Marcos signs law to boost PH natural gas industry

(UPDATE) PRESIDENT Ferdinand Marcos Jr. signed into law a measure establishing a framework to develop the country's natural gas industry and to promote natural gas as a safe, efficient, and cost-effective source of energy. Republic Act (RA) 12120, or the Philippine Natural Gas Industry Development Act, seeks to establish the Philippine downstream natural gas industry (PDNGI) and increase the share of natural gas in the country's energy mix by promoting it as a safe, efficient, and cost-effective source of energy and an indispensable contributor to energy security. RA 12120 also promotes the conversion of the existing fossil-fuel-operated equipment and facilities to natural gas use, provided that the conversion is technically and financially feasible. The measure, principally sponsored by Sen. Pia Cayetano, aims to enhance energy security for future generations by creating an investor-friendly environment. The new law positions natural gas as a transition fuel toward renewable energy. Cayetano said securing a steady and reliable local supply of indigenous natural gas will reduce the country's vulnerability to global disruptions. "With more than half of our energy requirement being imported, we are clearly vulnerable to geopolitical conflicts," the senator said. "As the country moves toward renewable energy sources, we need to find additional baseload resources, aside from oil and coal, which are less harmful to the environment." "Malampaya was supposed to be the first of many producing gas fields in the Philippines, but it turned out to be the only one. The country needs more Malampayas," she added. Cayetano thanked the President for signing the new law. "We move closer to our vision of a more energy-secure Philippines that harnesses its own natural resources for the benefit of the Filipino people." Under the new law, the Department of Energy (DOE) will be the lead agency to determine the need for aggregation and regulate its development. Aggregation is defined as the procurement of indigenous natural gas, combining it with imported LNG, and selling the aggregated gas to gas buyers in the Philippines or abroad. The DOE is also authorized to evaluate, approve and issue the permits necessary for the siting, construction, operation and maintenance, expansion, modification, rehabilitation, decommissioning, and abandonment of any PDNGI facility or activity. The operation of the PDNGI facility will undergo an evaluation process for possible inclusion and entitlement of incentives under the Strategic Investment Priority Plan. The law states that the PDNGI facilities could be designed and constructed to ensure the accommodation of both indigenous natural gas and imported natural gas, pursuant to the guidelines of the DOE. Regulations will be consistent with applicable Philippine and internationally accepted natural gas industry standards, the law says. The law will also facilitate the development of power and non-power end-uses of natural gas, which includes commercial, industrial, residential and transport applications that promote fuel diversity. RA 12120 is seen to help the country meet the increasing domestic demand for fuel and develop the Philippines as a liquified natural gas trading and transshipment hub in the Asia-Pacific region. Before Marcos signed RA 12120, the measure was passed by the Senate on Nov. 11, 2024, and adopted by the House of Representatives on Nov. 13. The new law will take effect 15 days after its publication in the Official Gazette, with the DOE expected to promulgate its implementing rules and regulations within six months.