Thai politics: As gas supplies dwindle, debate over extraction drags on

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BURNING ISSUE
As gas supplies dwindle, debate over extraction drags on
Sasithorn Ongdee
The Nation

BANGKOK: -- Prime Minister General Prayut Chan-o-cha seems to have put a brake on a move by energy network civic groups opposing the government's new round of bidding for petroleum concessions.

On Monday the anti-petroleum concession groups filed a petition with the Central Administrative Court asking for an injunction on any activity involving the new bidding round. Prayut the next day ordered the National Reform Council (NRC) to discuss this issue.

He gave it only two months to find a solution.

In the meantime, the process of inviting prospective investors to participate in the bidding for petroleum concessions is moving forward in parallel. According to the process, the bidding date will be slated within four months of their announcement.

Prayut and his government cannot afford to overlook the seriousness of this matter.

Opening opportunities for others to tap the Kingdom's energy resources beneath the ground is not the point. The real issue is what is the most appropriate system here to apply for the country.

Whether it should be a concessionary system or production sharing contract (PSC) is now the focus of a dispute between the government and the anti-concession groups. The two are among three that are the most popular systems in the world, the other being services contract.

Thailand has applied the concessionary system for more than 40 years. During the first 20 rounds from 1971 to 2007, about 7,800 million barrels of oil were extracted, most during the first round. Currently, there are 53 blocks still operating under the concessions.

The energy network groups, including that of NRC member Rosana Tositrakul, are refusing to budge on demands that energy concessions be deferred until the sector is reformed.

What they want is to apply the "PSC" regime for the government's energy acquirement, as they believe it can bring more financial benefits than the concessionary system. Other Asian countries such as China, Malaysia, Indonesia and Myanmar apply the PSC regime.

The groups are also ideologically in favour of nationalising petroleum production, promoting this as a reform proposal when they joined the anti-government protests that toppled the previous, Pheu Thai-led, administration. But the current government eventually followed its predecessor's policy on petroleum concessions.

The Prayut government - which includes many key people who served with previous administrations - still clings on to the concessionary system.

The government believes this is the most appropriate system for a country where energy extraction is limited by geographical factors. It is also faced with a threat of natural gas potentially running out within the next six to seven years if the new round of drilling does not proceed.

Were that to happen, electricity bills around that time would rise sharply, as natural gas accounts for 70 per cent of total energy used for electricity generation.

Meanwhile, using coal as fuel in generating power is being hindered by groups concerned by the impact of environmental pollution.

To understand this problem, we must face the fact that Thailand is an importer of energy, not an exporter, consuming more energy than it produces. Domestically produced natural gas produced only meets 80 per cent of our domestic demand. Also, the country lacks the budget to invest in a petroleum business that is risky and needs intensive capital.

Talks are needed between the government and public sector.

Moreover, the government needs to do more public relations over opening the 21st round of bidding for petroleum concessions in all dimensions to get people to understand how what it's doing will benefit the country.

Otherwise, the government might see the current drip of opposition become a tidal wave of people opposed to any activities related to the petroleum concessions - and that could push its energy acquirement plan into trouble.

Source: http://www.nationmultimedia.com/politics/As-gas-supplies-dwindle-debate-over-extraction-dra-30246664.html


-- The Nation 2014-10-31

[BSJ]

I am all for doing things by worlds best practice including reducing (limiting) the environmental impact of the process, but the process must happen. As long as the government receives some tax revenue and environmental issues addressed it is what has to be done. Does it matter how the contract is written? PSC or concession doesn't matter to you and me at the pump. The government needs to decide how to deal with it.

But from a protester point of view I think there is a hidden agenda to this matter. Or maybe not so hidden to some highly informed TV posters!

[sletraveler]

In a tropical country situated near the largest producer of panels, why no discussion of solar?

I live in an area famous for clouds and rain. Albeit I produce enough with 9 panels to provide enough to cover my average daily demand.

It would take government initiative and subsidy and the power companies also need to handle net metering. The lack of discussion seems to indicate it is not an option. No?

[bangrak]

Gas supplies don't 'dwindle'! This is INTOX, again, pure manipulation by the fossile energy 'barons'! Money and greed, greed and money, period.

[rickirs]

This isn't an issue about environmental impacts, methods of bidding, or a comprehensive energy plan.

These concession sales are simply about the Government getting a quick financial infusion of cash to use as an economic stimulus before mid-2015. Tax collections are failing, household debt continues to grow, government debt continues to grow with new subsidies, a larger government, and stimulus spending; business sector revenues such as agriculture, exports, and tourism are suffering. Delay of sale for these concessions could help push the economy into stagnation in 2015 - a situation that the Junta and its financial supporters cannot afford and could seriously affect its power base.

[Soutpeel]

Gas supplies don't 'dwindle'! This is INTOX, again, pure manipulation by the fossile energy 'barons'! Money and greed, greed and money, period.

tin foil hat time again I see ...

[Gonsalviz]

In a tropical country situated near the largest producer of panels, why no discussion of solar?

I live in an area famous for clouds and rain. Albeit I produce enough with 9 panels to provide enough to cover my average daily demand.

It would take government initiative and subsidy and the power companies also need to handle net metering. The lack of discussion seems to indicate it is not an option. No?

There are solar panel farms all over where I live.

[rubl]

This isn't an issue about environmental impacts, methods of bidding, or a comprehensive energy plan.

These concession sales are simply about the Government getting a quick financial infusion of cash to use as an economic stimulus before mid-2015. Tax collections are failing, household debt continues to grow, government debt continues to grow with new subsidies, a larger government, and stimulus spending; business sector revenues such as agriculture, exports, and tourism are suffering. Delay of sale for these concessions could help push the economy into stagnation in 2015 - a situation that the Junta and its financial supporters cannot afford and could seriously affect its power base.

Nonsense and untruths and a few conspiracy theories thrown together for a bit of government bashing.

Of course the government could use some cash seeing that they had to do a reservation in the 2014/2015 to pay off some of the 500 / 700 / +++ billion Baht the previous government guaranteed in the 'self-financing' RPPS and need to continue doing so for the next seven years.

Equally of course the government could actively do 'nothing' instead. Now that would give some bashing

Oh, by the way, new concessions even for land based drilling still requires some time before they possibly generate gas or oil if they manage to do that is. Maybe the NCPO should wait a few years till when as some have it we will have a Shinawatra to save the country 'again' ?

[SilverBeast]

Solar should be the discussion. How much sun do they get in the rainy season? I know the sun pattern being 11 hour days in winter and 13 hour days in summer and at a high angle are absolutely excellent for solar. Consistent and a good angle. Pair solar with electric cars and it really becomes a force to reckon with.

Solar and Electric cars are the solution.

[Soutpeel]

Solar should be the discussion. How much sun do they get in the rainy season? I know the sun pattern being 11 hour days in winter and 13 hour days in summer and at a high angle are absolutely excellent for solar. Consistent and a good angle. Pair solar with electric cars and it really becomes a force to reckon with.

Solar and Electric cars are the solution.

Naah..nuclear all the way...

[SilverBeast]

Solar should be the discussion. How much sun do they get in the rainy season? I know the sun pattern being 11 hour days in winter and 13 hour days in summer and at a high angle are absolutely excellent for solar. Consistent and a good angle. Pair solar with electric cars and it really becomes a force to reckon with.

Solar and Electric cars are the solution.

Naah..nuclear all the way...

Bah, Nuclear has too many problems and risks.