Mollah M Amzad Hossain
INTERVIEW
Direct cancellation of an agreement signed by a sovereign government creates an environment of mistrust about the country. “It’s not comfortable at al for a country for its image abroad,” said Annisul Huq, the President of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex body of the countries cham Direct cancellation of an agreement signed by a sovereign government creates an environment of mistrust about the country.
“It’s not comfortable at al for a country for its image abroad,” said Annisul Huq, the President of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex body of the countries chambers and trade bodies.
“I think the government should sit with the people who are demanding to scrap the agreements. At the same time the government should also sit with the parties with whom it signed the agreements,” he said adding “it will pave the way for an amicable solution for all. If there is any clause, which is against the interest of the country, he said, it will be detected in the discussion table. “And I think we’ll be able to resolve it with consensus,” said Annisul Huq. “People in the government responsible for this shouldn’t linger the process and reach consensus through discussions,” said the FBCCI President in an interview with the Energy & Power. The EP Editor Mollah Amzad Hossain took the interview. Following are the excerpts:
EP: How do you evaluate the infrastructure of the country, specially the energy infrastructure?
AH: If we talk about infrastructure, supply of energy is now the biggest problem in Bangladesh. In meetings of the Better Business Forum we categorically said that industrial and business development will come to a standstill if we fail to ensure energy supply. You know the Better Business Forum has five working groups. They made 260 recommendations as urgent tasks. Of these, the infrastructure development group made 90 suggestions. The key aspect of the recommendations is that the main obstacle towards economic development is lack in energy supply. How do you expect industrial development if you can’t give electricity. The number one problem is now energy. Here the question comes up… where the electricity will come from if there is lack in gas supply. We know the present generation capacity is 5,300 megawatt, but our demand is higher. On the other hand, the actual generation is 3,500-3,750 megawatt. One of the reason is gas crisis. Also, there are some units which are 40 years old and some were not maintained properly. As a result, now the main problem now emerged as not getting electricity for industries. There is no alternative to ensure power supply. We categorically told the government that neither domestic nor foreign investment will take place if electricity supply is not ensured.
EP: Board of Investment is a very important body for investment in the country. Don’t you think energy sector investment is also involved with the BOI?
AH: You must know we proposed the government to restructure the BOI for making it an effective organization. Before that we visited Australia, New Zealand, Hong Kong, Thailand and Malaysia and witnessed their works. At present 14-15 first class officers work in the BOI. We proposed to take the number to 135. At the same time, we approached to go for a competitive higher salary structure for them instead of government structure. If our proposal is implemented, the BOI will really work as a one-stop service. There will be a cell named Invest Bangladesh which will bring investment. But, you know there will be no use of bringing investment if there is no energy. Here I want to mention that the BEPZA now has all kinds of infrastructure. They have plots, have power supply facilities. But the BEPZA will not be able to supply electricity if the present state of gas supply continued. Now the number one priority should be ensuring energy supply.
EP: What’s your suggestion for increasing electricity generation in shortest possible time?
AH: We already gave some recommendations as urgent tasks for the government. One suggestion is rehabilitating the public sector old and unskilled power plants through private investment. The government started works on that. A policy is being drafted by the Power Division. I’m mentioning this as there is gas supply for those plants. If the units are rehabilitated we can get more electricity from the plants. Also, we approached that the small units in the private sector can be expanded as there is also assurance of gas supply to those areas.
EP: We saw in newspapers that you in the meeting of the Better Business Forum recommended to go for coal production to overcome the electricity crisis.
AH: Yes. We told the government that there is gas crisis in the country. But there is scope to go for coal-based power plants. So, we don’t have apprehension of primary energy. But, we have to produce coal at first. Many countries in the world are utilizing coal resources by managing the environmental and social problems. You know coal plays the leading role in power generation in India, China, USA, South Africa and many other countries. If they can manage the environmental problems and utilize coal for power generation why not we? It’s true there are challenges relating to environment and local people if we go for coal exploration. But, this is not a unique problem for Bangladesh. There are similar problems for all the countries who have coal resources. I think the problems should be resolved through discussion, timely decision and their implementation. And this is the main challenge now. What will happen if we sit idle and don’t take decision? It will ensure more and more power crisis for lack in primary energy and finally stop the investment and industrialization. In that case there will be no scope of economic development. I think we shouldn�t waste a single day. The government has to take pragmatic decision with discussions in the top level. Our back is on the walls.
EP: We have coal that can meet the country’s primary energy demand. But, reality is that we are debating years after years. A coal policy couldn’t be finalized in last couple of years.
AH: It’s really a concerning matter. The government shouldn’t sitting idle without resolving the questions raised about the foreign investment. But, you know producing coal is not the only answer. The coal-based electricity will be costlier, can be double than that of present tariff. But, also we can’t waste time and resources only because that the price will be higher. Whatever the price is we need electricity. The price of coal-based can be seven taka per unit, but it’ll be 10 taka if we generate power from imported oils. The coal policy has become a sensitive issue. If we can’t make it transparently there will be new bureaucratic complex. I doubt that the government which will come to power after the election will be able to do this overcoming all kinds of vested interests. Also, the present government is also in the last stage. I don’t think they will be able to finalize the coal policy at this stage. On the other hand, the intellectuals and experts are not in consensus. Also, we can say their opinion is influenced in different ways. So, it’s really a tough job, specially taking a right decision. Still we have to produce coal and we have to take decision right now.
