REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

House Bill No, _ 8387

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

EXPLANATORY NOTE

‘The Philippines has 529.5 kilometers of natural gas transmission pipelines that transport gas
from the Malampaya Gas Field to fuel three power plants: the 500 MW San Lorenzo, 1,000
MW Sta Rita and 1,200 MW Ilijan power plants in Batangas province. Nine other natural gas
pipeline projects are in the construction pipeline for Luzon from 2017 to 2022'.

According to the government’s Philippine Energy Plan (PEP) these are the Batangas-Manila
1 (BatMan 1), BatMan 2, Bataan-Cavite (BatCave), Subic Pipeline, Clark Pipeline, Subic-
Fort Bonifacio Pipeline, Sucat-Malaya, Sucat-Quirino lines and a city gas distribution
network—the EDSA-Taft Gas Pipeline’.

In the US, oil and natural gas pipelines traverse the United States through a network of
underground pipelines that transport product throughout the lower 48 states and Alaska.
According to the U.S. Department of Transportation (DOT), pipelines are the safest mode of
transportation for these products, safer than movement by rail, barge or truck.

The Office of Pipeline Safety within the US DOT is responsible for establishing and
enforcing proper design, construction, operation, maintenance, testing and inspection
standards for both oil and natural gas pipelines. However, such a system is not existing
currently in the Philippines.

This proposed measure seeks to provide the Department of Energy (DOE) the jurisdiction
that will regulate, monitor, and oversee the operations of petroleum pipelines in the country.
This measure likewise mandates the DOE to establish a Petroleum Pipeline Code that will
serve as basis for the regulation, monitoring, and overseeing operations of petroleum
pipelines in the country

Thru this measure, it is hoped that we will be able to review, expand, improve, and promote
regulations on our pipeline systems to ensure their safety and reliability. Hence, immediate
passage of this measure is sought.

Representative
Magdalo Para sa Pilipino Party-List

* nttps://www.manilatimes.net/pipelines-in-the-pipeline/79789/
* Ibid


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session
8387

House Bi

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO.

AN ACT

TO STRENGTHEN THE JURISDICTION AND POWER OF THE DEPARTMENT
OF ENERGY OVER PETROLEUM PIPELINE OPERATIONS AND FOR THIS
PURPOSE PROVIDE A PETROLEUM PIPELINE CODE TO PRESCRIBE
STANDARDS FOR THE DESIGN, CONSTRUCTION, OPERATION AND
MAINTENANCE AND ABANDONMENT OF LIQUID PETROLEUM PIPELINES
AND APPRORPIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

CHAPTER I
GENERAL PROVISION
SEC.1. Short Title. This Act shall be known as the “Philippine Pipeline Act of
2018”.
‘SEC.2. Declaration of Policy.- \t is hereby declared the policy of the State to:

a) Promote transportation of liquid petroleum products thorough pipelines as
a safe and efficient way of transporting liquid petroleum products;

b

Provide for basic safety rules in petroleum pipeline operations and enhance
reliability in the transportation of oil and liquid petroleum products by
pipeline in the country;

©

To encourage the inflow of private capital to encourage the use and
development of petroleum pipelines; and

d

To protect the public interest be ensuring the unhampered use of pipelines
as a mode of transporting petroleum, especially to urban areas.

SEC3. Scope and Application.- Except as otherwise provided herein, this Act shall
apply to all existing and future petroleum pipelines in the country.


SECA. Definition of Terms.

a) Act~ shall refer to the Philippine Pipeline Act of 2018;

b) Concession ~ shall refer to the authority granted to a Person for the right to own,
establish, provide, construct, install, operate and maintain Petroleum Pipeline
systems for transporting Petroleum Products;

¢) Contract of Concession - shall refer to the agreement executed between the DOE
‘on behalf of the Government of the Republic of the Philippines and a Pipeline
Operator granting a Pipeline Concession;

d) Crude Oil — means oil in its natural state before the same has been refined or
otherwise treated, excluding water and foreign substances;

°)

DILG ~ shall refer to the Department of Interior and Local Government;

£) DOE- shall refer to the Department of Energy;

