With the high price of oil, the unstable foreign oil countries, and with a renewed focus on the environment there has been much attention of late on finding an alternative fuel source. Biodiesel is nothing new, in fact it has been talked about and experimented on for close to a century, but has been the recipient of a lot of interest of late.

An alternative fuel source has been talked about for decades. The reasons different people have for looking for this alternative fuel source vary widely. It could be for environmental reasons, economic reasons, or even just the excitement of new technology. One thing is certain though, in the past when someone showed interest in biofuel technology it was usually a small group of environmentalists, a lone scientist, or a very small energy related startup company. Not true any longer as multinational corporations and entrepreneurial millionaires are jumping on the ever filling Biodiesel bandwagon.

From Ohio to Malaysia established biodiesel manufacturing plants are operating at capacity. So much that in recent months there has been announcements regarding huge Biodiesel manufacturing plant construction projects. Construction projects aimed at building Biodiesel manufacturing plants that can yield 50, 100, even 200 million gallons or more per year. All this is happening in the Biodiesel refining and manufacturing industry while the newest oil refinery built in The United States started operation in 1976.

Farmers large and small have also seen the trends and altered their growing plans. More farms are raising crops with their specific eye on the Biodiesel market. Soybeans, Corn, Rapeseed, and more are dotting the world’s landscape. Few experts would say that Biodiesel will one day replace petroleum based fuel as it is impractical to grow enough raw materials to fill the world’s fuel demands. But, anything that can make a dent in one of the world’s most established markets deserves notice.

Millionaires and corporations wouldn’t sink millions upon millions of dollars into a relatively new industry without believing that it would be profitable. Corporations are not known to be gamblers. Major corporations have buildings full of accountants and market analysts who are paid well to make sure that the corporation does not make a poor investment. The only reason that self-made millionaires and these multinational corporations would expend the manpower, time, and money to develop and construct Biodiesel manufacturing plants is that they believe there is money to be made. For there to be money to be made in the Biodiesel market, all these successful and knowledgeable people have not only seen that the growing and manufacturing processes are viable, but that there will be a market for their products. Without end users, the manufacturing of anything for resale is pointless.

So, why have millionaires and corporations invested so heavily lately in Biodiesel? Because they have seen the future, and the future is made up of a large number of consumers who for many different reasons are looking for an alternative-fuel. There needs to be no further evaluation on whether there is a future to the Biodiesel market. If there were no future to the Biodiesel market, then these investors and businesses would not be spending this kind of time and money on manufacturing a product that no one will buy. Continue manufacturing, the buyers are waiting.

Waste vegetable oil is a natural byproduct of cooking and presents an interesting problem for any restaurant owner. Just what does one do with the gallons, sometimes even barrels, worth of used vegetable oil accrued on a daily basis through the everyday workings of the restaurant? Fortunately there are several options, some of which can even be profitable to the restaurant owner.

The most common means of disposing of the large quantities of oil generated by a restaurant is the use of a waste oil disposal service. Depending on the area the restaurant is operating in, there may be several options in this. In areas where there is not a ready demand for used oil a restaurateur may find it necessary to pay to have cooking oil removed.

Locating a suitable disposal service is often as simple as turning to the local yellow pages. Cooking oil removal services are often listed under the heading “Oil – Used and Waste”. It is a simple matter of doing a bit of research and calling around to see which service offers the best price and works with the restaurant’s schedule. Often times refineries offer a waste cooking oil removal service at lower cost than independent operations.

In some areas, where there is an applicable use and facilities that utilize waste oil, a restaurateur may even find that he can make money off of his restaurant’s oil. Many removal services are willing to pay for oil that they then resell. Waste oil is used by rendering plants where it is recycled into high energy fat used in animal feeds. Used cooking oils can also be treated and turned into biofuel replacements or traditional fossil fuels in industrial environments. Removal services in areas with access to such facilities are often willing to pay a restaurant owner a fraction of the price they are able to get per barrel of waste oil.

Another option that is growing rapidly in popularity comes from private individuals who have adopted the growing trend of using waste oil as fuel for automotive use. In the current rise of environmental consciousness, more and more individuals are exploring the use of greener and more cost efficient fuels. In the wake of this movement there has been a rise in the conversion of diesel engines to run on waste oil. The process is safe and relatively inexpensive and has a great appeal to those seeking to lessen their carbon footprint or to lessen the burden on their wallet from exorbitant traditional fuel prices. These individuals are more than willing to take waste oil off of a restaurant owners hands, solving the problem of waste removal for the owner and giving him the satisfaction of knowing that he too is playing a role in protecting the environment.

