In 2004, the government initiated the pilot testing of using the locally sourced natural gas as fuel for public transport through Executive Order (E.O.) No. 290 entitled “Implementing the Natural Gas Vehicle Program for Public Transport (NGVPPT)”. The Department of Energy (DOE) was designated as the lead implementing agency of the program and other national government agencies (NGAs) that have jurisdiction in other aspects of the program, as co-implementing agencies. Likewise, an Executive Forum was established, composed of lead and co-implementing agencies with private sectors participation to ensure a unified and coordinated inter-agency effort in program implementation including provision of incentives to encourage private sector participation.
The program targets to deploy a total of 200 CNG Public Utility Buses (PUBs) using compressed natural gas (CNG) from the Malampaya gas field for the pilot phase implementation. In 2008, the DOE started the program by establishing the first CNG refilling station at Mamplasan Biñan, Laguna and the commercial operation of thirty-two (32) units of CNG fueled bus. The initial phase of the pilot phase implementation was a success considering that the riding public widely accepted the option of a cleaner public transport.
On the technical side, public safety and technical issues have been addressed through formulation of the necessary standards that governs the quality and specifications of equipment both for the buses and refilling station. Successful technical operations were likewise attained through series of capacity building activities. Even the challenge of transporting the CNG from the source to the refilling station without the required natural gas pipeline has been overcome through the use Material Accumulator Transport System (MATS). Overall, the pilot phase of using CNG for public utility buses was proven to be technically feasible.
Economically, the establishment of supply infrastructure remains to be the challenge. Economic modelling shows that at certain diesel price level and enough gas-offtake of the CNG buses, the program is economically feasible even without the natural gas pipeline. Investment opportunities remain to be robust both in the supply infrastructure side and the off-taker side such as the procurement of CNG buses.
Moreover, based on the data of the pilot phase, the social benefits for the country are enormous. As of 2014, the program benefited the country by displacing a total of 4 million liters with equivalent FOREX saving of US$ 2.0 Million of diesel fuel and a corresponding reduction in carbon dioxide (CO2) emission of around 4,400 metric tons. Also, if successfully mainstreamed, the NGVPPT will create a new industry in the manufacture of CNG buses and the corresponding sub-sector such as, spare parts supply and after sales services.
With the market potential of 16,000 units of public utility buses for shifting to CNG, massive investment requirement for supply infrastructure, i.e., CNG refilling stations is needed. At 100 buses per refilling station, the sector will require at least 160 CNG stations that will be strategically located nationwide. On the main gas supply side, even without the pipeline, the sector could technically use liquefied natural gas (LNG) as source of CNG, which will require establishment of LNG depots.
Moreover, the DOE is keen to pursue the program by engaging a third party to evaluate the project implementation and for possible extension of the pilot phase implementation beyond 2018. To date, the DOE is coordinating with Department of Transportation (DOTr) - Land Transportation Franchising and Regulatory Board (LTFRB) on the confirmation of franchise availability for the targeted 200 CNG buses, of which 176 were declared available for the CNG buses on March 2015.
The DOE, as the program’s lead agency, continues to exerts all the necessary intervention within its mandate to sustain the program. Accordingly, the Philippines National Oil Company-Exploration Corporation (PNOC-EC) was mandated by the DOE to take over the operation and maintenance of the CNG refilling stations. However, the procurement of two modular CNG stations for Biñan, Laguna and Port Area, Batangas City has yet to be finalized considering the issue of securing CNG supply and the negative impact of the current volatility of diesel price to the economic viability of operating the CNG delivery system.
The government is continuously considering CNG as an alternative option for the transport sector by coordinating with concerned NGAs to establish the necessary enabling mechanism for the nationwide commercial adoption of CNG in public transportation.
For this planning period, the DOE will explore other business model that could address the economic challenges of this initiative and continuously coordinate with the legislative body, academe and concerned NGAs for the provision of incentives, capacity building activities, policies and guidelines, establishment of CNG tank requalification facility, and development of emergency response protocol for CNG vehicles to support the deployment of CNG buses under the program.
In addition, to sustain the awareness on the program, continuous information, education and communication (IEC) campaigns and other promotional activities will be regularly conducted throughout the planning horizon.