Thursday, May 18, 2017

BWorld 131, Why the FiT-All is a burden to consumers

* This is my article in BusinessWorld yesterday.


Last May 15, Transmission Corp. of the Philippines (Transco) presented at the Energy Regulatory Commission (ERC) its petition of Feed-in-Tariff Allowance (FiT-All) for 2017 of 26 centavos/kWh. Very fast adjustments from 4.06 centavos/kWh in 2015, rose to 12.40 centavos in 2016, and soon 26 centavos starting mid-2017, all “to save the planet.”

The ERC still has to conduct public hearings in Visayas and Mindanao until early June and likely to make an order by late June, to be reflected in our monthly electricity bills starting July 2017.

The feed-in-tariff (FiT) provision in the Renewable Energy (RE) Act of 2008 (RA 9513) is very anomalous on the following grounds: (1) guaranteed price locked in for 20 years despite technology improving very fast these days, (2) the FiT rates are rising (see table below) yearly due to inflation and forex adjustments, (3) FiT rates of P8+ to P10+ per kWh for wind-solar are way high compared to current Wholesale Electricity Spot Market (WESM) average prices of P2-P3/kWh, (4) current capacity installations for wind and solar are higher than what was allotted, and (5) even consumers in Mindanao who are not part of WESM, not connected to the Luzon-Visayas grids, are paying for this.

The total forecast cost revenue of FiT-eligible plants would be (in P Billion): 10.22 in 2012-2015, 18.54 in 2016, 24.44 in 2017, and 26.14 2018. The bulk of this will go to wind and solar plants.

(a) Wind: 6.32 in 2012-2015, 8.00 in 2016, 9.20 in 2017, 9.20 in 2018.
(b) Solar: 1.50 in 2012-2015, 5.88 in 2016, 7.03 in 2017, 7.00 in 2018
(c) Biomass: 1.86 (2012-2015), 3.95 (2016), 6.69 (2017), 6.79 (2018)
Hydro is small, only 1.52 in 2017 and 3.15 in 2018.
(Source: ERC, Case No. 2016-192 RC, Docketed April 27, 2017, Table 4)

Below are the beneficiaries of expensive electricity via FiT scheme by virtue of their hugeness and higher FiT rates.


Many renewable firms were not able to snatch the limited FiT eligibility but they can still make money from expensive electricity via the renewable portfolio standards (RPS) provision of the RE law. The RPS coerces and forces distribution utilities (DUs) like electric cooperatives and Meralco to purchase a minimum percentage of their electricity supply from these expensive renewables, the price differential with cheaper conventional sources they will pass to the consumers. If DUs will not do this, they will be penalized and the cost of penalty they will still pass on to the consumers.

The government should step back from price intervention and price control, grid prioritization of intermittent and unstable energy sources via legislation. Consumer interest of cheaper and stable electricity should be higher than corporate interest of guaranteed pricing for 20 years, lots of fiscal incentives and other privileges that are marks of cronyism. RA 9513 is anti-consumers, anti-industrialization and hence, it should be abolished soon.
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Over-Generalization, Over-Bedanization in the Duterte Cabinet

The term "Over-Generalization" is from my former Political Science teacher in UP Diliman in the 80s, Dr. Seguondo "Doy" Romero. He posted this in his fb wall few days ago:


"My reading is that Duterte is afraid of the military and is appointing the generals to civilian top positions as a feeble attempt to guard against a possible unauthorized military exercise by colonels. The Duterte traitorous embrace of China to the point of frittering away our West Philippine Sea territories, the shift away from the U.S. and international law and organizations, and inexplicable accommodation of the CPP-NPA-NDF and rogues like Misuari, have not endeared Duterte to the military, although God knows he has courted them so assiduously. He has failed to get them on-board the campaign against drugs. What can Duterte offer to the military to make them follow him into another authoritarian regime, but ignominy and the hatred of the Filipino people? Where is the threat of rebellion and invasion, unless he himself fans the Kadamay occupation into a real mass uprising? It is the military in the image of Trillanes and Alejano that Duterte is deathly afraid of. "Over-generalization" gives him a false sense of security...

As far as I can tell, Sec. Lorenzana and Gen Ano have so far acquitted themselves very well as constitutionalist-oriented officers, curbing excesses of immature military officers and civilian officials who blur the boundaries of professionalism. I would not automatically put them as beholden to Duterte incapable of protecting the national interest."

From sir Doy's other friends, they added:

(a) Rob Ocampo: Col Alex Balutan of PCSO, Maj. Jason Aquino of NFA.

(b) Ellen Tordesillas (also my fb friend): A number of retired military officers have already been given ambassadorial posts. One is Red Kapunan to Myanmmar.

A friend complained about sir Doy's term, "Duterte traitorous embrace of China". I asked him what he would describe it, as "Duterte heroic embrace of China"? Pweh.

On another note, the PNP has been a civilian agency for many years and decades now, how come that until now almost all of its Director Generals are from the PH Military Academy (PMA), a military agency? The PMA guys are OA, or with high sense of state entitlement mentality and insecurity, that all high positions in government involving guns and bombs should be allotted only to PMA graduates?

Sir Doy replied that "Military service is also a well-structured and systematic training designed to transform a soldier into a manager and eventually into a statesman..." 

I don't exactly buy this argument. Management of certain sectors require some deep technical skills then add management skills. Rather, retired soldiers have the "scare effect" on the bureaucracy down the line, making them tow the orders of the retired generals without much noise. Even legislators are somehow affected by the "scare effect" of these gun-wielding officers who used to command thousands of gun-and-bomb-wielding soldiers in the past.

