Preparing for the oil shock

The oil shock was known as far back as March when the Saudi Minister for Petroleum and Mineral Resources Ali I. Al-Naimi, chairman of Saudi Aramco, visited Manila. I suspect he came to Manila to update Philippine government officials of the coming oil price crisis but he did not confirm or deny it. My daughter, CNN anchor Veronica Pedrosa tipped me that the news on the impending oil shock was being talked about in financial circles. Colin Campbell, an acknowledged oil expert who wrote ‘the Coming Oil Crisis’ gave a briefing to a group of universities, governments, and auto manufacturers.

His message was simple: we had reached the end of the age of oil and the only preparation is to use less since it is a non-renewable resource. This is easier said than done since almost every human activity today from transport to food production depends on oil. Other sources of energy – sun, wind, geothermal have not been developed yet to meet the world’s needs when the crunch comes. Campbell warned the key event is not when the oil runs out, but when oil production peaks. We have reached that peak, he warned.

He did not mince words about the gloom and doom that will follow. We have to prepare for the oil shock not by insisting on cheaper oil but how to use less oil – walkable communities, bicycling lanes, electric fans instead of air-conditioners, mass transport instead of cars are some of the things that come to mind. When oil becomes scarce in a worst scenario he said – expect war, starvation, economic recession possibly even the extinction of homo sapiens. "The evolution of life on earth has always been accomplished by the extinction of over-adapted species (when their environmental niche changed for geologic or climatic reasons) leaving simpler forms to continue, and eventually giving rise to new and more adapted species. If homo sapiens figures out how to move back to simplicity, he will be the first to do so," Campbell told his audience.

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If all goes well, we may have a modern airport, at last. As a traveler, it is welcome news to open NAIA3 whenever that might be. Manila Hotel Corp., through its President Atty. Jose Lina Jr. told this column, "We are targeting an opening before the end of the year." He confirmed that the Manila Hotel Corporation bought Fraport’s 30 percent equity shares in PIATCO for US$200. The group also bought out the shares of SB Airport Investments Inc. and Sojitz Corp. of Japan for US$30 million. Before the news is swamped yet again by the losers, let me just say that it is long overdue.

This column has campaigned vigorously for its opening, mindful that a modern and well-functioning airport is a public concern. We have a gleaming, state of the art airport meters away while we are condemned to an old airport falling at the seams because of squabbling vested interests. What kind of madness is this? The thrust of our campaign was to separate the issue of public service from the legal imbroglio. The government attempted to do just that – open the airport – without an agreement from the conflicting parties. It turned out to be just that – an empty public relations exercise.

Given the best intention in the world the airport could not be opened without securing agreements between the warring parties. There were loose ends that had to be tied down even just to make it operational. Moreover the problem was whether the airline operators would move in without any guarantee that they would not be sued if they signed contracts while the case was still pending in the international court of arbitration. Without airline operators, what is the use of an airport?

So the arrival of Mr. Emilio Yap’s Manila Hotel Corporation on the scene as a knight in shining armor may have preempted the embarrassment of a decision against the government which was expected to be handed down this November. NAIA3 has given us a black-eye as the best example of how not to do business with the Philippines.

Opening NAIA 3 will boost the Arroyo administration. Former President FVR was among the first who lauded Manila Hotel Corporation’s acquisition. "It will "provide a clear and strategic solution for the longstanding and much-delayed activation of Ninoy Aquino International Airport (NAIA) Terminal" 3, he said.

Still it may be too early to cheer. Remember this conflict dates back to FVR’s time when he tapped our local taipans to expand and modernize Manila’s international airport so it is at par with the rest in the region. At that time there was great excitement about what he called the emerging dragons (our local taipans) to get the country moving. Alas, my sources tell me, the dragons could not agree on who should lead the pack. Worse they were outbidded by PIATCO which was seen as an upstart and that was when NAIA3’s troubles began.

It showed a public service held hostage by bickering vested interests and a state too weak to intervene on the public’s behalf. There was a pathetic ceremonial opening of the airport last November but that was a farce. Until the airlines move in and the airport is operational, any opening will be a futile public relations exercise. "The new ownership over the majority stocks of PIATCO would now remove all the legal stumbling blocks to the opening and operation of Terminal 3 which had long been delayed due to some legal disputes," Lina added. "We are ready to endorse to the government the sale and the settlement of all disputes," he said.

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Americans are gnashing their teeth at the un-preparedness of the bureaucracy to deal with the New Orleans tragedy. It was days before officialdom, both national and local got their act together. It may be too late to find fault. The deed is done and cannot be undone.

It was good to be invited by the MIAA to a local version of how to respond to tragedy. What if a plane crashed in the middle of Roxas Boulevard? Will we be ready for it? With the specter of the airplane crash in Medan, Indonesia which killed more than a hundred people, I trudged down to see what Onie Nakpil, honcho for security of the airport operators (he was recently elected to head the regional group) called ‘table top exercises.’ It was a good learning experience to see what concerned officials would do.

The simulated tragedy was a Boeing 737 which took off at MIAA’s RWY 24 bound for Laoag International Airport. As soon as communication was lost with the pilot the MIAA Command Center alerted all concerned for a support group for a ‘probably downed aircraft – police, fire and medical services proceeded immediately to the presumed location of the crash. Moving little flags across a table may be far from real life emergency but the simulation at least highlighted some problems that would crop up when it did happen.

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My e-mail is [email protected]