EP: Chittagong is now at the most vulnerable stage in terms of energy crisis. However, the problem prevails across the country. Are you satisfied with the government assurance?
AH: The government is concerned about the energy crisis. They are also working on it. But, it will be a very tough for the next government if the decision is taken by the present government. So, now we are in dilemma.
EP: Some groups in the country have been demanding cancellation of agreements with international oil companies and ouster of the IOCs. How do you consider the demand?
AH: Direct cancellation of an agreement signed by a sovereign government creates an environment of mistrust about the country. It’s not comfortable at al for a country for its image abroad. I think the government should sit with the people who are demanding to scrap the agreements. At the same time the government should also sit with the parties with whom it signed the agreements. It will pave the way for an amicable solution for all. If there is any clause which is against the interest of the country, it will be detected in the discussion table. And I think we’ll be able to resolve it with consensus. People in the government responsible for this shouldn’t linger the process and reach consensus through discussions.
EP: Better Business Forum discussed about another aspect… If you want uninterrupted energy supply, the price must be marked-based. What’s your opinion?
AH: As a consumer I’ll never want that the price of gas and power is increased. But as a businessman and a conscious citizen I must consider the amount of subsidy being given by the government and how long the government can continue it. The previous governments had talks about price hike and the present government has also been discussing about it. If we want energy supply for overall development of the country we have to pay the actual price that it should be. A time will come when we’ll have no alternative but to fix the market-oriented price.
EP: How do you look into the regional cooperation in the energy sector as well as proposed tri-nation gas pipeline?
AH: The days of keeping ourselves isolation are over. There is no alternative to regional cooperation. If we are benefited from a tri-nation gas pipeline, if our energy demand is fulfilled why not we’ll go for it. Any project in the energy sector if it’s beneficial for the nation must be welcomed. You know economic development is not possible without cooperating each other.
EP: What’s your opinion about the present debate on offshore exploration?
AH: I think we don’t have time to waste for offshore oil and gas exploration. We need new gas discoveries. For this we need new exploration. I believe we�ll find new gas reserves if we go for exploration in the Bay of Bengal. if there is any opposition from our neighbors we can resolve it through diplomatic channel. Also, we have to work to determine our maritime area. But, for this excuse we can’t suspend our exploration. Not only in the sea, we also need onshore exploration. The BAPEX has been strengthened. Alongside BAPEX, we have to bring foreign investment in a transparent manner. It has no alternative. This will also help to build our own resources and develop human resources. Time has come to take decision. If we don’t decide and waste time our economic development will come to a halt. Everyone has to understand it. You know the result in the energy sector is belated, it takes time.
EP: It’s said that the private sector of the engine of development. That’s why the conception of public-private partnership has emerged. How can we go for result oriented such partnership?
AH: Look, the energy is an investment-intensive sector. Also, skills technical capacity is very important. The government has to create opportunities to develop the capability. Specially the government has to initiate special steps so that local companies can come forward. There can be one option that a foreign company will get incentive if it has local companies as partners. Also, there should be options so that domestic companies can work with government companies on the basis of partnership. This will help development of local private sector in the energy sector. I think, there are opportunities to build public-private partnership keeping the BAPEX in the center of the projects.
Finally, I think the government has to formulate policy for flourishing the local private sector by increasing their skills and capacity and creating an environment for flourishment of their capital. It will ensure participation of local private sector in the energy field of the country.
Source: Energy & Power, Bangladesh
Date: 16/09/08
Link : http://www.ep-bd.com/news.php?cat_id=5&archive=9&namee=INTERVIEW
Wednesday, September 24, 2008
The Carbon Conspiracy
In the name of carbon trading, developed countries are offering developing countries paltry handouts to keep development in check while they go ahead in leaps and bounds
A PROBE report
A PROBE report
Climate change is on us. Ardent environmentalists and hardened skeptics alike are ready to admit this. It is a reality that has caught global attention and which is causing concern among developed and developing countries alike. We are, after all, under one sky. Given the magnitude of the issue, climate change is now one of the most important social, economic and political issues of all time. Atmospheric gases responsible for causing global warming and climate change have increased by 25% since large scale industrialisation began a century and a half ago. World carbon dioxide (CO2) was expected to increase by 1.8% annually between 2004 and 2030. Other greenhouse gases (GHGs) are methane, nitrous oxide and some which are less significant.
Global bodies have taken up the climate change issue in all earnest. There is the Inter-Governmental Panel of Climate Change (IPCC), the Asian Development Bank, the World Bank, UN bodies, the European Union bodies and others all making a loud clamour about climate change. It is commonly acknowledged that it is the industrialised nations which are the main cause of global warming, what with their excessive carbon emissions and other forms of industry-related pollution. And the developed world is bearing the brunt. However, as has been the propensity, it is the wealthy developed nations which are now drawing up rules and regulations, imposing restrictions, and the developing countries, with exceptions, that are acquiescing with characteristic complacency, bordering on fatalism.
A study reveals that where annual carbon emissions are concerned, USA and Canada take the lead. This region, in 2000, was spewing out nearly 1800 million metric tonnes of carbon annually. This has increased manifold since. This region is followed by Western Europe. Bangladesh, given its insignificant industrialisation, is nowhere on the carbon emission map. Yet Bangladesh is having to pay the price. If the Asian Development Bank is to be believed, this region is particularly vulnerable to climate change, threatened with freshwater shortages by 2020. Crop yields could drop by half within 2050. And Bangladesh in particular will be vulnerable to flooding. Even if all this is taken with a pinch of salt, the fact remains that the spectre of climate change looms large in our horizon.
