PORTAL: Trailblazers - 2014 Volume 3 No. 3 3RD QUARTER ISSUE

Born into the Kankana-ey Igorot tribe in Besao, Mountain Province, deep in the hinterlands of the Cordillera, Rufino Bomasang’s curiosity for the mountains started when he was a young boy playing on the ridges and slopes of his natural environment.

Like all other highlanders, he familiarized himself with the terrain as he traversed one mountain to another to gather firewood. Although his parents were simple farmers, the American Episcopalian missionaries, who had been working in Cordillera since the 1900s, convinced them to give their children good education.

After graduating at Besao Elementary School, a public school, he studied at St. Mary’s School (SMS) in Sagada, a school set up by the missionaries in 1912, which later became one of the best high schools in Northern Luzon. The quality education he obtained at SMS in turn enabled him to pass a competitive examination that qualified him for college scholarship at the University of the Philippines, where he ultimately obtained a degree in mining engineering in 1963.

After a one year management training program at Procter and Gamble Philippine Manufacturing Company, he then went on to explore for and mine gold, copper and other minerals all over the country from 1964 to 1976. His last job was Resident Manager of a barite mine in Mansalay, Oriental Mindoro, where he says he was quite literally “king of the mountain.”

But while he was living his dream, there was something else that he was fated to do. At the height of the global oil crisis in 1976, Bomasang’s career unexpectedly shifted to what would define the rest of his life.

He was called to serve the government as a Manager for Development and Production in the Energy Development Board (EDB) along side an appointment as an oil executive of Petrophil Corporation (now Petron), which in turn seconded him to the EDB. He was tasked to lead the development and utilization of Philippine coal in furtherance of the overall national objective of energy self-reliance through the development of indigenous energy resources.

The challenge was immense and addressing it required a long term commitment. Bomasang ended up serving in the public energy sector for almost three decades. He served successively as Chief of the Coal and Uranium Division of the Bureau of Energy Development under the old Ministry of Energy, General Manager of PNOC Coal Corporation, Acting Executive Director of the Office of Energy Affairs, Undersecretary of Energy, Senior Adviser to the Philippine Gas Office, and finally President and Chief Executive Officer of PNOC Exploration Corporation (PNOC-EC). After retiring from PNOC-EC in 2004, he continued being involved as consultant, senior adviser, or board member of various private energy companies (e.g. First generation Holdings, Taiwan Overseas Mining, Sultan Energy Philippines, Semirara Mining Corporation, Otto Energy Limited, and Philcarbon, Inc.). In 2011, President Noynoy Aquino appointed him to the board of PNOC-EC. Thus, as of 2014, he had served under all six Philippine presidents from Marcos to Noynoy Aquino.

Now in his mid-70s, one would think that he has had enough of solving our energy woes and is ready to throw in the towel. On the contrary, the sturdy grandfather of two continues to work as Non-Executive Director of Otto Energy Ltd., an Australian oil and gas exploration and production company; Non-Executive Chairman of Otto Energy’s Philippine subsidiary; and Chairman of PhilCarbon, Inc., a renewable energy company. In addition, he continues to serve as board member of various church-related educational institutions (e.g. Trinity University of Asia, Brent International School Manila, St. Mary’s School of Sagada, All Saints Mission School in Bontoc, etc.).

In this candid and quite bracing interview, Portal attempts to make sense of our country’s complex energy situation through the knowledge and experience of a man who has passionately stood behind its long-term growth and development.


RUFINO BOMASANG: It started by accident. In 1975 and 1976, I was working for Frontino, Inc., a company managing the mining operations of other companies all over the country. I was then the Resident Manager of a barite mining and processing operation in Mansalay, Oriental Mindoro.

Among our customers was the Philippine National Oil Company (PNOC), which was using barite in its oil drilling operations in the Cagayan Valley. PNOC was then a newly established company set up by the Marcos government to take the lead role in developing indigenous energy resources in response to the the global oil crisis in the 1970s. Geronimo Velasco, a highly successful business executive in the private sector, was appointed by then President Marcos as Chairman and President of PNOC. Marcos also set up a new government agency, the Petroleum Board, which was later expanded into an Energy Development Board (EDB), with a mandate to promote the development of indigenous energy resources not only through PNOC, but through technically and financially qualified private companies. Velasco was also appointed Chairman of the EDB. To accelerate the development of indigenous coal, a Coal Task Force was organized and headed again by none other than Geronimo Velasco.

