EMERGENCY RESPONSE MEASURES DEVELOPMENT IN ASIA: THAILAND

Viraphol Jirapraditkul
Director, Energy Policy and Planning Division
National Energy Policy Office, the Royal Thai Government

Presented at the Second Seminar on Energy Security in Asia
-- Addressing Energy Security Challenges in Asia –
6 March 2001, Tokyo, Japan

1. THAILAND’S ENERGY SITUATION

Crude oil: As of 31 December 1999, Thailand’s total proved reserves of crude oil is 156.2 million barrels (MMBls), divided into 82 MMBls of onshore reserve, which is mainly from Sirikit field, and 74 MMBls of offshore reserve, of which major resources are Benchamas, Pakakrong, Maliwan and Tantawan fields.

Natural Gas: The total proved reserve is 12,168 billion cubic feet (bcf), of which 11,308 bcf is offshore reserve. Major offshore resources are Bongkot, Pailin, Satun, Erawan, Benchamas, Pakakrong, Maliwan, Tantawan and JDA (only the portion belonging to Thailand). Major onshore resources are Nam Phong and Sirikit.

Condensate: As of 31 December 1999, the total proved reserve is 212.7 MMBls. All are offshore, with Erawan, Pailin, Bongkot and JDA as major resources.

Coal: Most of Thailand’s proved coal reserve has low calorific value and is of lignite type, with a total volume of 2,128 million tons. The main resource is Mae Moh basin in Lampang province in the north of Thailand, with a reserve of 1,240 million tons.

(a) Primary Energy Demand: It was estimated that the primary energy demand in 2000, under the assumption that the economic growth rate was 4.2%, would be at a level of 71,229 Ktoe, accounting for a growth rate of 1.7% compared with the 1999 records. Demand for natural gas, hydropower and imported electricity would increase at a high rate whereas renewable energy demand would slightly increase. On the other hand, petroleum demand would decrease by 5.6% since crude oil and petroleum products prices in this year were exorbitantly high, resulting in reduced consumption of petroleum products by the residential sector whereas certain commercial and industrial activities have turned to use natural gas instead of oil. Demand of lignite/coal would slightly decrease compared with 1999. Petroleum product demand would account for the highest proportion of the primary energy demand, sharing 40.5%. Next to this were natural gas, renewable energy, lignite/coal and electricity with a share of 26.4%, 19.9%, 10.8% and 2.4% respectively.

The economic growth rate during 2001-2005 is expected to be at a level of 4.3% - 4.7% and during 2006-2010 to be at a level of 4.5% - 4.7%. Consequently, energy demand during 2001-2005 is forecasted to increase at an average rate of 4.3%. In this respect, petroleum demand will increase at an average rate of 3.6%, natural gas at 4.7% and lignite/coal at 9.9% since, pursuant to the Power Development Plan (PDP) of the Electricity Generating Authority of Thailand (EGAT), IPP coal-fired power plants are expected to become operational in 2004. It is anticipated that hydropower utilization will decrease at an average rate of 6.2% while renewable energy utilization will increase at an average rate of 2.7%.

Primary energy demand during 2006-2010 is forecasted to increase at an average rate of 4.6%, with increased consumption of all energy types, i.e. petroleum and natural gas will increase by 4.7%, hydropower and imported electricity will increase at an average rate of 16.5% as there will be greater import of electricity from the Lao PDR in 2007. Lignite/coal will increase at an average rate of 4.2%. The share of each energy type in 2010 will not be much different from that in 2000, with petroleum still accounting for the highest share of 39.4%. Natural gas, lignite/coal, electricity and renewable energy will share 27.1%, 13.8%, 2.4% and 17.3% respectively.

Energy Type	Consumption (Ktoe)				Growth (%)			Share (%)
Energy Type	1999	2000	2005	2010	2000	2005	2010	2000	2005	2010
Petroleum	30,574	28,848	34,443	43,300	-5.6	3.6	4.7	40.5	39.2	39.4
Natural Gas	16,781	18,795	23,658	29,795	12.0	4.7	4.7	26.4	26.9	27.1
Lignite/Coal	7,728	7,686	12,304	15,118	-0.5	9.9	4.2	10.8	14.0	13.8
Hydro & Imported Elec.	951	1,700	1,236	2,658	78.8	-6.2	16.5	2.4	1.4	2.4
Renewable Energy	13,975	14,201	16,216	19,028	1.6	2.7	3.3	19.9	18.5	17.3
Total	70,008	71,229	87,857	109,899	1.7	4.3	4.6	100	100	100

Thailand’s dependence on the import of energy resources has substantially decreased, from 98 % in 1980 to 63% in 2000. However, oil remains the major fuel import dependence of the country.

(b) Power Generation: In 2000, the total generating capacity and power purchase of Thailand reached 97,759 GWh, a 5.7% increase from 1999. This could be divided into the generation by EGAT’s power plants (71.1%), purchase from IPPs and SPPs (26.1%) and import from the Lao PDR (2.8%). Power generation in 2005 is forecasted to be 132,782 GWh, or an average increasing rate of 6.3%. The share of EGAT generation is expected to decrease from 71.1% in 2000 to 46.2% in 2005 and 32.2% in 2010. On the contrary, IPP generation will significantly increase from 16.4% in 2000 to 50.6% in 2010. Similarly, power import from the Lao PDR will increase from 2.8% in 2000 to 9.8% in 2010. However, the share of power purchase from SPPs will slightly decrease from 9.8% in 2000 to 7.4% in 2010.