Global bodies have taken up the climate change issue in all earnest. There is the Inter-Governmental Panel of Climate Change (IPCC), the Asian Development Bank, the World Bank, UN bodies, the European Union bodies and others all making a loud clamour about climate change. It is commonly acknowledged that it is the industrialised nations which are the main cause of global warming, what with their excessive carbon emissions and other forms of industry-related pollution. And the developed world is bearing the brunt. However, as has been the propensity, it is the wealthy developed nations which are now drawing up rules and regulations, imposing restrictions, and the developing countries, with exceptions, that are acquiescing with characteristic complacency, bordering on fatalism.
A study reveals that where annual carbon emissions are concerned, USA and Canada take the lead. This region, in 2000, was spewing out nearly 1800 million metric tonnes of carbon annually. This has increased manifold since. This region is followed by Western Europe. Bangladesh, given its insignificant industrialisation, is nowhere on the carbon emission map. Yet Bangladesh is having to pay the price. If the Asian Development Bank is to be believed, this region is particularly vulnerable to climate change, threatened with freshwater shortages by 2020. Crop yields could drop by half within 2050. And Bangladesh in particular will be vulnerable to flooding. Even if all this is taken with a pinch of salt, the fact remains that the spectre of climate change looms large in our horizon.
Kyoto Protocol
As one of the mechanisms to address this problem, the Kyoto Protocol was drawn up in 1997. This is linked to the UN Framework Convention on Climate Change (UNFCCC) and sets binding targets for 37 industrialised countries for reduction of 5.2% GHG emissions against the 1990 level over its commitment period until 2012. For EU the target is 8%. In short, countries are to cut down on carbon emissions. The industrial and other sectors of these countries must take measures to this end, to curtail their contribution to global warming. Ironically, USA is not a signatory to this protocol despite being the highest on the carbon emission charts.
The big industrial players invariably find a way of wriggling out of paying the price for their “sins”. Since 2005, about 12,000 energy intensive plants of EU have been able to buy and sell permits to allow them emit carbon dioxide. There are three flexible mechanisms to enable countries with quantified emission limitation and reduction commitments to acquire GHG reduction credits: International Emission Trading (IET), Clean Development Mechanism (CDM) and Joint Implementation (JI). There is even consideration for a Stock Exchange for carbon credits!
The big industrial players invariably find a way of wriggling out of paying the price for their “sins”. Since 2005, about 12,000 energy intensive plants of EU have been able to buy and sell permits to allow them emit carbon dioxide. There are three flexible mechanisms to enable countries with quantified emission limitation and reduction commitments to acquire GHG reduction credits: International Emission Trading (IET), Clean Development Mechanism (CDM) and Joint Implementation (JI). There is even consideration for a Stock Exchange for carbon credits!
The second category, CDM, applies to Bangladesh. Under this, a developed country can tie up GHG reduction project activity in a developing country. The developed country would be given credits for meeting its emission reduction targets, while the developing country would receive the capital and clean technology to implement the project. This is, in plain language, carbon trading. The developed country continues at its own pace of carbon emissions, while paying a country like Bangladesh to cut down on their’s, thus earning carbon credits. Outside the Kyoto Protocol compliance regime, an alternative carbon trading market is emerging. This is the Voluntary Emission Reduction (VER) framework. It has no internationally recognised central body.
What has Bangladesh done so far?
So far Bangladesh has set up a National CDM Board and CDM committees for approval of CDM projects. The Board has approved two CDM projects so far with a few in the pipeline. In comparison, India has approved 360 projects and Sri Lanka 105. There are plenty of CDM opportunities in Bangladesh: Afforestation and conservation of forests as tree tissue stores significant amounts of CO2; methane tapping and better use of methane waste; use of electrical vehicles; advanced rice production technology; electricity cogeneration from sugarcane; solar home systems; wind turbine; energy saving cooking stoves, CFL lamps, etc.
There is a garbage disposal project in Matwail where biodegradable waste is being converted into compost fertiliser and so the methane emissions are being reduced. The project could earn points but is still tied up with the local CDM committee. It will have to go to the CDM executive board under UNFCC for approval. The irony of it all is that while Bangladesh is still not a carbon producing country in any sense of the term, the government has already made carbon commitments on par with the countries which produce high amounts of carbon annually. The bottom line is, while the industrialised countries continue in their industrialisation and development, countries like Bangladesh will adopt a carbon neutral development strategy, keeping tangible industrialisation at bay. In other words, Bangladesh cannot get wealthy. It will accept a few token handouts to keep its carbon output in check and hand the carbon credits to the wealthy world so it can get wealthier.
“Bangladesh must not settle for any aid funds or loan packages in this connection. Bangladesh must demand hard compensation in no uncertain terms,” says an analyst of global politics. “It’s like telling a rich guy in Europe that he can drive his SUV while we ride on cows, as long as he hands us a few euros — then too he’ll tell us to change our cow’s diet so it doesn’t belch out methane gas into the air!” says an irate industrialist in Bangladesh. It’s like the developed world is buying permits to pollute. “Poor countries smell money in the climate-change negotiations,” reads an article in The Economist.