In mid-1976, Velasco and his team in the Coal Task Force went to Semirara Island, then known to have substantial coal resources, but due to bad weather the team could not land in Semirara. They ended up in Bulalacao, Oriental Mindoro, a town immediately South of Mansalay. Mr. George A. Scholey, Executive Vice President and my immediate boss, who was a mining engineer and also a pilot, then fetched Velasco and his team by helicopter to show them our barite operations. Velasco was after all also Chairman and President of PNOC, our major customer. I was introduced to Velasco and his team and I thought I did a good job of briefing them on our mining and processing operations, as PNOC continued to buy our barite product.

Little did I know that a month later I would be asked to come to Manila to be interviewed by officials of the EDB, including Velasco himself, for a management position in the EDB. I was initially hesitant and was asking myself why I should I join the government, where compensation was very low, when I was already some sort of king of the mountain in Mindoro. Velasco himself, however, said I would not be hired as a government employee, but as a Manager in Petrophil Corporation (now Petron Corporation) and then seconded to the EDB. I was then offered a compensation and benefit package that was much better than what I was getting in the mining industry. With such an offer and considering that my joining EDB would enable me to have more time with my family, I accepted the position of EDB Development and Production Manager.

I was asked to join because of my broad background in the mining business. At that time the only known indigenous energy resource that could be developed soonest as an alternative to imported oil was coal, which has to be mined. EDB, however, didn’t have an experienced mining engineer in the organization and I was told that they needed a mining engineer to professionalize the Philippine coal industry. That was the mandate given to me. At that time, it was something new to me as my previous experience was mostly in copper and gold and I had not even seen a coal mine. I had not even seen coal yet I was, however, willing to work hard and learn new things. I told myself that I could always go back to the private metal mining industry, if things did not work out well. It never dawned on me that I would remain in the energy sector until retirement as a public official and even continue my involvement in energy development in the private sector up to now.


BOMASANG: The challenge was to develop indigenous energy sources as soon as possible as a replacement for imported oil. Imported oil then (and even up to now) has been imported mainly from the Middle East, a politically highly volatile region. In 1976, the only major indigenous energy source being tapped was hydro. At that time, the Philippines had not discovered any commercial oil. We knew, however, that there was coal in Cebu and in Semirara.

It was a question of being able to expand coal production in a manner that is safe and economical. The other known indigenous energy resource was geothermal. Geothermal development, however, was just starting and was not yet drawing much attention. Thus, the most immediate opportunity for replacing imported oil was in accelerated coal development and utilization.


In 1976, this country was only producing 100,000 tons a year. The following year, we practically tripled that by expanding production in Cebu. By 1983, the country was producing over one million tons per year with Semirara starting to operate. By then, the Philippines was already producing oil in offshore Northwest Palawan. An even bigger success story, however, was in the geothermal sector, with the Philippines having become the world’s second largest user of geothermal energy for power generation (second only to the United States) by the early 1980s.


To me, my most important contribution was my role in the development of the Malampaya gas project, which currently fuels almost fifty percent of the power requirements of Luzon and contributes to the national coffers about one billion US dollars a year while saving at least another one billion US dollars in forgone oil importation. Most importantly, it ushered in the era of clean natural gas Of all the senior executives of DOE and the companies that have participated in the project (i.e. Occidental Petroleum, Shell, Chevron, and PNOC-EC) I was the only one who had been involved from gas discovery in 1989 to project commissioning in 2001. From 1989 to 2004, I had been involved as (a) Deputy Executive Director of the Office of Energy Affairs (OEA) when Camago gas was discovered by Occidental Petroleum (Oxy) in 1989; (b) Acting Executive Director when the Malampaya gas field was discovered in 1992; (c) Undersecretary of Energy when appraisal drilling was done from 1993 to 1994 confirming that there was gas in commercial quantity and the market for natural gas was defined;(d) Senior Adviser to the Philippine gas office, which prepared the initial gas regulatory guidelines and facilitated negotiations between gas sellers and gas buyers; and (e) President/CEO of PNOC-EC, who convinced Shell to bring in PNOC-EC as its local partner. With my long involvement in the energy sector in various senior positions, I helped convince every new Secretary of Energy (which kept changing with every new administration) and other senior government officials of the strategic importance of the project and got all of them to support the project. I remember that when Teopisto Guingona, an avowed nationalist, was appointed as Executive Secretary under President Ramos, he called me to explain what the Malampaya poject was all about. When I explained to him that it was a project where Shell and Occidental Petroleum, both foreign companies, provided all the capital and technical/managerial expertise, but government gets 60 % of the net proceeds, he immediately said that it was a very good project, which should be the model for other similar projects.