	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
EGAT	69,488	68,701	56,163	57,993	58,891	61,290	63,041	62,017	62,289	61,093	59,716
-Hydro	3,853	3,642	3,642	4,446	4,349	4,466	4,749	4,556	4,563	4,590	4,999
-Fuel Oil	12,935	6,158	5,611	2,937	2,642	3,068	4,273	3,713	2,505	2,135	1,951
-Lignite	16,115	14,931	15,413	17,784	16,708	16,950	18,460	17,052	17,414	16,057	17,165
-NG	36,501	43,916	31,439	32,694	35,169	36,783	35,536	36,673	37,784	38,288	35,578
-Diesel	63	29	33	109
-Others	21	25	25	23	23	23	23	23	23	23	23
Purchased	28,271	34,984	54,273	59,880	66,078	71,492	78,851	89,973	100,798	113,116	125,714
-IPP	15,999	20,269	38,291	43,400	49,561	54,928	59,789	63,461	70,293	81,083	93,848
-NG	15,999	20,269	38,291	43,400	37,176	39,710	42,965	40,423	42,024	41,019	39,722
-Coal					12,385	15,218	16,824	23,038	24,900	24,822	24,822
-Other IPP									3,369	15,242	29,304
-SPP	9,571	12,025	13,292	13,619	13,724	13,724	15,978	13,724	13,724	13,724	13,724
-Imported	2,701	2,690	2,690	2,861	2,793	2,840	3,084	12,788	16,781	18,309	18,142
Grand Total	97,759	103,685	110,436	117,873	124,969	132,782	141,892	151,990	163,087	174,209	185,430

Among the fuel types used in power generation in 2000, natural gas remained the major fuel. The share of power generation by fuel type was as follows: natural gas 60.3%, lignite/coal 19.6%, fuel oil 13.2%, hydropower 3.9% and imported electricity 2.8%. It is forecasted that natural gas will remain the major fuel used in power generation in 2010, accounting for a share of 62.2%. The share of power generation using lignite/coal as fuel will increase to 24.3% and that of power import from the Lao PDR will increase to 9.8%. Nonetheless, power generation using fuel oil as fuel will dramatically decrease from 13.2% in 2000 to only 1.1% in 2010. The share of hydropower generation will slightly decrease to 2.7% in 2010.

Fuel Type	Unit: %
Fuel Type	1980	1999	2000	2005	2010
Hydro	8.38	3.70	3.90	3.40	2.70
Natural Gas	0.00	59.00	60.30	65.60	62.20
Oil	77.30	17.20	13.30	2.30	1.10
Coal and Lignite	9.28	17.70	19.60	26.50	24.30
Import	5.04	2.40	2.80	2.20	9.80
Total	100.00	100.00	100.00	100.00	100.00

(a) Consumption of Petroleum Products: In 2000, demand for petroleum products was 609 KBD, a 45% decrease from the 1999 records. The major reason was that the prices of petroleum products during the year were so high that the overall petroleum consumption decreased. Consumption of gasoline decreased by 3.9% and that of diesel by 2.0%. The main reason for the decreased consumption of these two products was assumed to result from less use of cars by the general public. As for fuel oil, the consumption dramatically decreased by 22.3% compared with the 1999 records since EGAT had reduced the use of fuel oil for power generation and, as an alternative, turned to use more natural gas, which is clean fuel and is cheaper than fuel oil. Moreover, some industries had also shifted to use more natural gas instead of fuel oil. The share of consumption by product type in 2000 was as follows: diesel, 42.4%; gasoline, 19.1%; fuel oil, 17.5%; LPG, 11.0%; jet, 9.8% and kerosene, 0.1%.

Demand for petroleum products of Thailand in 2005 is expected to be 739 KBD, an average increasing rate of 3.9%. Demand for gasoline, diesel, jet and LPG tends to increase while demand for fuel oil will decrease. This will be in line with the policy on fuel utilization in power generation of EGAT, i.e. to reduce the use of fuel oil and to promote the use of natural gas as a substitute. It is anticipated that the demand for petroleum products in 2010 will be 932 KBD, an average increasing rate of 4.7% with increasing demand for all petroleum product types except for kerosene.

Given that EGAT has planned to reduce the use of fuel oil for power generation to only 8 KBD by 2010, the structure of petroleum product demand will change from that in 2000. That is, the share of consumption by product type in 2010 will be as follows: diesel, 44.5%; gasoline, 21.4%; LPG, 13.1%; fuel oil, 10.8% (a decrease from 17.5% in 2000); jet, 10.2% and kerosene, 0.1%.

During the period 2000-2010, petroleum product production capacity of Thailand will be considerably higher than domestic demand. As a result, during the mentioned period, Thailand will be an exporter of petroleum products.

Sector	Consumption (KBD)				Growth (%)			Share (%)
Sector	1999	2000	2005	2010	2000	2005	2010	2000	2005	2010
LPG	58	67	92	122	15.7	6.5	5.8	11.0	12.4	13.1
Gasoline	121	116	154	199	-3.9	5.8	5.3	19.1	20.8	21.4
Kerosene	1	1	1	0	-8.9	-5.4	-5.5	0.1	0.1	0.1
Jet Fuel	57	60	77	95	5.2	5.2	4.3	9.8	10.4	10.2
Diesel	264	258	326	415	-2.0	4.8	4.9	42.4	44.1	44.5
High Speed	261	256	324	412	-1.9	4.8	5.0	42.1	43.8	44.2
EGAT	2	1	0	0	-53.7	-27.7	1.5	0.2	0.0	0.0
Others	259	255	323	412	-1.4	4.8	5.0	41.9	43.8	44.2
Low Speed	2	2	2	3	-19.7	3.4	2.9	0.3	0.3	0.3
Fuel Oil	137	107	89	100	-22.3	-3.5	2.4	17.5	12.1	10.8
EGAT	65	48	13	8	-26.3	-23.3	-10.0	7.9	1.7	0.8
Others	72	58	77	93	-18.7	5.6	3.9	9.6	10.4	10.0
TOTAL	638	609	739	932	-4.5	3.9	4.7	100.0	100.0	100.0

An analysis of petroleum product consumption by economic sector in 2000 shows that the transportation sector accounted for 62.5% of the total consumption, followed by the industrial sector, 23.3% and others 14.2%. As for the consumption in 2010, the share of the transportation sector will increase to 69.7% while that of the industrial sector will decrease to 16.4%, mainly due to the decrease in utilization of petroleum products as fuel in power generation by EGAT. Other sectors will account for the remaining 13.9%.

