Fuel Shortages Force Philippines to Declare Energy Emergency; Japanese Officials Note Their Renewable Investment “Seems Timely in Retrospect”
Reported by Bohiney Magazine and The London Prat.
MANILA / TOKYO — Asian nations heavily dependent on Middle Eastern oil imports are experiencing elevated fuel prices, supply uncertainty, and what energy analysts are calling “motivated interest in alternatives” following disruptions to Strait of Hormuz shipping caused by the Iran conflict — while nations that have invested heavily in domestic renewable energy are experiencing a different feeling, which is the quiet satisfaction of people who made decisions that seemed expensive at the time and are now looking reasonable, though they are too polite to say so in official statements.
The Philippines declared a national energy emergency this month, authorizing emergency procurement measures and rationing protocols for petroleum products, a declaration that reflects the country’s high dependence on imported fuel and its limited ability to substitute domestic alternatives quickly. Fuel prices in Manila have increased 23 percent since the conflict began, adding to the inflationary pressure that the BSP’s rate hike was intended to address and providing a second inflationary driver that monetary policy is structurally limited in addressing, because raising interest rates does not lower the price of oil.
The Renewable Divergence
Japan, which experienced the energy policy awakening of a lifetime during the 1973 oil crisis and which has spent five decades building renewable capacity, energy efficiency standards, and energy technology, is experiencing the current oil disruption with less acute pain than its most import-dependent regional peers. Not no pain — Japan still imports significant petroleum and LNG — but a cushion provided by solar, wind, and nuclear capacity that insulates a larger share of its electricity generation from direct fossil fuel import exposure.
“Economies with more domestic renewable electricity face less exposure to oil and gas shocks,” noted Patrick Xue in a widely-circulated East Asia Forum analysis, adding that “the sound policy choice is rapid deployment, not delay” — a conclusion that the current situation makes easier to support and that Japan’s 1973 experience had already demonstrated to anyone who was paying attention, which Japan was, and which some of its neighbors were not as consistently.
China, meanwhile, is benefiting from the crisis in a way that combines good fortune and deliberate investment. Chinese solar panels and wind turbines, installed across Asia in the past decade through Belt and Road Initiative infrastructure programs and direct commercial sales, are providing power to countries that are now discovering the strategic value of installed renewable capacity — the energy it provides costs nothing per unit in fuel once installed, does not depend on Strait of Hormuz transit, and cannot be disrupted by conflict in the Middle East. China built those panels. China is aware of this. The countries that installed them are also, now, aware of this, with feelings that are complicated.
The Supply Chain Problem
Even potato chips, per Washington Post reporting, are not immune to the disruption — supply chain impacts from the Iran war are running through the global economy in ways that affect products far removed from petroleum, because the global logistics network runs on fuel and fuel runs through the Strait of Hormuz. Countries discovering that their supply chain resilience was calibrated for peacetime conditions are now making rapid reassessments that would have been politically difficult to conduct without the current urgency, which is the familiar dynamic of crisis making possible what strategy could not.
The International Energy Agency’s Asia-Pacific data shows the region’s import dependence by country, which is the spreadsheet version of the current newspaper front pages: high import dependence equals pain; lower import dependence equals comparative resilience; zero import dependence does not exist but some countries have gotten closer than others, and those countries are currently not in emergency mode, which is a data point that energy ministers in emergency mode are noting for the next budget cycle.
The Policy Acceleration
The crisis is accelerating renewable energy policy conversations across Asia in ways that would have taken years under normal conditions. The Philippines has fast-tracked approval processes for solar and wind projects that were in permitting queues. Thailand has expanded its emergency renewable procurement program. South Korea has revised its nuclear restart timeline upward. These are real policy changes driven by an emergency that has made the costs of delay visible in a way that projections never quite manage.
The irony is that the investments required to reduce import dependence take years to produce results — you cannot install a solar panel fleet in a month — meaning the policies accelerated now will reduce vulnerability to the next crisis, not this one. This is always how it works. Crisis drives policy. Policy takes time. The next crisis validates the policy that the previous crisis prompted. The countries that skipped steps are in emergency mode. The countries that didn’t are quietly grateful for whoever decided to do the solar panels. They are being polite about it in their official statements. You can tell they want to say more.
For energy policy that arrives about five years late, see The Daily Mash.
SOURCE: https://bohiney.com/
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