Now, aside from "over-generalization", there is also "Over-Bedanization" of the Du30 government.


This is from San Beda's College of Law alone, there could be many other appointments from other colleges or departments of San Beda. I have no further comment about this trend in the Du30 government.

Sunday, May 14, 2017

Mining 51, Gina Lopez, Roy Cimatu and rule of law

When Gina Lopez was finally rejected as DENR Secretary by the Commission on Appointments (CA), lots of conspiracy hypothesis were flying. And one thing I notice about these comments and opinions is that it seems all of the people who spread such opinions did not watch the 2 1/2 hours CA hearing of Gina last May 02, 2017.

I watched it in full and here are my impressions:

1. Simple questions answerable by Yes or No, Gina cannot answer. Her mind and mouth is full of emotions, little or nothing on specifics, numbers and law.

2. Three questions by Sen. Alan Cayetano: (a) how much of total PH land area is actively mined, (b) beach resorts, how much of total coastal land of the PH have beach resorts, (c) what are the standards and criteria for her recent orders on mine closure — she could not answer.

3. Questions on land multiple titles involving DENR corruption resulting in perennial land grabbing problem raised by 3 Congressmen, what she’s doing about it in her 10 months in office, she was clueless, no specific answer, only generalized ones like “we are cleaning up the department” or “we are computerizing things.” She can suspend or close down many mining firms that follow certain regulations but she cannot suspend or kick out any corrupt officials in her department the past 10 months.

4. Question on very dirty rivers like Marilao river, Pasig river, she answered “structural problems” daw, despite heading the Pasig river clean up commission. She has no specific plans to clean up these rivers.

5. Questions on unabated logging, she has no clear answer.

6. Questions on legal basis, what existing laws, as basis for her recent AOs (Administrative Orders) on P2M/hectare of “disturbed” agri land as deposit — no answer. She argued “my prerogative” as Secretary.  Congw. Josephine Sato who insisted on this issue is very specific in her points — “we are a nation of laws, not of men”. Our actions and policies should be based on existing laws, not on whims of men/women leaders. Bright legislator.

DENR work is more than mining. She’s very hard-working, very passionate, only in anti-mining campaigns. But she’s lazy on other mandates of the DENR. Gina's big problem is her big ego.

I liked Congw. Sato’s rejection of Gina’s “my prerogative as Secretary” answer to her question. Department Secretaries cannot legislate on their own, otherwise Secretaries of DA, DOTC, DPWH, DSWD, DAR, etc. can just issue dozens of AOs or Department circulars (DCS) creating new prohibitions and regulations, new fines and penalties, new subsidies and entitlements — all bypassing Congress as legislative body.

PDu30 made a mistake in appointing her as DENR Secretary even without fully scrutinizing her work ethics, her technical skills. Du30 corrected this mistake by not defending her at the CA.

People who oppose mining and argue “zero mining” are as confused as the people who say “zero fossil fuel”. These people should be riding bicycles or skateboards or just walking/running, or riding horses, cows, ponies. They should not ride cars, jeeps, buses, airplanes, ships because all these use fossil fuels 100%.

People who say “zero mining” don’t want to live in caves. Even barong-barong use mining products like nails, hammer, saw, bolo, etc. Hypocrisy always finds some scapegoats like the “oligarchs”, as if the Lopezes are not oligarchs.
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Last Monday, May 08, former AFP Chief Roy Cimatu was appointed as new DENR Secretary by President Duterte. A retired soldier, then labor diplomat in the Middle East, and now a DENR chief.

Perhaps near-zero official experience in managing an environment agency except in some tree planting activities of the AFP, his appointment is a guessing game for many sectors under DENR supervision — mining, forestry, solid waste, air pollution, coastal resources, rivers/lakes/sea water quality, land titling, etc.

Since all Cabinet posts are political appointees of the President, then it is assumed that the major policies of the appointed Secretary are also the policies of the President.

I am not a fan of “good governance” in a BIG government because it is a contradiction in terms. Big government almost always lead to bad governance because government would over-extend its power of coercion. Like creating a dozen new regulations on top of hundreds of regulations, laws and prohibitions that are already in place. That is what former DENR Secretary Gina Lopez did, creating new department regulations (administrative orders (AOs), department circulars (DCs), etc.) that pile up new requirements on top of existing ones, resulting in the closure and/or suspension of many mining firms.

The big question now is whether the new DENR Secretary will focus on the rule of law, enforce existing laws and regulations before creating new department orders or seek new laws in Congress. Like the laws regulating small-scale mines and quarrying equally implemented as the laws regulating large-scale metallic, non-metallic mines and quarrying.

This act alone of focusing on the rule of law will be a big improvement in the department and in the national government as a whole. A better situation of course is that many existing regulations that are “out of tune” are abolished, or consolidated with others so that instead of having 10 “out of tunes” AOs, DCs and other department orders, they are consolidated into one AO that is more “in tune” with the times.
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Saturday, May 13, 2017

BWorld 130, Mobility of goods, capital, and people in Asia

* This is my article in BusinessWorld on May 09, 2017.


One big issue that failed to land on front pages during the ASEAN Prosperity Summit last week is the creeping protectionism, not through rising tariffs but rising non-tariff barriers (NTBs).
  
Malaysian Prime Minister Najib Razak pointed out during the Summit that NTBs and non-tariff measures (NTMs) from 2000 to 2015 have surged by nearly four times to 5,975 from 1,634. This despite the zero tariff regime for intra-regional trade and the creation of the ASEAN Economic Community (AEC) or the regional single market.

While ASEAN was created initially for defense cooperation against regional communist revolutions in the ’60s and ’70s, it has evolved into a platform for freer movement of goods, people and services, and capital or investment. It was a good development and it should be pursued.

