Gas reserves running dry

FE Team | Published: December 17, 2023 20:09:58

That the domestic natural gas production has dipped to a decade-low, according to an FE report, is a wake-up call for the policymakers who have long been dragging their feet over exploration of new gas fields. Instead of ratcheting up exploration of new gas fields, the authorities apparently prioritised the import of costly Liquefied Natural Gas (LNG) allegedly to benefit some business conglomerates. The imported LNG is hardly doing any good to many gas-based power plants that are shut due to short supply of fuel. The depleting reserve of gas is also getting in the way of electricity generation. Again, the policymakers tried to find an alternative by hinging the future of power plants on coal, instead of gas.
The growing import dependency to meet ever-growing demand for gas and power has not only contributed to the dragging down of our foreign reserve, but also left the future energy security at risk. The government had no other option but to halt or limit the import of LNG and coal on and off in the last two years amidst a drastic fall in foreign reserves. While interruption in the flow of LNG created a massive shortage of gas in industries (as LNG was mostly used for industrial purposes), the lack of coal virtually paralysed several newly built power plants. Against this backdrop, the government has ordered to raise production from existing gas fields but without much luck.
At present, Bangladesh can generate 2,090 million cubic feet per day (mmcfd) of natural gas on average from all of its gas fields against an estimated demand for more than 4,000mmcfd. If we add the imported LNG, which currently stands at 501 mmcfd, to the national gas grid, the gap between the supply and demand is still staggeringly huge, which leaves both household and commercial consumers gasping for gas. What is more alarming, however, is the fact that the country's current natural gas production capacity from local fields decreased by 5.26 per cent compared to the production capacity of 2012 mmcfd. What does the plummeting capacity indicate? Is it an indication that the reserve of the country's natural gas is running out fast as feared earlier?
Needless to say, the gas crisis has to be solved as soon as possible. But the question is -how? As of now, there is no clear strategy as to how the gas requirement is going to be met. One way could be exploration and extraction from new sources from both onshore and offshore sites. Experts argue that the government didn't pay adequate attention to exploring new gas fields, which resulted in a continuous fall in the country's overall natural gas output. The country's offshore blocks are considered to be a treasure trove of natural gas, oil and other minerals. But since the delimitation of the maritime boundary with Myanmar and India over a decade ago, which increased Bangladesh's maritime territory by 130,467 square kilometers, only one bidding round was launched, that too was for three deep-water blocks. So this is nothing but sheer negligence and foot-dragging which kept potential offshore reserves untapped.
Overall, it has been a massive policy failure that has landed us in the current uncomfortable situation where the limitation of energy sources is also threatening to limit the country's future prospects. So the government must come up with a sound energy policy for tapping into untapped wells and efficient utilisation of the scarce resource. In between exploring new wells and finding viable alternatives, it would help if the waste of gas in our daily use could be eliminated and leakage through the dilapidated pipelines could be significantly curtailed.