DoE to Regulate Operation of Natural Gas Pipelines

Article excerpt


The Department of Energy (DoE) is being vested the authority to regulate the construction and operation of natural gas pipelines and related facilities for the transmission and distribution and supply of natural gas.

This was propounded under the proposed Downstream Natural Gas Industry Act which already mustered the committee level approval at the House of Representatives.

Under said legislation, the energy department is also being mandated to issue permits, initially for a period of 3 years after the effectivity of the law, for the construction of pipelines and other related facilities.

However, before any entity can engage in the natural gas pipeline ventures; it would need first to secure a Congressional franchise because such facilities have been declared as public utilities. It would be noted that the Philippine Constitution vested to Congress the sole authority to issue franchises for the operation of public utilities.

Meanwhile, the Energy Regulation Commission (ERC) shall be given the sole regulatory powers to establish the rates and related terms and conditions for the downstream natural gas businesses; from transmission, distribution to supply.

The development of the downstream natural gas industry is one of the key areas that the current administration has been wanting to give focus to; so it would be able to generate fresh investments.

President Arroyo has earlier mandated state-owned Philippine National Oil Company (PNOC) to spearhead the formation of a consortium that will put up the proposed 100-kilometer Batangas-Manila and 150-kilometer BataanManila gas pipeline projects. …