BOMASANG: As I said earlier, we had known that there was coal even before the energy crisis of the 1970s and it has been a matter of expanding local coal production, particularly at Semirara (the country’s largest coal field), where further exploration had led to an exponential expansion of the coal reserves. Currently, Semirara produces almost 8 million tons a year, 100 times the Philippine coal production in 1976 when we started to accelerate the development of Philippine coal. This in turn has been made possible because of the conversion of cement plants from oil firing to coal firing and the setting up of coal-fired power plants. In the oil and gas sector, several oil discoveries were made in the late 1970s and early 1980s as a result of the service contract system which made it possible for foreign companies to participate on a majority basis. However, they were mostly small fields and not all were developed. With the lack of major discoveries, aggravated by the political unrest during last few years of the Marcos administration, most of the exploration companies pulled out in the mid-1980s.

When the Cory administration took over, the newly created Office of Energy Affairs (OEA), which replaced the Ministry of Energy, launched a worldwide campaign to bring back the foreign oil companies. In a road show in Texas attended by senior executives of the major oil companies, President Aquino herself agreed to be the principal speaker. In response, some oil companies did come back and among them was Occidental Petroleum (Oxy), which decided to focus on the deep water. Lo and and behold, in 1989 Oxy discovered the Camago gas field, the first major hydrocarbon discovery in the Philippines. I was very excited as I was then the OEA’s Deputy Executive Director.

Oxy, however, did not have the expertise in deep water gas development so they invited Shell. We approved the entry of Shell and approved their work program. Shell initially opted to drill Iloc, which was potentially an oil play, but Iloc turned out dry. Thus, Shell decided to drill the Malampaya gas prospect adjacent to Camago. Due to the prohibitive water depth and the long distance from the Luzon market, Camago gas was not big enough to be commercially viable and there was a need to find additional gas in the adjacent Malampaya structure. In May, 1992, just after I had been promoted to head the the OEA as its Acting Executive Director, the Shell-Oxy joint venture struck a gas field which was much bigger than Camago and with an oil leg underneath.


Yes it was and I remember we had a very big celebration at the Hotel Intercontinental. It was not only the biggest hydrocarbon discovery in Philippine history, but its size was potentially world class. By that time, I was no longer just a mining engineer as my involvement had been expanded into the rest of the energy spectrum. I was no longer just promoting coal, but all indigenous energy resources. The discovery of a world class gas field during my watch as the head of the energy agency was extremely gratifying for me professionally. After all, the dream of every mining engineer is just to put up a new mine and here I was involved in a project potentially much bigger than a mine and of utmost importance to the country. Here was a project that could usher in a new era of a new indigenous energy source much cleaner than coal.

While a world class gas field was discovered, we realized that it was going to be a very long term project. We discovered gas in Palawan but how do we use it? If we discovered oil, we can just load it in a tanker and sell it anywhere. But gas? What do you do with gas? The main use we were looking at was in the power sector. But where are the power plants? Where is the demand for electricity? It’s not in Palawan but in Luzon. How do we bring the gas? We had to build a long pipeline—a five hundred-kilometer pipeline underwater from Palawan all the way to Batangas. But before that, even after when we discovered Malampaya oil and gas, we were not very sure that it could be done commercially. We had to drill additional wells to establish that there is enough gas to supply a market that was big enough to make the project viable considering its distance and its location in very deep water. At that time it was the deepest gas field in Southeast Asia. So it took time.

It took two years to do the appraisal drilling and concluding that we have enough gas. Then the issue of who is going to use it and who is going to build the power plants came up. The Lopez group of companies was interested in putting up the entire power market needed to make the project viable. However, NPC was also interested in providing the entire gas market. Then, newly appointed Energy Secretary Francisco Viray made the solomonic decision of allocating the market equally to both the Lopez group and NPC. The former decided to put up their plants at San Lorenzo and San Pascual, while the latter decided to put up at Ilijan. The sellers of the gas (Shell and Oxy) had to negotiate a gas supply and purchase agreement with the buyers for about three years. By 1998, just before the end of the Ramos administration, all the contracts were signed and construction of the production facilities and laying of the offshore pipeline started soon after the new Estrada administration started. By October 2001, the entire Malampaya gas-to-power project was commissioned (this time under the new GMA administration), gas started flowing, and in January 2002 full commercial operations started.

PNOC was initially not part of the original consortium. It was just Shell and Oxy. PNOC had wanted to participate during the Ramos administration when I was Undersecretary and Dr. Francisco Viray was Secretary of Energy. By then the gas field had been appraised to be of commercial quantity enough to fuel 3000 megawatts of power generating capacity for 25 years. PNOC asked the DOE to mandate their participation. We told PNOC, however, that we could not legally mandate their participation. The policy then and now has been to promote maximum private sector participation. But we said, “if you can contribute something to the project, why not?” So they talked to Shell, but unfortunately they were not able to come to terms.