Sector	Consumption (KBD)				Growth (%)			Share (%)
Sector	1999	2000	2005	2010	2000	2005	2010	2000	2005	2010
Transportation	398	380	502	649	-4.5	5.7	5.3	62.5	67.9	69.7
Industry	157	142	131	153	-9.6	-1.6	3.2	23.3	17.7	16.4
Others	83	86	106	129	3.6	4.2	4.1	14.2	14.3	13.9
Total	638	609	739	932	-4.6	3.9	4.8	100.0	100.0	100.0

(b) Production of Petroleum Products: Production of petroleum products in 2000 was 706 KBD, a decrease of 0.8% from 1999. In this year, certain refineries, such as Thai Oil, Bangchak and Esso, did not operate at their full production capacity; the utilization ratio was merely at 88.2%.

The production in 2005 is estimated to be 905 KBD, accounting for an average increasing rate of 3.7% and that in 2010 to be 942 KBD, an average increasing rate of 0.8%. The production share of each petroleum product will be rather stable during 2000-2001. In the year 2010, the production share is expected as follows: diesel, 40.0%; gasoline, 21.8%; fuel oil, 16.2%; LPG, 12.3% and jet/kerosene, 9.7%.

Sector	Production (KBD)				Growth (%)			Share (%)
Sector	1999	2000	2005	2010	2000	2005	2010	2000	2005	2010
LPG	77	88	117	116	15.1	5.2	-0.2	12.5	12.9	12.3
Gasoline	149	139	191	205	1.4	4.8	1.5	19.7	21.1	21.8
Jet/Kerosene	77	81	88	91	7.0	1.4	0.5	11.5	9.7	9.7
Diesel	274	277	306	337	10.6	3.8	0.6	39.2	40.5	40.0
Fuel Oil	135	121	143	153	-6.3	2.5	1.3	17.1	15.8	16.2
Total	712	706	905	942	5.6	3.7	0.8	100.0	100.0	100.0

For Thailand, the total consumption of crude oil in 1998 stood at an average of 708 KBD, down from 757 KBD for 1997. The crude oil import in 1998 was 679 KBD, down from 729 KBD in 1997. Thailand’s level of dependence on imports in both years was at approximately 95% and is expected to continue in the foreseeable future. The major source of crude oil for Thailand is the Middle East, which makes the country more vulnerable to possible disruptions in oil supply from that region.

Presently, Thailand is a net exporter of petroleum products. However, with increasing consumption of petroleum products forecasted over the next 10 years and no significant refining capacity increases planned, Thailand is projected to become a net importer of petroleum products by the year 2010. This is reflected in the following table:

Product		Unit: thousand barrels per day (KBD)
Product	1997	1998	1999	2000	2001	2005	2010
LPG	17	15	23	21	22	25	(6)
Gasoline	33	29	29	20	52	36	6
Kerosene/Jet Fuel	5	5	19	18	26	11	(5)
Diesel	(6)	26	15	15	59	40	(37)
Fuel Oil	(7)	(8)	10	0	44	54	52
Total	42	67	96	74	203	166	10

The present total storage capacity of crude oil in Thailand is approximately 28 Mbbl (million barrels) and the total storage of petroleum products (excluding LPG) is approximately 39 Mbbl. This brings the total existing storage capacity to approximately 67 Mbbl, equivalent to 96 days of consumption in 1997, well above the normal working requirements of 40-45 days. However, actual stocks are lower than the storage capacity.

The six refineries account for essentially all the crude oil storage in Thailand. The total storage of major petroleum products (excluding LPG) with these companies is at the level of 16.8 Mbbl. Apart from the refinery storage, a significant portion of the storage capacity of petroleum products is with oil traders and distributors.

Item	Storage Capacity in million barrels (Mbbl)
Item	Refineries	Other	Total
Gasoline	4.1	5.9	10.0
Kerosene/Jet Fuel	1.9	2.5	4.4
Diesel	6.6	9.0	15.6
Fuel Oil	4.2	4.8	9.0
Products	16.8	22.2	39.0
Crude Oil	27.7	-	27.7
Total	44.5	22.2	66.7

At present, the only stockpiling is under the Fuel Act of 1978 which requires the private sector to stockpile a certain percentage of the annual throughputs/sales amounts.

For crude oil, both producers and importers were required to stock 5% of annual throughput (equivalent to about 18 days throughput) until December 1997. Marketers of petroleum products were also required to stock 5% of annual throughput until December 1997. Importers of petroleum products were required to stock 10% of annual imports (equivalent to about 36 days) until December 1996. For diesel and fuel oil, this requirement was reduced to 5% in December 1997.

	Prior to Dec 96		Dec96-Dec97		Dec97-Present
	Production	Import	Production	Import	Production	Import
Crude Oil	5%	5%	5%	5%	3%	3%
Gasoline	5%	10%	5%	10%	3%	6%
Kerosene/Jet	5%	10%	5%	10%	3%	6%
Diesel	5%	10%	5%	5%	3%	6%
Fuel Oil	5%	10%	5%	5%	3%	6%

Due to the economic downturn in 1997, the mandatory stockpiling regulations require refineries to stock 3% of crude oil based on their throughput (equivalent to about 11 days) and marketers and importers to stock 3-6% of different petroleum products based on sales.

2. ENERGY SECURITY POLICY

Energy security policy remains the prime policy of the country as currently 60% of domestic energy consumption has to depend on imported energy, and it is projected to increase to 80% in the next decade. Therefore, it is important to promote domestic energy resource development, both petroleum and coal resources. However, since the potential of our domestic energy resources is quite low, in the long run, priorities will have to be given to energy cooperation with neighboring countries. So far, we have made several agreements with our neighboring countries on energy exploration and development for mutual utilization, including the construction of energy networks in this region to enhance the regional energy security.