2) DOH ~ shall refer to the Department of Health;

h) DOT? ~ shall refer to the Department of Transportation;

i) DPWH ~ shall refer to the Department of Public Works and Highways;

i) Grantee ~ shall refer to a Person to whom a Concession for Petroleum Pipeline
Operations has been granted by law;

k) Local Government Units of LGUs- shall refer to the local government units

created under the Local Government Code;

MMD2~- shall refer to the Metro Manila Development Authority;

m) National Pipeline Board or NPB- shall refer to the Board created under Chapter
VI, Section 16 of this Act;

n) Petroleum Pipeline- shall refer to the system of Pipelines, including related
Pipeline Facilities through which Petroleum Products are transported, including
without limitation the pipeline, valves, break out tanks and other appurtenances
connected to the pipeline and pumping units;

0}

Petroleum Products- shall refer to any liquid petroleum product obtained from
distilling and processing of crude oil, unfinished oils, natural gas liquids and
other hydrocarbon compounds. The term shall exclude natural gas and liquefied
natural gas;

Pp

Petroleum Pipeline Operations- shall refer to the business of engaging in the
engaging in the Transportation of Petroleum Products through a Petroleum
Pipeline;

q) Petroleum ~ shall refer to crude oil, condensate and liquefied petroleum gas;


1) Person includes a natural person, corporation, or partnership;

Pipeline or Line Pipe ~ shall refer to a tube, usually cylindrical, through which
liquid Petroleum Product flows form one point to another;

t) Pipeline Facility(ies) ~ shall refer to a new or existing Pipeline, including right-
of-way and equipment, facility or building used in the Transportation of
Petroleum Products;

Pipeline Operators ~ Persons operating Petroleum Pipeline or Pipeline systems;
v) PNP ~ shall refer to the Philippine National Police; and

CHAPTER IL
JURISDICTION OF THE DEPARTMENT OF ENERGY

SECS. Jurisdiction. This Act strengthens and confirms the sole regulatory and
administrative power and authority of the DOE to supervise and regulate Petroleum Pipeline
Operations. In addition to its existing powers and functions, the DOE shall have the sole
responsibility to supervise and regulate Petroleum Pipeline Operations. It shall:

a) Formulate, in consultation with petroleum pipeline industry participants, a
Petroleum Pipeline Code and such other rules and regulations to Implement this
Act: Provided that, said regulations shall not be inconsistent with the standards
and regulations adopted under the Petroleum Pipeline Code;

b) Ensure the reliability and safety of transporting liquid petroleum products through
pipelines;

©) Enforce the Petroleum Pipeline Code as well as rules and regulations
implementing this Act;

4) Exercise original and exclusive jurisdiction over questions and cases involving
Concessions as well as fees and fines imposed by the DOE in the exercise of the
foregoing functions, and

e) Exercise such other powers and functions as may be necessary to attain the
objectives of this Act.
CHAPTER II
PIPELINE CONCESSION

SEC.6. Nature of a Pipeline Concession. A Concession is an authority granted to a
Person for the right to establish, own, operate and maintain a Petroleum Pipeline(s) for
transporting Petroleum Products. No Peron may engage in Petroleum Pipeline Operations
without a valid Concession obtained from the DOE: Provided that, Persons who are holders
of existing Concession or are existing Pipeline Operators shall not be required to secure a
new Concession from the DOE for the remaining period of their current Concession.


SEC.7. Philippine Ownership Requirement. — No Concession for the ownership
establishment, operation and maintenance of a Pipeline shall be granted except to citizens of
the Philippines or to corporations or associations organized under the laws of the Philippines
at least sixty percent (60%) of whose capital is owned by such citizens.

SECS. Term of Concession. The Concession shall be valid for a term of twenty five
(25) years, renewable for another twenty five (25) years, provided that, due consideration will
be given for the automatic renewal of the Grantee’s Concession in view of the Grantee’s
sizeable investments, infrastructure and installations or the necessity and/or urgency of
maintain the Pipeline to serve public interest. For existing Pipeline Operators, the term
Concession shall be provided in their existing Concession Agreements: Provided that,
existing Pipeline operators may apply for a contract of Concession under this Act prior to the
expiration of their current Concession.