Little did I know that I would soon be appointed as President and CEO of PNOC-EC. I subsequently talked to Shell and while I reiterated my original view that government can not legally mandate PNOC’s participation, I convinced them that it was in their interest to bring us in as a paying participant. They finally agreed and gave us 10 percent participation. That was about US$200M project for us. Using PNOC’s internally generated funds and money from a syndicate of banks, we became a 10 percent participant in this huge project. That 10 percent participation, however, currently constitutes at least 95 % of PNOC-EC’s net income and has it enabled PNOC-EC to consistently give substantial dividends to PNOC and the national government over and above the government’s 60% share of the of the net proceeds.


BOMASANG: I understand from DOE that it’s going to be depleted by 2024. The challenge for this country therefore is to find the next Malampaya. If we don’t, we will be dependent on imported Liquified Natural Gas, or LNG, which could be very expensive.


BOMASANG: Yes. While I consider Malampaya as the country’s most important indigenous energy project, the other very important development has been the expansion of indigenous coal production and utilization. We still need other alternatives to imported oil and coal has been and remains as a major alternative, particularly with the substantial expansion of production at Semirara. Natural gas, oil, and coal are all fossil fuels that are ultimately depleted, but they all play important roles. For the transport sector, the most convenient fuel is still oil, while coal is the least cost option in power generation. However, where there is available natural gas and where the price is competitive, it is the preferred fuel in power plants as it is the cleanest of the fossil fuels. To me, you need all of these, most especially if they are available within the country.


BOMASANG: There is no question that the burning of fossil fuels (especially coal) has some adverse environmental impacts, which should be eliminated as much as possible. In this connection, a lot has already been accomplished in the development of clean coal technologies, which have substantially minimized the emission of pollutants (e.g. solid particulates and oxides of sulphur and nitrogen). In so far as climate change is concerned, one of the contributory factors is the release of carbon dioxide from the burning of fossil fuels. Research is currently on-going on carbon sequestration and I think it is essentially a matter of economics. One of the mitigating measures of course is reforestation and this is why responsible energy and mining companies (e.g. Semirara Mining, Energy Development Corporation, PNOC, etc.) are among those actively involved in reforestation. Having said these, however, I think we should put things in perspective before we start condemning those involved in extracting and using energy and mineral resources. We use cell phones and other hi tech gadgets. These are all made of materials that had to be mined. We drive cars, mostly fuelled by by oil, which has to be extracted from the bowels of the earth. And of course we are heavily dependent on electricity, which is produced mostly from the combustion of fossil fuels. We live in modern homes made of concrete, the ingredients of which had to be mined. In other words, mining is what contributed to all our modern conveniences. Are you saying that this is all bad? If so, then we should go back to the caves. Is that the life that we want?

Let us not forget that the developed countries have been burning fossil fuels and releasing greenhouse gases into the atmosphere for over a century. It was precisely the use of this concentrated energy in fossil fuels that enabled them to quickly develop their economies. This is why many policy makers in third world countries, particularly China and India, are questioning why the developed countries, who have been emitting most of the greenhouse gases in the atmosphere, now want to limit the use of said concentrated energy by third world countries, who need to develop their own economies, particularly by providing affordable electricity. Thus, China and India, the world’s two most populous countries, continue to burn lots of coal to provide affordable electricity to their people and help in poverty reduction, which is their top priority.


BOMASANG: Considering that the amount of coal burned in the Philippines is a very small fraction of the coal burned in China, India, and many developed countries (e.g USA, Japan, Germany, etc.), even the complete stoppage of coal burning in the Philippines will hardly make a dent on the reduction of greenhouse gas emissions. Only the reduction of coal use in these major coal consuming countries will really matter and at the moment it looks like they are still going to continue burning substantial amounts of coal. The good news, however, is that these countries are at the forefront of the development of clean energy technologies to eliminate, or at least substantially minimize, the adverse environmental impacts of the combustion of fossil fuels, especially coal. They are also taking the lead in addressing the problems of global climate change. For us in the Philippines, some environmental groups want to totally ban the setting up of new coal fired power plants, which is also what we need to do to keep the cost of electricity reasonable. However, they are barking at the wrong tree because as earlier mentioned our contribution to global climate change is negligible considering the size of power plants being proposed in the Philippines. China puts up 1,000 megawatts of coal-fired power plants every week. That’s more that 50,000 megawatts per year. India is almost like that. The United States and other developed countries also continue to put up coal fired power plants. Frankly, therefore, I don’t see the wisdom of banning coal-fired power plants in the Philippines when most other countries continue to depend on coal.

