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Economy, Energy

Bataan Peninsula, international petroleum prices, Luzon Island, sharp increases, geothermal resources

Since the early 1970s the Philippines has developed a variety of domestic energy resources, including geothermal resources, hydroelectric power, offshore oil reserves, and coal fields. Increased production of domestic energy reduced the country’s dependence on imported petroleum from 95 percent of the energy supply in 1973 to about half that amount by the end of the century.

Offshore exploration for oil reserves was spurred by sharp increases in international petroleum prices in 1973 and 1979. Oil was discovered near the island of Palawan in 1976, and commercial production began in 1979. The domestic oil wells produce relatively insignificant amounts of crude petroleum, however, and the Philippines must import most of the petroleum it consumes. A natural-gas field off western Palawan was estimated to contain abundant reserves and held promise for future production. The major potential of undersea fields in the South China Sea is diminished by competing claims from China, Vietnam, and Malaysia. In addition to petroleum and natural gas, fossil-fuel plants utilize the country’s coal resources. However, the coal is of generally poor quality for electricity production. Thermal plants utilizing fuels such as coal and oil generated 61 percent of the country’s electricity in 1999.

The Philippine government has also pursued the development of alternative sources of energy. The Philippines has significant geothermal resources. The country’s installed capacity for geothermal power is exceeded only by the United States, and most of its geothermal resources remain unexploited. Geothermal, solar, and wind sources generated 20 percent of the country’s electricity in 1999. Hydroelectric sources generated 19 percent.

In 1990 a shortage in electricity-generating capacity on Luzon resulted in frequent power outages in the Manila metropolitan area. This threatened the stability of the country’s economy because many important industries are concentrated in this area. The government of President Fidel Ramos managed to construct new fossil-fuel plants to meet the burgeoning demand for electricity. Construction of a nuclear power plant on the Bataan Peninsula, on Luzon Island west of Manila, was never completed because the plant’s location on seismic fault lines was deemed a hazard to public safety. Accelerating economic and population growth in the Manila region continues to put pressure on the energy supply.

Article key phrases:

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