Such carbon trading can be suicidal for the developing countries in the long run. Myopic policies can stunt a poor country’s growth and keep it in the poverty rut forever. “Such international negotiations have the distinct stench of conspiracy” says an observer of the energy scene in Bangladesh, “It’s a conspiracy to ensure the poor countries remain poor while the rich get richer.” “It’s like the myths being propagated that Bangladesh will soon be completely submerged under the sea, when in actuality, a satellite map will show you how the country is growing by 20 sq km a year,” he continues. “Such negative reports fed into the media serve to weaken the national psyche.”
And it is because of such weakened national psyche that Bangladesh jumps into non-conclusive agreements. Rather than getting entwined in such one-sided negotiations, Bangladesh needs to build a robust economy. It must exploit its existing resources to this end, whether gas, coal or whatever.
CONSPIRACY AGAINST COAL
One must always be on the watch out for the furtive do-gooders who do more harm than good in the name of the environment, public interest, etc. They change colours quicker than a chameleon. For example, years ago when talk was on about a nuclear power plant at Rooppur, there was a hue and cry about the health hazards and dangers of such a plant. Now in this critical hour of need where power is concerned, coal has been discovered at Phulbari. This coal mine is being equated with a gold mine in the sense it can fire a much needed power plant, providing electricity to the electricity-starved country. It can provide fuel to the innumerable brick fields leading to the infrasructural development of the country. It can contribute more than substantially to the country’s economy. Environmental and social concerns about the project are also being taken care of in the way of tree-planting, water management, rehabilitation and other projects. The tree-huggers now decide to welcome the nuclear power plant deal with China and turn their vitriolic attention towards the Phulbari coal mine.
Certain vested quarters are loud and vocal against the mining of coal at Phulbari and the establishment a coal-fired power plant. They see carbon spewing into the air, covering the world in a cloud of black smoke, all in contravention to those conventions and protocols being touted around the globe. Yet this very same righteous bunch remains mysteriously and absolutely silent about the coal coming in from India across the border. This substandard coal is so high in sulphur content that it is not even being used in India itself. The Bangladesh government is sanctioning import of this hazardous coal even though it exceeds permissible levels of sulphur. Yet it is dragging its feet on approving the Phulbari coal mine where the coal is of such low sulphur content and of such a high standard that it is almost on par which the coal of Newcastle. When the chimneys of the brick fields churn out the sulphur-infested pollution into the air,
where are GHG concerns then?
Delay in starting up the Phulbari coal mine is extremely harmful in more ways than one. Not only are we delaying in the production of electricity and wasting money on inferior quality imported coal, we are missing out on the deadline for carbon emissions. The carbon trading policy has a dateline until the year 2012. The year 2012 is vital because after that, rather than carbon trading, there will be carbon capture and storage. Carbon offsetting will no longer be in the scheme of things. Bangladesh is simply not prepared for this.
While polluters tend to make millions from the European carbon permit scheme, Bangladesh sits back twiddling its thumbs. That is nothing short of a travesty. Bangladesh must make hay while the sun shines. If the development of the coal sector is slowed down, Bangladesh will lose its CO2 emission rights. At these crossroads, Bangladesh faces a dilemma. In the name of internationalism, quarters urge it to reduce global warming by sacrificing industrialisation in Bangladesh; to move towards low-carbon economy; and to depend on international carbon funds and aid. However, nationalism dictates that Bangladesh maximise carbon emission rights. It must maximise economic growth and industrialisation.
While polluters tend to make millions from the European carbon permit scheme, Bangladesh sits back twiddling its thumbs. That is nothing short of a travesty. Bangladesh must make hay while the sun shines. If the development of the coal sector is slowed down, Bangladesh will lose its CO2 emission rights. At these crossroads, Bangladesh faces a dilemma. In the name of internationalism, quarters urge it to reduce global warming by sacrificing industrialisation in Bangladesh; to move towards low-carbon economy; and to depend on international carbon funds and aid. However, nationalism dictates that Bangladesh maximise carbon emission rights. It must maximise economic growth and industrialisation.
The bottom line is, if Bangladesh wants to survive in this dog-eat-dog system of global economy, the coal sector should be developed as fast as possible to justify higher emission rights. And Bangladesh should not bear the burden of global warming by suppressing coal sector development. It is ironical that coal and other industries in the developed world are flourishing and injecting more carbon into the air and growth into their economies, while we are expected to sit back and put a cap on our coal so a balance can be struck. They are emitting excess carbon into the air and we are helping out by emitting less. Oh, and in the process we’ll earn a few Brownie points.
Source: http://www.probenewsmagazine.com/index.php?index=2&contentId=4376
Date: 19-25 September 2008, Bangladesh
Date: 19-25 September 2008, Bangladesh
Energy security & coal development
Badiul Alam
The power cut or load shedding has become the order of the day. All the national fertilizer factories have been shut down because of energy crisis. The power development Board (PDB) has been facing extreme difficulties to maintain its generation schedule due to gas shortage. The gas based industries specially the textile sector has been experiencing production shortage owing to acute energy crisis. The government has decided to cut power to the industries to maintain stable power supply to mosques and houses during the holy month of Ramadan. The Petrobangla has notified the PDB that it would not be able to make any commitment of new connections to any new power plant hence. These are a few tips about the country’s energy situation.