This coming November, the Philippines will host the ASEAN partners’ meeting composed of ASEAN + 6 (China, Japan, South Korea, India, Australia, and New Zealand) + Russia and US. Mr. Putin, Mr. Xi, and Mr. Trump and other leaders will be coming to Manila.

The US exit from the Trans Pacific Partnership Agreement (TPPA) and China-Japan leadership in the Regional Comprehensive Economic Partnership (RCEP) are important developments.

By how much have Asian economies improved based on freer mobility of goods, services, investments, and tourism? Here are some basic data (see table).


Those that have expanded by more than seven times in just 15 years are the following:

1. Vietnam: 11.2x in exports, 10.6x in imports, 9.1x in investments, and 10.6x in tourism receipts.

2. Myanmar: 7.2x in imports, 12.1x in investments, 12.9x in tourist arrivals; also high expansion in tourism receipts.

3. Cambodia: 14.2x in investments, 10.3x in tourist arrivals, and 24x in tourism receipts.

4. Laos: 9.3x in imports, 10.4x in tourist arrivals and 36x in tourism receipts.

5. China: 9x in exports, 7.5x in imports, almost 6x in investments, and 7 to 7.5x in tourist arrivals and receipts.

6. Japan: 7.4x expansion in international tourist arrivals.

7. India: 7.5x in exports, 12.3% in imports, and 7.8x in exports.

The Philippines also experienced modest growth in all the above indicators but not fast enough to create more jobs and businesses to its 104 million people. We should take hard lessons from our two small neighbors with huge economic achievements, Singapore and Hong Kong.

Singapore with only 5+ million people and just 3 1/2 hours by plane south of Manila, has 6x more exports, 11x more FDIs, attracts more than 3x foreign tourists and more than 4x in tourism receipts than the Philippines.

Hong Kong with only 7+ million people and less than 2 hours by plane north of Manila, has 8x more exports, 32x more FDIs, attracts nearly 7x foreign tourists, and nearly 8x in tourism revenues.

What small economies Singapore and Hong Kong have that the Philippines lacks are two important policies: free trade (zero tariff, minimal NTBs) and stricter rule of law (the law applies equally to both rulers and ruled, applies equally to unequal people).

So while we have improved our GDP size and material wealth via freer trade, freer movement of people and capital, we need to free up more.

We should allow more islands and provinces to have their own industrial zones to attract more investments and foreign trade. To have their own international airports and seaports to attract more investments and more tourism.

More modern infrastructure, simpler rules, and freer trade will help the Philippines attain what our developed neighbors have already achieved. Drastic reduction in NTBs and the removal of rice quantitative restriction (QR) and protectionism for instance. And less politics, taxes and bureaucracies, more respect for the law by politicians and bureaucrats.

Bienvenido Oplas, Jr. heads Minimal Government Thinkers and a Fellow of SEANET. Both institutes are members of the Economic Freedom Network (EFN) Asia.
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Seasteading means more rule of law, less government

There is a good presentation by Joe Quirk of the Seasteading Institute at Dubai Freeport Zone a few months ago, Pitch: SustainableFloating Free Zones in Dubai. Below are some photos from his presentation showcasing the power of free market, competition and innovation, and relative freedom from intrusive politicians and the state.

Hong Kong, Shenzhen, and China overall.


Dubai, French Polynesia, global ecozones, and the very important role of the rule of law -- stability and certainty of application of the law to all, absence or minimum arbitrariness.


The speaker and his book, the two pioneers of the Institute, and various models of modular, detachable, floating cities and ecozones. Joe said that they can guarantee prosperity to host countries or economies that will allow these floating ecozones in relatively calmer sea near the shores. If their model is a failure, no worries, they can tow away these structures and move to other economies that are willing to host them.


I have read about the Institute since about four years ago but it was only in January 2015 when I personally heard and saw the presentation by the Executive Director of the Institute, Randy Hencken, during the 3rd Asia Liberty Forum (ALF) in Kathmandu, Nepal. The 2-days conference was sponsored by the CCS (India), Samriddhi (Nepal), Atlas (USA), and a few others.

Randy was very emphatic that the principle behind seasteading and its projects is to create future economies that are founded on the principles of free market, limited government and rule of law. Very lean government whose main function is to lay down very few laws and enforce them without favor and exemptions. Taxes and fees therefore will be few and small. Market competition and innovation will attract residents, business locators, multinational investors and tourists.

Very radical yet practical worldview. Instead of reforming existing countries towards smaller government (the success rate here I think is about close to zero), create small and new territories with some political independence from host countries, to evolve later into new countries.

I just saw in fb that today is Randy's birthday. Happy birthday man.

Friday, May 12, 2017

Energy 95, Al Gore's $15-T carbon tax racket

According to the bible of Al Gore, the UN and other groups/individuals, we should be guilty that we are riding cars, jeepneys, buses, motorcycles, airplanes, boats, other machines that use fossil fuels. We should be riding only cows, horses, bicycles, skateboards other things that do not use fossil fuel. We should be guilty that we have 24/7 electricity mainly from base load coal and natgas power plants. Thus, we should send them more money via carbon tax so that they can "save the planet." Nice but not-so-brilliant global robbery scheme.