Waste oil is a normal and unavoidable aspect of restaurant operation, so it benefits the owner to survey the options available for its disposal before the grill is even fired for the first time. As demonstrated above, there are numerous options available to the owner, some of which can even prove beneficial to the business. It pays to do the research and find out what is accessible.

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I am quite puzzled how the oil companies are handling the oil problem. In a matter of fact, I think they have done this for a reason and the government needs to look into this. No more taking kick backs, or bribes we need the truth. All I know is the prices we pay for gasoline right now are ridiculous. I am also concerned, if we have so much Natural Gas why do the prices keep going up. I would think if we have enough, why price are climbing. Are they restricted to OPEC?

I thought as an average person who has some intelligence, if the US has oil and natural gas we would be using them here in the US. The US oil and gas Prices should be helping Americans and not making daily life hard to handle and impossible for the average American to pay their bills. On the average we are spending more than 30% more in gas for transportation, our utility bills are way higher, and everything we buy is higher, because transporting it went up with everything else.

We as America need to start asking why our government has not been working on this problem since they seen the red flags go up and why they did nothing. I know that the government was relaxed for a few Decades, because the economy was doing somewhat good. But in business we apply disaster and recovery plans. I think our government needs to look how businesses work to protect their services, employees, and clients. I know they have a lot to govern but that is why they are there and we voted them into office.

What I gather is: we have been kept in the dark about critical problems that could have been nipped in the butt before it got this far. We were not told to about the oil problem, let alone that we do not have enough oil refineries in the US to handle the demand. The last time the US built a refinery was back in the 70s. My children are that old, what happened? I thought we were a country that is geared for advancement.

We have 4 or 5 oil refineries down in the Mexico gulf near New Orleans, Louisiana. Those refineries are not in full use because, they cannot get all the employees back, the re-building of New Orleans has just began and the employees have no place to live. The government has not stepped up to the plate and informed the US of this problem. We need more investors down in that area so we can get our gas prices down. Another consideration here is: A major port in Louisiana is not running at full capacity, same reason as the oil refineries, no employees, and no homes for the employees. The ships have to go to other ports, which costs more money, and also more money to transport the products because they had to dock at another port further away.

Back in the 70s and 80s we started buying smaller cars, moved closer to work and we were utilizing solar power. We were looking into alternative energy sources and then we started back into the same old ways. We got richer and we moved further away from our jobs, we bought those bigger cars and started buying all those recreational vehicles. Nothing wrong with that, we just do not want to deal with problems when things are going so well. Then here we are now! The government could have informed us about the problems so we could start tightening our belts.

Start asking questions, and quit getting so comfortable when things are going well. Start applying that rule that businesses use on our personal life. Maybe we can start getting America back where it should be! Start asking questions and see if we get answers.

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It is apparent that we are in some desperate situations:

Texas (where the large oil refineries are) just experienced a major hurricane disaster and this is the exact climate for high gas price increase.

Lehman Brothers just filed bankruptcy and Wall Street is scrambling for help. This is another disaster for high gas prices.

We are in the process of an election and the economy is a steady topic, but there is no immediate help with the gas prices.

Chavez chased the UN ambassador out of his country and his country does supply gas to the US. This is another disaster for trouble with high gas prices.

I could go on and on. You listen to the news and hear how it is all playing out.

Over the weekend, I went to purchase gas to fill up because I know the high price is coming. I filled up my car and two five gallon bottles that I am keeping in my shed (this is unsafe, but I have no choice). The gas then was $3.69 per gallon. This is in Florida.

The next day when I passed by the same gas station, the price had gone up to $3.74 and today it is up to $3.79. It is steadily rising.

Of course, you may have heard about gas gouging in Orlando and other States where the gas prices went up to as much as $5.00 per gallon.

What do we do in this time of crisis? What alternatives do we have?

Of course, there is the option of running your car on biofuel or vegetable oil, but that is just too much work. I saw a documentary the other day with a couple in England driving around looking for vegetable oil. I would rather buy the gas than go on a pilgrimage for vegetable oil.

What about the concept of “run your car on water?” This is a viable option and I have taken a serious look at it and done some intense research on the subject because people like myself want to know what alternatives there are out there since there is no help right now from the government or its entities.

There does not seem to be any end in sight soon either.

Reuters released a video about water powered cars and the video shows how a company in Japan by the name of Genepax utilized the technology and is creating cars to run with water.

As indicated by the published Reuters video on June 13, 2008, the water powered car is selling for about $18,700 US dollars. This does not include the cost of the car, however.

That sounds a bit expensive to me and probably would not be a feasible option to our immediate problems of high gas prices.

If you want to learn more about how to run your car on water, then you should definitely look into it and go directly to the website with more information to show you how to convert your car to run on water.

