An Oligarchic Conspiracy is Behind High Fuel and Power Prices?

One reason given for the country’s lag in industrial growth is that power rates and fuel prices in the country are among the highest in the Asia Pacific Region.

Jane Subang, a former boss of mine during my days at the Office of the Secretary of the Department of Trade and Industry keyed me on a couple of reasons why this is so. Â One point that I remember quite well is that the cost of power generation and the cost of fuel importation do not determine the final cost of both electricity and fuel. Â The reasons for this seems vastly complex and are easily misunderstood by the common consumer.

Just looking at your electric bill is enough of an indication of the circuitous processes involved in determining the cost of electricity.

It is somewhat confounding to figure out why, for example, despite being the second largest producer of geothermal energy in THE WORLD, we are still very much dependent on power sourced from imported coal and diesel. Â Another thing that boggles the mind is why we have to import as much as 75% of our coal needs when the country actually produces coal.

As an ordinary consumer, one would think that if coal prices go down, power rates should go down as well. Â But that hardly happens or if it does, it doesn’t happen in the way one would ordinarily expect it to — like a drastic reduction in your electricity bill.

The same observation can be made for the price of fuel. Â At times when sharp fuel price increases are announced, people point out such increases come too soon because landed fuel stocks in the country were acquired at a lower price. Â The argument is that when world fuel prices increase, oil companies immediately jack up prices quickly and when it goes down, it takes quite a while for fuel companies here to reduce their prices.

Anyway, we’ve all been through all these discussions before and I’m not in a position to make sense of these things, at least enough to really write about it.

However, some people in a number of online communities are inclind to blaming the Oligarchy, the Presidential System, the 60/40 limits on foreign capital ownership and not being a Federal system or the convenient bogeyman called “corporate greed”. Â These things have been argued and debated for so long, it’s just really a matter of sustaining the discussion with NEW approaches and treatments rather than coming up with really ORIGINAL ideas.

There is no denying that going against these causes for Philippine suckiness can make for good causes, some may even make a reputation out of being a self-proclaimed advocates of certain “solutions” related to dismantling the Oligarchy or making corporations less greedy.

However, as a solution to high fuel prices and power rates, some people espousing grand over-arching changes in the country’s political and economic system may be taking the unnecessarily long route. Â Taking the grand anti-Oligarchy route, a wholeÂ interrelated caboodle of things have to happen first before you finally get what you want — which is a lower electric bill as well and a lower fuel price. Â Or alternatively, higher personal incomes which will make it possible for people to afford high power and fuel costs.

I am certainly not against such grand schemes to counter the somewhat believable spectre of an Oligarchic conspiracy, it’s only that I tend to go for readily implementable ideas — ideas that directly answer theÂ problem and can be immediately built or done.

Here’s how I see the problem: Cost of electricity and price of fuel is high as well as uncontrollable.

Here’s how I see the solution: Produce your own electricity and fuel.

A Nod to the Nuclear Option

Lorenzo “Obi” Abadinas started a very intriguing discussion on nuclear power at Get Real Philippines Community which has spun off into a discussion about alternative energy sources.

Abadinas seems to be opposed to nuclear power for a number of reasons and while I do not agree with them, most of what he said seems valid to me. Â One thing that he said which struck me as speculative but probable is this, “A nuclear meltdown due to incompetence, corruption or even an earthquake could never happen in the Philippines.”

This is something which I thinkÂ Congressman Mark CojuancoÂ can rebut or refute, having talked with him about nuclear power before both off-line and on Twitter. Â For those of you who may not be aware, Cong. Mark was the guy who proposed to revive the Bataan Nuclear Power Plant (BNPP) and the construction of additional nuclear power plants. Â Nuclear energy, he asserts, may pave the way to lower power costs as well as help stem a projected lack in our country’s power supply in the coming years.

This idea of reviving the BNPP is something he shares with other legislators, another one being Senator Dick Gordon. Â My former boss mentioned the idea of using nuclear power some time in 2008 or 2009 at a time when the price of oil rose rather sharply and not too far behind it was the rise in the cost of power. Â He pointed out that one advantage to nuclear power is that its fuel (uranium) had remained stable over the past 5 decades.

But of course, one has to admit that nuclear power and the revival of the BNPP are topics that spark heated arguments here in the Philippines. Â Among the reasons I can point out is the recent Fukushima Daichi Nuclear Disaster and the fact that the BNPP is one of the most demonized Marcosian projects. Â Put together, arguing for nuclear power in the Philippines will be an excruciatingly tough task.

Like ending the Oligarchic Conspiracy, the nuclear power option is also something that I am not buying into at this point.

Waste To Energy, Particularly Waste Cooking Oil to Diesel

The thing with other renewable energy options is that they are costly. Wind-turbines, photo-voltaic (pv) solar panels, geothermal, and Â wave require massive amounts of investment to these things up and running. Â Moreover, there are also drawbacks to these technologies and given the price for developing these energy sources, it may not really result in a substantial reduction of price at the pump or meter. Â But that’s not to say they aren’t any good, because they are — but it just doesn’t fit into my idea of a direct and immediately implementable solution.