CHAPTER IV
PROCEDURES FOR APPLICATION OF CONCESSION

SEC. Application of Concession. Any applicant for Concession shall apply with
the DOE pursuant to the requirements herein. An application for Concession under this Act
shall be filed with the Oil Industry Management Bureau (OIMB) of the DOE which shall
examine and pass upon the same as well as upon the qualifications of the applicant.

SEC.10, Requirements.- The applicant must demonstrate that it is legally existing and
qualified to conduct its business under Philippine laws and, taking into account the length and
location of the Petroleum Pipeline, is financially and technically capable of operating and
maintaining the same pursuant to this Act, the Petroleum Pipeline Code and the rules and
regulations implementing this Act.

SEC.11. Public Note-The OIMB shall issue a public notice of all Concession
applications and afford interested parties an opportunity to comment on such applications. If
1no opposition is filed within the period provided in the public notice, it shall be conclusively
presumed that no such opposition exist. Thereafter, no objection from third parties to granting
of the Concession shall be heard and the Contract of Concession shall be executed by the
Secretary of the DOE on behalf of and for the Republic of the Philippines, and the Grantee, in
accordance with this Act, the implementing rules and regulations and existing laws.

SEC.12. Disposition of Opposition to the Concession.- If an Opposition is filed in
accordance with Section 11 hereof, the DOE shall, decide based on the qualifications of the
applicant pursuant to this Act, the implementing rules and regulations as well as merits of the
oppositor’s claims if the applicant is duly qualified to be granted a Concession. The DOE
may require submission of additional documents and other papers and shall render a decision
within fifteen (15) days from the date of filing of the opposition or from the date the case is
deemed submitted for resolution as may be provided in the implementing rules and
regulations, without prejudice to the right of any aggrieved party to appeal to the courts,
pursuant to the Rules of Court

SEC.13. Issuance of Concession.- The DOE shall issue a Contract of Concession
upon its determination that the establishment, operation and maintenance of the Petroleum
Pipeline(s) by the applicant is consistent with this Act. The Contract of Concession shall state
definitely the principal rights and obligations of the parties concerned pursuant to this Act.


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SEC.14. Registry of Pipeline Operators.- The DOE shall establish and maintain a
registry of all pipeline operators or Concession Grantees,

CHAPTER V
RIGHTS GRANTED

SEC.1S. Grant of Right. — Grantees of Pipeline Concessions acquire the right to own,
construct, establish, operate and maintain a Petroleum Pipeline to transport Petroleum
Product, by means of, and through, a Pipeline or system of Pipelines, between the sources of
production and/or refining and/or supply (storage) the places defined in the Pipeline
Concession, in accordance with the provision of this Act and the implementing rules and
regulations.

The right includes the construction, installation and operation of pipelines, pipeline
facilities, pumping stations, storage tanks and other buildings, water supply and
communication systems, roads, and such other equipment or facilities as may be needed by
the Grantee to conduct its Petroleum Pipeline Operations.

Among other things, the Contract of Concession shall state definitely:

a) The right of the Grantee to own, construct, install, operate and maintain a
Petroleum Pipeline system passing through a designated area(s), specifying the
province(s), city(ies), and/or municipality(ies);

b)

‘The Grantee’s right to acquire rights of way, easements and other similar right on,
over, under, across and through the designated area(s) or adjacent thereto;

6)

The right of eminent domain to be exercised by the Government, as represented
by the DOE, for and on behalf of and/or through the Grantee, over private
property when the occupation of private land is needed by the Grantee in
connection with his Concession, for the purpose of constructing, installing,
maintain and operating Petroleum Pipelines, road, wells, tanks, reservoirs,
pumping stations for public use or benefit;

d) Term of Concession;

Right to receive assistance from the DOE in obtaining fiscal and non-fiscal

incentives granted by this Act;

f) Right to receive assistance form the DOE and/or other government
instrumentalities in securing permits, licenses and clearances relating to the

Petroleum Pipeline Operations; and

2) Other rights consistent with this Act.