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The main difference between biodiesel and diesel is that while diesel is a derivative of petroleum products, biodiesel is a compound of biological nature- hence its name. The major sources of biodiesel are plant materials such as vegetable oils as well as animal materials. Unlike diesel which is manufactured through refinery processes carried out on crude oil, biodiesel is mainly a derivative of compounds of alcohol, which are produced in a series of biochemical processes that lead to fermentation in animal and plant materials. Whereas diesel is derived from a series of cracking processes involving crude petroleum, biodiesel is a derivative of plant or animal matter, particularly oil and fat respectively. These compounds consist of long chains of alkyl-, ethyl-, methyl- or propyl- esters. The compounds are derived by using several substances including vegetable oils and animal fats with alcohol-based substances.

Biodiesel is used in typical diesel engines. This feature differentiates it from other vegetable oil-based fuels that are consumed by converted diesel machine engines. Most converted fuels are usually in the form of ethanol. Biodiesel may be used on its own or be fortified with conventional diesel, which is commonly referred to as petro diesel.

The utilization of biodiesel in engines as opposed to petro diesel presents a number of benefits in regard to environmental concerns and economic impacts. To begin with, combustion of biodiesel results is reduced carbon dioxide emission rates of about 60 percent as compared to the use of petro diesel. This means that biodiesel is more environmentally-friendly vis-

I. INTRODUCTION

The Policy As An Output

Embodied in the Republic Act No. 8479, otherwise known as the “Downstream Oil Industry Deregulation Act of 1998,” is the policy of the state that deregulates the oil industry to “foster a truly competitive market which can better achieve the social policy objectives of fair prices and adequate, continuous supply of environmentally-clean and high quality petroleum products” (Congress 1998).

With deregulation, government allows market competition. That means government does not interfere with the pricing, exportation, and importation of oil products, even the establishment of retail outlets, storage depots, ocean-receiving facilities, and refineries.

It has been a decade ago since lawmakers made a proposition that deregulation would secure the Philippines from the vulnerability of oil price shocks due to its heavily dependent on imported oil. But it is now increasingly apparent that many are calling to scrap the law as six out of ten Filipinos favor the repeal of RA 8479 (Somosierra 2008).

The Policy As A Process

When President Fidel Ramos started his administration in 1992, the country had already started feeling the effects of power supply deficiencies, with major areas already experiencing power interruptions. The power crisis caused a slowdown in the national economy for nearly three years and prodded the government to initiate major reforms in order to rehabilitate the energy sector (Viray 1998, p.461-90). In response to a power supply crisis, Ramos revived the plans to liberalize the oil industry that were cut short during the Aquino administration due to Gulf crisis.

The government’s efforts to enact an oil deregulation law were also intensified in 1995 when the Oil Price Stabilization Fund (OPSF ) started to threaten the fiscal stability of the economy. Deregulation was thus seen as the solution to the recurring deficit.

The problem of the OPSF deficit was in part related to the highly political nature of oil prices, which encouraged government to defer price increases as much as possible in order to avoid public protest even at the expense of incurring a fiscal deficit. However, government mismanagement of the fund also included using it for non-oil purposes such as financing other government projects or the public sector deficit when it was in surplus (Pilapil 1996, p.12).

At the height of a strong lobbying effort for deregulation by oil companies and despite the loud opposition of militant groups, the industry was eventually deregulated in 1996 with the enactment of RA 8180 (the Downstream Oil Industry Deregulation Act of 1996) in Congress.

However, Supreme Court declared in 1997 the unconstitutionality of RA 8180. The Court decision stemmed from three provisions in the law that were deemed to inhibit free competition and therefore, violated the anti-trust mandate of the 1987 Constitution (Supreme Court 1997). But administration Congressmen quickly re-filed the oil deregulation bill leading to the new oil deregulation law. RA 8479 was then enacted to pave the way for the full deregulation of the oil industry. Since then, government has no longer control over the industry. What it can do is only monitoring.

Applicable Models

The policy model that best describes the policy process is Vig and Kraft 1984 model where policy stages/phases are characterized by five elements: 1) agenda setting, 2) policy formulation, 3) policy adoption, 4) policy implementation, and 5) policy monitoring.

On the other hand, the model that best describes the policy approach is Mixed Scanning because the Ramos administration resorted to rational planning process and incrementalized on liberalization plan of the Aquino government.

II. THE POLICY IN THE CONTEXT OF THE POLICY SYSTEM

The Policy Environment

Identified policy environment includes the regime characteristics of Ramos Administration, socio-economic structure in 1990′s, and the prevailing international financial influence on the country’s economy and politics.

