Wednesday, June 23, 2004

ADB says high oil prices a manageable risk

Asian nations now shifting from export- to consumption-led growths should also pursue structural reforms to boost their investment climates by improving competitiveness, productivity, and corporate governance. Rising oil prices can even be a "blessing in disguise" if Asian nations implement policies that increase energy efficiency and lower oil consumption, it added.

i think that observation is, to a certain extent, true. but in our case, i think private enterprise should take the initiative in this matter. a crisis could either spell doom or opportunity, and this crisis, in my opinion, reeks of opportunity. imagination however is required to discover the full extent and diversity of opportunities that lurk behind the crisis we face today.

i, for one, am puzzled as to why nobody, either in government or the private sector, has ever publicly considered taking full advantage of the huge natural gas resource we have in malampaya. the current primary consumers of the natural gas taken from malampaya are several power plants using natural gas turbines. i believe that malampaya could directly benefit the filipino consumer if we make use of natural gas in an alternative fashion, i.e., having trucks and buses in the country convert to compressed natural gas engines from diesel. yes, this is possible and in by no means unprecedented, in fact india has shown the way in this regard.
In March 2002, the Supreme Court of India mandated that all buses in the capital of Delhi be converted to run on cleaner-burning compressed natural gas (CNG). As a result, Delhi, the third-largest city in India, currently has the largest natural gas bus fleet in the world, with approximately 7,500 CNG transit and school buses on the road.

along with the economic benefits, the use of natural gas engines will have environmental benefits, performance and maintenance benefits, and others. plus, conversion isn't that expensive.

considering these, the initial costs of conversion would, at the long run, be minimal compared to the benefits. thus i would consider any resistance and/or hesitation to such a program as nonsense.

if such a program was successful, demand for the staple fossil fuels like gasoline and diesel will be reduced significantly and the pressure to maintain high their prices will be lessened as well. this shift in demand for fuel, i hope, would lead further to the reduction of the costs of other goods and services like transport fares.

an ambitious fantasy? perhaps it is, but only until somebody actually turns it into realty, since it is truly feasible, as the indians have shown. this is, however, merely one of the many possible opportunities we should grab at this turning point of our economic history. too bad we still keep on sticking to managing risks rather than taking them head on.

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