CHAPTER VI
THE NATIONAL PIPELINE BOARD AND THE PETROLEUM PIPELINE CODE

SEC. 16. National Pipeline Board.- There is hereby created the National Pipeline
Board. The NPB shall be composed of the Secretary of the DOE as Chairman and the
Secretaries of the Department of Environment and Natural Resources, Department of
Transportation, and the Department of Public Works and Highways, as members, and
representatives from Pipeline Industry operators, who shall automatically be members by
reason of being Grantees of a Pipeline Concession. The DOE Secretary, in his capacity as
Chairperson, shall, within thirty (30) days from the effectivity of this Act, convene the NPB
to discharge its powers and functions as provided in Section 17 hereof. The Board shall be
assisted by a Technical Secretariat and the corresponding positions shall be determined by the
Board, subject to approval by the Department of Budget and Management (DBM) and
existing civil service rules and regulations.

SEC.17. Powers and Functions of the NPB. - The NPB shall have the following
powers and functions:

a) It shall recommend to the DOE the standards for the design, construction, pressure
testing, operation, and maintenance, corrosion control and abandonment of
Petroleum Pipeline systems. Within thirty (30) days from enactment of this Act,
the NPB shall formulate a Petroleum Pipeline Code for approval by the DOE. The
NPB may adopt such relevant and applicable standards from the United States
Department of Transportation Regulations and American Society of Mechanical
Engineers on Petroleum Pipelines as well as other intemationally accepted
standards for Petroleum Pipelines. In view of changes in internationally accepted
Petroleum Pipeline standards and Pipeline standards and Pipeline technologies,
the NPB may revise and/or amend the Petroleum Pipeline Code; Provided that,
the NPB may only introduce amendments after sufficiently holding consultations
with all its members to ensure transparency and further encourage private sector
participation. The NPB may call on members form the academic community and
experts from the private sector, and other pipeline industry participants as resource
persons to aid in updating the Petroleum Pipeline Code. There shall be a
mandatory review of the Petroleum Pipeline Code set pursuant to the provisions of
this Act every two (2) years;

b) In carrying out its duties and functions under this section, it shall, whenever
appropriate, be authorized to utilize agencies of the govemment to obtain
technical, economic and statistical information and advice; and

CS

It shall conduct periodic analyses of the domestic transport of Petroleum Products
by Pipeline. Such analyses should identify the areas through which the Pipeline
traverse where unplanned loss of Petroleum Pipeline may cause shortages of
Petroleum Products or price disruptions and where shortages of Pipeline capacity
and reliability concerns may have or are anticipated to contribute to shortages of
Petroleum Products or price disruptions. Upon identifying such areas, the NPB
may determine if the current level of regulation is sufficient to minimize the
economic impact of such unplanned losses of Pipeline capacity. In preparing any
analysis hereunder, the NPB may consult with the heads of other government
agencies and public and private sector experts in Petroleum Pipeline Operations

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and other forms of Transportation of Petroleum Products, energy consumption,
pipeline capacity, population and economic development.

CHAPTER VII
RIGHT OF WAY, EXPROPRIATION, EASEMENT

SEC.18. Grant of Right of Way.- As may be required by the DOE or granted by the
Concession, all government agencies and/or instrumentalities, including but not limited to the
DPWH, the relevant LGUs, MMDA, their successors and assigns, shall grant the necessary
right of way over non-private property within their jurisdiction.

SEC.19. Priority.- Due to the importance of a steady, safe and efficient supply of
Petroleum Products, priority shall, whenever practicable, be given to Pipeline Operators in
acquiring right of way over government property.

SEC.20. Right of Way over Private Property, Expropriation.- The DOE shall assist
or represent Grantees of Concessions in procuring the necessary right of way over private
property.

When the occupation or possession of private land is needed by the Grantee in
connection with its Concession, for the purpose of constructing, installing, maintaining and
operating pipelines, reservoirs, wells, roads, railroads telephone and telegraph lines, airfields,
radio station, powerhouse, transmission lines, pumping stations, wharves, piers, and
terminals, which are hereby declared to be for public use or benefit, the right of eminent
domain may be exercised by the Government, as represented by the DOE, for and on behalf
of the Grantee, in accordance with applicable laws on the matter. In all cases of voluntary
agreement between the Grantee and a private landowner, a copy thereof shall be furnished the
DOE. For the purpose of this Section, the necessity of the work in Petroleum Pipeline
Operations will be presumed in cases of construction of Pipelines, tanks, pumping stations,
power systems, and other means of transportation and communication, including any
auxiliary facilities and works

SEC.21, Easement Over Public Land. — When easement or right of temporary
‘occupancy over public land is needed by a Grantee for the purpose of carrying out any work
necessary to its Petroleum Pipeline Operations, such right may be granted by the Government
through the DOE subject to applicable laws and regulations. The same presumption in
Section 20 applies in this instance.