The Policy Stakeholders

Identified as stakeholders in this policy are the Filipino people, the President, Legislators, Supreme Court, DOE, DOJ, DTI, NEDA, the oil companies, NGO/advocacy groups, and media.

The Interrelationships Between Policy Environment And Stakeholders

Despite a strong opposition coming directly from ordinary people, transport groups, and NGOs, the oil deregulation policy was still pushed through. It was formulated and instituted under the regime of President Ramos who, in his flagship program called the Philippines 2000, envisioned to make the country globally competitive by pursuing the thrusts of deregulation, market liberalization, and privatization. The media then exposed the fact that the biggest factor that influenced the formulation of the policy was the perceived eventual bankruptcy of the Oil Price Stabilization Fund, which had been originally established by President Ferdinand Marcos for the purpose of minimizing frequent price changes brought about by exchange adjustments and/or an increase in world market prices of crude oil and imported petroleum products.

Influenced by the International Monetary Fund, Ramos administration argued that there was a need to deregulate the industry because under a regulated environment, prices are not allowed to rise and fall with market levels. This means that when prices went up, government had to shell out money to subsidize the difference between the old and the new price.

According to the National Economic Development Authority (NEDA), had the government opted not to deregulate, OPSF obligation would have ballooned to at least P8.3 billion in 1998. The P8.3 billion is equivalent to the construction of more than 4,500 kilometers of provincial roads, 51,000 deep wells of potable water, 25,000 school houses, or free rice for 20% of the poorest Filipinos (Bernales 1998)

The Supreme Court in 1998 ruled in favor of the constitutionality of the Downstream Oil Industry Deregulation Act of 1998. Since then, it has been the policy of the subsequent administrations to deregulate the industry. DOE, DTI, DENR, DOST are agencies mandated to serve as the monitoring-arm of the government.

Is The Policy Working?

The answer is obviously “No.” IBON Foundation reported that the Oil Deregulation Law has further strengthened the monopoly of the big oil companies as automatic oil price hikes are allowed. Consequently, other oil companies took advantage of the policy, hiking pump prices of all petroleum products by around 535% since the Oil Deregulation Law was first implemented in April 1996 (Bicol Today 2007). The policy is also unable to solve or, at least, mitigate the effects of global oil crisis.

III. THINKING ALOUD

A. Repeating The Process

a.1 Problem Definition/Structuring

It has been recognized that the problem with oil is far from over as deregulation policy fails to meet its goal to foster a truly competitive market and reasonable oil prices. The current president herself, Gloria Macapagal Arroyo, acknowledges the fact that the oil crisis is threatening to erode the very fiber of the Philippine society.

Unlike in 1998, the crisis today seems to be more irreparable as the United States is facing what many economists describe as the worst economic crisis in its history, triggering unstoppable skyrocketing of oil prices and prices of foodstuffs around the world. As already stated, the oil crisis is a global one and has to be addressed not only at the national level, but at the international level as well.

But why is the oil crisis a global crisis? Is it really beyond the government control?

The Philippines, like many other nations, buys the oil at the spot market. By “spot” is meant, that one buys the oil at a market only 24 to 48 hours before one takes physical (spot) delivery, as opposed to buying it 12 or more months in advance. In effect, the spot market inserted a financial middleman into the oil patch income stream.

Today, the oil price is largely set in the two futures markets: London-based International Petroleum Exchange (IPE) and the New York Mercantile Exchange (NYMEX). Here, traders or investors buy or sell certain commodities like oil at a certain date in the future, at a specified price. Basically, traders invest in the futures market by buying futures contracts called “paper oil” or simply paper claim against oil. The very purpose of buying oil is not to wait for the actual delivery of the physical oil in the future, but to sell the paper oil to another trader at a higher price. That’s how investors engage in widespread speculation; and it is becoming a viscous cycle. Almost all countries, including the Philippines, buy the oil at the spot market where the price is already at its peak.

In a year 2000 study, Executive Intelligence Review (EIR) showed that for every 570 “paper barrels of oil”-that is futures contracts covering 570 barrels-traded each year, there was only one underlying physical barrel of oil. The 570 paper oil contracts pull the price of the underlying barrel of oil, manipulating the oil price. If the speculators bet long-that the price will rise-the mountain of bets pulls up the underlying price (Valdes 2005).

This only disproves the popular assumption that oil price hike has something to do with the “law of supply and demand.” In fact, as much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price (Engdahl 2008).

