Philippines: After oil and rice crises, a power crisis

More bad news: things are going to get worse before they get any better for Filipinos. First, there is the oil crisis; the price of crude oil is going through the roof in the world market. Then there is the rice crisis; price of the grain is rising and there is an impending shortage. And now comes an impending power crisis; we cannot generate enough electricity because there is a worldwide shortage of coal. With the coal-powered generating plants unable to produce enough electricity the other plants using hydro, thermal, diesel and wind won’t be able to cover up the shortage, especially now in summer when there is a big demand for cooling from air conditioners. So expect frequent brownouts.
But why is there a world shortage of coal? Because of a confluence of events, man-made and natural. As in the rice crisis, because of increased demand and short supply. There is an increased demand from Japan, Korea and China. Indonesian coal (bituminous) reserves are being depleted at an alarming rate. China, once one of the major coal exporters, has now become a net importer. India has also increased its demand for bituminous fuel. We have coal in Semirara but it is of low quality and has to be mixed with imported coal.

Adding to the demand are the logistical problems due to a disparity between rail capacity and port development in Australia. The resulting imbalance led to long queues of up to 79 vessels in the port of Newcastle.

A worldwide increase in demand for commodities has not helped the situation. Freight market volatility has gone up due to lack of available vessels to transport goods around the world. Freighters formerly used exclusively for fuel deliveries are now being used to transport other products such as iron ore, nickel and grain. As a result, coal freight costs have gone up considerably in the last 12 months.

Then there is Mother Nature. Global weather has wreaked havoc in coal-exporting countries. Indonesia experienced incessant rains in one area and searing temperatures in another, drying up rivers and hindering coal mining and delivery operations. Australia storms, particularly in the Newcastle and Hunter Valley regions, have similarly caused flooding in mines and affected railways and loading ports. As a result, numerous Indonesian, Australian and South African mines have already declared force majeure for their scheduled deliveries in 2007 and 2008.

Inquirer