Pandacan Oil 1

Pandacan Oil Depot

Term Paper in Ecology

Louisito Chavez Pagaspas
Polytechnic University of the Philippines
Bachelor of Political Science
October, 8 2016

Table of Contents

1. Introduction

2. Outline

3. Incidents and concerns

4. Pandacan: Kicking out Big Oil

5. Pandacan Scale down Project

6. Legislative Actions

7. Conclusion

8. References

Outline:

Term Paper Outline

Pandacan Oil Depot
Centra, Luzon

I.

Introduction

II.

Incidents and conerns

III.

Pandacan: kicking out Big oil

IV.

Pandacan Scale down Project

V.

Legislative actions

VI.

Conclusion

VII.

References

INTRODUCTION

The Pandacan
Oil
Depot is
a
33-hectare
compound
in Pandacan, Manila, Philippines. It houses the storage facilities and distribution
terminals of three major players in the country's petroleum industry, namely Caltex (a
petroleum brand name of Chevron Corporation), Petron, and Shell. The oil depot takes
its roots from separate establishments by these oil companies. The continued operation
of the oil depot in a densely populated major city has been a subject of various
concerns, including its environmental and health impact to the residents of Manila.

Caltex began using the Pandacan warehouse depot in 1917, when it started
marketing its products in the Philippines. Eleven years later, its Pandacan warehouse
depot was converted into a key distribution terminal to bring products to nearby
province. Caltex gained its foothold in the Philippines in 1917 when Texas Company (as
Texaco was then known) began marketing its products in the Philippines through a local
distributor, Wise and Co. Four years later, Texaco (Philippines) was formally established
and opened its office in Binondo, Manila. Eleven years later, its Pandacan warehouse
depot was converted into a key distribution terminal to bring products by barge to
nearby provinces. In 1936, Caltex (Philippines) Inc was formed when Texaco joined
forces with the Standard Oil Company (California). On the same year, Caltex improved
its position dramaticallyit increased its capitalization from an initial PHP 2 million to
PHP 200 milliontransferred to a new office, and opened depots and service stations
nationwide, making it the countrys number one oil company. But three years of plunder
and neglect during World War II wreaked havoc on the companys facilities. The
Pandacan Terminal was destroyed and the Caltex network of depots and service
stations were rendered inoperative. After the Liberation, Caltex sought to rebuild and reestablish its distribution and service station facilities. In 1951, construction of the Caltex
Refinery in San Pascual, Batangas began on a 125-hectare lot. No less than then
Philippine President Ramon Magsaysay was present when the US$60-million Caltex
refinery was inaugurated in 1954, becoming the first petroleum refinery in the
Philippines. On the same year, Caltex affiliates California Asiatic Oil and Texaco
Overseas Petroleum explored the Cagayan Valley for oil deposits. In 1956, Caltex
moved its main offices into its own building on Padre Faura Street in Ermita, Manila. [1]

Incidents and concerns:

The continued operation of the oil depot in a densely populated major city has
been a subject of various concerns, including its environmental and health impact to the
residents of the adjacent community surrounding the compound, as well as to the larger
Manila population. International standards allow oil depots to operate within a 20kilometer radius buffer zone, away from residential and commercial establishments
which would be directly affected by the facilitys everyday operations and impending
accidents in the future
In 1997, two Shell oil tankers exploded inside the oil depot complex.
In 1999, a pipeline leak was the source of fires in Muntinlupa, City, killing one. [2]
In January 2008, a tanker burst into flames at the foot of the Nagtahan fly-over.
In 2005, the College of Medicine of the University of the Philippines
Manila conducted the cross-sectional study which found that the number of cases of
neurophysical disorders in the area surrounding the area have been progressively
increasing.
In the same year (2005), a health survey proved that the air surrounding the oil
depot contains high levels of benzene, a chemical compound known to increase risks of
cancer.
In July 2010, the leak of the underground pipeline of the First Philippine Industrial
Corporation (FPIC), which carries oil from the oil refineries in the province
of Batangas to Pandacan, caused the contamination of water bed table at the basement
of West Tower Condominium in Bangkal in Makati City.
In 2013, the Laguna Lake Development Authority (LLDA) General
Manager Nereus Acosta fined the operator of the depot with P200, 000 daily due to
environmental violations in the Pasig River, which runs thru Laguna Lake. [3]
The Malacaang Palace, the official residence of the President of the Philippines,
is only two kilometers away from the depot
The Polytechnic University of the Philippines, the largest university in the
Philippines in terms of student population (approx. 40,000), is located directly across
from the depots on the banks of the Pasig River. [4]