In its recent statement, IBON Foundation cited a study conducted by the U.S. Senate Permanent Subcommittee on Investigations, which revealed that 30 percent or more of the prevailing crude oil cost is driven only by speculation. IBON further cited that speculation adds about $35 to a barrel of crude oil (Martinez 2008).

a.2 Developing Alternative

In the face of the alarming oil price hike that threatens the survival of ordinary Filipino people, a number of stakeholders call for alternative solutions: 1) amendment of the Oil Deregulation Law, 2) scrap/repeal the law, 3) removal of 12% vat on oil, 4) seek alternative sources of energy, and 5) engage in country-to-country oil agreement.

a.3 Options Analysis

1. Amendment of the Deregulation Law

As the public continues to hurt from surging oil prices, many policy makers call to re-examine the Downstream Oil Industry Deregulation Act of 1998. One of whom, is Ilocos Sur Rep. Eric Singson who has sought several amendments in the said law to ensure transparency in the pricing of oil products and encourage greater competition in the retail industry, which has been under the influence of giant oil companies. He cited the need to amend Sections 14 and 15 of RA 8479 to strengthen the powers of the Department of Energy (DOE) so it can effectively carry out its mandate to inform and protect the public from illicit practices in the oil industry and to provide more financial assistance for the establishment and operation of gasoline stations, which will encourage investment and fair competition (Malacanang 2005).

2. Scrap/Repeal the Oil Deregulation Law

To many, amending the law is not enough to rectify the skyrocketing prices of oil and oil-based products; they demand for the repeal, instead. A lawmaker from the Lower House, Cagayan de Oro City Rep. Rufus Rodriguez filed House Bill 4262 aiming to repeal Republic Act No. 8479, arguing that instead of fostering a competitive market, the law has only strengthened the oil cartel in the country and brought the oil prices up. The bill also seeks to re-establish the Oil Price Stabilization Fund. He articulated that dominant oil companies still dictate the price because even new oil industry players get their supply from the giants (Sisante 2008).

Militant groups and other non-government organizations have staged rallies and strikes all over the country in opposition of the deregulation policy. Kilusang Mayo Uno (KMU), one of the country’s prominent labor groups, contested that cartelization still exists amidst deregulation. In its recent statement, KMU articulated that with recent Dubai oil prices pegged at $97 per barrel (as of 3rd week of September), local price of diesel is at P49/liter; while when Dubai crude was at $97/liter on Nov. 6, 2007, diesel in the Philippines was sold only at P37.95/liter, or P11.05/liter lower than the present rates (GMANews.TV 2008).

3. Removal of 12% VAT on oil

Senator Mar Roxas said that government must heed calls to remove the 12% value-added tax (VAT) on oil and oil products as prices continue to go up despite the lowering of oil prices in the world market. Roxas had filed Senate Bill No. 1962. However, in her eighth State of the Nation Address (SONA), President Arroyo, stated that it will be the poor who will suffer the most from the removal of VAT on oil and electricity as this will mean the loss of P80 billion in programs being funded by her tax reform (Arroyo 2008).

4. Alternative sources of energy.

While many have engaged themselves in the long-running debate about amendment vs. repeal of the law, a number of stakeholders argue that Philippine government must, instead, focus on alternative sources of energy to rectify the heavy dependence on imported oil. Senator Juan Miguel Zubiri, now considered “Father of the Philippine Biofuels Bill,” has hyped biofuel as the miracle product which can lower oil prices. But more and more scientists are worried that focusing on biofuels could jeopardize food production.

The Philippine LaRouche Society, an increasingly emerging think tank organization in the country, says that biofuel advocacy is a losing proposition as it competes with food production for human consumption. The organization calls, instead, for the revival of the Bataan Nuclear Power Plant (BNPP) as soon as possible to provide the population with a cheap, reliable, and continuous source of power to subsequently free the people from dependence on oil. The organization further articulates that since that will require huge financial requirements, the Philippine government must, therefore, declare a moratorium on foreign debt payments-since much of which are onerous and merely product of “bankers arithmetic” (Billington 2005).

5. Country-to-country oil agreement

The Philippine LaRouche Society has long been proposing to the government to initiate immediate steps to establish bilateral contract agreements with oil-producing countries of not less than 12 months’ government scheduled deliveries at reasonable, fixed prices. Government can also enter into commodity-swap agreements with oil-producing countries.

As a member of the United Nations and other intergovernmental associations like APEC and WTO, the Philippine government should join the growing worldwide call for a fair and honest oil trading by de-listing oil as a commodity traded in the futures market.

a.4 Deciding the Best and Most Feasible Option

It must be known to all the Filipino people that oil deregulation, as a policy, has failed to foster a truly competitive market towards fair prices and adequate, continuous supply of environmentally-clean and high quality petroleum products. Proposed solution # 2 (scrap/repeal the Oil Deregulation Law) is therefore a better option. But repealing the Deregulation Law is not the ultimate answer to the rise in oil prices. Even if the law is repealed, the Philippines will still be subjected to the same factors-a rise in oil prices in the global market.

