Expert committee's report on coal policy
Tuesday, 18 December 2007
Syed Fattahul Alim
The five coalmines of Bangladesh including Barapukuria and Phulbari have an estimated 2221 million tonnes of proven reserves of coal. After gas, it is the second most important fossil energy reserve this country is in possession of. Like gas, Bangladesh also needs this fossil fuel for its own use. Needless to say, of the many uses of fossil fuel, power generation is an extremely vital one. In the present context, when failure in the national power grid leading to darkness engulfing the entire nation is becoming an occasional experience, there are few arguments to dismiss power's claim to country's fossil fuel reserves for its secured and enhanced generation over a longer period of time. But what is the best way to extract and use the country's existing reserves of coal and other fossil fuels underneath its soil? This particular issue has to be resolved first before deciding what should be the best use of fossil fuels, especially the coal deposited in our mines.
The particular method to be used to extract coal has been an issue of big controversy in the country, even of public agitation in the recent past. The bloody protests at the site of the Phulpbari coalmine occurred over the contentious issue of open-pit method of extraction adopted by the foreign mining company Asia Energy. All these untoward developments call for devising an appropriate policy for exploiting this particular kind of hydrocarbon deposit in the country. An attempt to this end was first taken by the immediate past BNP-led coalition government. The policy underwent a number of revisions in the light of the very critical issues like the method of mining to be adopted, whether export of coal should be allowed or not, the rate of royalty due to the government from the mining company, how the problem of pollution at the mining site would be handled and what should be the modalities of licensing. But the coalition government was not able to resolve these issues to pave the way for finally approving the coal policy.
However, the incumbent caretaker administration on June 21 constituted an eight-member advisory committee to give recommendations on the draft coal policy after necessary examination and scrutiny. The committee was supposed to submit the final proposal to the energy division by July 21, but failed to meet the deadline.
Against the backdrop of the controversies surrounding the exploration of coal, the government had formed an independent coal policy review committee which has meanwhile finalised a draft coal policy. The committee report will be ultimately sent to the advisory committee for approval.
What does this report prepared by an expert committee suggest on the issue of tapping the country's coal reserves, especially on the method of its extraction? Interestingly though, the open-pit method of exploration that had caused a serious agitation at the Phulbari site has been suggested as a viable method of extraction that would ensure optimal utilisation of the coal deposit as against underground mining. The report further said that 90 per cent of the entire recoverable deposit could be mined through this process which is to the tune of 1050 million tonnes. And this amount of coal would be able to supply electricity to the country until 2033. By contrast, employing methods other than open-pit, for example, underground mining, only 20 per cent of the recoverable deposits of coal could be extracted, which can meet power demand of the country up until 2022.
Considering the bitter experience in the past over the issue of open-pit mining, the present report produced by the expert committee headed by the former vice chancellor of the Bangladesh University of Engineering and Technology (BUET), therefore, provides a serious food for thought for all concerned. On this score, it may be recalled that the energy adviser the other day at a seminar called upon the people to reach a consensus on the best way to tap the coal resources of the country, if only for the sake of development of the northern and the north-western districts as well as meeting the rising demand for power in the country. On the same occasion, the finance and planning adviser did also speak in a similar vein. So, the open-pit method of coal extraction has again taken the centre stage of the discussions.
Another important aspect of the expert committee report on coal under scrutiny is the suggestion that coal would not be considered as an item for export. What is of greater import on this context is the realisation that the gas reserve of the country will be facing a crunch by 2011 triggering a huge energy crisis from 2015. So, the recommendation made by the draft policy against coal export needs not further elucidation.
Another important finding of the final draft coal policy is the relationship between country's GDP growth and the state of power production. It showed that for a lower level of GDP at 5.5 per cent, the power generation units will have to maintain a supply of about 19, 000 megawatts of electricity to the national grid. On the other hand, if the economy is to perform at a better pace, say with the GDP growth at 8.0 per cent, the power generation units will have to supply 41,000 megawatts of electricity to the national power grid. These findings provide enough reasons why export of coal is not a sound idea to encourage in the present situation.
As indicated in the foregoing, the first draft policy on coal was framed in 2005. Meanwhile, in the intervening years the policy under consideration has gone through revisions or editions for six times, before the present 'final draft' has been prepared. It is worthwhile to mention here that the inordinate delay on finalising the draft coal policy had often been blamed on the bureaucracy. However, one may now feel reassured that a final shape could after all be given to the draft coal policy conceived about two years and a half back.
The primary consideration of the government while adopting a coal policy should be its potential for meeting the country's energy needs over a long period of time. Power is one of such needs. There has been a lot of hot debates on issues such as whether the country should export coal, what method is to be used to extract the resource lying underground, whether or to what extent foreign companies would be employed to exploit coal and so on. There is no question that all those quarters are trying to put across their views from their own perception of what should best meet the country's vital needs. But while appreciating their concerns, it must also have to be kept in mind that orthodoxy has never served any good to any cause. Pragmatism, readiness to listen to other's point of view and desisting from the temptation of politicising such a serious issues should be the guiding principle of such discussions and debates. As hurrying to a decision is not welcome, so waging unnecessary crusades over coal or any strategic resource of the country is also not advisable. But there is also no excuse for dillydallying over the issue indefinitely. The policymakers and all concerned need to be rather expeditious about reaching a solution at the earliest.
For time is also a very precious resource the nation cannot afford to lose under any circumstances, if it is catch up with the rest of the world.
