The economists said that high dependency on natural gas was arisky proposition, due to Thailand's paltry domestic supply and suggested that the government select coal as an alternative energy source.

Praipol Koomsup, a lecturer in Thammasat University's Faculty of Economics, said that although past governments had spent Bt24 billion on energy conservation campaigns between 1995 and 2004, in accordance with the Energy Preservation Promotion Act, the efforts managed to shave only Bt15 billion worth of energy consumption.

Direct conservation has been inadequate, particularly in the last five years when savings were only five per cent of the target, Praipol said.

"From 2000 to 2004, the Oil Conservation Fund managed to conserve only five per cent of the target. That is quite a poor performance," he said.

The energy conservation plan cut only 1,618 gigawatt hours (Gwh) and 2,174 Gwh in the first and second five-years of the plan, respectively, compared with electricity consumption of an average of 106,000 Gwh a year.

The plan slightly slashed oil consumption by 357 million litres and 169 million litres in the two periods, from the country's annual oil consumption of 46 billion litres.

Praipol said the dismal performance was the result of inefficient practices at stakeholder agencies, the lack of experience and skills among energy audit consultants, business failures, little attention to savings by the private sector, and unsustainable and unsteady prices of energy.

Puree Sirasoontorn, a faculty lecturer, said that the government had failed in its attempt to subsidise diesel and petrol prices over the last two years. The policy did not encourage oil consumers to change their behaviours.

She said the government's oil subsidies, which totalled Bt92 billion, had resulted in price distortions. The subsidies have caused prolonged high prices of oil in order to recoup the expenditures of the Oil Fund.

"In the short-term, oil consumers have not reacted much to the higher prices of oil when they floated because the elasticity of demand is low. Usage, however, has gradually declined," she said.

She added that the Oil Fund's subsidy of liquid petroleum gas (LPG) has had a negative effect on the promotion of natural gas for vehicles.

Veerapol Jiraprditkul, deputy director-general of the Energy Policy and Planning Office, said the failure of energy conservation policies was due to a lack of cooperation in the private sector. Although some factories have plans to reduce energy consumption, they have not been implemented yet.

"Energy consumption has mostly been in the industrial and transportation sectors but the plan has not focused on transportation. Logistics improvements also have not shown progress," said Veerapol.

He suggested that the government launch additional incentives for energy-saving campaigns to increase efficiency such as electricity-usage labels on electrical appliances.

He predicted that oil prices would continue to rise over the next few years.

Praipol said the price of natural gas was likely to increase in line with oil prices because of low domestic reserves that will last at most 34 years. High dependence on natural gas will result in increasing imports as the world's natural gas reserves are good for only 67 years.

The country, however, could choose cheaper, yet dirtier, coal as an alternative energy source which would be able to reduce natural gas consumption for electricity production. Global coal reserves are estimated at 164 years.

Anoma Srisukkasem

The Nation