Proposed solution # 5 (country-to-country oil agreement) can address the issue of the oil crisis at the international level. How about the efforts to solve the crisis at the national level?

The Philippine government must revive the Bataan Nuclear Power Plant to provide the population with a cheap, reliable, and continuous source of power to subsequently free the people from dependence on oil. As proposed, government must direct enough funds, instead for debt servicing, towards the revival and upgrade of BNPP. Removal of the entire E-VAT, not only on oil, must also be taken into consideration to ease the pain of the Filipino people. By moratorium, government doesn’t have to extract a pound of flesh out of every Filipino to have the means to fund its programs.

B. Why seemingly “better” options are not adopted? The Peculiarities of the Philippine Policy System

From the standpoint of the present administration, amending RA 8479 seems to be difficult to adopt because re-regulating the oil industry would mean subsidizing oil prices-something like OPSF. To many, this does not work in an era of rising crude prices because it would entail government resources. This is where debt moratorium comes in as an effective fiscal strategy. But moratorium, to many skeptics, is unwise because they fear the blackmail or retaliation of the multinational creditors. Our leaders must learn how then President Nestor Kirchner of Argentina defied the predatory financial institutions, averring that “There’s life after the IMF.”

On the other hand, many leaders deem country-to-country oil agreement impossible to implement as the giant oil companies have still strong influence on the policy-making process in the country. On the part of the oil companies, it will be a huge loss if government will assert its power to have a bilateral agreement with any of the oil-producing country. Also, many leaders consider the Philippines as a small nation with no voice in the international assembly. But it is a matter of having “big balls,” to put it in a figurative language. After all, they are the leaders and are mandated by the Constitution to protect and promote the general welfare.

Another peculiarity of the Philippine policy system is the negative perception towards nuclear energy. BNPP has been stigmatized as being environmentally dangerous and as being associated with “corruption.” The fact of the matter is, the technology has already evolved and been modernized. The Philippine government spent $2.3 billion to build BNPP without generating a kilowatt of electricity. It is high time to revisit the old strategy to finally free the country from dependence on imported oil.

It is worth mentioning that the International Atomic Energy Agency inspected the power plant in Bataan early this year and reported that this could be rehabilitated, in full compliance with high international safety environment standards, in at least five years at a cost of $800 million (Burgonio 2008). The Philippine LaRouche Society emphasizes the importance of declaring debt moratorium as a fiscal strategy to start the rehabilitation. The organization argues that the Philippines is servicing the debt over US $10 billion per year, which is more than enough to start the full operation of BNPP (PLS 2008).

IV. INTEGRATION AND RECOMMENDATIONS: TOWARDS A BETTER PUBLIC POLICY SYSTEM

With the recognition that oil crisis is a global oil crisis, affecting the lives of all inhabitants of our planet, it is incumbent, therefore, upon the leadership of the Philippines to immediately take the following steps:

A) To immediately repeal the oil deregulation law, for the government to assert its sovereign power to have control over the oil industry and economy as a whole.

B) To propose at any international summit or assembly that oil, being a commodity, critical to the continuation of human life, be de-listed as a commodity traded in the futures market, thereby escaping the clutches of unscrupulous people and speculative financial institutions.

C) To initiate immediate steps to establish bilateral contract agreements with petroleum-producing countries of not less than 12 months’ government scheduled deliveries at reasonable, fixed prices.

D) To design a comprehensive energy development program, such as nuclear power plant being the most cost-efficient source of energy to date, for the purpose of freeing our country from complete dependence on imported energy sources. To this end, moratorium on foreign debt must be taken into account as a paramount fiscal strategy.

The crisis, which we now face as a nation, requires understanding of the problems through diligent study and concomitant courage to do what is right for the benefit of the present and future Filipino generations.

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When we mention Oil, most people think “gasoline”. While it is true that about half of the crude oil we use every day gets refined into gasoline, that is only half of what we use. What does the other half do? The purpose of this exercise is to figure out where all that oil goes, and what it is used for. All crude oil has to be refined before it is used, so we will look at what came out of our refineries. We will use October of 2009 as an example.