The purpose of a carbon tax is to make cheaper energy, cheaper transpo, cheaper manufacturing, become expensive. National governments, the UN and Al Gore will get the extra money, trillions of $ of money and they will "save the planet". http://www.carbontax.net.au/category/what-is-the-carbon-tax/

Al Gore, Obama, di Caprio, Richard Branson, etc., they hate fossil-fuel-guzzling airplanes a lot. https://wattsupwiththat.com/2015/04/20/want-a-green-pass-you-fly-your-own-private-jet-heres-how/

Meanwhile, the WB, IMF, ADB, DOF, etc already made a chorus that petroleum is a "public bad" because our use of cars, buses, boats, motorcycles, airplanes are bad for the environment, so they are raising the excise tax of petrol products by P6/liter across the board. Some legislators are not satisfied with this, they want additional tax on petrol products, coal power plants, etc. to get more money to "save the planet." http://www.philstar.com/science-and-environment/2016/11/10/1642091/carbon-tax-eyed-philippine-polluters

People who are "non-polluters" are those who have zero demand for fossil fuels like petroleum and coal power plants. Like those who live in the caves, those who only ride horses, carabaos, bicycles or just walk/run only. For their trips to far away provinces and countries, they ride flying witches like manananggals that do not use fossil fuels.

The ecological socialists partner with "cap-carbon" capitalists for a multi-trillion dollars robbery of energy consumers. New racket indeed, but it is bound to fail. People hate more expensive energy, more government/UN taxation.
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Energy 92, Asia retains big coal use, April 07, 2017 

BWorld 129, Open pit mines and the DENR Secretary

* This is my article in BusinessWorld on May 02, 2017.


Department of Environment and Natural Resources (DENR) Secretary, Ms. Gina Lopez, created a stir with the issuance of DENR AO (Administrative Order) No. 2017-10, banning all prospective “open-pit method of mining for copper, gold, silver, and complex ores.”
  
To be excluded in her AO are existing open-pit mining (OPM) of metals, existing quarries, and prospective quarries for non-metallic products like granite, marbles, and limestone.

The reason for the new order is that OPM by large metallic firms is destructive to the environment and that the method is already being avoided by many countries around the world.

This is not true, for three reasons.

One, almost all forms of deforestation or land conversion from forest to non-forest uses (agriculture, housing, commercial and industrial development, road construction, quarrying of non-metallic products, etc.) create damage to the natural environment and yet only large metallic mining is singled out.

Two, OPM concentrates metallic extraction in a few thousand hectares of land and spare millions of hectares of reservation from further disturbance and extraction.

Three, OPM continues to be practiced in many countries including developed ones like the US, Australia, Sweden, and Canada. Because mining firms and their stockholders earn substantial incomes, their governments get huge tax revenues, and many workers get long-term high-paying jobs.


What Ms. Lopez will likely do among others, if she is confirmed by the Congressional Commission on Appointment (CA) as DENR Secretary:

1. Enforce and implement the closure of 22 large metallic mines and continue hiding the results of their so-called “audit” as basis for such closure order. This is because the Mining and Geosciences Bureau (MGB) conducts a quarterly review of all mining firms based on technical criteria and its 4x a year assessment produce no recommendations of large-scale mine closure while the Secretary’s “audit” seems to be based on emotional criteria, hence it remains hidden.

2. Continue turning a blind eye on plenty of small-scale miners which operate more destructive open-pit mines to extract gold. About 80% of all gold purchases by the Bangko Sentral ng Pilipinas (BSP) are sourced from these small scale mines as gold output by large metallic mines is limited owing to regulations and prohibitions, if not outright closure orders.

3. Enforce and implement DENR AO 2017-10.

4. Create new AOs in the future that will ban and close existing OPM, producing another round of “audits” justifying such closure orders.

To avoid these and other uncertainties in the industry, the CA should consider rejecting her appointment. Let the President appoint a new DENR secretary.

The main purpose of government is to lay down rules and implement laws that apply to all, to institutionalize the rule of law that apply equally to unequal people and players,that exempt no one and rulers are prevented from making exemptions. Giving rulers and in this case a Cabinet secretary, the power to make exemptions is tantamount to the rule of men that despise the rule of law.
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Tuesday, May 09, 2017

Drugs War 6, How PDu30 supporters justify his kill-ambush-poison-bomb policy

I have a fb debate with a physician-friend who supports PDu30's violent style in fighting the drugs war. See again PDu30 language last May 04, 2017: “I told them that once you get involved in drugs I will kill you. I will ambush you, poison you, bomb you, whatever. Steal your wife from you..." 
https://www.rt.com/news/387205-duterte-un-killings-complaint/

I respect my friend's medical views and his healthcare policy views, he is a brilliant physician and surgeon. But his political views related to the drugs war are lousy, so I am blogging our debate.

I argued foremost that with such explicit message above, PDu30 is exhorting certain government armed personnel and the trigger-happy civilians to conduct any or all of these:

a. state-sponsored murders (PNP, other state officers doing it),
b. state-inspired murders (vigilantes, gangs, etc. doing the murders as inspired by Du30), or 
c. state-tolerated murders (PNP knows the murderers and gangs but little or zero investigation as the murders produce the same result as ordered by PDu30. 

Below are some of his comments which I think are commonly uttered by many supporters and followers of PDu30. Then my reply/comments, slightly revised from the original fb exchange.

1. "were you this vocal during the past admins". No, except the Maguindanao massacre. Under the past administrations -- Cory Aquino, FV Ramos, Erap Estrada, Gloria Arroyo and BSA3/Pnoy -- there were no murders by the thousands on drugs war. Most murders in the past administrations were pol. murders, ordinary crimes, etc. Here we are talking about drug-related murders with explicit exhortation by a President to kill-murder-ambush-poison people suspected to be involved in drugs.

2. "are those purported extra-judicial killings (EJKs) indeed EJKs". PNP data showed that from July 01, 2016 to January 24, 2017 anti-drugs campaign, they killed 2,500+ and so this falls under (a) state-sponsored murders. The 5k+ other murders by vigilantes/gangs but some of them are actually policemen, like the incident in Mindoro in October 2016. Two hooded men killed a woman at night, local police were able to catch the murderers within minutes, and they were active duty policemen from another municipality. 