CHAPTER VIII
COMPLIANCE WITH STANDARDS

SEC.22. Petroleum Pipeline Code.- All Grantees of a Pipeline Concession under this
‘Act shall provide safeguards for the safety, reliability, adequacy, security, stability and
integrity of their Petroleum Pipeline systems in accordance with the technical specifications
and performance standards set forth in the Petroleum Pipeline Code to be promulgated by the
NPB, as may be amended



CHAPTER IX
PIPELINE SECURITY

SEC.23. Pipeline Security; One Call System. It is hereby declared that Petroleum
Pipeline systems are imbued with public interest. For this purpose, the DOE, in coordination
with the DND, DPWH, PNP, MMDA, DILG, LGUs and the appropriate government
agencies and instrumentalities shall implement a one-call system, whereby any third party
shall report to a designated agency any possible excavation, installation or activity which may
affect Pipelines as well as any act which may result in damage to property or injury to
persons. The one-call system is intended to bring to immediate notice of the foregoing to the
affected Grantee or other underground utility providers and to provide a mechanism for
immediate liaison and coordination with all relevant government agencies to avoid damage to
or loss of property as well as injury to persons.

‘The DOE shall implement a procedure for a systematic response to emergency cases,
including without limitation, incidents involving leaks, breaches on the Pipelines or Pipeline
facilities and other similar occurrences, whereby there will be immediate, appropriate and
coordinated response actions from the concemed LGUs, Bureau of Fire Protection, the
DENR, DOH and such other govemment agencies and instrumentalities. In case of
remediation or clean-up, the DENR shall be the lead agency (in coordination with other
government agencies or instrumentalities) in directing the clean-up of affected areas premised
on a risk based criteria.

SEC.24. Inter-agency Cooperation. Should the DOE find it necessary, it shall
consult, participate, cooperate and enter into agreement with other government agencies and
instrumentalities, non-governmental organizations or people's organizations and private
enterprise in the furtherance of the foregoing objectives.

CHAPTER X
ROLE OF GOVERNMENT AGENCIES

SEC.2S. Role of Government Agencies.- In the Implementation of the provisions of
this Act, its implementing rules and regulations and related laws, the following agencies shall
perform, among others, the following functions:
a) The DOTr shall:
1. Assist in coordinating networks for the transportation of Petroleum as well as
the fast and safe transportation services thereof, as determined by the DOE;
and

2. When requested by the DOE, assist the DOE in identifying routes, zones or
areas of operations of particular operators.

b) The DPWH shall, when necessary, provide the technical support in the
construction and installation of Petroleum Pipelines.

©) The DILG shall


1. Provide, through the Philippine National Police (PNP), manpower and
available resources to Grantees of Pipeline Concessions in case of threats to
the security of the Pipelines and other similar acts;

2. Employ the assistance, cooperation and coordination of LGUs in the
implementation of the policies and orders issued by the DOE; and

3. Mobilize the Bureau of Fire and Protection (BFP) to ensure the prevention and
suppression of all destructive fires on the Petroleum Pipeline installations.

d) The corresponding LGUs, where the Pipeline are situated, shall share in the
responsibility of implementing safety and prevention measures within their
territorial jurisdiction solely with respect to third parties who may affect the
Pipelines situated within their respective territorial jurisdictions.

CHAPTER XI
ABANDONMENT AND DECOMMISSION!

SEC. 26. Abandonment and Decommissioning.- At the expiration of the term of the
Contract of Concession or a renewal thereof, or when a Pipeline has come to the end of its
useful life and/or users or customers of the Petroleum Product have discontinued using the
Pipeline to transport Petroleum Products or there are no foreseeable new users or customers
in the future, the Grantee shall undertake Pipeline decommissioning and cleaning. The
Pipeline shall be cleaned and decontaminated before it can be either left in its existing place
or dismantled for proper disposal.