US refineries supplied 543,158,000 barrels of products in October 2009. That is about 17,521,000 Barrels per day. We’re gonna see what those products were, but first, a short word from the bean counter (me). Tracking every single barrel of oil through the complex network of imports, exports, in and outs, processes and transportation is a daunting task. Even for one as smart as me. Every effort was made to make sure all of the figures here, and throughout this blog, add up. And, they come awful close. But they are not quite perfect. There are losses, leaks, and slight inconsistencies in all of the numbers, facts and data used. What follows is certainly close enough for all but an IRS Tax assessor. Most of my data is from the EIA (Energy Information Agency)

One other note. A refinery experiences something called refinery gain. Due to various things such as additives, the output of a refinery is approximately 5-8% more than the crude oil inputs. This is why, while refineries used 504,607,000 barrels of crude (16,277,000 bbl per day), they produced 543,158,000 (17,521,000 Barrels per day) of product in October 2009. So, lets now take a look at what came out of those US refineries in October of 2009.
These numbers are the total for the month of October 2009.

* Finished Motor Fuel (Gasoline): 271,299,000 bbl
* Distillate Fuel Oil (mostly No. 1, No. 2, and No. 4 diesel fuel ): 123,509,000 bbl
* Residual Fuel Oil (No. 5 and No. 6 fuel oils, includes Bunker C fuel oil): 20,851,000 bbl
* Jet Fuel (Kerosene): 40,036,000 bbl
* Petroleum Coke (Similar to Coal): 23,823,000 bbl
* Still Gas (Gaseous byproducts of refining): 19,096,000 bbl
* Propane/Propylene: 16,392,000 bbl
* Liquefied Petroleum Gases (LPG): 15,074,000 bbl
* Asphalt: 9,043,000 bbl
* Lubricants: 5,536,000 bbl
* Aviation (non jet) Gasoline: 494,000 bbl
* Kerosene: 587,000 bbl
* Many, Many other things: 22,418,000 bbl
* Refinery losses: -30,000,000 bbl (That’s a minus, stuff that didn’t turn out quite right).

A couple notes.

Petroleum coke is almost pure carbon. It is used to manufacture things like anodes for batteries, and furnaces, or as a fuel to heat things like forges. It is not an ingredient in soft drinks. (http://en.wikipedia.org/wiki/Petroleum_coke)

Still gas is NOT used to power a moonshine factory. It is gas that is emitted from the refining process. Since refineries use heat for many of their operations, in a move of thoughtful conservation, most of this is used to provide heat for the process. OK. Ignoring those minor refinery losses, lets do the statistical thing, and create some quotable figures.

* 49% of our crude oil went into our gas tanks as gasoline.
* 22% of it went into trucks, farm and construction equipment, etc – Diesels.
* 7% went into our fleet of airplanes.

Seventy Eight percent of the oil we used in October 2009 was used for transportation. But, 22% of the oil we used in October went to non transportation use. In industry, making plastics, pharmaceuticals, lubricants, roads, and a thousand other products. Some of it went to our propane gas grills, and that is good.

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As a restaurant owner, you are undoubtedly all too familiar with the problem of waste oil removal. Perhaps, like thousands of others, you find yourself having to pay month after month to have your waste oil bins emptied and maintained, sometimes having to pay additional charges if your restaurant exceeds its normal business and you find your bin full ahead of schedule. Wouldn’t it be nice if you could find a way to make that waste oil work for you, rather than have it be a constant drain on your profits?

There are options for those willing to think outside the box and do a bit of reseach. Not only can you eliminate the cost of having waste cooking oils removed from your business, but you can actually turn that used oil to your advantage. Waste cooking oil, accrued through normal operation of any restaurant, can be turned to profit with a bit of investigation and ingenuity.

The simplest way of turning waste oils to profit is to sell your barrels of waste oil either directly to companies that recycle and reuse such oils, or by contracting with a company that collects and resells to such companies. Waste oil is used for a variety of industrial purposes. Waste oils are used by rendering plants in the production of high energy fats for cattle and pet foods. Used oil is also used in industrial settings as biofuels as a cost efficient replacement to traditional fossil fuels.

Rather than paying a removal service to haul off your used oil, with a bit of digging it could be possible to find a service that will pay you for your oil. Such services sell barrels of used oil to refineries and rendering plants for prices up to $30 a barrel. As such, it is not uncommon for them to be willing to pay in the neighborhood of $10 a barrel for the oil that many restaurateurs actually pay to have removed. These services can be contracted with to run on a regular schedule, coming by at times most suitable for the restaurant owner and giving no penalty for additional unscheduled pickups.

One need not necessarily rely on the availability of a local removal service in the area, either. Many rendering plants and refineries will work directly with the restaurant owner and contract to purchase used waste oil. Some even offer on site pick up of waste oils and may provide cooking oil receptacles for the business. This also offers the restaurant owner a chance of fetching a higher price for his waste oil by cutting out the middle man.

Running a restaurant is a costly and time consuming venture. It is the wise business owner that seeks out every possible potential for profit and for solutions that ease the flow of conducting business. With a minimal amount of research and effort, the unavoidable waste generated by your business need not be an unavoidable expense as well. Waste oil can become an additional source of revenue rather than an additional source of stress.