Pandacan: Kicking out Big Oil

Should they stay or should they go?

Erap had spoken. The current City Fathers of Manila have given the three oil
majors up to 2016 to vacate the Pandacan oil depot. After so many legal battles and
public opinion skirmishes through many changes of city administrations, it would seem,
again, that Manila has spoken with finality.
What Justice?
But one must again ask, where is the justice in all this? Is justice on the side of
the thousands of residents of Pandacan who, no doubt, have benefited, historically,
from the collateral business such a big and busy business facility generates? Is justice
serving those residents who complain about the existence of a major fire and health
hazard, despite oil depot meeting all international oil industry fire and environmental
standards? Never mind if many of the lean-toos and wooden structures around the oil
depot are more of a fire hazard themselves.
Justice for whom?
Or is justice on the side of the City coffers, who benefited for close to a century of oil
company business related taxes, not to mention, the out of pocket development costs
that the oil majors spent on the surroundings ever since they pioneered their location to
these mosquito infested marshes of river side Pandacan.

Problems under the earth

Then there is a greater, underlying threat, beyond what the eye sees. The departure of
the oil depot from Pandacan also means the death of the age old Batangas-Manila
pipeline, as all that oil flow will have nowhere to terminate. Consider that there is
probably no space large enough to accommodate repositioning the oil depot on
anywhere along the route of the pipeline right of way. Remember also that keeping that
pipeline working keeps the refineries out in the countryside while the locus of fuel
distribution in Pandacan is as close as possible to the country's largest concentration of
oil consumers.
Killing the pipeline
Case in point; when the fracas over the oil pipeline leak, caused by the weakened
DPWH pavement of the SLEx, started a few years ago, the oil transport industry needed
400 tanker truck trips a day to cover for the oil flow that was temporarily closed by court
order. Imagine what these increased truck trips would do to traffic, which the truck ban
is trying to mitigate? It doesn't take rocket science to figure out the domino effect of
what all this will do to fuel prices, nationwide.
5

Big Oil vs. little residents?

All this, for what? Appeasing the complaints of thousands of irate residents? It's all nice
and melodramatic for pundits to paint this as a fight between Big Oil against little
residents, with the city government responsibly and nobly taking up the cudgels for its
citizens. But there's more to it than it meets the eye.
Big Oil vs. Big Land
This is more a fight between Big Oil and Big Land, as in real estate developers.
Naturally, the city fathers, unwitting proxies of Big Land, are enticed by the increased
cash flow that real estate developers eyeing Pandacan are dangling. No wonder one
hardly hears a peep of protest from the legitimate Left, the self-appointed spokesman
for the underprivileged masses. Environmental issues are only the red herring, the false
cover of the real estate prize. Then, is justice now all about giving in to the highest
bidder?
What lies beneath?
Generally, there is nothing environmentally wrong with brownfield sites. But an ex-oil
depot with a live pipeline, and right next to a river, to boot? Is the ground of the oil depot
environmentally sound, considering its life as an oil depot? Lord knows what lies
beneath the soil of all those huge tank farms and even under those fire mitigation
berms.
Genuinely pro-environment?
If the exit of the oil depot from Pandacan for genuine environmental reasons is a fait
accompli, then we will grudgingly grin and bear the resulting traffic problems and
higher fuel price that this will entail. In exchange, the City fathers of Manila should do
more than just pay lip service to Pandacan's environmental concerns.
The challenge to prove environmental sincerity
To prove this, the City should require the interested party that will develop the ex-oil
depot site, to make the place a no-build zone for the next 20 years. The developer can
turn it into a park, stage some concerts, and allow a few weekend flea markets, but no
permanent ground disturbing construction. Manila may never recover the lost tax
income from the oil companies, but it should at least pay for securing the area if the
real estate developer is willing to invest in a 20-year no build zone. Lest the area
becomes a tempting and unplanned relocation center for informal settlers. That will be a
zero-income proposition for the City but who knows, a whole new batch of informal
settlers is always a vote rich gold mine for any politician running for office in the City of
Manila.
6