These tips are enough to raise concern about the country’s future energy security. Some 5-7 years back we debated about the export of energy from Bangladesh to our neighbour India. Now we are actively considering importing energy to provide minimum level of energy security. A dialogue has been opened with the Mayanmar government to ink a deal regarding the Import of gas from that country. Special Assistant to Chief Adviser Prof. Mohammed Tamim has spoken very strongly about linking Bangladesh with the Iran-Pakistan-India gas pipeline to ensure future energy security.
Not only Bangladesh, the entire South Asian Region has become energy hungry although there exists a huge potential of energy resources in this region. If the water resources of the Himalayan valley could be utilized, the South Asian region would have minimum 43000 additional power generation capacities. But this potential could not be harnessed because of the lack of understanding among the South Asian nations, which put the entire region in the category as energy hungry.
The lack of national understanding about harnessing energy sources in Bangladesh has been the major threat for our energy security. The country’s energy security has become vulnerable because of dependence on the single source of energy i.e. gas. Almost all the industrial energy are being met from gas and our gas resource has been depleting very fast, which is the major cause of the current energy crisis.
We have discovered gas reserve of around 21 trillion cubic feet (TCF) of which 15.40 TCF is proven. Till June 2007, around 7.08 TCF gas had been used and only 8.3 TCF gas could be utilized. Every year the gas demand has been increasing more than 6-7 per cent and with the present proven reserve Bangladesh could meet its energy demand from gas up to 2011. If no new gas field is found Bangladesh would have to1ook for other options to meet its energy demand after 2011.
Coal is one of the major alternative source to meet the energy demand. Bangladesh has so far discovered five-coal fields which are Barapukuria, Phulbari, Khalashpir, Jamalganj and Dighirpara. Among these coalfields, the Phulbari is the largest having a reserve of 572 million tonnes of coal. The estimated coal reserve in the Khalashpir is around 600mllllon tonnes, Jamalganj 1053 million tonnes, Barapukuria 300 million tonnesand Dighirpar200 milliontonnes. All these coal reserve would be equivalent to 50 TCF gas, which could ensure minimum 50 years of energy security.
Despite laving potential alternative energy source, the country is heading towards severe energy crisis within the next three to five years. One may ask why we are heading towards a energy crisis despite having the potential alternative source. The answer is very simple. Like other national issues, we are lacking national consensus on extracting coal, which limited the national endeavor of extracting coal only in the Barapukuria coal field. Till the day only half a million tonnes of coal could be extracted from Barapukuria.
There was no debate about extracting coal, but the debate has been going on the mode of extraction. Throughout the world two acceptable methods are followed to extract coal, one is the under ground mining and another is open cut mining. The selection of methods of extracting coal is total1y dependent on the geological condition and the economic viability of the mining.
If the depth of the coal reserve is more than three meters then underground mining option is considered, but from the economic point of view the underground mining is not very much lucrative. According to the mining experts, out of the total reserve around 15 per cent plus or minus coal could be extracted through the under ground mining. For example, Bangladesh could hardly extract less than 1oo million tonnes of coal from Barapukuria despite having a reserve of 300 million tonnes of coal because of the adoption of under ground mining system. On the other hand, the open Cut mining system would provide opportunity to extract all the available reserve.
We are debating what method should Bangladesh follow to extract its black diamond? This debate has developed over the extraction of coal from Phulbari coalfield. The government earlier signed agreement with the Asia Energy to develop coal from Phulbari. The Asia Energy opted for open cut mining as the coal reserve available at the depth of 50 to 200 meters. The coal experts have agreed that the open cut mining is the only viable option to develop Phulbari coal- field.
But there will be certain social and environmental problems if the open cut mining option is given go-ahead signal. The entire Phulbari region is arable area and land is suitable for the production rice. Around 600 hectares of land will come under the open cut mining system over a period of 30 years. The land will lose its original character after the open cut mining and it will take 10 to 15 years to restore the original character of land. The large-scale extraction of under ground water would be required to implement the under ground mining, which will create a danger of desertification. Several thousands of people will have to be rehabilitated in new places over a period of 35 years, as their homestead will come under the open cut mining system.
Every development project bears social and. environmental hazards but by applying proper mitigation approach the environmental concerns could be addressed. The Environment Impact Assessment (EIA) study has been made compulsory for all the development projects irrespective of its size. In respect of Phulbari coal field the EIA had been completed, which got the nod of the Directorate of Environment (DoE) although question was raised whether the DoE has enough technical manpower to examine the EIA study on Phulbari coalfield.
The major social concern in respect of Phulbari would be rehabilitation of several thousand people in the new places. According to the Asia Energy study over 40 thousand people will come under the relocation programme over a period of 3 years. But other sources claimed that one lakh people will have to be re-located. If the later’s version is accepted, every year less than 3000 thousand people or less than 600 families (5-member in each family) will have to be resettled. Is it a very big challenge? Of course not? It was argued that enough land will not be available for resettlement. It might be true to some extent because Bangladesh is a land of hunger. But this problem cannot be addressed through the development flats at the rural areas. In view of the shrinking arable land due to population pressure demand has been raised to adopt flat option in rural areas.
Another major concern is the desertification and shortage of water in the northern region because of the extraction of under ground water from Phulbari region. Yes, this is a big concern, but it has the solution. A portion of extracted under ground water could be used for drinking by applying proper treatment process. Another portion of extracted water would be injected to maintain the under ground water table after refilling the land hole. Such practice has been followed throughout the world in case of adoption of open cut mining method.