Let’s also not forget that the Philippines has already made contributions to the reduction of greenhouse gas emissions. We pioneered the geothermal industry in Southeast Asia and as early as 1984, we were already the second largest producer of geothermal energy in the world, next to the US. Geothermal has very little adverse environmental impact and it hardly emits any greenhouse gas. We developed Malampaya. It displaced 2700 megawatts of coal-fired power generation. And we continue to look for the next Malampaya. So as a country, I think we are doing our part in terms of providing affordable energy for our people, while doing our share of protecting the environment.


BOMASANG: I agree that we have very high electricity rates compared to our neighbouring countries, but it is not really an apple-to-apple comparison. Most of our neighbours provide subsidies to their power sectors, while we in the Philippines have stopped subsidizing the power sector. I also think that our electricity rates would have been much higher if we did not put up coal-fired power plants and natural gas plants and continued to depend on oil-fired plants. But that is just the cost of generation. Remember when you talk of your ultimate electricity bill, it’s not just the generation cost. There’s transmission, distribution, and other costs. The transmission and distribution losses in this country are very high due among others to antiquated and inadequate transmission and distribution infrastructure.

Furthermore, although the private utilities are managed by professionals, I understand that many rural electric cooperatives are inefficiently managed because of unqualified board members and managers whose primary qualifications are their being friends, or relatives, of local politicians who appointed them.


BOMASANG: Yes, as we are able to reduce our dependence on imported oil, particularly if we are able to find cheaper gas (e.g. onshore gas, gas in shallow waters, etc). Malampaya gas is not cheap because it’s in very deep water and transported over a very long pipeline. However, the government gets a big share out of the net proceeds from the sale of gas and I think the government can and should use part of its share to reduce electricity rates. For the immediate future, the reduction of transmission and distribution losses and more efficient management of the electric cooperatives, especially in the rural areas, could help reduce electricity rates.


WHICH ONE HAD THE BEST PROGRAM FOR ENERGY? BOMSASANG: The situations were very different. Thus, I can not make an apple- to-apple comparison. Nonetheless, I think we should credit the Marcos administration for putting up the policy and financial structure, particularly through the introduction of the service contract system, that effectively attracted qualified local and foreign companies to expand and accelerate the development of indigenous energy resources. Such system has remained in place up to now and has led to the expansion of coal production, discovery and development of indigenous oil, and discovery and development of the world class Malampaya gas field. In the case of Malampaya, for example, I remember that Mr. Dre Boon, then the Managing Director of Shell in the early 1990s, said that if the Malampaya field were located in Indonesia, or Malaysia, Shell would not develop the field under said countries’ stiff contractual terms, given the water depth and the distance from the Luzon market. On the other hand, under Philippine contractual terms stipulated in PD 87 (which was issued by Marcos in the early 1970s), Malampaya was a viable project for Shell and Oxy.

One good thing is that the succeeding administrations (Ramos, Estrada, and GMA) all supported the development of Malampaya gas, which was discovered during the Cory Aquino administration. This has not been the usual practice in other big projects, which are often delayed, or even stopped, with every change in administration due to changing policies and directions. In the energy sector the energy policies, particularly in energy development, that were laid down by Marcos has been found to be useful by the succeeding administrations and are still intact.


In 1976, it was the global oil crisis. The Marcos administration handled that very well and we did not have to go into the rationing of gasoline. During the Cory administration, we had the power crisis. You have to give credit to the succeeding Ramos administration for addressing that very effectively through innovative schemes, such as BOT, BOO, BTO, etc. Using said schemes, the Ramos administration was able to bring in the private sector into power generation and many plants were built not just to address the power crisis, but to meet the projected growth in demand. Unfortunately, the projected growth did not materialize because of the Asian Financial Crisis. Kaya lumabas sobra sobra ang energy supply natin at nagiging mahal. The next energy crisis is now, with this shortage of power in Mindanao and the impending power shortage in Luzon starting next year.


BOMASANG: I think the government has been able to convince private companies to put up the necessary power plants in Mindanao and they are now being built. A lot of these are coal-fired power plants, but you know putting up a power plant takes time. It’s not like a faucet that you just turn on and off. It takes at least 36 months. So the crisis will continue for the next several months.


BOMASANG: That is true but one of the reasons why no action was taken was that because the people of Mindanao have been used to cheap power from hydro, they opposed the building of new coal fired power plants, which would increase their power rates. Now they realize that there is no other choice as high cost of electricity is still cheaper than no electricity. Ganyan ang sitwasyon sa Mindanao.


In Mindanao yes there is. And the reserves in Luzon and Visayas are also thin. Plants are being built in Mindanao, but it will still take some time. As Secretary Petilla has pointed out, the problem in the coming years will be in Luzon and the Visayas.