Pandacan Scale down Project

In response, the three oil companies sought to show that the depots do not pose any
danger to the Pandacan community. Shell, Caltex and Petron conducted a quantitative
risk assessment on health, safety and environment through EQE International, a thirdparty consultant.
In May 2002, EQE concluded that the existing configuration of the oil facilities in
Pandacan exceeds internationally acceptable societal risk criteria. To further improve
safety and security in the Shell depot, the following key recommendations were made:
1. Removal of two vertical tanks nearest to the residents;
2. Additional fire water deluge system for the pipe-racks;
3. And automatic start-up system for the firewater pumps.

After implementing these measures, EQE concluded that the maximum individual risk of
a fatality caused by the depots becomes 20 times lower than the risks in an average
household.
In June 2002, the Mayor signed a Memorandum of Understanding (MOU) with the three
oil companies, and the Department of Energy, agreeing to let the depots stay if the oil
companies:
1. Dismantle 28 tanks located near the perimeter walls and residential areas,
including the LPG spheres;

2. Develop a buffer zone between the depots and the residential areas, wherein
they would place a linear park;

3. Establish joint operations and management of common, integrated and shared

facilities.

As a part of its commitment to ensure the health, safety, security and environment of its
neighboring community, Shell decided to check the safety of the environment using a
process called environmental site assessment (ESA) through ENSR, a multi-national
environmental consultancy company, to do the study on the condition of the soil and
groundwater within the property of Shell Pandacan and in the community adjacent to its
perimeter walls.

Legislative Actions
In 2001, the Manila City Council passed Ordinance No. 8027 that changed the
classification of Pandacan from an industrial to a commercial area. It gave the oil depot
six months to cease operating in the area
In 2006, Ordinance No. 8119 ordered the phasing out of hazardous industries in
the city, including the depot. In 2009, Ordinance 8027 was upheld by the Supreme
Court of the Philippines; while the City Council passed Ordinance No. 8187 to negate
the first ordinance. This time, Pandacan was re-classified as a heavy industrial zone,
allowing the depot to operate.
In 2012, Ordinance No. 8283 re-classified the area as a high-intensity
commercial zone, thus giving the oil depot until 2016 to relocate, but was vetoed by
then Mayor Alfredo Lim. The proposal instead is to transfer the facilities to the North
Harbor, still in Manila

Conclusion
After this study Ive known that every citizens in Pandacan have united and fought for
their safety and won the battle now; the Oil depots are transferred to a new location in
which more citizens wont be harmed but because of this there are also some people
who lost their job/s. So there for I conclude that, in this project there are some positive
and negative aftermath on what theyve done.

References
1. "Caltex in Philippines". Caltex Philippines. Retrieved 2014-03-03. 1
8

2.
3.
4.
5.
6.

"A CENTURY-OLD CHALLENGE: The oil depots in Pandacan". Interaksyon.com.

Retrieved 2014-03-03.2
http://www.autoindustriya.com/the-inside-man/pandacan-kicking-out-big-oil.htmabove
LLDA slaps P200, 000 daily fine on Pandacan oil depot operator". The Manila Times.
Retrieved 2014-03-03. 2
"BROKEN PROMISE IN MANILA: The dying and the fearful ask". Global Community
Monitor. Retrieved 2014-03-03.2
http://www.autoindustriya.com/the-inside-man/pandacan-kicking-out-big-oil.html
http://www.shell.com.ph/environment-society/shell-in-the-society/pandacanscaledown.html