DOE mulls uniform standard for diesel

The Department of Energy (DOE) will come up with a decision soon if there is a need for the industries to comply with the new diesel specification under the Clean Air Act (CAA).

Energy Undersecretary J.V. Emmanuel de Dios said there are ongoing hearings and/or consultations with the industry stakeholders on this issue.

"We are trying to see (if the industries should follow the same standard as the automotive diesel). There is a move to study if there is a need for one standard for diesel. We are still looking at it," De Dios said.

De Dios admitted that during the hearings, there were some "pros and cons" that were raised by the industry players.

"We are currently weighing the pros and cons. Some say we need one standard for a cleaner environment but others believe it will result to higher costs for industries," he said.

According to De Dios, they hope to come up with a resolution on whether the industries will have to follow such CAA diesel specification on or before Jan. 1, 2004.

The energy official also said they will still have to compute how much will be the impact of the CAA compliance to the new diesel specification on the industries. On the automotive industry, it is estimated that the new specs will result additional cost of 20 to 50 centavos per liter which will eventually be passed on to consumers.

But De Dios recognized that the CAA is "silent" on the industries compliance to the diesel specs unlike the automotive industry wherein it is mandated to lower its sulfur content of its diesel products to 0.05 percent from 0.2 percent.

Some of the industries that use diesel are wary that if they will have to use the same standard as the automotive, it will mean additional cost to their customers.

Foremost of these industries is the power industry. The National Power Corp. (Napocor), for instance, is now studying the possible impact of the CAA on its operations.

Aside from Napocor, other industries that use diesel in their operations are manufacturers and exporters using generation sets (gensets), among others.

Initial estimates show that the Napocor’s fuel cost adjustment will increase by P0.0086 per kilowatthour (kWh) in Luzon, P0.0174 per kWh in Cebu-Negros-Panay, and P0.0126 per kWh in Mindanao.

In other areas like Bohol, where bunker fuel accounts for 90 percent of the generation mix, consumers will pay higher or will have a five-centavo increase in the fuel cost adjustment component in their bills.

The impact on the CAA will be added to the new generation charge approved by the Energy Regulatory Commission (ERC) where fuel cost adjustment is allowed to be recovered from its customers.

Napocor president Rogelio Murga said they are optimistic they will be able to complete the study before the end of this year.

The state-run power firm earlier said it is planning to rationalize the use of its diesel-fired power plants to minimize the impact of the CAA on its customers. It said it may utilize more hydroelectric power plants to lessen the impact of the CAA if there will be any.