Exploiting coal reserves: No more time to waste
Monday, 27 July 2009
Shamsul Huq Zahid
The government has recently decided to offer 15-year tax holiday facility to those new power plants, which would be able to start commercial production by June 2012. The facility that has come in contrast to the government's recent policy to discontinue the same for other sectors of the economy highlights the urgency of improving the country's power situation.
Many investors, both local and foreign, might feel tempted to start new power plants, which, according to a government's policy announcement, would be dual fuel (gas and coal) fired.
Going by the ongoing developments in the gas sector, one does not have reasons to believe that enough gas would be available soon to feed new power plants of medium to large capacities. In that case, the use of coal remains to be the most viable option for power generation.
The country is rich in coal deposits, an estimated 2.5 billion tonnes, in five coalmines discovered so far at Barapukuria, Phulbari, Jamalganj, Khalsapir and Dighipara. The deposits are equivalent to 65 trillion of cubic feet (TCF) of gas and enough to ensure the country's energy security in both medium and long terms. However, except for the Barapukuria, all other coal deposits are awaiting exploitation. One of the unexploited deposits at Jamalganj with a proven reserve of more than 1.0 billion tonnes was discovered way back in 1962 at a depth ranging between 640 metres and 1158 metres.
The Phulbari deposit (proven reserve of 572 million tonnes) was discovered in 1997 at a depth of only 150 metres to 240 metres, making it easily exploitable. The Khalaspir deposit-143 million tonnes, is also located at a depth of 257 to 483 metres. Similarly, the Dhigipara deposit, proven reserve 150 million tonnes, was found at a depth of 328 metres to 407 metres.
It may appear rather strange why a country facing acute shortage of fuel to feed its old and new power plants is delaying the exploitation of its huge coal reserves. The nation needs an economic growth rate of over 7.0 per cent to eradicate poverty and meet economic and human development goals. And for achieving these goals, energy remains a fundamental challenge.
Bureaucratic foot-dragging apart, there are other problems, some are serious in nature, which have made successive governments hesitant to take definitive decisions on coal exploitation. The issues of high population density, environment and response from civil societies have always occupied the minds of the policymakers. Displacement of population living in the coalmine areas and destruction of arable land are two politically sensitive issues that every government in the past tried to avoid.
It is because of the same reason the first draft coal policy prepared by the International Finance Corporation (IFC) back in 2005 has been amended, at least, eight times until now. The recommendations made by the 'Patwary committee', of late, have been the most discussed ones.
There exist two opposing views in the present ruling circle on the method of coal extraction. One is strongly opposed to the open pit mining method, which ensures the maximum recovery of coal deposit but not without a cost. It causes displacement of people, destroys completely agricultural land and forests in the coalmine area. The other view does support such human and environmental costs for the sake of greater good of the nation.
However, recommendations made by a group of non-resident Bangladeshi experts at a recent seminar held at the Jamuna Resort have contributed to the softening of the stance of the second group of people in the government. The experts maintained that through the application of modern technology even 80 per cent deposit of a coalmine could be exploited under the traditional mining method. They also suggested creation of a statutory body like 'KhaniBangla' and making necessary legal framework for coalmining.
The Petrobangla has, reportedly, modified the draft coal policy in the light of the recommendations made by the NRB experts and sent to the energy ministry for approval. The final draft of the policy is likely to be placed before the head of the government soon after necessary review.
The deteriorating power situation and the fast depleting gas reserves of the country makes it imperative for the government to take an early decision on the exploitation of the country's coal deposits. The political leaders and experts have wasted enough time in doing that at the cost of the national economy.
The government will have to finalise the coal policy within the shortest possible time. However, the nation cannot afford to exploit only 10 to 20 per cent of the deposits of the coalmines. The country needs the maximum possible exploitation of coal reserves. Nobody would mind if the government decides in favour of traditional tunnel mining method, provided it ensured the maximum recovery of the coal deposits.
Moreover, the coal policy should not only concentrate on extraction of the coal. It should also examine the possibility of using the coal-bed methane and underground coal gasification if extraction of coal is found difficult because of depth. The Jamalaganj coal deposit is a strong candidate for such exploitation.
What is also important is taking up of a programme by the government to fill in the vacuum of manpower needed for coal development. The public sector engineering universities should introduce mining degree programme, putting special focus on coalmine development. The energy ministry should also set up a training institute to create other necessary manpower in the sector.