One alternative energy solution that I favor for a number of reasons is Waste to Energy, particularly waste cooking oil and waste plastic to fuel. Â One reason is that the typical Filipino diet uses a lot of cooking oil and with the prevalence of fast food or fast serve outlets, there seems to be an endless supply of waste cooking oil. Â Waste cooking oil from fast-food outlets are usually sold as recycled cooking oil in wet markets at a fraction of the cost of new cooking oil or end up being dumped in drains and sewers, eventually running off into streams which causes massive water pollution.

Converting used cooking oil to diesel is a good idea on a number of accounts:

1. There is no need to grow feed stock, avoiding the food vs. fuel argument.

2. It keeps possibly carcinogenic used cooking oil from the market.

3. A high demand for waste cooking oil may keep food companies from dumping waste cooking oil in sewers.

4. Waste cooking oil diesel is actually cheaper than regular diesel.

Friends Ricky Cuenca, Gene Gregorio, Gerry Anderson, Henry Palacio, and JP Fenix have been slogging it on with a project which involves the large-scale conversion of waste cooking oil to diesel. Â These guys are behind the waste to fuel company called Eway54Â and after years, their persistence is now paying off.

Here’s an excerpt from a report on their progress:

A partnership between government and private sector will kick off a project that will test the viability of using esterified waste vegetable oil on diesel-run vehicles.

The Department of Energy, Department of Science and Technology, Department of Environment and Natural Resources, USAid, Jollibee, Seaoil and E-way54 have agreed to test four vehicles using diesel with 4% esterified waste vegetable oil within 6 months.

DENR and Seaoil will provide the vehicle and pumping station while Jollibee will supply the used oil coming from their various stores in Metro Manila.

Engineers involved in the project say in case its found out to be feasible, even used oil from households can be used as biodiesel blend for fossil diesel.

But Energy Secretary Jericho Petilla says before embarking on a national policy to encourage all households to save and collect their used oil, the study must first establish the viability and safety of the new source of biodiesel so that car owners will not be afraid to use it.

(Read the rest of the article here)

Another Waste to Energy Option: Converting Waste Plastic to Diesel

In addition to Waste Cooking Oil to Diesel, another alternative energy option I like is the conversion of plastic into diesel and it’s not as costly as one would think it is.

Jetijs on Energetic Forum says a bit about the cost of waste to energy devices:

Some Japanese companies manufacture such devices, but their prices for this size unit is more than 100 000$, our home made device cost us 900$ max.

Jetijs actually had a waste to plastic reactor made and this is what it looks like:

Waste Plastic to Diesel Reactor (Image from http://www.energeticforum.com/renewable-energy/7040-how-turn-plastic-waste-into-diesel-fuel-cheaply.html)

Jetjs says the fuel yield from the conversion of plastic is typically 95 liters diesel from 100 kilos of plastic. Â The plastic to diesel reactor uses electricity to heat up plastic and break it down into diesel and paraffin. Â Apart form the cost of building a reactor and the cost of plastic, the really major expense here is electricity — but this can be off-set by using some of the diesel converted from plastic to fuel a generator.

Here’s how Jetjs describes the waste plastic to diesel conversion:

The process is really simple, it is similar to how alcohol is made.

If you heat plastic waste in non oxygen environment, it will melt, but will not burn. After it has melted, it will start to boil and evaporate, you just need to put those vapors through a cooling pipe and when cooled the vapors will condense to a liquid and some of the vapors with shorter hydrocarbon lengths will remain as a gas.

The exit of the cooling pipe is then going through a bubbler containing water to capture the last liquid forms of fuel and leave only gas that is then burned.

If the cooling of the cooling tube is sufficient, there will be no fuel in the bubbler, but if not, the water will capture all the remaining fuel that will float above the water and can be poured off the water.

On the bottom of the cooling tube is a steel reservoir that collects all the liquid and it has a release valve on the bottom so that the liquid fuel can be poured out. Here are some pictures to better understand the design:

This device works on electricity (3 phase), it has six nichrome coils as heating elements and consumes a total of 6kW (1kW each coil). The coils are turned on and off by three solid state relays, one for each phase, the relays are controlled by a digital thermostat with a temperature sensor just a bit below the lid, so that the vapor temperature can be monitored.

You need to heat the plastic slowly to about 350 degrees and just wait till it does the magic. Our device has a capacity of 50 liters and can hold about 30 kg of shredded plastic. The process takes about 4 hours, but it can be shortened considerably by tweaking the design a bit.

We made calculations, it turns out that our device, as crude as it is with much room for improvement, can produce diesel fuel at a cost of 17 US cents a liter, that is when only plastic and electricity is considered.

If you want to read more about this, here’s the link to Jetjs’ entry in Energetic Forum.