The Thai government aims to promote and encourage the exploration and development of domestic petroleum resources, and encourage the application of petroleum information and modern technology so that the petroleum exploration and development of the country would be continuous and more efficient.

Moreover, foreign and Thai investors are encouraged to engage in joint ventures on energy development projects at all stages of the business, for example, the crude oil transportation pipeline system, refineries, storage terminals, distribution terminals and other infrastructure.

Another strategy is to promote and encourage the exploration and development of natural gas in the Joint Development Area (JDA) in compliance with the domestic demand and the development of other natural gas-based projects, for example, a joint venture project on natural gas development from the JDA and a joint venture project on the Trans-Thailand-Malaysia natural gas pipeline.

Promotion of the exploration for additional coal resources to ensure adequate primary energy reserves for future use is encouraged, including speeding up concession granting to the private sector to develop coal mines initially explored by the Department of Mineral Resources.

Hydropower has been developed for power generation since 1964. The potential of hydropower in Thailand is estimated at 15,155 megawatts (MW). As of April 2000, EGAT had 2,880 MW of installed capacity of hydropower, whereas the Department of Energy Development and Promotion (DEDP) and the Provincial Electricity Authority (PEA) operated 49 MW of installed capacity. The remaining hydropower resources are difficult to exploit due to the environmental impact on the resource areas a power project would entail. Therefore, future development of hydropower resources will be limited to a few small-scale projects which are considered most economical and environmentally friendly.

As part of the rural electrification program, bringing electricity to 98% of villages in Thailand by 1997, small hydropower sites have been identified as economically suitable for more accurate cost estimates and detailed engineering work. It should be noted, however, that a thorough feasibility study of a small hydropower project tends to indicate that the cost of electricity generated from a suitable hydropower site can be more economical than electricity generated from a set of photovoltaic plants. One way to further reduce the capital cost of a small hydropower plant is to run a commercially available pump as a turbine.

Although oil will remain a major energy of the country, the ratio of the total demand will continuously decrease, from 40.5% in 1999 to 39.4% in 2010. Moreover, Thailand also emphasizes diversification of energy sources to secure a stable supply of energy. Natural gas and coal will gradually replace oil, particularly for use as fuel in power generation and in the industrial sector. Utilization of natural gas in power generation has been intensified since the year 2000. Imported coal will play an important role as fuel in power generation by Independent Power Producers (IPPs) from 2004 onwards.

Negotiation with neighboring countries on energy development has been a means to provide an adequate amount of energy to satisfy the demand of the country and to ensure the supply security. Thailand has executed Memorandum of Understandings and/or power purchase agreements with Lao PDR, Myanmar, the People’s Republic of China and Cambodia.

A Memorandum of Understanding (MOU) was signed on 4 June 1993, under which Thailand agreed to purchase 1,500 MW of electricity from projects in Lao PDR. Later, a second MOU was signed on 19 June 1996, increasing the purchase to 3,000 MW by 2006. In addition, Lao PDR also agreed to support passage of the transmission system from a third country, hence facilitating Thailand’s purchase of power from Yunnan province of the People’s Republic of China in the future.

However, the decreasing demand after the economic crisis has made it necessary for Thailand to delay the purchase of 3,000 MW from the Lao PDR to two phases. That is, to purchase 1,600 MW by 2006 and 1,700 MW by 2008 to be in line with the decreasing demand.

Myanmar has significant potential for hydro and natural gas. Preliminary studies by Myanmar government on 196 projects indicate a total capacity of 37,000 MW. An MOU was signed on 4 July 1997 for Thailand to purchase up to 1,500 MW of electricity from projects in Myanmar by 2010.

An MOU was signed on 12 November 1998 for purchase of 3,000 MW from China by 2017. The ADB estimates that Yunnan province of P.R. China has hydropower generating capability of 90,000 MW. The first possible project for power sale is Jing Hong Project, with 1,500 MW for sale to Thailand.

According to the bilateral Agreement signed on 3 February 2000, Thailand agrees to promote power trade and provide training and technical assistance relating to the power system to Cambodia. Initially, Thailand will sell power to four provinces in Cambodia, i.e. Banteay Meanchey, Battambang, Siem Reap and Koh Kong, with a total capacity of 20-30 MW. After the establishment of the Thailand Power Pool in 2003, Thailand will support Cambodia to participate in this market.

Resulting from the government’s policy to promote the use of natural gas instead of fuel oil in power generation, utilization of natural gas in power generation continually increased from 42.3% in 1995 to 59.0% in 1999. A plan has been set to modify EGAT’s power plants using fuel oil to be able to use natural gas instead.

Most of domestic natural gas fields are located in the Gulf of Thailand. Foreign sources include Malaysia-Thailand Joint Development Area (JDA), Yadana and Yetagun Fields in Myanmar.

It is expected that during the period 2000-2010, around 1,700-2,290 mmscfd of the total natural gas supply would be obtained from domestic sources while around 530-990 mmscfd would be imported from foreign sources.

In 1999, total coal consumption in Thailand was about 22.8 million tons. Coal utilization in electricity generation accounted for almost 70% of the total domestic coal consumption. The rest was used as fuel in the industrial sector, comprising the cement industry, paper mill, fiber factory, calcium oxide making process and tobacco curing.

Due to the comparatively low cost of supplies and low political risks of supply disruptions compared with other major energy sources, it is foreseeable that coal will remain a major fuel, next to natural gas, for electricity generation. Coal utilization by Independent Power Producers (or IPPs) is expected to start in 2004, when some IPP plants are scheduled to complete, at a level of about 3 million tons, and then is forecast to rapidly increase to 5.5 and 8.8 million tons in 2005 and 2010 respectively. For Small Power Producers (SPPs), coal demand is expected to be at a level of 2.15 million tons per year during the period 2000 to 2010.