BOMASANG: They are all being considered. By the way, the Philippines is the pioneer in wind power in Southeast Asia. The wind farm in Ilocos Norte is in fact the first one, but we are only talking of 40 megawatts. Maliliit. We need hundreds of megawatts. And that is why whether we like it or not, we still need to put up coal-fired power plants. The main drawback to wind farms is that the wind is not always there. You generate electricity only when the wind is blowing. What if there is no wind? That’s why you need a base load. You need coal-fired power plants and geothermal plants where geothermal energy is available. Coal plants, however, are still the most cost effective base load plants. In the past, however, they have been the least environment friendly and this is is why there’s an important role for clean coal technologies. It enables us to use coal in a manner that minimizes the adverse environmental impacts.


BOMASANG: First, the emission of solid particulates can now be practically eliminated with the use of modern scrubbers. And then coal contains some sulphur and when coal is burned that sulfur becomes sulfur dioxide, which when released into the atmosphere, reacts with water and becomes sulphuric acid. That’s why there’s what’s known as acid rain. That is practically eliminated through the use of limestone in fluidized bed plants, or in conventional plants equipped with modern flue gas desulfurization (FGD) systems. The limestone reacts with sulfur dioxide and forms synthetic gypsum, which is used in the construction business. Thus, what was once a pollutant is converted into a useful product. Then, there is nitrogen oxide, another pollutant emitted during coal combustion. There are now less of them being emitted because of lower temperatures in power plants using fluidized bed technology, especially the circulating fluidized bed (CFB) technology. Most of the new plants in the country use CFB technology. There are also technologies being developed to improve the efficiency of coal fired power plants so that there is much less carbon dioxide (a greenhouse gas) released per unit of electricity produced. All of these technologies are collectively termed clean coal technologies.


BOMASANG: The old plants can still be improved by installing anti-polluting devices, such as scrubbers. However, the CO2 emission from coal-fired power plants, gas-fired power plants, or oil-fired power plants, which abate global warming and climate change, can’t be controlled and it is released into the atmosphere. There are ways now to recover them, such as carbon sequestration but it’s still very expensive. When they sequester it, they store it underground. The technology is currently still being developed in some countries. There is, however, a natural way of storing carbon dioxide. This is through reforestation. We should therefore plant as many trees as possible because they absorb carbon dioxide. Overall, I’m hopeful that with the advances in clean coal technology and other green technologies green we will be able to substantially minimize the adverse environmental effects of burning fossil fuels.


BOMASANG: There has already been a substantial lowering of pollutant emissions from coal-fired power plants, not only in the developed countries but in the Philippines as well. They are much cleaner now than 10 or 15 years ago and they will be even much cleaner in the future. In parallel, we should be developing renewable energy resources to displace plants burning fossil fuels as much as possible. Renewable energy sources are not only much more environment friendly, but do not get depleted like fossil fuels.


BOMASANG: Of all the renewable energy sources, I would go for wind in the immediate future. As earlier mentioned, Ilocos has already done that and they are expanding their wind farms. The country has a very large wind potential—70,000 according to the National Renewable Energy Laboratory of the United States. If only 10 percent of that is tapped, that’s 7,000 megawatts. But, still it’s an intermittent source of energy. You need to link it with base load plants. Solar is another one. We have a lot of sun. Like wind, it’s intermittent. It is also still relatively expensive, but as the market expands and as the cost of manufacturing panels goes down, it should ultimately become a viable option.


BOMASANG: Yes and I think the government is putting up the necessary institutional set-up (e.g. net metering scheme) to be able to encourage people to put up solar panels even in their homes as is done in Germany. They put up solar panels and during the day they generate a lot more power than what they need so they even sell to the grid. When the sun is not there and they are not generating enough, they make use of the grid. You know, I have a solar panel in my home. We put it up in 2010 and it was expensive. During the recent typhoon Glenda, nagka-brownout, walang ilaw yung iba pero kami may ilaw. It’s just a panel that converts sunlight directly to electricity. We just had lights, but that was good enough for us. If we put up solar panels all over the roof, it could probably supply all of our needs. It’s still very expensive, but under the net metering scheme it might be worth doing it in the future.

Let us take wind for example. Twenty years ago, it was also expensive. In the last 10 years, however, with technological advances and expansion of the market, it’s now almost competitive with fossil fuel. However, it is still intermittent and needs to be connected to the grid, or any other decentralized power system with base load plants.


BOMASANG: That can happen. There are countries doing that. As we are able to put up more and bigger plants besides coal-fired power plants, the users, especially the big users, can in fact choose their suppliers. A major consumer in Mero Manila can for instance have a direct agreement with a wind farm somewhere in Luzon as long as it’s connected to the grid.


BOMASANG: Nuclear energy in my view is safe provided it is run by experts and provided you are able to find a place to dispose of your waste. We do not have the expertise. We have to train people like what we did in the 1980s. We have to train people because the ones we trained are no longer here.