Another portion of extracted under ground water could be used to maintain the water channels and water bodies, which ultimately will benefit the agriculture and the industrial sector. Those who are opposing the open cut mining system very much know how to address the social and environmental concerns but still they are opposing the system. Question may be asked what will be the determining factors to adopt a particular method of extraction of coal? The answer is very simple. The economics of coalmine and geological condition will be the major determining factors for deciding the method of mining.
It has been stated that coal at Phulbari is available at a depth of 150 to 250 meters, which is covered by alluvium rocks. The coal mine expert opinion is that the coal at a depth of 150 to 250 meters covered by alluvium rock is suitable for open cut mining. From the point of economics open cut mining system is much beneficial, as it will give almost cent per cent recovery of coal. Badrul Imam, prof. Geological Department of Dhaka University and also member of the Natural Resources Protection Committee agreed that the open cut mining is suitable for extraction of coal if the same is situated at a depth of 150 to 200 meter. Another point of debate is the involvement of the Asia Energy for the development of the Phulbari coalfield. The national energy policy and other policies related to the foreign investment justify the Asia Energy involvement. It could be better if we could extract the coal by investing our own resources, which could give us opportunity to enjoy the total dividend, but now we have to share the dividend with a foreign company.
But facts remain that our national exchequer is not so healthy to afford millions of dollar investment. Besides, we have not enough technical manpower to develop a coalmine. Opponents of the open cut mining, however, put forward an absurd proposal in this regard. They suggested abandoning the mining until the development of national technical staff, according to them, which would take minimum 10 years. But they have to suggest how to address the energy problem at least for 10 years.
They have suggested developing an independent body to handle coal sector, which is a good proposal. The coal policy suggested developing a body, which would be called ‘Coal Bangla’. But the present regime is not in a position to finalise the coal policy. The matter is likely to be left for the next elected government. According to the agreement signed with the Asia Energy, the Phulbari coalfield development works can be started in 2006. If the process were allowed to go on by this time coal from Phulbari would be a reality. Not only coal, a coal fired power plant having 500-mw generation capacity could also start generation.
Source: The News Today, Bangladesh
Date: 04/09/2008
The power cut or load shedding has become the order of the day. All the national fertilizer factories have been shut down because of energy crisis. The power development Board (PDB) has been facing extreme difficulties to maintain its generation schedule due to gas shortage. The gas based industries specially the textile sector has been experiencing production shortage owing to acute energy crisis. The government has decided to cut power to the industries to maintain stable power supply to mosques and houses during the holy month of Ramadan. The Petrobangla has notified the PDB that it would not be able to make any commitment of new connections to any new power plant hence. These are a few tips about the country’s energy situation.
These tips are enough to raise concern about the country’s future energy security. Some 5-7 years back we debated about the export of energy from Bangladesh to our neighbour India. Now we are actively considering importing energy to provide minimum level of energy security. A dialogue has been opened with the Mayanmar government to ink a deal regarding the Import of gas from that country. Special Assistant to Chief Adviser Prof. Mohammed Tamim has spoken very strongly about linking Bangladesh with the Iran-Pakistan-India gas pipeline to ensure future energy security.
Not only Bangladesh, the entire South Asian Region has become energy hungry although there exists a huge potential of energy resources in this region. If the water resources of the Himalayan valley could be utilized, the South Asian region would have minimum 43000 additional power generation capacities. But this potential could not be harnessed because of the lack of understanding among the South Asian nations, which put the entire region in the category as energy hungry.
The lack of national understanding about harnessing energy sources in Bangladesh has been the major threat for our energy security. The country’s energy security has become vulnerable because of dependence on the single source of energy i.e. gas. Almost all the industrial energy are being met from gas and our gas resource has been depleting very fast, which is the major cause of the current energy crisis.
We have discovered gas reserve of around 21 trillion cubic feet (TCF) of which 15.40 TCF is proven. Till June 2007, around 7.08 TCF gas had been used and only 8.3 TCF gas could be utilized. Every year the gas demand has been increasing more than 6-7 per cent and with the present proven reserve Bangladesh could meet its energy demand from gas up to 2011. If no new gas field is found Bangladesh would have to1ook for other options to meet its energy demand after 2011.
Coal is one of the major alternative source to meet the energy demand. Bangladesh has so far discovered five-coal fields which are Barapukuria, Phulbari, Khalashpir, Jamalganj and Dighirpara. Among these coalfields, the Phulbari is the largest having a reserve of 572 million tonnes of coal. The estimated coal reserve in the Khalashpir is around 600mllllon tonnes, Jamalganj 1053 million tonnes, Barapukuria 300 million tonnesand Dighirpar200 milliontonnes. All these coal reserve would be equivalent to 50 TCF gas, which could ensure minimum 50 years of energy security.
Despite laving potential alternative energy source, the country is heading towards severe energy crisis within the next three to five years. One may ask why we are heading towards a energy crisis despite having the potential alternative source. The answer is very simple. Like other national issues, we are lacking national consensus on extracting coal, which limited the national endeavor of extracting coal only in the Barapukuria coal field. Till the day only half a million tonnes of coal could be extracted from Barapukuria.
There was no debate about extracting coal, but the debate has been going on the mode of extraction. Throughout the world two acceptable methods are followed to extract coal, one is the under ground mining and another is open cut mining. The selection of methods of extracting coal is total1y dependent on the geological condition and the economic viability of the mining.
