China bullying hurts our economy

China’s bullying in our exclusive economic zone at the West Philippine Sea is hurting our economy, particularly the energy sector. It is disrupting exploration and development of oil and gas. Whatever resources may be there will remain untapped; a tragedy given our urgent need for domestic energy sources.

China is preventing us from exploiting potential hydrocarbon deposits at the Recto bank. We urgently need a replacement for the Malampaya gas field in Palawan which supplies 20 percent of the Luzon Power Grid’s requirements.

For now, we are lucky Ricky Razon’s Prime Energy has been able to squeeze out enough gas at Malampaya to power the natgas plants in Batangas at full capacity, a blessing in these critical times when other aging power plants are down and/or derated. 

Eric Jurado, writing on his blog International Investor, noted that “despite significant natural gas discoveries, projects like Vietnam’s ‘Blue Whale’ remain stalled due to Chinese interference…The Philippines, facing an imminent energy crisis with the depletion of the Malampaya gas field, struggles to access its own resources amid Chinese maritime encroachments.”

This leaves us dependent on costly energy imports whose reliability is subject to geopolitical disturbances that are many these days.

The closest and most viable prospect to replace Malampaya is in the Sampaguita field in Recto bank, also known as Reed bank. I recall that we have done extensive studies in the area some decades ago to determine the presence of structures that could contain hydrocarbons.

In 2013, the US Energy Information Administration estimated it to hold 5.4 billion barrels of oil and 55.1 trillion cubic feet of gas. That’s 63.5 times more oil and 20.5 times more gas than Malampaya. But we have to drill to confirm the existence of the deposit.

Recto bank is 120 miles from Palawan, well within the Philippines’ 200-mile exclusive economic zone. It’s 650 miles from Hainan, China’s nearest province, thus outside its EEZ. China can’t claim it by its arbitrary “nine-dash line.” The Hague arbitral court affirmed that in 2016.

The Philippine government has long awarded Service Contract-72, covering Recto to Manuel V.