DEC.

23, 2011 DATE

NR # 2626B
REF. NO.

Solons call for regulation of fuel pipelines

In the aftermath of another environmental disaster where an oil leak was found in the basement of the West Tower Condominium in Makati, two lawmakers proposed the regulation of oil and gas pipelines through the creation of a national pipeline board. At the same time, Reps. Rufus B. Rodriguez (2nd District, Cagayan de Oro City) and Maximo Rodriguez Jr. (Party-list Abante Mindanao Inc.), authors of House Bill 5477, said Congress should require owners of fuel pipelines to secure a congressional franchise before they could operate. It must be clarified and put into law that oil and gas pipeline systems are national security concerns and that the transport of oil and gas is an act of common carriers and as such requires the owners of the oil and gas pipeline to secure a Congressional franchise before they could operate, Rodriguez said. Rodriguez said the West Tower incident became an eye-opener for the public and the government for it showed the absence of a particular governing body that regulates the operation of fuel pipelines in the country and ensures that necessary safeguards and regulations are in place to protect the public from potential disasters that oil leaks could cause. Rodriguez further explained that there is a need for a regulatory board for the specific industry given that regulation of gas and oil pipelines are entirely different matter, require different safety standards and involve different technologies. The creation of this new Board comes at an opportune time considering that the Department of Energy is prioritizing the establishment of gas pipelines from Batangas to Metro Manila and establishing other pipelines in order to improve the delivery of supply all over the country, Rodriguez said. The bill seeks to create the National Pipeline Board which shall be responsible for prescribing the safety and environment standards in all aspects of the oil and gas pipeline systems as well as in remediation procedures in cases of pipeline leaks or other physical disturbances. Under the proposal, Congress may grant, upon application of any person, a franchise to construct, install, own, operate and maintain for commercial purposes and in the interest of the public, oil and gas pipeline system including such other equipment or facilities as may be needed from time to time for the purpose of transporting and distributing oil and gas through pipeline in the country.

DEC. 23, 2011 DATE

NR # 2626B
REF. NO.

The pipeline franchise grantee shall have the preferential right to utilize his installations for the transportation of petroleum owned by him, but is obligated to utilize any remaining transportation capacity pro rata for the transportation of such other petroleum as may be offered by others for transport, and to charge without discrimination such rates as may be approved by the NPB, pursuant to the provisions of the bill. The measure limits the term of a pipeline franchise to, but not exceeding, 25 years counted from the date of issuance, unless sooner revoked and is renewable for another 25 years upon application of the grantee filed prior to the expiration of the original term. A grantee of a Pipeline Franchise is required under the bill to pay an annual franchise tax equivalent to five percent of gross income earned during the year in lieu of all national internal revenue taxes. (30) mvip