To address the concern over the impact of coal utilization on the environment, the application of modern technology would also be encouraged so that utilization of coal in electricity generation and in the industrial sector would cause minimal impacts on the environment.

To ensure that there will be adequate energy for future use, consideration has been given to all potential energy resources that are both economically viable and environmentally friendly. Renewable energy is clean energy; however, its development as a large resource cannot be materialized and the production cost is still very high. Although renewable energy technologies have nowadays been more sophisticated and hence have helped to reduce some of the production costs, the overall costs are still high compared with those of commercial primary energy which is currently in use.

Consequently, the government has to take the role in promoting renewable energy technology development, using financial support from the Energy Conservation Promotion Fund (ENCON Fund). The ENCON Fund had provided financial support to promote renewable energy utilization, and renewable energy research and development. For example:

Promotion has been made on the establishment of a biogas system in livestock farms to make use of manure, residues or wastewater by using biogas technology. This has not only alleviated the farm owners’ energy cost for wastewater treatment but also produced biogas that can be used as a substitute energy source for liquefied petroleum gas (LPG), petroleum and electricity.

The Thai government has a target to increase the electricity generating capacity by using the solar system at a minimum capacity of 4 MW nationwide by the end of 2001. A major project has been implemented by EGAT with an installation of a 500-kW solar power system in Mae Hong Sorn province, in the northern part of Thailand, of which the areas are mountainous in order to enhance the security of the power system in the province. Since the topographical features of the province are mountainous and the population is scattered in the mountainous areas, an enormous investment on the grid system would, otherwise, have been required. An assessment will be made on technical problems and impacts on the society and environment as well as the potential investment by the private sector in constructing manufacturing plants to produce or assemble solar cells and other component parts in Thailand.

The government has also allocated financial assistance from the ENCON Fund for various demonstration projects on solar energy. Examples of such projects are:

Wind is another source of energy that can be used instead of oil. However, there is still a lack of up-to-date data on wind energy potential and the distribution of wind resources in Thailand. Hence, there has not been much progress on the development of power generation projects or other forms of use of wind energy resources. Consequently, the ENCON Fund has provided support for the Department of Energy Development and Promotion (DEDP) to carry out a project to compile existing wind energy data and those from weather-measuring satellites to develop a “Wind Map.” This will help with the evaluation of the wind energy potential in Thailand for determination of economic viability of wind energy and potential of wind resource development.

Besides, the ENCON Fund has supported the Provincial Electricity Authority (PEA) to carry out a study on wind energy potential at four places on the south coast of Thailand. The wind measurement system, especially designed to measure wind energy potential, has been installed by the PEA to obtain accurate data for assessment of the feasibility of wind turbine installation for power generation, the energy to be obtained from the wind turbine system and the operational efficiency of the system. If the wind energy in the targeted areas is high, the PEA will further install a grid-connected wind farm for power generation, with a minimum generating capacity of 1,000 kW.

Thailand, being an agricultural country, has a vast potential of agro-industrial residues and wastes such as rice husk, sawdust, corncobs, coconut shells and outer covering, leaves, bagasse or weeds, which are left decaying in the fields as fertilizer or awaiting burning. The ENCON Fund has provided financial assistance for an R&D project on the utilization of agricultural residues or wastes to generate energy as alternative fuel, called “the Green Fuel Briquette,” instead of using charcoal, firewood, LPG or electricity.

Moreover, support has been given to a research on utilizing cassava rhizome, through gasification process, to produce fuel gas to be used as fuel in solid waste incineration since cassava rhizome has a high heating value. Wastes will be pre-heated prior to incineration in order to save energy. The gasifier developed under this project can be used with other fuel types, e.g. fuel wood from such trees as eucalyptus, horse tamarind, and other quick-growing trees. This will help get rid of 1-2 tons of small-sized wastes in the communities near the cassava growing areas.

The Thai government, via the ENCON Fund, has supported a study on the guidelines on determining pricing subsidies for power generated by agricultural or industrial wastes (or biomass). The amount of power generated can be used on site, and the excessive amount, if any, can be sold back to the system of the Electricity Generating Authority of Thailand (EGAT) under the Regulations for the Purchase of Power from Small Power Producers (SPPs).

During Phase 2 of the ENCON Program, covering the fiscal period 2000-2004, the ENCON Fund has a clear policy to promote and support SPPs using biomass or other forms of renewable energy (such as solar, biogas, municipal wastes) as fuel. An allocation of 2,060 million baht from the ENCON Fund will be used in the form of pricing subsidies per unit of electricity (kWh) generated by renewable energy, on top of the EGAT’s SPP purchasing price. The objective of this project is to maximize the use of domestic energy resources in power generation. This will help to reduce the government burden on imported energy and to reduce the adverse impact on the environment resulting from energy utilization. A target of 300 MW of generating capacity has been set for the first five years of the project.

Promotion of efficient and economical use of energy is one challenge for which the government has formulated policies and strategies to achieve. This is because efficient and economical use of energy will help reduce not only investment requirements in energy supply but also fuel costs in various production processes. In this regard, basic policy measures to be implemented are pricing measures, provision of incentives, raising of the general public’s awareness, and compulsory measures. Some examples of the implementation to achieve this goal are as follows:

First, the petroleum pricing structure has been revised so that it reflects the actual economic costs of supply. The current pricing mechanism that allows prices to fluctuate according to the market forces and competition will be maintained, without political intervention.

Next, the electricity tariff for both retail and wholesale levels has been improved in order to reflect the actual supply costs and to be transparent. At the same time, an incentive system will be created for the electricity utilities to improve their operational efficiency and service quality.

Guidelines in determining natural gas prices and pipeline tariff are being worked out, and a clear and transparent regulatory system is being developed.

In addition, the Demand Side Management (DSM) Program has been intensified. The DSM Program was established in 1993 to promote energy conservation and efficient use of electricity. Market transformation strategy has been introduced, that is, local manufacturers and importers are stimulated to produce and import energy-saving and efficient appliances while consumers are provided with education and energy conservation awareness through various media.

