Special Law Eyed for Natural Gas Industry

Article excerpt


The legislative branch, in coordination with the Department of Energy (DoE) is eyeing to push for a special law that would govern the development of the local natural gas industry.

While the energy department already prepared a draft circular that initially lays down rules for the downstream business in the gas sector, particularly on the concerns of transmission and distribution of gas supply, the House committee on energy has recommended that "the DoE hold in abeyance any issuances of rules and regulations," and proposed that they jointly draw up a proposed legislative measure for the industry.

Rep. Alipio Cirilo V. Badelles, chairman of the House committee one energy and member of the committee on legislative franchises, stated in his letter to Energy Secretary Vicente Perez that his committee is already preparing a draft bill that would "cloth the DoE with ample authority to regulate the natural gas industry."

Some lawmakers have found provisions of the draft circular for the industry as "objectionable," especially the proposed rules that are seen to infringe on Congress' authority to issue franchises for public utilities, including transmission and distribution pipelines.

Badelles said the special law would be drafted in collaboration with the DoE and other stakeholders in the industry.

Meanwhile, Perez disclosed in a press statement, that they are already subjecting the draft natural gas rules and regulations to a scrutiny by international gas players, through the DoE-sponsored seminar workshop of the Implementation Facilitation Assistance Team (IFAT) of the Asia Pacific Economic Cooperation.

He noted that outcome of the workshop would be incorporated in the government's plan in firming up strategies for the industry's development.

Perez claimed the legal ground for the crafting of the rules is Executive Order 66 issued by President Arroyo this year, designating DoE "as the policymaking body to create guidelines and strategies that will set the direction for the development of the natural gas as an efficient and economical source of energy."

However, there is no specific provision in the EO that gives the energy department the authority to issue franchises or licenses for the operation of transmission and distribution pipelines.

The APEC-IFAT is a joint initiative of the APEC Energy Working Group and the APEC Energy Business Network aimed at helping member-economies which are undergoing energy sector reforms, primarily through policy recommendations on how to promote investmentfriendly environments and open competition.

"The full scale development of our natural gas industry is significant in the sense that it completes the three-fold energy sector reforms that we have long envisioned," the energy secretary said. …