Energy crisis: Use of coal should be top priority
Shamsul Huq Zahid | Monday, 9 March 2009
The Petrobangla, the state-owned oil and gas entity, might soon suggest the government to allow the import of liquefied natural gas (LNG) by the private sector to help offset the energy crisis which might soon become unmanageable, particularly in the Chittagong region.
What can be more frustrating than exploring the possibility of LNG import for a country which once thought to be floating on natural gas? Local and foreign experts throughout the nineties dished out varying estimates on the country's gas reserve. The giant neighbour, India, showed keen interest to import gas from Bangladesh and the USA on behalf of its oil companies engaged in gas extraction here started pushing hard the idea of gas export.
A strong nationwide debate over gas export surfaced with the two main political parties which have the habit of picking up quarrel even over non-issues took up opposing stands. Some experts announced their strong resistance to any gas export move. But the warring groups actually were not aware of the actual situation with country's gas reserve. However, the strong debate over gas export issue has saved the country from getting into deep trouble and the political governments from embarrassment.
It did not take too long a time to know that the current proven reserve would be exhausted with next six to seven years. All the rosy projections, particularly made by the US Geological Survey, proved wrong. Bangladesh is already in the midst of a gas crisis which might aggravate further in the next few years. The gas-based power plants and industrial units cannot utilize their full capacity due to gas scarcity. The worst-affected is the Chittagong region. Power plants and industrial units in the region remain gas starved because of the short supply of the same. The production at the Sangu, the country's lone offshore gas field, has declined drastically, by nearly 75 per cent, because of the depleting reserve. A good number of newly installed industrial units are not being able to start commercial production since the authorities concerned have stopped providing new gas connections. The delay has thrown sponsors of these mills and factories into great financial difficulties.
The gas short-supply has made the power situation worse; the power deficit has now reached more than 1500 megawatt (MW). The present government has promised to enhance power production substantially. But the gas shortage is likely to make it difficult for the government to get its electoral pledge relating to power production fulfilled.
Unless new gas reserves in adequate volume are found soon, the country's economic growth stands to suffer seriously. There are lots of talks about finding alternative energy sources, including installation of nuclear power plant. But getting the same in place might prove very expensive for an economy of small means like that of Bangladesh.
Then what is the way out? How can we ensure generation of enough power and, at the same time, supply of gas to industries and domestic consumers?
The Petrobangla's proposition to import LNG by the private sector does not seem feasible because of the cost factor. The cost of import and re-gasification would make LNG unattractive to its intended buyers. Moreover, the cost involved in setting up a re-gasification, nearly $2.0 billion, seems exorbitant. It is unlikely that the government has the money to build such an expensive plant. Neither there will be any local private entrepreneur interested in building the same.
The only feasible option left before the country is the setting up of coal-based power plants. Bangladesh has substantial deposit of quality coal. It is now extracting coal from one coalmine at Barapukuria through the traditional method. The extraction of coal from a large coalmine at Phulbari has remained stalled due to controversy over the method of coal extraction. In the absence of an official coal policy, experts as well as politicians are now engaged in a heated debate over the methods of coal extraction-open-pit or traditional tunnel systems. The open-pit extraction ensures nearly full exploitation of the coal reserve but not without a cost. It displaces population settlements, destroys arable land and causes other environmental degradation. It seems that for fear of political fallouts, the government has dragging its feet on the issue of coal extraction from the Phulbari coalmine.
But the time is running out fast. The government has to make a firm decision on the Phulbari coal and start extracting the same as early as possible. This is all the more necessary not to earn foreign currency by exporting coal but to start using the same for generating power.
The country at the moment has only one coal-fired power plant at Barapukuria. The plant has been set up by a company from the People's Republic of China, the world's largest producer of coal-based power.
The government must not waste anymore time on the coal extraction issue. It should ask the foreign company concerned to start extracting coal from Phulbari and, in the meanwhile, start making arrangements for setting up coal-based power plants. Many private entrepreneurs will be interested in setting up the same.
What can be more frustrating than exploring the possibility of LNG import for a country which once thought to be floating on natural gas? Local and foreign experts throughout the nineties dished out varying estimates on the country's gas reserve. The giant neighbour, India, showed keen interest to import gas from Bangladesh and the USA on behalf of its oil companies engaged in gas extraction here started pushing hard the idea of gas export.
A strong nationwide debate over gas export surfaced with the two main political parties which have the habit of picking up quarrel even over non-issues took up opposing stands. Some experts announced their strong resistance to any gas export move. But the warring groups actually were not aware of the actual situation with country's gas reserve. However, the strong debate over gas export issue has saved the country from getting into deep trouble and the political governments from embarrassment.
It did not take too long a time to know that the current proven reserve would be exhausted with next six to seven years. All the rosy projections, particularly made by the US Geological Survey, proved wrong. Bangladesh is already in the midst of a gas crisis which might aggravate further in the next few years. The gas-based power plants and industrial units cannot utilize their full capacity due to gas scarcity. The worst-affected is the Chittagong region. Power plants and industrial units in the region remain gas starved because of the short supply of the same. The production at the Sangu, the country's lone offshore gas field, has declined drastically, by nearly 75 per cent, because of the depleting reserve. A good number of newly installed industrial units are not being able to start commercial production since the authorities concerned have stopped providing new gas connections. The delay has thrown sponsors of these mills and factories into great financial difficulties.
The gas short-supply has made the power situation worse; the power deficit has now reached more than 1500 megawatt (MW). The present government has promised to enhance power production substantially. But the gas shortage is likely to make it difficult for the government to get its electoral pledge relating to power production fulfilled.
Unless new gas reserves in adequate volume are found soon, the country's economic growth stands to suffer seriously. There are lots of talks about finding alternative energy sources, including installation of nuclear power plant. But getting the same in place might prove very expensive for an economy of small means like that of Bangladesh.
Then what is the way out? How can we ensure generation of enough power and, at the same time, supply of gas to industries and domestic consumers?
The Petrobangla's proposition to import LNG by the private sector does not seem feasible because of the cost factor. The cost of import and re-gasification would make LNG unattractive to its intended buyers. Moreover, the cost involved in setting up a re-gasification, nearly $2.0 billion, seems exorbitant. It is unlikely that the government has the money to build such an expensive plant. Neither there will be any local private entrepreneur interested in building the same.
The only feasible option left before the country is the setting up of coal-based power plants. Bangladesh has substantial deposit of quality coal. It is now extracting coal from one coalmine at Barapukuria through the traditional method. The extraction of coal from a large coalmine at Phulbari has remained stalled due to controversy over the method of coal extraction. In the absence of an official coal policy, experts as well as politicians are now engaged in a heated debate over the methods of coal extraction-open-pit or traditional tunnel systems. The open-pit extraction ensures nearly full exploitation of the coal reserve but not without a cost. It displaces population settlements, destroys arable land and causes other environmental degradation. It seems that for fear of political fallouts, the government has dragging its feet on the issue of coal extraction from the Phulbari coalmine.
But the time is running out fast. The government has to make a firm decision on the Phulbari coal and start extracting the same as early as possible. This is all the more necessary not to earn foreign currency by exporting coal but to start using the same for generating power.
The country at the moment has only one coal-fired power plant at Barapukuria. The plant has been set up by a company from the People's Republic of China, the world's largest producer of coal-based power.
The government must not waste anymore time on the coal extraction issue. It should ask the foreign company concerned to start extracting coal from Phulbari and, in the meanwhile, start making arrangements for setting up coal-based power plants. Many private entrepreneurs will be interested in setting up the same.