Royal Dutch Shell PLC late last year announced that it would slash capacity by half at its biggest oil refinery. For Singapore, where the plant has been a mainstay of the economy for six decades, it marked a turning point in one of the most successful bets on fossil fuels in history.
The plant on Bukom Island is part of a massive refining and petrochemical industry built largely on reclaimed islands just off the city-state. In tandem with the cargo vessels they fueled, the refineries helped drive Singapore’s economic success after independence, attracting billions in investment, and spawning businesses from plastics to rig construction and finance.
“We’ve come a long way as a result of the energy and chemical sector,” Singaporean Minister of Manpower Tan See Leng (陳詩龍) said. “The key thing is not to completely sort of move away, but to see how we can pivot, how we can transform.”
To that end, the government this year released the Singapore Green Plan 2030, setting out a path for the city-state to become a leading regional hub for carbon trading, green finance, consulting and risk management, among other services.
State investor Temasek Holdings Pte, along with the Singapore Exchange, Standard Chartered PLC and DBS Group Holdings Ltd, in May announced a plan to set up a global exchange for high-quality carbon credits.
The city-state offers a modern base with a skilled workforce from which new energy companies can run their operations in the region. Vena Energy Capital Pte, one of the largest independent renewable power generators in the Asia-Pacific region, with wind and solar projects stretching from Australia to India, established its headquarters in a modernist glass-and-steel tower in the city-state’s financial center, despite having no other operations in the country.
“Given the regulatory transparency that Singapore has, it gives comfort to investors,” Vena chief executive officer Nitin Apte said. “That was true in the past and will be true in the future with renewables.”
Singapore’s switch from black gold to green energy is a difficult balancing act. In 2019, the city-state was the world’s fourth-biggest exporter of refined petroleum, and fuels and chemicals accounted for about 23 percent of its total merchandise trade, data from the World Bank and the Observatory of Economic Complexity showed. It is still a regional trading center for coal, natural gas and oil products, and supports dozens of finance houses that specialize in the commodities. More than 100 global chemical companies have operations in the city-state.
Bukom Island was there from the start. As far back as the 1890s, it was the landing place for Russian kerosene. Shell opened Singapore’s first refinery there just prior to independence in 1961, and four more plants were added over the next couple of decades.
Exxon Mobil Corp’s antecedents soon followed, including a refinery on the nearby island of Ayer Chawan, now part of the giant Jurong Island refining complex that Singapore is hoping to transform into an industrial park for sustainable energy and chemicals.
Now, Shell is pulling out about 500 jobs from the Bukom complex. Many more jobs in Singapore are likely to follow in the near future. For a nation with no natural resources of its own, it became entrenched as an intermediary in the global fuel supply chain.
Singapore owes much of its economic success to an imaginative and ruthless exploitation of its location, wrote historian Michael Barr in his book Singapore: A Modern History. In the energy sector, that meant leveraging its position on one of the world’s busiest shipping routes, between the Middle East and the major economies in East Asia.
That success will not necessarily help its status as an energy hub for renewables such as solar and wind, which tend to be located in consuming countries, but it could be an asset for hydrogen, which is gaining momentum as a possible emissions-free fuel for transportation.
“As it has with natural gas, it may be able to position itself as an intermediary for hydrogen in terms of pricing, terminal facilities and storage,” said David Skilling, founding director of Landfall Strategy Group, which advises small, advanced economies.
Still, it is not yet clear to what extent the hydrogen economy is to rely on hubs, said Skilling, who was based in Singapore for more than a decade before relocating to the Netherlands.
More than 30 countries have released hydrogen roadmaps, a report by the Hydrogen Council and McKinsey & Co said.
However, Singapore is not yet ready to commit to a strategy, Tan said.
The government has agreements with Australia and Chile for potential collaboration on hydrogen technology, and is working with Japanese companies on ways to transport the gas, Tan said.
“As the technology gets more accepted, more widely available, as costs start to drop somewhat, I think they’ll come to an inflection point,” he said.
For Singapore, hydrogen and liquefied natural gas (LNG) have the advantage that some oil and petrochemical infrastructure can be retooled for them, said George Nassaouati, who looks at energy transition risks as head of natural resources Asia at Willis Towers Watson.
Singapore could also provide engineering and project management expertise to help set up LNG or hydrogen facilities in Southeast Asia, he said.
The “constructive paranoia” that enabled Singapore to navigate waves of economic disruption might help it make the transition, Skilling said.
“It’s always very adept at figuring out what the next thing is, figuring out what its niche in that space is and being able to extract value from it,” he said.
The attention and direction from the government is definitely there, Oversea-Chinese Banking Corp treasury research and strategy head Selena Ling (林秀心) said.
The Monetary Authority of Singapore is developing grant programs to support green and sustainability loans, as well as placing US$2 billion of funds with asset managers to catalyze green finance activities out of Singapore, she said.
Singapore is looking to raise its carbon tax higher than originally planned, Singaporean Minister for Sustainability and the Environment Grace Fu (傅海燕) told Bloomberg in an interview.
The city-state introduced the carbon levy in 2019, currently at S$5 (US$3.68) per tonne of greenhouse gas.
The government expects to collect about S$1 billion in revenue from the tax in the first five years, Fu said.
A privately run carbon-credit trading platform that is backed by some of the nation’s biggest firms is likely to be up and running by the end of the year, she said.
Singapore, with a population of 5.7 million people, might have more time to adapt than Europe or the US, because it is in a region that looks set to rely on hydrocarbons for many years to come.
South and Southeast Asia are to have the highest demand growth for oil products from 2019 to 2035, another report from McKinsey said.
Singapore’s refiners do not need to do anything drastic yet, IHS Markit energy consulting vice president Victor Shum said.
Until about 2030 at least, there is little risk of a major drop-off in demand for oil products, Tan said.
Meanwhile, the Singaporean government is encouraging innovation in areas such as carbon capture, and moving toward more solar and tidal power in its drive to be in the vanguard of energy transition in the region.
“I’m not sure they want to follow us, but I think we hope to be the green oasis,” Tan said.
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth
In the intricate ballet of geopolitics, names signify more than mere identification: They embody history, culture and sovereignty. The recent decision by China to refer to Arunachal Pradesh as “Tsang Nan” or South Tibet, and to rename Tibet as “Xizang,” is a strategic move that extends beyond cartography into the realm of diplomatic signaling. This op-ed explores the implications of these actions and India’s potential response. Names are potent symbols in international relations, encapsulating the essence of a nation’s stance on territorial disputes. China’s choice to rename regions within Indian territory is not merely a linguistic exercise, but a symbolic assertion
More than seven months into the armed conflict in Gaza, the International Court of Justice ordered Israel to take “immediate and effective measures” to protect Palestinians in Gaza from the risk of genocide following a case brought by South Africa regarding Israel’s breaches of the 1948 Genocide Convention. The international community, including Amnesty International, called for an immediate ceasefire by all parties to prevent further loss of civilian lives and to ensure access to life-saving aid. Several protests have been organized around the world, including at the University of California Los Angeles (UCLA) and many other universities in the US.
Every day since Oct. 7 last year, the world has watched an unprecedented wave of violence rain down on Israel and the occupied Palestinian Territories — more than 200 days of constant suffering and death in Gaza with just a seven-day pause. Many of us in the American expatriate community in Taiwan have been watching this tragedy unfold in horror. We know we are implicated with every US-made “dumb” bomb dropped on a civilian target and by the diplomatic cover our government gives to the Israeli government, which has only gotten more extreme with such impunity. Meantime, multicultural coalitions of US