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Biodiesel is a clean burning substitute for petroleum based diesel fuel. Biodiesel is made of vegetable oil. Most modern diesel burning engines can use Biodiesel with few or no modifications. Biodiesel is making inroads at the gas pump too where it can be found more and more as an option when it’s time to fill up the tank. But, how is Biodiesel made?

To make, or manufacture, Biodiesel you must first start with raw materials. The raw materials needed in the production of Biodiesel are a small amount of Methanol and a ready supply of vegetable product. One of the most common vegetables used in the production of Biodiesel is corn, although depending on the geographic location of the manufacturing facility many other plants are used as well (rapeseed, soybeans, flaxseed, etc.). The first step is to use the raw vegetable product to make vegetable oil. Vegetable oil by itself will not be what you need to power a car, from here it has to be processed into Biodiesel.

The process for converting vegetable oil into Biodiesel is sometimes called ester interchange. To complete this process the vegetable oil has to be combined with a smaller amount of Methanol and then put in the presence of a small quantity of an alkaline catalyst (for example, .5% to 1% sodium hydroxide). Vegetable oil is made up of so-called triglycerides, which is a compound of the trivalent alcohol glycerin with three fatty acids. The goal of ester interchange is to separate, or detach the glycerin molecule from the three fatty acids and replace it with three methanol molecules. This process then yields roughly 90% Biodiesel and 10% of a glycerin byproduct. The glycerin byproduct can be used in a number of other chemical processes for different industries. There are also studies being done to see if the glycerin byproduct, since it is vegetable based, can be used as feed for animals. This makes the production of Biodiesel produce virtually no waste products at all.

The production of Biodiesel is done in a large manufacturing facility like those being built around the world to take advantage of this relatively new fuel source. These facilities are built much like their oil refinery cousins with the intent of putting out hundreds of thousands, if not millions, of gallons of fuel. Unlike the manufacturing process of standard mineral based fuel, Biodiesel can also be manufactured in smaller home or farm units, or kits. The process remains the same but on a much smaller scale. There is also the option of making Biodiesel at home from used vegetable oil gathered from restaurants and delis. To achieve this the oil first has to go through another process to clean it of any impurities.

One of the main benefits of Biodiesel is that it burns cleaner than standard mineral based fuel. An additional benefit is that it also pollutes less during the process of making Biodiesel than it does during the manufacture of standard mineral based fuel like diesel and gasoline. Cleaner to burn and cleaner to make, Biodiesel is truly a viable alternative energy source.

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Among the desperate and ridiculously expensive attempts to find a new fuel for the future, lays a green fuel that has been around for decades. This liquid is called ethanol and has already been mixed with a small amount of gasoline (15% gasoline to be exact) to create the fuel called E85. Ethanol is nothing new, in fact, at a chemical level it is exactly the same to grain alcohol, the same alcohol that is illegal to consume in an open container while driving. What makes E85 so special is its efficiency compared to standard gasoline. E85 increases gas mileage, has roughly 80% fewer carbon emissions, eliminates the emissions of acid rain creating toxins, and on top of all that can be harvested and created from such a wide variety of sources. Ethanol can be extracted from sources such as prairie switch grass, wood chips, corn husks, and soy. So now you know about E85, but what you might not know is that over five million cars and trucks are already outfitted to handle this fuel. Vehicles such as Explorers, Tauruses, Stratuses, Suburbans, and other vehicles are equipped to fuel up right this minute. The technology is called flex-fuel and has been around for several years now. The only problem now is that the fuel is virtually non-existent and extremely hard to find. There are roughly 170,000 gas stations in the United States and less than 1000 carry the E85 fuel.

The complete change over from standard gasoline to E85 is not going to be happening overnight. E85 is slightly more corrosive to contain than gasoline, so service stations would have to retrofit certain tanks to contain the fuel, and more refineries would have to start opening soon to create ethanol. The current ethanol production stands at less than five percent of what it would take to wean the United States off of imported oil that has been costing the economy so much.

Ethanol is not new. In fact, Henry Ford’s early cars ran off of ethanol. The major change in the price is the fact that there is very little infrastructure to produce it. Despite the advantages of numerous sources of ethanol, there are not enough refineries to turn the plethora of material into usable ethanol. Slowly angel investors, including Bill Gates, have been investing in the future production of ethanol by funding new refineries. Once these production plants are in place, it is up to an oil enthralled country to change their perspective on green fuel and take the necessary measures to support the growth of the fuel that can increase efficiency, save money, and take drastic measures in cutting down harmful emissions that are plaguing the planet.

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