Several campaigns have been launched with emphasis placed on utilization of high-efficiency electric appliances, such as the voluntary labeling project for energy-efficient lighting equipment, refrigerators, air-conditioners and motors.

Besides, intensive efforts have been made to speedily materialize the establishment of Thailand^’s testing laboratories; promotion of high-efficiency equipment production; and establishment of minimum energy efficiency standards, initially for six products, namely, refrigerators, air-conditioners, motors, fluorescent lamp ballast, fluorescent tubes and compact fluorescent.

Public relations work has been implemented to raise people’s awareness and benefits to be obtained from energy conservation. The PR activities are implemented under the “Divide by Two” campaign, popularly known as “Harn Song (÷ 2).” The campaign aims at motivating the general public to reduce energy consumption and to cut back the use of energy and natural resources without reducing personal comfort or the quality of life.

Examples of activities are: the production of series of television commercials on energy conservation which have proven to be very popular among the public, dissemination of energy conservation issues through various types of media, energy camps for students, plays and cultural shows based on energy conservation themes and the establishment of energy information centers to disseminate materials, posters, and other printed matters on energy conservation and renewable energy related issues.

These relate to mandatory energy conservation implementation as specified by laws and regulations enforced under the Energy Conservation Promotion Act, involving designated factories and buildings, government buildings and other buildings whose owners are interested in energy conservation.

“Designated factories” and “designated buildings” are factories and buildings with an installed electrical capacity of more than 1 MW or 1,175 kilovolt-amperes (kVA).

The owner of such a factory or building must conserve energy, audit and analyze energy utilization in his factory/building, in accordance with the standards, criteria and methods prescribed in relevant Ministerial Regulations. In this connection, the owner may request for a grant from the ENCON Fund to undertake the requisite energy conservation measures.

In addition, the ENCON Fund also provides financial support for the improvement in the design or construction of new government or state-enterprise buildings, with a view to conserving energy so as to demonstrate the outcome of such implementation to the general public.

The Energy Conservation Promotion Act (the Act) was passed by the government in March 1992 with mandates to promote energy conservation discipline and energy conservation investment in factories and buildings. This Act is seen as innovative as it blends incentives with mandatory regulations to facilitate the implementation of mandated energy-efficiency measures. The Energy Conservation Program is implemented under the Act.

One major tool of the government to promote energy conservation and use of renewable energy and to facilitate the implementation of energy-efficiency measures is the Energy Conservation Promotion Fund. The ENCON Fund provides financial support to government agencies, state enterprises, non-government organizations, individuals, and businesses that wish to implement measures to increase efficiency in energy utilization.

The Energy Conservation Program is divided into three sub-programs, namely: Compulsory Program, Voluntary Program and Complementary Program.

- Compulsory Program, as detailed earlier, relates to mandatory energy conservation implementation as specified by laws and regulations enforced under the Energy Conservation Promotion Act, involving designated factories and buildings, government buildings and other buildings whose owners are interested in energy conservation.

The Compulsory Program is overseen by the Department of Energy Development and Promotion (DEDP).

- Voluntary Program involves provision of financial assistance by the Fund to support energy conservation efforts by government and private agencies aiming at more efficient and economical use of energy, promulgation of utilization of renewable energy which has less adverse impact on the environment, promotion of products and services which contribute to energy conservation, as well as promotion of R&D projects and development of energy conservation related technology.

- Complementary Program consists of training, public relations, and management & monitoring sub-programs.

The Training Sub-Program aims to develop human resources with right skills and knowledge for both the public and the private sectors so as to eventually achieve effective implementation of the Energy Conservation Program as a whole.

The Public Relations (PR) Sub-Program is being undertaken to change consumers’ behavior with a view to achieving energy saving objectives. PR activities are carried out under the “Divide by Two” campaign as mentioned earlier. Efforts will continue to motivate people to save energy and change their wasteful behavior in energy consumption. A particular theme will be developed for each year, for example, in 2001 the tentative theme will be “Energy Saving in Transportation.”

The Management & Monitoring Sub-Program covers the expenditures of all government agencies responsible for the implementation of the Energy Conservation Program.

The Voluntary and Complementary Programs are implemented by the National Energy Policy Office (NEPO).

The present stockpiling in Thailand consists only of mandatory storage requirements imposed on the oil companies based on throughput/sales.

However, with a view to ensuring the energy security of the country, consideration on an official oil stock is currently being made. The National Energy Policy Office has undertaken a study on National Oil Stockpiling Strategy and we are now considering stockpiling options utilized in other countries in order to determine which model would be suitable and viable for application to Thailand as well as the optimum level of the long-term oil stockpiling together with appropriate implementation plan and institutional issues.

2.5 International Cooperation
Having bilateral/multilateral contracts with neighboring oil-exporting countries for the exchange of energy products in emergency cases is another means to ensure energy supply security and to protect the country against oil crises.

The world oil situation could be addressed from both the supply and the demand ends. On the supply side, many APEC member economies have been seeking increase of OPEC oil production. OPEC agreed to increase oil production at several intervals during the course of the past few years. However, prices have not responded in a downward direction to appropriate and sustainable levels. APEC is better placed to address the demand side, and bring oil supply and demand closer to equilibrium. The international oil price situation presents APEC with an opportunity to respond within the boundaries of its existing fields of cooperation. The APEC Energy Working Group (EWG) has an Expert Group on Energy Efficiency and Conservation as well as an Expert Group on New and Renewable Energy Technologies.

In mid-2000, Thailand pursued the diplomatic efforts urging greater APEC cooperation in the issue of oil and energy through the APEC EWG and APEC SOM mechanism. These efforts world merely carried out without focusing merely on the interest of Thailand or any particular party, but focusing on the interest of the APEC region as a whole. The interest of both oil exporting and oil importing economies have been taken into account with a view to creating stability of the oil market and oil prices as well as to enhancing steady and stable growth of the world economy.

