THE Department of Energy (DoE) said it will propose service contracts to explore and develop hydrogen resources.

In a draft circular posted on its website, the DoE said native hydrogen resources can be classified as mineral gas, putting it within the coverage of Presidential Decree (PD) No. 87 or the amended Oil Exploration and Development Act of 1972.

Mineral gas is classified alongside hydrocarbon gas, bitumen, asphalt, and “all other similar or naturally associated substances” except coal, peat, bituminous shale and/or other “stratified mineral fuel deposits.”

“Native hydrogen gas occurs naturally in geological formations and can be associated with methane and other hydrocarbon gases and can be considered a mineral gas,” the DoE said.

“The exploration, development, and utilization of native hydrogen found in geological formations (analogous with) ‘natural gas’ as provided under Section 3 of PD 7, which are obtained from boreholes and wells and consisting primarily of hydrocarbons,” the DoE said.

If the draft is approved, the DoE said that the management of native hydrogen will be governed by PD 87 as amended and implemented under the rules, regulations, issuances and procedures issued by the DoE.

In a separate draft circular, the DoE said it will allow operators with active petroleum service contracts (PSC) — as validated by the DoE — to submit new applications prior to the expiry of the production term.

The DoE said a new approach to awarding PSCs is needed to effectively develop confirmed petroleum reserves, to “fully exhaust petroleum reserves.”

“There is a need to implement a judicious and cost-effective way to optimize the development and utilization of confirmed petroleum resources to avoid stranded petroleum reserves which will result in substantial losses to the Philippine Government,” the DoE said. — Sheldeen Joy Talavera