Since there is legal, judicial killing by the state in the form of death penalty via lethal injection, then those drugs-related murders can be considered as EJKs. 

3. "shy away from drugs, surrender or be killed." Singapore, Malaysia, etc. have the same warning and law for people to "shy away from drugs" but their main tool is legal, due process, not kill-ambush-poison-bomb order from a President who has very little or zero respect for due process.
In SG or MY and other countries, the due process itself that can be worse than death penalty for drug offenses. Being put in courts, reported in media, put in prison, brought to the courts again for another hearing, public reporting, execution if proven guilty -- the humiliation can be worse than death. And that scares potential drug offenders.

4. “i cannot condone killing, my business is saving lives, paano ko singilin yung patay?”
and yet why there is no explicit, categorical condemnation of Du30's explicit, categorical pronouncement of kill-ambush-poison-bomb people in drugs? 

5. “whatever compassion you have for these drug users and pushers, you render to the sick who couldn't afford healthcare.” I have no compassion for real pushers and users, but give them due process, to defend themselves if they are indeed guilty or innocent and simply falsely accused. As mentioned above, SG, MY, ID, etc. also have death penalties for drug offenders, similar to PH laws. The difference is that there is due process there; here, little or no due process, short cut kill-ambush-poison-bomb order as pronounced by the President himself.

6. “we're better off sana with Mar?” This as political paranoia. The thread is about Du30's drug war, not Mar, not Marcos, not any other personality or sector. 

7. "mukhang sobrang sacred sa yo ng due process" because (i) many murdered people accused of being drug users/pushers may be innocent, simply falsely accused. Pero tapos na, dedo na sila. And because (ii) that is what SG, MY, ID, etc are doing to control drug crimes without killing thousands. SG with death penalty but due process to drug offenders has low drugs incidence compared to PH with kill-murder-bomb them policy of Du30.

8. "policy criticism is the same as criticizing the person." Wrong. I like PDu30 infra policy on build-build-build, I like his questioning the UN climate drama, etc. My criticism is mainly on his kill-murder-ambush-bomb people in drugs war. Have allowance for those falsely accused as drug users/pushers and not just murder them. Dead people cannot defend themselves.

9. "your choice is the right one for us." Wrong, it's not me 'ordering' the PDu30 government to "go through due process". Far out. It's the existing laws, the criminal code, the various Republic Acts, that are ordering this and other administrations that they should respect these laws.

10. "di naman pwedeng wala tayong presidente." Another pol. paranoia. I did not make any statement, explicit or implicit, that we should have no President, or that Du30 should be replaced without constitutional process or be bombed to eradication, nada. 

Du30 should stay as elected President until 2022 unless the impeachment case against him in Congress prospers. We focus on Du30's kill-ambush-bomb mentality and policy and it should stop. Go the due-process route. Police to get plenty of evidence against suspected drug pushers and users. If evidence is strong, make arrest, bring to jail, go to the courts, wait for court decision. If innocent, set them free. If guilty, death penalty via lethal injection.

From this Guardian article, "Asked in an interview with al-Jazeera about minors caught up in the violence, Duterte said those cases would be investigated but added that police can kill hundreds of civilians without criminal liability." https://www.theguardian.com/world/2016/oct/17/duterte-says-children-killed-in-philippines-drug-war-are-collateral-damage

This hypothetical case becomes policy pronouncement. "police can kill hundreds of civilians without criminal liability." wow. Implying no need for police training to avoid killing civilians in dealing with criminals. Just kill the criminals, kill the civilians too, no criminal liability, magaleeeng na logic.

For now, nothing can stop PDu30 from his wild and insane remarks on drugs war. Sometime last year he said something like "annihilate 3M drug users... I'll be like Hitler". And last week, he said kill-poison-bomb. Tomorrow he might say "kill-burn-grill-eat their liver". And PDu30 supporters will clap and applaud him.
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Monday, May 08, 2017

BWorld 128, The quest for more stable and cheaper electricity in the ASEAN

* This is my article in BusinessWorld last April 28, 2017.


High economic growth means high energy demand coming from stable supply and competitively priced energy, not unstable, intermittent, and expensive energy. This is what the Association of Southeast Asian Nations (ASEAN) economies need as their high GDP growth of 4.7% in 2016 is projected to improve to 4.8% this year and 5% in 2018 (ADB data), much faster than the projected growth of other regions and economic blocs.

One week before the ASEAN 50th Summit Meeting, the 7th Annual Meeting of the Nuclear Energy Cooperation Sub-Sector Network (NEC-SSN) hosted by the Department of Energy (DoE) was held. A pre-feasibility study showed that many ASEAN countries are in favor of using nuclear energy for commercial use. The ASEAN Center for Energy (ACE) also sees nuclear energy as a long-term power source for the member-countries.

The intensive infrastructure projects of the Duterte administration require huge amount of energy. The proposed 25-km. subway in Metro Manila by the Japan government alone would require high energy supply for the dozens of trains running simultaneously below the ground plus dozens of train stations below and above ground.

Lots of base-load power plants, those that can run 24-7 all year round except when they are on scheduled shut down for maintenance, will be needed. These baseload plants include coal, natural gas, geothermal, and nuclear. Hydro plants too but only during the rainy season.

How reliable and how costly are the different power generation plants that the Philippines and other ASEAN countries will need? This table will help provide the answer as I have not seen data for the ASEAN yet.