The government has recently decided to offer 15-year tax holiday facility to those new power plants, which would be able to start commercial production by June 2012. The facility that has come in contrast to the government's recent policy to discontinue the same for other sectors of the economy highlights the urgency of improving the country's power situation.
Many investors, both local and foreign, might feel tempted to start new power plants, which, according to a government's policy announcement, would be dual fuel (gas and coal) fired.
Going by the ongoing developments in the gas sector, one does not have reasons to believe that enough gas would be available soon to feed new power plants of medium to large capacities. In that case, the use of coal remains to be the most viable option for power generation.
The country is rich in coal deposits, an estimated 2.5 billion tonnes, in five coalmines discovered so far at Barapukuria, Phulbari, Jamalganj, Khalsapir and Dighipara. The deposits are equivalent to 65 trillion of cubic feet (TCF) of gas and enough to ensure the country's energy security in both medium and long terms. However, except for the Barapukuria, all other coal deposits are awaiting exploitation. One of the unexploited deposits at Jamalganj with a proven reserve of more than 1.0 billion tonnes was discovered way back in 1962 at a depth ranging between 640 metres and 1158 metres.
The Phulbari deposit (proven reserve of 572 million tonnes) was discovered in 1997 at a depth of only 150 metres to 240 metres, making it easily exploitable. The Khalaspir deposit-143 million tonnes, is also located at a depth of 257 to 483 metres. Similarly, the Dhigipara deposit, proven reserve 150 million tonnes, was found at a depth of 328 metres to 407 metres.
It may appear rather strange why a country facing acute shortage of fuel to feed its old and new power plants is delaying the exploitation of its huge coal reserves. The nation needs an economic growth rate of over 7.0 per cent to eradicate poverty and meet economic and human development goals. And for achieving these goals, energy remains a fundamental challenge.
Bureaucratic foot-dragging apart, there are other problems, some are serious in nature, which have made successive governments hesitant to take definitive decisions on coal exploitation. The issues of high population density, environment and response from civil societies have always occupied the minds of the policymakers. Displacement of population living in the coalmine areas and destruction of arable land are two politically sensitive issues that every government in the past tried to avoid.
It is because of the same reason the first draft coal policy prepared by the International Finance Corporation (IFC) back in 2005 has been amended, at least, eight times until now. The recommendations made by the 'Patwary committee', of late, have been the most discussed ones.
There exist two opposing views in the present ruling circle on the method of coal extraction. One is strongly opposed to the open pit mining method, which ensures the maximum recovery of coal deposit but not without a cost. It causes displacement of people, destroys completely agricultural land and forests in the coalmine area. The other view does support such human and environmental costs for the sake of greater good of the nation.
However, recommendations made by a group of non-resident Bangladeshi experts at a recent seminar held at the Jamuna Resort have contributed to the softening of the stance of the second group of people in the government. The experts maintained that through the application of modern technology even 80 per cent deposit of a coalmine could be exploited under the traditional mining method. They also suggested creation of a statutory body like 'KhaniBangla' and making necessary legal framework for coalmining.
The Petrobangla has, reportedly, modified the draft coal policy in the light of the recommendations made by the NRB experts and sent to the energy ministry for approval. The final draft of the policy is likely to be placed before the head of the government soon after necessary review.
The deteriorating power situation and the fast depleting gas reserves of the country makes it imperative for the government to take an early decision on the exploitation of the country's coal deposits. The political leaders and experts have wasted enough time in doing that at the cost of the national economy.
The government will have to finalise the coal policy within the shortest possible time. However, the nation cannot afford to exploit only 10 to 20 per cent of the deposits of the coalmines. The country needs the maximum possible exploitation of coal reserves. Nobody would mind if the government decides in favour of traditional tunnel mining method, provided it ensured the maximum recovery of the coal deposits.
Moreover, the coal policy should not only concentrate on extraction of the coal. It should also examine the possibility of using the coal-bed methane and underground coal gasification if extraction of coal is found difficult because of depth. The Jamalaganj coal deposit is a strong candidate for such exploitation.
What is also important is taking up of a programme by the government to fill in the vacuum of manpower needed for coal development. The public sector engineering universities should introduce mining degree programme, putting special focus on coalmine development. The energy ministry should also set up a training institute to create other necessary manpower in the sector.