If the depth of the coal reserve is more than three meters then underground mining option is considered, but from the economic point of view the underground mining is not very much lucrative. According to the mining experts, out of the total reserve around 15 per cent plus or minus coal could be extracted through the under ground mining. For example, Bangladesh could hardly extract less than 1oo million tonnes of coal from Barapukuria despite having a reserve of 300 million tonnes of coal because of the adoption of under ground mining system. On the other hand, the open Cut mining system would provide opportunity to extract all the available reserve.
We are debating what method should Bangladesh follow to extract its black diamond? This debate has developed over the extraction of coal from Phulbari coalfield. The government earlier signed agreement with the Asia Energy to develop coal from Phulbari. The Asia Energy opted for open cut mining as the coal reserve available at the depth of 50 to 200 meters. The coal experts have agreed that the open cut mining is the only viable option to develop Phulbari coal- field.
But there will be certain social and environmental problems if the open cut mining option is given go-ahead signal. The entire Phulbari region is arable area and land is suitable for the production rice. Around 600 hectares of land will come under the open cut mining system over a period of 30 years. The land will lose its original character after the open cut mining and it will take 10 to 15 years to restore the original character of land. The large-scale extraction of under ground water would be required to implement the under ground mining, which will create a danger of desertification. Several thousands of people will have to be rehabilitated in new places over a period of 35 years, as their homestead will come under the open cut mining system.
Every development project bears social and. environmental hazards but by applying proper mitigation approach the environmental concerns could be addressed. The Environment Impact Assessment (EIA) study has been made compulsory for all the development projects irrespective of its size. In respect of Phulbari coal field the EIA had been completed, which got the nod of the Directorate of Environment (DoE) although question was raised whether the DoE has enough technical manpower to examine the EIA study on Phulbari coalfield.
The major social concern in respect of Phulbari would be rehabilitation of several thousand people in the new places. According to the Asia Energy study over 40 thousand people will come under the relocation programme over a period of 3 years. But other sources claimed that one lakh people will have to be re-located. If the later’s version is accepted, every year less than 3000 thousand people or less than 600 families (5-member in each family) will have to be resettled. Is it a very big challenge? Of course not? It was argued that enough land will not be available for resettlement. It might be true to some extent because Bangladesh is a land of hunger. But this problem cannot be addressed through the development flats at the rural areas. In view of the shrinking arable land due to population pressure demand has been raised to adopt flat option in rural areas.
Another major concern is the desertification and shortage of water in the northern region because of the extraction of under ground water from Phulbari region. Yes, this is a big concern, but it has the solution. A portion of extracted under ground water could be used for drinking by applying proper treatment process. Another portion of extracted water would be injected to maintain the under ground water table after refilling the land hole. Such practice has been followed throughout the world in case of adoption of open cut mining method.
Another portion of extracted under ground water could be used to maintain the water channels and water bodies, which ultimately will benefit the agriculture and the industrial sector. Those who are opposing the open cut mining system very much know how to address the social and environmental concerns but still they are opposing the system. Question may be asked what will be the determining factors to adopt a particular method of extraction of coal? The answer is very simple. The economics of coalmine and geological condition will be the major determining factors for deciding the method of mining.
It has been stated that coal at Phulbari is available at a depth of 150 to 250 meters, which is covered by alluvium rocks. The coal mine expert opinion is that the coal at a depth of 150 to 250 meters covered by alluvium rock is suitable for open cut mining. From the point of economics open cut mining system is much beneficial, as it will give almost cent per cent recovery of coal. Badrul Imam, prof. Geological Department of Dhaka University and also member of the Natural Resources Protection Committee agreed that the open cut mining is suitable for extraction of coal if the same is situated at a depth of 150 to 200 meter. Another point of debate is the involvement of the Asia Energy for the development of the Phulbari coalfield. The national energy policy and other policies related to the foreign investment justify the Asia Energy involvement. It could be better if we could extract the coal by investing our own resources, which could give us opportunity to enjoy the total dividend, but now we have to share the dividend with a foreign company.
But facts remain that our national exchequer is not so healthy to afford millions of dollar investment. Besides, we have not enough technical manpower to develop a coalmine. Opponents of the open cut mining, however, put forward an absurd proposal in this regard. They suggested abandoning the mining until the development of national technical staff, according to them, which would take minimum 10 years. But they have to suggest how to address the energy problem at least for 10 years.
They have suggested developing an independent body to handle coal sector, which is a good proposal. The coal policy suggested developing a body, which would be called ‘Coal Bangla’. But the present regime is not in a position to finalise the coal policy. The matter is likely to be left for the next elected government. According to the agreement signed with the Asia Energy, the Phulbari coalfield development works can be started in 2006. If the process were allowed to go on by this time coal from Phulbari would be a reality. Not only coal, a coal fired power plant having 500-mw generation capacity could also start generation.
Source: The News Today, Bangladesh
Date: 04/09/2008
Tuesday, September 9, 2008
Draft coal policy likely to get final seal in Oct
Abir Mahmud
The much talked about national coal policy is set to be approved in early October as the energy ministry has planned to place the draft of the policy to the council of advisers again. “We are now working on incorporating observations over royalty rate, land reclamation and environmental issues, which were the much discussed about during a discussion of the council of advisers over the draft coal policy and,” energy secretary Mohammad Mohsin said.