Power reliability is represented by plant capacity factor or actual power output relative to its installed capacity. So unstable, intermittent sources like wind and solar have low capacity factor, not good for manufacturing plants, hotels, hospitals, malls, shops, and houses that require steady electricity supply.

Power cost is represented by the levelized cost of electricity (LCOE), composed of capital expenditures (capex), fixed and regular operation and maintenance (O&M), variable O&M, and transmission investment. CCS means carbon capture and sequestration.

The cost of ancillary services for intermittent sources, the standby power plants if the wind does not blow or if it rains make solar plants temporarily inutile, does not seem to be reflected in the transmission cost though.

ASEAN countries like the Philippines will need those power plants that have (a) high reliability, high capacity factor, (b) low LCOE, and (c) low or zero need for ancillary services.

However, more ASEAN countries are entertaining more solar PV and wind onshore since they were convinced to believe that they need unstable yet expensive electricity to “save the planet.”

During the Energy Policy Development Program (EPDP) lecture last April 20 at the UP School of Economics (UPSE), Ms. Melinda L. Ocampo, president of the Philippine Electricity Market Corp. (PEMC) talked about “Electricity Trading and Pricing in the Philippine WESM.” Ms. Ocampo discussed among others, the new management system where the interval for electricity dispatch has been improved from one hour to only five minutes.

I pointed during the open forum that the imposition of the lousy scheme feed-in-tariff (FiT) or more expensive electricity for favored renewables was unleashed even to consumers in Mindanao, which is not part of WESM, and is not connected to the Luzon-Visayas grids. The FiT-Allowance that is reflected in our monthly electricity bill has risen from 4 centavos/kWh in 2015 to 12.40 centavos in 2016 and this year, we should brace for at least 26 centavos/kWh soon because the 23 centavos petition by Transco starting January 2017 has not been acted by the Energy Regulatory Commission yet.

The issue of stable and affordable energy will be tackled in the forthcoming BusinessWorld Economic Forum this May 19, 2017 at Shangri-La BGC. Session 4 “Fuelling Future Growth”of the conference will have the following speakers: John Eric T. Francia, president & CEO of Ayala Corp. (AC) Energy Holdings, Inc.; Antonio R. Moraza, president & COO of Aboitiz Power Corporation; Josephine Gotianun Yap, president of Filinvest Development Corp., and DoE Secretary Alfonso G. Cusi. Yap and Cusi are still to confirm the invite.

Local energy players will have a big role in ensuring that the Philippines should have stable and competitively priced energy supply today and tomorrow.
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Drugs War 5, Kill-ambush-poison-bomb-you from PDu30

May tupak talaga ito. See his language:

“And here’s the shocker: I will kill you. I will really kill you. And that’s why the rapporteur of the UN is here, investigating extrajudicial killing,” Duterte said, referring to drug dealers as he was addressing an orthopedic conference in Davao City, as cited by The Philippine Star.

“I told them that once you get involved in drugs I will kill you. I will ambush you, poison you, bomb you, whatever. Steal your wife from you,” the Philippines leader added. – May 6, 2017, https://www.rt.com/news/387205-duterte-un-killings-complaint/

Those words cannot come from a stable mind. Unpresidential gutter language.

PDu30 is scared of the UN HR body. If there is nothing to fear, just invite them to come with zero conditionalities, nothing. Having conditionalities means there are fears, there are things to hide.

Many sectors also bring up the LP/yellow/dilawan in the visit by Ms. Callamard. Why divert the issue? PDu30 and his many agencies can quickly organize a forum with that lady anywhere, anytime, challenge her to a public debate because she opted to come here, pulverize her arguments if they can, they did not do it. 

Reposting some comments from my friend Bernard Ong, posted in his fb wall May 5 and 6, 2017.
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(1) TAKOT SA UN RAPPORTEUR

Malacanang objected to the 'unannounced' visit of UN Special Rapporteur for Extrajudicial, Summary or Arbitrary Executions Agnes Callamard.

"We are aware that Dr. Callamard is currently in the Philippines and we are disappointed that, in not contacting our government in advance of this visit, she has sent a clear signal that she is not interested in getting an objective perspective on the issues that are the focus of her responsibility" - Spokesman Ernesto Abella.

Hold your carabao, Ernie. She is not here for you. No need to announce her visit dahil wala kayo sa agenda niya. Your are being paranoid. Which part of "extrajudicial, summary or arbitrary executions" triggered your praning reaction. Fentanyl muna to ease your worries.

Turns out Dr Callamard is here to attend & address a drug policy forum sponsored by CHR & Free Legal Assistance Group at UP Diliman. Government is actually represented in the forum by its lead drug agency - Dangerous Drugs Board. Sayang. Kung hindi lang sana takot si Duterte sa UP Diliman, he could have gone there to share his "Kill. Kill. Kill" approach.

So there. Dr Callamard is not here for you. Wait lang muna, your turn will come. You can relax. She is also braver than you.

Unlike you, she is not afraid of going to UP Diliman.

(2) TEKA TEKA MALI YATA

1. Takot na takot, at galit na galit, sa isang UN Human Rights official na inimbitang magsalita sa UP.

2. Nagsisilbing bugaw ng China - #1 supplier ng shabu, at nangaagaw ng lupa at dagat ng Pilipinas - para sumuko na lang ang Pilipino.

Kayo na lang. Susundin ko ang mga halimbawa nila Lapu-Lapu, Bonifacio at Gregorio Del Pilar. Ayaw ko sumama sa mga duwag at traydor.

(3) WHAT THE UN RAPPORTEUR SAID

Warning: long post. UN Special Rapporteur on Extrajudicial, Summary or Abitrary Executions Agnes Callamard gave the opening speech at the drug policy forum at UP Diliman. Link to full transcript in Comments section.