The five coalmines of Bangladesh including Barapukuria and Phulbari have an estimated 2221 million tonnes of proven reserves of coal. After gas, it is the second most important fossil energy reserve this country is in possession of. Like gas, Bangladesh also needs this fossil fuel for its own use. Needless to say, of the many uses of fossil fuel, power generation is an extremely vital one. In the present context, when failure in the national power grid leading to darkness engulfing the entire nation is becoming an occasional experience, there are few arguments to dismiss power's claim to country's fossil fuel reserves for its secured and enhanced generation over a longer period of time. But what is the best way to extract and use the country's existing reserves of coal and other fossil fuels underneath its soil? This particular issue has to be resolved first before deciding what should be the best use of fossil fuels, especially the coal deposited in our mines.
The particular method to be used to extract coal has been an issue of big controversy in the country, even of public agitation in the recent past. The bloody protests at the site of the Phulpbari coalmine occurred over the contentious issue of open-pit method of extraction adopted by the foreign mining company Asia Energy. All these untoward developments call for devising an appropriate policy for exploiting this particular kind of hydrocarbon deposit in the country. An attempt to this end was first taken by the immediate past BNP-led coalition government. The policy underwent a number of revisions in the light of the very critical issues like the method of mining to be adopted, whether export of coal should be allowed or not, the rate of royalty due to the government from the mining company, how the problem of pollution at the mining site would be handled and what should be the modalities of licensing. But the coalition government was not able to resolve these issues to pave the way for finally approving the coal policy.
However, the incumbent caretaker administration on June 21 constituted an eight-member advisory committee to give recommendations on the draft coal policy after necessary examination and scrutiny. The committee was supposed to submit the final proposal to the energy division by July 21, but failed to meet the deadline.
Against the backdrop of the controversies surrounding the exploration of coal, the government had formed an independent coal policy review committee which has meanwhile finalised a draft coal policy. The committee report will be ultimately sent to the advisory committee for approval.
What does this report prepared by an expert committee suggest on the issue of tapping the country's coal reserves, especially on the method of its extraction? Interestingly though, the open-pit method of exploration that had caused a serious agitation at the Phulbari site has been suggested as a viable method of extraction that would ensure optimal utilisation of the coal deposit as against underground mining. The report further said that 90 per cent of the entire recoverable deposit could be mined through this process which is to the tune of 1050 million tonnes. And this amount of coal would be able to supply electricity to the country until 2033. By contrast, employing methods other than open-pit, for example, underground mining, only 20 per cent of the recoverable deposits of coal could be extracted, which can meet power demand of the country up until 2022.
Considering the bitter experience in the past over the issue of open-pit mining, the present report produced by the expert committee headed by the former vice chancellor of the Bangladesh University of Engineering and Technology (BUET), therefore, provides a serious food for thought for all concerned. On this score, it may be recalled that the energy adviser the other day at a seminar called upon the people to reach a consensus on the best way to tap the coal resources of the country, if only for the sake of development of the northern and the north-western districts as well as meeting the rising demand for power in the country. On the same occasion, the finance and planning adviser did also speak in a similar vein. So, the open-pit method of coal extraction has again taken the centre stage of the discussions.
Another important aspect of the expert committee report on coal under scrutiny is the suggestion that coal would not be considered as an item for export. What is of greater import on this context is the realisation that the gas reserve of the country will be facing a crunch by 2011 triggering a huge energy crisis from 2015. So, the recommendation made by the draft policy against coal export needs not further elucidation.
Another important finding of the final draft coal policy is the relationship between country's GDP growth and the state of power production. It showed that for a lower level of GDP at 5.5 per cent, the power generation units will have to maintain a supply of about 19, 000 megawatts of electricity to the national grid. On the other hand, if the economy is to perform at a better pace, say with the GDP growth at 8.0 per cent, the power generation units will have to supply 41,000 megawatts of electricity to the national power grid. These findings provide enough reasons why export of coal is not a sound idea to encourage in the present situation.
As indicated in the foregoing, the first draft policy on coal was framed in 2005. Meanwhile, in the intervening years the policy under consideration has gone through revisions or editions for six times, before the present 'final draft' has been prepared. It is worthwhile to mention here that the inordinate delay on finalising the draft coal policy had often been blamed on the bureaucracy. However, one may now feel reassured that a final shape could after all be given to the draft coal policy conceived about two years and a half back.
The primary consideration of the government while adopting a coal policy should be its potential for meeting the country's energy needs over a long period of time. Power is one of such needs. There has been a lot of hot debates on issues such as whether the country should export coal, what method is to be used to extract the resource lying underground, whether or to what extent foreign companies would be employed to exploit coal and so on. There is no question that all those quarters are trying to put across their views from their own perception of what should best meet the country's vital needs. But while appreciating their concerns, it must also have to be kept in mind that orthodoxy has never served any good to any cause. Pragmatism, readiness to listen to other's point of view and desisting from the temptation of politicising such a serious issues should be the guiding principle of such discussions and debates. As hurrying to a decision is not welcome, so waging unnecessary crusades over coal or any strategic resource of the country is also not advisable. But there is also no excuse for dillydallying over the issue indefinitely. The policymakers and all concerned need to be rather expeditious about reaching a solution at the earliest.
For time is also a very precious resource the nation cannot afford to lose under any circumstances, if it is catch up with the rest of the world.