNG in the Philippines, renewables would be a better option to meet the country’s growing energy demand.

The country already plans to increase the share of renewables in its power mix to 50% by 2040. By then, it will require 43 GW of additional power capacity. Additionally, the government has imposed a moratorium on new coal-fired power plants, a promising step towards its clean energy transition.

However, installed solar and wind capacity in the Philippines stood at just 1,766 MW earlier this year. This indicates significant untapped potential and is much lower than some neighbouring countries have achieved. Vietnam, for example, had 12,379 MW of operational capacity.

“There is readiness in the Philippines for moving more towards renewable energy sources,” said Osorio, “but the government is moving the opposite way.”

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