The DOE, through the appropriate regulations, may provide guidelines for:

a) the clean-up of residual fluids in the Pipeline and proper disposal thereof in
accordance with applicable environmental laws and regulations;

b) decontaminated Pipelines which may be trenched or buried underground;
©) environmental concerns have been addressed; and

) whether such Pipelines can be left in place without creating any risk to the
surrounding environment or to the community.

SEC.27. Decommissioning Fund.- For this purpose, the DOE shall, after public
consultation with Pipeline Operators and Pipeline industry participants, implement a system
whereby the Pipeline Operator shall collect form its users or customers decommissioning
costs/fees, to be agreed upon between the Pipeline Operator and the users or customers.
‘These decommissioning costs or fees shall be held in a Decommissioning Fund, established
jointly by the Pipeline Operator and its users or customers and administered by the Pipeline
‘Operator specifically to pay for the costs of decommissioning. The Decommissioning Fund
shall not be subject to Value Added tax, income tax and such other taxes, charges and fees.



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CHAPTER XII
FISCAL INCENTIVES

SEC.28. Taxes.- Pipeline operations shall be subject to the payments of all taxes,
duties, fees or charges and other impositions under the National Internal Revenue Code of
1997, as amended, and other applicable laws; Provided however, that in recognition of the
substantial investments needed for the construction, installation, operation and maintenance
of the Grantee, the Grantee shall be entitled to an income tax holiday and such other
incentives granted to pioneer enterprises under the Omnibus Investment Code, as amended.

SEC.29. Customs Duties.- The Grantee may import, free of applicable customs duties
and charges all equipment, machinery, material, instruments, supplies and accessories
necessary for the installation, construction, operation and maintenance of the Petroleum
Pipeline.

CHAPTER XIII
FORCE MAJEURE AND/OR FORTUITOUS EVENTS

SEC.30. Force Majeure and/or Fortuitous Events.- Failure on the part of the
Grantee to fulfill any of the terms and conditions provided by this Act or its implementing
rules and regulations or by other relevant laws shall not be deemed a breach of such
obligation on the part of the Grantee in so far as such failure results from force majeure
and/or fortuitous events, including without limitation, acts of God, war, insurrection, riot,
civil, commotion, strike, tide, storm, flood, lightning, explosion, fire, earthquake, passage of
laws, orders and rules and any other happening which the Grantee could not reasonably
prevent, control or avoid.

CHAPTER XIV
PROHIBITED ACTS

SEC.31. Prohibited Acts.-- Without the prior written consent of the Grantee, it shall
be unlawful for any Person to:

a) Demolish, excavate, tunnel, or construct, drill, install, or make improvements
within five (5) meters from the nearest portion of the Pipeline facility;

»d)

Cut, saw slice, separate, split, sever, smelt, remove mutilate, alter, tap, reconnect,
disconnect, or in any way tamper any Pipeline or part thereof, or any other
pipeline related installation form the place of installation of any other place or site
where it may be rightfully or lawfully situated;

©) Take, carry, away, transport, transfer, move, with or without the use of a motor
vehicle or any other means of conveyance, the Pipeline, or part thereof, or any
other Pipeline related installation;

d) Store, possess, or otherwise keep in his premises, custody or control, any portion
of the Pipeline including Pipeline related installation; and

©)

Knowingly use or receive direct benefit of petroleum delivery service obtained
through any of the acts mentioned in paragraphs (a), (b), (c) and (d) above

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SEC.32. Fines and Penalties for Unlawful Acts.- Any person who commits any of
the foregoing acts shall suffer the penalty of a fine of not less than Ten Thousand Pesos
(PhP10,000.00) but not more than Five Million (PhPS,000,000.00) or imprisonment of not
less than six (6) months, or both shall be imposed. If the offender is a juridical person, the
president, manager, directors, trustees, officers or the officials directly in charge of the
operations shall suffer the penalty herein provided

CHAPTER XV
APPROPRIATIONS

SEC.33. Appropriations.- Such sums as may be necessary for the initial
implementation of this Act shall be taken by the DOE from its annual appropriation.
Thereafter, the fund necessary to carry out the provisions of this Act shall be included in the
annual General Appropriations Act.