With support from all APEC member economies, the energy security issue was finally addressed in the APEC Leaders’ Declaration on the occasion of the Eighth APEC Economic Leader Meeting held in Brunei Darussalam, on 15-16 November 2000. In the APEC Leaders’ Declaration, leaders addressed their concern on the energy security that “We noted through the risks posed by oil price volatility to the world economic recovery and for developing economies that are heavily dependent on oil market conditions, and the need to stabilize prices at sustainable levels. We call for appropriate increases in supplies and other necessary measures to promote long-term price stability in the mutual interests of consumers and producers. We welcome the many ongoing cooperation activities within APEC which will help reduce vulnerability and promote market stability and note the efforts made this year by APEC members to address the volatility.”

The APEC Energy Working Group with support from Korea will arrange a planning meeting on Energy Security Initiative, as endorsed by the Economic Leaders, in March 2001 in Seoul. The meeting will focus mainly on oil stockpiling and oil market information.

At the Senior Officials’ Meeting on Energy of the Eighteenth ASEAN Ministers on Energy Meeting (SOME of the 18^th AMEM) in Hanoi, Vietnam, on 3 July 2000, the ASEAN Council on Petroleum (ASCOPE) informed the meeting that all ten ASEAN member countries had already acceded to/ratified the ASEAN Petroleum Security Agreement (APSA). This agreement stipulates that any member country whose normal supply drops to less than 80% of its normal requirements can ask the exporting members of ASEAN to supply 10% of said requirements.

Since the inception of the APSA in 1986, it has never been actually executed, although it was once nearly implemented during the Gulf war crisis. In severe crude oil and/or petroleum product supply disruptions affecting not only one single country, but the whole region, the security of oil supplies from the neighboring countries could become uncertain and threatened. Neighboring countries might not be able to increase their production fast enough and/or might decide to sell crude oil and petroleum products at an inflated price.

A review of APSA is being undertaken by ASCOPE following its proposal at the SOME of 18^th AMEM in July 2000. After the review, the implementation procedures should be tested in a simulated crisis situation, and amended as necessary to remedy possible deficiencies. The test would be repeated until the process is streamlined.

At the 17^th ASEAN Ministers on Energy Meeting (AMEM) held in Bangkok in July 1999, the Ministers adopted the ASEAN Plan of Action for Energy Cooperation (1999-2004) which has served as the guide in the identification, formulation and implementation of specific projects and activities in the ASEAN energy sector. The Ministers also reaffirmed their commitment to the development of an integrated ASEAN energy network consisting of the ASEAN Power Grid and the Trans-ASEAN Gas Pipeline Projects as the ASEAN energy sector’s collective and coordinated program to achieve sustainable economic growth, greater economic integration and international competitiveness in the ASEAN region.

- ASEAN Power Grid The success of implementation of the ASEAN Power Grid will enhance the potential for economic development in ASEAN as reliability of power supply will attract investors. Member countries will benefit from the fuel mix for power generation. Also, the success of this project implementation will necessitate sharing of technology, expertise and experience and this will facilitate further cooperation among ASEAN countries.

The development of transmission infrastructure, which is essential for energy trade, is highlighted to help sustain energy security, and the need to coordinate a framework for the establishment of an ASEAN Power Pool in the future. Currently, many ASEAN countries are accelerating the restructuring and privatization of the electricity supply industry, with the future establishment of the ASEAN Power Pool in mind.

- Trans-ASEAN Gas Pipelines ASEAN gas pipelines are regionally considered an important element for further economic recovery and sustained development, regional energy security, and satisfying international requirements on the environment. Several gas pipeline projects have already been identified or planned, linking various parts of the ASEAN region, including:

As natural gas has good combustion qualities and will lead to fuel savings and lower emissions, it is predicted that more gas fired power plants will be established. So the regional demand for gas will significantly increase. Early completion of the Trans-ASEAN Gas Pipeline project will bring about better quality of life for ASEAN, apart from the energy supply security.

The Special Senior Officials’ Meeting on Energy (SOME) held in Jakarta on 11 March 2000 endorsed the Terms of Reference and the holding of the SOME-MITI Consultations on Energy, to pave way for closer cooperation between ASEAN and Japan in the cooperation areas, which cover Energy Security Planning, Energy Efficiency and Conservation, and New & Renewable Energy. The first consultation was held on 30 June 2000 back to back with the SOME/18^th AMEM in Hanoi, during which the SOME/MITI Energy Work Program for 2000-2001 was considered. The meeting also stressed that the SOME-MITI Consultations must have tangible outcomes, especially in investment promotional activities and in the mutual exchange of information on “best practices” in the energy sector.

As a consequence of this, several meetings were organized. The First Meeting of the ASEAN Energy Security Project was held in Bangkok on 4 November 2000, with a view to establishing the project implementation, in particular the development of the report on “Energy Security Policies in ASEAN Countries.” The Regional Meeting on the Energy Security Project was held on 14 December 2000 in Tokyo, and the Third Meeting on the Energy Supply Security Planning in ASEAN on 15 January 2001 in Jakarta. Thailand participated in these meetings and exchanged information on Thailand energy situation with other participants.

Thailand has recently been approached by the IEA in early February 2001 to discuss energy cooperation via energy dialogue and exchanges of energy information.

3. EMERGENCY MEASURES TO REMEDY OIL CRISIS

For any country, enhancing oil security requires both long-term and short-term measures. Long-term measures could include:

While long-term policy measures could reduce the risks of supply disruptions, alleviating the effects of an oil crisis, once it occurs, requires short-term measures. Emergency preparedness and response measures for the short-term are very important elements of a strategy for alleviating some of the effects of an oil crisis, especially for countries as heavily dependent on imports as Thailand. Short-term measures could include:

Among these measures, except for information sharing which is essential, emergency oil stocks seem to be the most important and useful means of dealing with an oil crisis because of the limited effectiveness of other measures for certain countries.