Presidential counsel Salvador Panelo used her speech as basis to claim that she is incompetent to probe killings in War on Drugs in the Philippines – that Callamard already made conclusions based on news reports, some videos, opinions of critics, and hearsay.

SUMMARY OF HER SPEECH

1. There’s a document called ‘Our Joint Commitment to Effectively Addressing and Countering the World Drug Problem’ drafted by heads of states assembled at UN General Assembly.

2. Joint Commitment calls for more comprehensive approach that considers diverse factors behind drug problem – including social development, public health, justice & human rights. It calls for more effective approaches than punishment model some governments have adopted.

3. Joint Commitment urges governments to respect human rights, protect freedoms, uphold rule of law in their drug policies.

4. Joint Commitment recognizes dependence is a health disorder, whose social causes & consequences can be prevented & treated thru scientific evidence-based treatment, care & rehab. The governments affirmed the importance of data, scientific research, sharing of information including best practices on drug prevention & control.

5. Governments did not commit to War-on-Drugs approach. Instead they called for balanced approach including health, rights & justice.

6. They did not suggest death penalty as an appropriate or effective response to drug trafficking or use. Instead they spoke about proportionate sentencing & alternative punishments.

7. In April 2016, the UN General Assembly recognized that ‘War on Drugs’ does not work. It is well documented around the world that bad drug policies fail to address drug dependency, drug criminality & drug trade.

8. Further, War on Drugs only makes things worst. They add problems such as extrajudicial killings, breakdown of law, vigilante crimes, torture, disproportionate sentences for drug possession, etc. It can foster a regime of impunity promoting rule of violence, eroding public trust in institutions, breeding fear.

9. In all research undertaken around the world, none of the countries that adopted War on Drugs made the drug problem disappear. In fact, the opposite happened.

10. Conference in UP Diliman is to learn from local & foreign experts who have studied drug policies, their impact & effectiveness....
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See also:
The PH drugs war, part 2, July 27, 2016

President Duterte and hyperbole, December 19, 2016 

Sunday, May 07, 2017

Energy 94, Developing Asia's love affair with coal

Energy precedes development, not vice versa. Developing countries cannot sustain growth without cheap and stable energy supply. 

I am reposting some recent reports about efforts by many developing Asian countries to grow fast via cheaper energy from coal power. Enjoy.
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"Pakistan’s Water and Power Ministry... investment project with China, it’s committed to spending $15 billion on as many as 12 new coal power plants over the next 15 years…

To anyone who would criticize the move, Piyush Goyal, India’s power minister, had this to say: “India is not a polluter," he told the Financial Times. "It’s America and the western world that has to first stop polluting.” There’s a grain of truth to that: America and Europe did a lot of coal burning during their development, and now have strong economies to leverage in order to clean up their acts.”
– May 3, 2017, https://www.technologyreview.com/s/604323/india-and-pakistans-continued-love-affair-with-coal/

"$54 billion China Pakistan Economic Corridor (CPEC), which includes spending of about $33 billion on a total of 19 energy projects, including coal-fired and renewable power plants, transmission lines, and other infrastructure.

Combined, the projects will eventually generate 16,000 megawatts (MW) of electricity, which the government says is urgently needed. About three-quarters of the newly generated power will come from coal-powered plants, and the government insists that these will be fitted with the latest technology to reduce pollution and climate-changing emissions.” – May 2, 2017, http://www.reuters.com/article/us-pakistan-energy-coal-idUSKBN17Z019

"China’s production of electricity from coal stayed at elevated levels post the northern hemisphere winter after reaching a high of 423.6 billion kWh in December – and the highest level recorded based on available data going back to January 2010.

And electricity production from coal in March 2017 rebounded strongly following the Lunar New Year lull in February, rising 7.7% year on year to 396.1 billion kWh, according to the National Bureau of Statistics data." – May 2, 2017, http://blogs.platts.com/2017/05/02/china-coal-fired-power-generation-surprises-naysayers/

"India is heavily reliant on coal for its electricity, more than three-quarters of which was generated by its 132 coal-fired power stations in 2014-15, according to the most recent data from the central electricity authority. However, while it is the world’s third-biggest emitter of greenhouse gases in absolute terms, its per capita emissions are a fraction of many other nations’, at just 1.59 metric tonnes a year, compared with 7.55 for China and 16.39 for the US." – May 3, 2017,


"A MoneySuperMarket report listed Mozambique, Ethiopia and Zimbabwe as having “the most environmentally friendly people in the world,” while ranking Americans as being some of the least eco-friendly people on the planet. That may not be a bad thing, though, given the greenest countries also tend to be poor and run by authoritarian regimes." – April 22, 2017, http://dailycaller.com/2017/04/22/worlds-greenest-people-live-in-ridiculously-poor-authoritarian-regimes-graph/


"America was built on cheap and abundant coal. Fossil fuels powered the U.S. into the industrial age and replaced inefficient windmills and woodburning as the primary sources of electricity. America currently has access to 500 years’ worth of coal — far more than any other nation. Even despite the last decade’s war on coal during the Obama years, the U.S. still derives about one third of our power from coal — second only to natural gas." – April 17, 2017, https://spectator.org/coals-colossal-comeback/

“China’s fundamental demand for coal and natural gas has improved alongside better-than-expected economic growth in the first quarter,” Tian Miao, an analyst at North Square Blue Oak Ltd. in Beijing, said by phone. “The government’s investment in infrastructure has boosted power consumption while the move to replace coal with gas to fight pollution is also gaining some traction for gas demand.” – April 17, 2017, https://www.bloomberg.com/news/articles/2017-04-17/china-coal-production-rises-as-government-avoids-output-limits

"Coal conversion has become profitable in China because of an unusual combination of low coal prices relative to state-set gas or petrol prices.  Coal-to-liquids projects normally make economic sense only when oil prices are high or supply is limited. The technology was first developed in Nazi Germany, and commercialised in apartheid-era South Africa." https://www.ft.com/content/02931290-1d94-11e7-a454-ab04428977f9

"despite a huge workforce of almost 400,000 solar workers (about 20 percent of electric power payrolls in 2016), that sector produced an insignificant share, less than 1 percent, of the electric power generated in the United States last year (EIA data here).