CHAPTER XVI
FINAL PROVISIONS

SEC.34, Implementing Rules and Regulations. The DOE, in coordination with the
NPB, shall promulgate the necessary implementing rules and regulations within thirty (30)
days after the effectivity of this Act. There shall be a mandatory review every two (2) years
of the implementing rules and regulations and the pipeline standards set pursuant to the
provisions of this Act.

SEC.35. Separability Clause.- \f any provision of this Act is declared invalid or
unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.

SEC.36. Non-Retroactivity Clause.- Concessions which have been granted under
previous laws at the time this Act becomes effective, shall remain effective and shall continue
to operate under their existing Concessions or authority.

SEC.37. Grantees of Concession under Other Laws.~_ Nothing in this Act shall be
deemed to revoke any existing Concession granted under the Petroleum Act of 1949, as
amended, or other administrative or regulatory permit, authority or contract, which
Concession, Permit, Authority or Contract shall be allowed to its full term or renewal thereof,
but may not be renewed except pursuant to the provision of this Act.

SEC.38, Precursor Law.- Under the Petroleum Act of 1949, as amended, the power
to grant pipeline concessions was granted to the Secretary of Agriculture and Natural
Resources. The authority over pipeline concessions under the Petroleum Act was transferred
to the Petroleum Board pursuant to Presidential Decree No. 782 dated 25 August 1975. The
Petroleum Board was thereafter abolished and its powers and functions were transferred to
the Energy Development Board in accordance with Presidential Decree No. 910 dated 22
March 1976. The Energy Development Board (EDB) was abolished by Presidential Decree
‘No. 1206 dated 6 October 1977. The powers and functions of the EDB were transferred to the
Bureau of Energy Development under the Department of Energy pursuant to Section 12 of
Presidential Decree No. 1206. Presidential Decree No. 1700 issued on 10 July 1980 amended
Presidential Decree No. 1206 by transferring the power to regulate and fix the rates of
pipeline concessionaires under the Petroleum Act to the Board of Energy. The powers of the

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Board of Energy to grant and regulate pipeline concessions were later transferred to the
Energy Regulatory Board under Section 3 of Executive Order No. 172. Executive Order 193
abolished the Bureau of Energy Development on 10 June 1987 and transferred its pertinent
functions to the Office of the Deputy Director for Energy Operations of the Office for Energy
Affairs. The non-price regulatory jurisdiction, powers and functions of the Energy Regulatory
Board were thereafter transferred to DOE, pursuant to Section 12 (c) and 18 of Republic Act
No. 7638, otherwise known as the Department of Energy Act of 1992. Subsequently, the
powers and functions of the Energy Industry Administration Bureau, which includes the
formulation and implementation of policies, programs and regulations on the downstream oil
industry, including the transportation of petroleum crude oils, products and by-products, were
transferred to the Oil Industry Administration Bureau under Administrative Order No. 38
issued on 23 August 2002. Pursuant to Section 44 of Republic Act No. 9136, otherwise
known as the “Electric Power Industry Reform Act of 2001”, the non-price regulatory
functions of the Energy Regulatory Board were transferred to the Energy Regulatory
Commission.

SEC.39. Repealing Clause.- The provisions of Republic Act No. 387, otherwise
known as the “Petroleum Act of 1949”, as amended and the provisions of all foregoing
precursor laws, and such other laws, acts, executive orders, rules and regulations and other
issuances inconsistent with this Act are hereby repealed or modified accordingly.

SEC.40. Transitory Provision.- Pipeline Operators or Grantees of Petroleum Pipeline
Concessions which have been constructed and have commenced operation prior to the date of
effectivity of this Act shall continue to operate under their existing authorities. Nothing in
this Act shall be deemed to revoke or otherwise modify any of the powers and functions of
the Director of Mines and the Secretary of Agriculture and Natural Resources and its
successors and assigns under the Petroleum Act of 1949, as amended, any existing
Concession granted under the Petroleum Act of 1949, as amended, or any administrative or
regulatory permit or concession, which concession certificate or franchise shall be allowed to
its full term but may not be renewed except pursuant to the provisions of this Act.

SEC. 41. Effectivity.- This Act shall take effect after fifteen (15) days following the
completion of its publication either in the Official Gazette or in newspaper of general
circulation in the Philippines.

Approved,