BOMASANG: Not quite because a lot of people are afraid of nuclear power. Can you sell it to the public? In a democratic country like ours, you have to convince the public. You know there are some congressmen trying to propose rehabilitating the Bataan nuclear plant. Technically, it makes sense but in actual fact, it’s going to take a long, long time because you have to train people. Of course you can get foreigners to run it. The bigger problem there is convincing people. If you look at the fatalities in nuclear plants all over the world, it’s still nothing compared to fatalities in coal mines. So you know it’s good but can you convince the public? We also need the discipline to run and maintain the power plant.


BOMASANG: The most important lesson that I have learned is that energy projects are mostly long-term and they need continuity in government policies. You see we are a democratic country and we change administrations every six years. In a lot of projects, whenever you have a new administration, you have new directions and new policies. You cannot do that in the energy sector. You have to be consistent. The Malampaya project is a classic example of a project that succeeded. It was successful largely because of a continuity of policies and support by every administration from the Cory Aquino to GMA, even if the policies were set up during the Marcos administration.

The other lesson is that in the high risk business of oil exploration, we cannot afford to be very jingoistic and nationalistic. We still need the big boys, the big foreign oil companies (e.g. Shell, Exxon-Nobile, Chevron, etc.) because oil exploration is essentially high-stakes gambling. The big boys are the ones prepared to take the risks in a country like the Philippines, where the chance of success is only 1 in 10. That simply means one has a 90 percent chance of failure.

For instance, Exxon Mobil, the world’s largest oil company, drilled here in the Philippines two years ago in the Sulu Sea. They spent almost US$500 million and they found some gas but it was not big enough so they simply pulled out and went to other countries. It’s indeed high stakes gambling. What you need are companies with deep pockets and are involved globally. So that, tataya sila dito, pero tumataya din sila sa Middle East o ibang lugar na mas mataas ang chances of success, all over the world. They may not discover anything here but they probably found something there in the Middle East, which enables them to recover all of their costs and losses. That is what we need. Without them nobody else would drill especially in deep waters where one exploration well can cost 100 million dollars, or more. Even the big Filipino companies (e.g. the Ayalas, San Miguel, Lucio Tan, etc.) will not go into a business where there is 90 percent chance of failure. It’s only the big oil companies.


BOMASANG: Of course I would encourage them. Energy is so important that it impacts the whole gamut of industry, the whole Philippine economy. If you are able to contribute something to reduce our dependence on imported oil, you can say you have done something concrete for our country. You need not work in government. You can be in the private sector, but you are in a company that made a difference in the lives of Filipinos.


BOMASANG: In a way, the main challenge that we face today and in the immediate future is not much different from what we faced during the first oil crisis in the 70s. Then we were 92% dependent on imported energy. We have since then increased our energy self-sufficiency from 8% in the 70s to about 60% today. But there’s still that 40% imported energy and that is 40% of a much bigger number. Furthermore, we are still heavily dependent on the Middle East (which has become even more volatile politically) for our oil requirements. For energy supply, particularly for the transport sector, the challenge is still to reduce our dependence on imported oil. For power, the challenge is to be able to provide adequate power at an affordable cost to our people because the cost of power is very high. For the future, the long term challenge is to tap our vast renewable energy resources at affordable costs and lessen our dependence on depletable fossil fuels.


As I said, I am also a firm believer in renewable energy. I think even as we need to put up clean coal-fired power plants we should at the same time be pushing for the development of renewable energy resources. Thus, I am also Non-Executive Chairman of PhilCarbon, which is actively involved in developing renewable energy resources (e.g. wind, biomass, mini-hydro, etc.). We haven’t taken off the ground yet, but we are in the planning stage. With the cooperation agreement we recently entered into with Megawide, I am hopeful that some of our projects can get off the ground soon.

Outside the energy sector, I play a lot of golf. I used to play a lot of tennis until 2004 when I retired from PNOC-EC. After I retired, I shifted to a more relaxing and less strenuous game, which is golf. I started at the late age of 64, and now I am already 74, but I still enjoy playing golf. I try to play about twice a week.

Apart from playing golf I’m also busy trying to help schools up in the Cordilleras.


BOMASANG: I am a bonafide indigenous person, or IP, and am proud to say I am a Kankana-ey Igorot. You know, our forefathers never surrendered to the Spanish crown, but they traded with the lowland Filipinos (e.g. Ilocanos and Pangasinenses). According to William Henry Scott, a foremost authority on Cordilleran history and Pre-Hispanic Philippine history, the Ilocanos used to call our people I-Golot (from the mountains, or highlander).

I studied seventh grade and high school at St. Mary’s School (SMS) in Sagada, which was set up in 1912 by the American Episcopalian missionaries. It was a small school but became one of the best schools in the Philippines. In fact in 1962, an examination was given to more than 1500 Philippine private and public schools and St Mary’s school ranked No. 9 in the entire Philippines. We were privileged to be taught by the Americn missionaries, all of whom were excellent educators, and the Filipino teachers who had earlier been taught by the Americans. Unfortunately, when the Philippine Episcopal Church became independent of the Episcopal Church in the US, the missionaries left, together with their financial support for the school. The school’s facilities soon deteriorated, the good teachers left for better salaries in public schools, enrolment declined, and the school was about to close in 2002.

Under the leadership of Mr. Frank Longid, an SMS alumnus who had become a successful businessman, the St. Mary’s School Alumni Association (SMSAA) decided to incorporate the school in order to raise funds and make the school survive. Unfortunately, Frank died in 2003. Upon his wife’s insistent appeal, I agreed to take over the leadership of the alumni, fast tracked the incorporation process, and in November 2003, I was elected Chairman of the newly formed St. Mary’s School of Sagada, Inc.(SMSSI). Before I accepted the chairmanship, I told the stakeholders (e.g. diocese, alumni, Sagada community, etc.) that I was not interested in just keeping the school alive. My goal was to regain the school’s reputation as one of the best schools in Northern Luzon, provided I had the stakeholders’ full support.

I was chairman of the SMSSI Board of Trustees from 2004 to 2010. Thanks to the support of the alumni, especially the US based St. Mary’s School of Sagada Alumni and Friends Association (SMSSAFF), and my corporate friends in the energy and mining sectors, we were able to raise funds to upgrade the school’s physical facilities (e.g. the rooms, library, laboratories, etc.), put up new facilities (e.g computer laboratory, covered gymnasium, etc.), and even help defray teachers’ salaries until we were able to raise tuition fees to fully cover salaries. Then in 2005, we got no less than the newly retired assistant principal of International School Manila, Mr. Dennis Faustino, who liked to live in Sagada, and he became the headmaster.

He is an excellent educator and he was able to revamp the faculty and introduce a new curriculum—a student-centered curriculum. It’s a curriculum that is now setting the pace in the Cordilleras. Instead of the usual traditional learning methods like lectures, the student-centered curriculum is more of discussions. Their desks are shaped like a hexagon so a group of six can face each other and have a group discussion. Effectively, the school is now the model high school in the Mountain Province.

Because of our success at St. Mary’s School, we have ben asked to help All Saints Mission Elementary School in Bontoc, another school set up by the Episcopalian missionaries in the early 1900s. Once again, Dennis Faustino was made head master and I was elected chairman of the newly incorporated All Saints Miission School of Mountain Province, Inc. We are still in the early stage of rehabilitating and expanding the school, but we are hopeful that we can replicate what we did at SMS, given the full support of the Bontoc community, the alumni, and other stakeholders.

Here in Manila, I am also board chairman of Brent International School in Mamplasan, Laguna, board secretary of the Trinity University of Asia in Quezon City, and board member of Holy Spirit Elementary School in Taguig, all of which are also church-related schools.

Together with my continuing involvement in energy development and my golf game, these schools keep me busy.

BOMASANG: Education has meant a lot for me. Our forefathers and my parents were very poor and if I didn’t go to school, I wouldn’t be where I am now. My parents were poor peasants up there in Cordillera. The missionaries convinced them that if they wanted better lives for their children, they needed education. That’s why they sacrificed everything to send us to school. I couldn’t afford to go to college, but because of my training in St. Mary’s School, I was able to pass with flying colours the competitive examination given by the Commission on National Integration, which then sent me to UP. After I finished college, I got a job and I was able to help my parents send my younger sisters to school. Now they have children who are all professionals. Education is indeed the greatest equalizer, especially in the Philippines where the great majority of people are poor. Education not just enables poor people to earn a decent living, but, even more importantly in my view, liberates their minds and frees them from the bondage of ignorance and superstition.

Senior age has not diminished Rufino Bomasang’s wisdom and strong passion to respond to any challenge and improve the lives of Filipinos. In his 74 years, he has never backed down on a difficult task: be it hours of climbing a mountain, committing to decades of work to develop a landmark gas discovery, looking for renewable resources or revitalizing his alma mater at the age of retirement.

He speaks of his Kankana-ey Igorot roots with much pride, valuing how they have preserved to this day their culture and way of life within the “dap-ay”. Although he has opened himself to modern day comforts, his ingrained knowledge of sustainable living inspires him to continue seeking for cleaner energy as well as enriching the human mind.

A man like him who is used to exploration knows that while the future is still uncertain, a glimmer of hope is all we need to take that chance to make it better.


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