In contrast, it took about the same number of natural gas workers (398,235) last year to produce more than one-third of U.S. electric power, or 37 times more electricity than solar's minuscule share of 0.90 percent. And with only 160,000 coal workers (less than half the number of workers in either solar or gas), that sector produced nearly one-third (almost as much as gas) of U.S. electricity last year." – May 3, 2017, http://www.washingtonexaminer.com/todays-most-productive-energy-workers-are-in-coal-and-gas-not-solar/article/2622029



"According to a recent International Energy Agency (IEA) report, Japan’s 600 MW Isogo plant in Yokohama is probably the best in the world. It is an ultra-supercritical HELE plant, with emission levels comparable to a natural gas combined cycle (NGCC) power plant." -- April 18, 2017, https://dddusmma.wordpress.com/2017/04/18/japan-and-china-remarkably-clean-coal/

"The Petra Nova carbon capture system was installed in the W.A. Parish generation station. This is the largest and cleanest fossil fuel generaton station in the United States." -- April 18, 2017, https://wattsupwiththat.com/2017/04/18/clean-coal-carbon-capture-and-enhanced-oil-recovery/

India's "plans to build nearly 370 coal-fired power plants... The construction of 65 gigawatts worth of coal-burning generation with an additional 178 gigawatts in the planning stages would make it nearly impossible for India to meet those climate promises, the researchers say." -- April 25, 2017, https://wattsupwiththat.com/2017/04/25/india-wont-be-able-to-meet-paris-climate-agreement-commitments-due-to-expanding-coal-power-plants/


Two other useful sources here,

2. GWPF, “THE PARIS AGREEMENT and the Fifth Carbon Budget” by David Campbell,


Bottomline: more environmentalism, more UN, more government renewables cronyism are bad for developing economies that want cheaper energy for them to develop faster and sustain growth.
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See also:
Energy 91, Thailand's bright nights (part 2), March 03, 2017 

Energy 92, Asia retains big coal use, April 07, 2017 

BWorld 127, Economic freedom in Asia means faster growth, lower prices

* This is my article in BusinessWorld on April 26, 2017.


Thanks to its rapid economic growth, the Association of Southeast Asian Nations (ASEAN) is being looked up to by other economic blocs as it celebrates its 50th anniversary this month in Manila.

The pace of trade liberalization until this decade is perhaps the world’s fastest both among ASEAN member-states, and even among those outside the group.

Free trade creates good will among people and governments across the globe. It gives foreign trade partners greater access to the home market and, in the process, these trade partners tend to open up to more ASEAN countries’ exports and investments.

Here are two tables that show the economic wonders of free trade policy -- not exactly zero-tariff and minimal non-tariff barriers (NTBs) but approaching there -- for the emerging economies of Asia. We will use the purchasing power parity (PPP) values of gross domestic product (GDP) to somehow equalize valuation of goods and services across the world.

Overall, the GDP size of the world at PPP values was $40.3 trillion in 1996 and it rose to $120 trillion in 2016 or an expansion of more than three times in just two decades.

ASEAN-5 refers to Indonesia, Malaysia, Philippines, Thailand, and Vietnam. G7 countries are the US, Canada, Japan, UK, Germany, France and Italy.


Table 1 numbers show the following:

1. Emerging and developing Asia (including China and India) is now the world’s biggest economic bloc with GDP size of $38 trillion in 2016, overtaking the G7. The expansion of GDP size in just two decades was six times, an astonishing feat. The per-capita GDP also expanded almost five times, the fastest in the world.

2. ASEAN-5 GDP size of $6.5 trillion in 2016 was larger than the combined economies of the CIS or developing Europe or Sub-Saharan Africa. Per capita GDP expanded more than two and a half times over two decades which is larger than that attained by many other economic blocs. 



Table 2 numbers further show that:

3. While emerging and developing Asia is only the 3rd largest bloc in the exports of goods and services in the world, selling $3.9 trillion in 2016, the size of exports has expanded 7.2 times after only two decades, the fastest in the world. In terms of price inflation, the region also showed consistent price decline and stability at only 2.9% in 2016, the lowest among developing blocs in the world.

4. Sub-Saharan Africa and MENA remain burdened with high prices and slow expansion in exports.

Giving local consumers and manufacturers more economic freedom where they can buy and sell the various goods and services that they need and produce means empowering the whole economy. Price declines and price stability are proof that freer trade is working and are instrumental in stabilizing the supply of various traded goods and services.

There are winners and losers in free trade, the same way that there are winners and losers in protectionism. But overall, “net gains” from trade trump “net losses” from protectionism because locals are deprived by policies that limit choices and options.

It is important therefore, that emerging Asian economies like the Philippines should never lose sight of the potentials of free trade and resist protectionist aspirations that penalize the consumers while protecting local vested business interests.


Bienvenido S. Oplas, Jr. is the President of Minimal Government Thinkers and a Fellow of SEANET; both are members of Economic Freedom Network (EFN) Asia.
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See also: