Ethanol Producers: More biofuel can be tapped vs oil price hikes

The Ethanol Producers Association of the Philippines (EPAP) wants government to re-think its present approach in addressing rising oil prices and get existing plants to pump more biofuels into the local market instead of haggling with oil importers. EPAP president Jose Maria Zabaleta said in a letter to the Department of Energy (DOE) and Department of Agriculture (DA): “The price-setting power of government must be exhausted to extract ethanol from the existing plants. This can only happen if government sets a price that covers the true operating cost of these plants. Begging oil companies to lower their cost can only take us so far as it is not they, but the oil markets, that determine prices." “Leyte Agricultural, San Carlos Bioenergy and ROXOL have annual production capacities of about 75 million liters of fuel alcohol," Zabaleta pointed out. “Unfortunately, these plants do not produce ethanol fuel today as the Department of Energy refuses to adopt what other countries like Thailand did to promote its alternative fuel program." He said the installed capacities of the standing plants can be made available and readily deployable to the consuming public. Government can tap these infrastructures and make them operational again by imposing a remunerative ethanol price similar to what Thailand has done, setting the price on an index. The EPAP president explained that while ethanol producers had built their plants in response to government’s call to start the alternative fuels program, they are now appealing government to ensure through an Executive Order a one-year local supply from ethanol producers at current pump prices. "We are prepared to perform our civic duty and collaborate with government as long as the DOE and DA recognize that farmers of cane, cassava, or sweet sorghum must be paid a fair price to farm as they are small and many of them are DAR [Agrarian Reform] beneficiaries. This farmed feedstock cost should be the basis of the price for distilleries to keep producing clean fuel. Instead of putting money in the hands of foreign oil producers let us give the right price to our farmers," he said. Oil dependence in time of crisis The group also requested government to ensure the import of the remaining ethanol requirements from other countries in South East Asia to lessen the impact of rising oil prices. “It is our firm belief that one of the main reasons our legislators crafted the Biofuels Law is to have policy options during times of crisis," Zabaleta said. He said “the ethanol producers comprising both farmers and distilleries, express their commitment to help government mitigate the rising cost of gasoline. The Middle East situation is nearing crisis level and the prices of oil in the global market are becoming highly volatile to the detriment of the Philippine consuming public." He added that this volatility is expected to remain in the market and could keep oil at the “high" range. “Perhaps, you will agree with our assessment that no one knows for sure how the international oil market will behave in the months to come. Neither are we certain when the political situation in the Middle East will stabilize," he said. “What is definite however, is our continued dependence on imported oil. Such dependence puts the Filipino people and our national economy in a very vulnerable spot. We will remain at the mercy of the oil companies unless there is a clear roadmap addressing our vulnerabilities," the association president said. – MRT/VS, GMA News