The Emergency Decree on Remedy and Prevention of Shortage of Petroleum Oil, B.E. 2516 (AD 1973) provides the Prime Minister with extensive authority in designating measures to remedy and prevent shortage of petroleum products. Under the decree, the Prime Minister can issue orders on the following matters:

NEPO, as the central agency responsible for energy management and development in Thailand and reporting directly to the Prime Minister, has direct responsibilities to conduct, oversee, and coordinate actions in conformity with the legislation, which has thus far served as the enabling law for the setting of prices for petroleum products and for establishment of the Oil Fund. NEPO, therefore, has the direct responsibilities in managing the Oil Fund and in formulating policies and measures relating petroleum product prices and the Oil Fund. The Oil Fund was created for subsidizing the retail prices of LPG. Revenue is generated for this Fund by means of an extra tax in the retail prices of gasoline, diesel and fuel oil. The current tax rates for this purpose are as follows:

The Emergency Decree was originally issued for a period of one year but has since been extended indefinitely. The provisions of the Decree have not been used so far and there are no detailed implementation plans.

Severity levels of crisis should be clearly defined. A crisis, as defined by IEA, is a shortfall in supply to 93% or less of normal requirements and should trigger measures for curbing demand and increasing domestic supply, including:

Prior to a crisis, only Persuasion and Public Information measures are warranted. If a crisis sets in, Administrative Measures may be necessary. Finally, as a last resort, if a crisis persists for a long time, more severe measures including Allocation and Rationing may be utilized.

It must be emphasized that curbing demand incurs a heavy penalty due to its negative effect on the GDP.

A more severe crisis (perhaps defined as shortfall to 90% or less of normal requirements) would require more severe measures. The most important measure, of course, would be drawing down on the strategic reserve.

Thailand’s energy policies and plans are developed by the National Energy Policy Council (NEPC) which is chaired by the Prime Mister of Thailand with Ministers from related Ministries as committee members. The NEPC is in charge of developing and overseeing all aspects of the national energy policy and the national energy management plan. The National Energy Policy Office (NEPO) acts as the Secretariat to the NEPC.

One of the important responsibilities of NEPO is recommending measures to remedy and prevent shortage of petroleum products as well as coordinating the activities of related agencies under these measures. The Department of Commercial Registration (DCR), Ministry of Commerce, monitors in compliance with the current mandatory stockpiling requirements imposed on oil companies.

4. CONCLUSION

Thailand recognizes the importance of emergency preparedness of energy supply since we have to depend substantially on energy import, especially oil. Emphasis has been placed on diversification of energy sources and efficient and economical use of energy. Thailand’s oil dependency has decreased a great deal from 93.6% in 1980 to 55.1% in 2000. As oil stockpiling would be crucial for the remedy of oil shortage or crisis, serious consideration would be required on establishing an official oil stock. The National Energy Policy Office has undertaken a study on National Oil Stockpiling Strategy and we are now considering stockpiling options utilized in other countries in order to determine which model would be suitable and viable for application to Thailand.

In addition, Thailand will support cooperation in improving the ASEAN Petroleum Security Agreement (APSA) so that its implementation would be efficient as that of IEA. Also, we are willing to share energy information and exchange energy dialogue at both intra-regional and inter-regional levels with a view to strengthening the energy security in Asia.

Source	Crude (Million Barrels)	Condensate (Million Barrels)	Natural Gas (bcf)	Coal (Million Tons)
Off shore	73.8	212.7	11,308.2	-
On shore	82.4	-	859.8	2,128
Total	156.2	212.7	12,168.0	2,128

Source	Unit: thousand barrels per day (KDB)
Source	1997	1998	1999	2000
Middle East	562	574	557	500
Far East	141	96	104	132
Other Sources	26	9	39	43
Total Crude Import	729	679	700	675
Indigenous Crude	28	29	34	57
Total Crude Consumption	757	708	734	732

Product	Tax Rate to Oil Fund (Baht/litre) As of 5 Jan 2001
Gasoline: ULG 95 ULG 91 ULG 87	0.50 0.30 0.30
High Speed Diesel	0.50
Low Speed Diesel	0.50
Fuel Oil	0.06

Persuasion and Public Information
Measure	Activity Targeted
Low cost persuasion campaign	Road Transport/Air Conditioning/ Lighting
Strong publicity campaign	Road Transport/Air Conditioning/ Lighting
Administrative Measure
Measure	Activity Targeted
Increased Surveillance of Existing Speed Limits	Road Transport
Compulsory Reductions in Cooling and Lighting in Public Buildings	Air Conditioning /Ambient Lighting
Car-Pooling	Road Transport
Reduction of Speed Limits	Road Transport
Sunday Driving Bans	Road Transport
Odd and Even License Plate Fueling Restrictions	Road Transport
Tax Increases on Petroleum Products	Specific Petroleum Products
Reduced Opening Hours of Service Stations	Road Transport
Allocation and Rationing Measures
Measure	Activity Targeted
Percentage Reduction Bulk Users	Crude Oil and Petroleum Products
Percentage Reduction to Retailers	Petroleum Products
Rationing with coupons to retailer or end users	Petroleum Products


	CURRENT SITUATION AND THE FUTURE DIRECTION OF THE EMERGENCY RESPONSE MEASURES DEVELOPMENT IN ASIA: THAILAND

CURRENT SITUATION AND THE FUTURE DIRECTION OF THE EMERGENCY RESPONSE MEASURES DEVELOPMENT IN ASIA: THAILAND

1. THAILAND’S ENERGY SITUATION

2. ENERGY SECURITY POLICY

3. EMERGENCY MEASURES TO REMEDY OIL CRISIS

4. CONCLUSION

CURRENT SITUATION AND THE FUTURE DIRECTION
OF THE EMERGENCY RESPONSE MEASURES DEVELOPMENT
IN ASIA: THAILAND