He said the draft of the policy would be sent to the council of advisers by early October next for approval. The council of advisers last month sent back the draft coal policy to the energy ministry for further scrutiny of the issues related to royalty rate, mined land reclamation and environmental issues. During the meeting, headed by the chief adviser, Fakhruddin Ahmed, at the Chittagong circuit house, the advisors discussed the policy draft for hours and of the opinion for some changes to the draft policy. They were, however, unanimous over that a coal policy was needed to immediately develop the country’s coal reserves and mitigate the mounting energy crisis.
Sources said, investments worth several billion US dollars have long been hanging over the draft national coal policy that got its current shape following several changes carried by the previous successive governments, energy ministry officials said. UK-based Asia Energy, South Korean Luxon Global and US-based Global Vulcan Energy are among the foreign companies now eyeing closely over the national coal policy to initiate their project works of coalmine development and setting up coal-fired power plants, they said.
Indian business conglomerate Tata group, that had investment proposals worth US$ 3.0 billion including development of a coalmine and setting up a coal-fired power plant, recently pulled back after waiting for over two years due to indecisiveness of the government, it was alleged. The foreign investment proposals still pending with the Board of Investment (BoI) include include $2.5 billion from the Asia Energy, $ 1.6 billion from the Vulcan Energy, $1.5 billion from Luxon Global, a senior BoI official said.
In the draft national coal policy it was recommended that no foreign companies would be permitted to develop coalmine independently. Foreign companies would be allowed to develop country’s coalmines under a joint venture with local coalmining company, it noted. Like elsewhere in the world coalmines in Bangladesh can be developed by either open pit or underground method. But the mining method should be determined on the basis of geological structure and reserve potentials, draft policy suggested. A Coal Sector Development Committee comprising professionals from all walks would be constituted for smooth operation of coalmines and relevant activities.
The committee would fix the royalty rate of different coalmines considering mine-specific geological structures instead of the existing mining rules where the royalty rate has been fixed at 6.0 per cent for open-pit mines and 5 per cent for underground mines. Awarding of licences for coal explorations from any coalmines through open tenders, whereas the existing rules say that the licences would be awarded on first-come-first-served basis, the draft policy recommended.
The country’s existing Land Acquisition Act to acquire required land and compensate the displaced people from the mining sites to ensure smooth development of coalmines and its subsequent utilisation, it noted. The globally accepted guidelines of ‘equator principles,’ should be adopted to ensure adequate management of environmental and social issues relating to coalmines, the draft policy said. The draft policy said there would be no option of coal export other than ‘cocking coal’ in the coal policy. Setting up coal-fired power plant at the mine mouth would be made mandatory for developing any coalmine it recommended further.
During the meeting of the council of advisers some felt that there should have some guideline before the proposed committee for fixing royalty rate.Some also opined that mined land should be returned to owners while others felt returning the land to the owners would be a complex and huge task. They were also of the opinion to ensure environmental safeguard out of coalmining.
He said the draft of the policy would be sent to the council of advisers by early October next for approval. The council of advisers last month sent back the draft coal policy to the energy ministry for further scrutiny of the issues related to royalty rate, mined land reclamation and environmental issues. During the meeting, headed by the chief adviser, Fakhruddin Ahmed, at the Chittagong circuit house, the advisors discussed the policy draft for hours and of the opinion for some changes to the draft policy. They were, however, unanimous over that a coal policy was needed to immediately develop the country’s coal reserves and mitigate the mounting energy crisis.
Sources said, investments worth several billion US dollars have long been hanging over the draft national coal policy that got its current shape following several changes carried by the previous successive governments, energy ministry officials said. UK-based Asia Energy, South Korean Luxon Global and US-based Global Vulcan Energy are among the foreign companies now eyeing closely over the national coal policy to initiate their project works of coalmine development and setting up coal-fired power plants, they said.
Indian business conglomerate Tata group, that had investment proposals worth US$ 3.0 billion including development of a coalmine and setting up a coal-fired power plant, recently pulled back after waiting for over two years due to indecisiveness of the government, it was alleged. The foreign investment proposals still pending with the Board of Investment (BoI) include include $2.5 billion from the Asia Energy, $ 1.6 billion from the Vulcan Energy, $1.5 billion from Luxon Global, a senior BoI official said.
In the draft national coal policy it was recommended that no foreign companies would be permitted to develop coalmine independently. Foreign companies would be allowed to develop country’s coalmines under a joint venture with local coalmining company, it noted. Like elsewhere in the world coalmines in Bangladesh can be developed by either open pit or underground method. But the mining method should be determined on the basis of geological structure and reserve potentials, draft policy suggested. A Coal Sector Development Committee comprising professionals from all walks would be constituted for smooth operation of coalmines and relevant activities.
The committee would fix the royalty rate of different coalmines considering mine-specific geological structures instead of the existing mining rules where the royalty rate has been fixed at 6.0 per cent for open-pit mines and 5 per cent for underground mines. Awarding of licences for coal explorations from any coalmines through open tenders, whereas the existing rules say that the licences would be awarded on first-come-first-served basis, the draft policy recommended.
The country’s existing Land Acquisition Act to acquire required land and compensate the displaced people from the mining sites to ensure smooth development of coalmines and its subsequent utilisation, it noted. The globally accepted guidelines of ‘equator principles,’ should be adopted to ensure adequate management of environmental and social issues relating to coalmines, the draft policy said. The draft policy said there would be no option of coal export other than ‘cocking coal’ in the coal policy. Setting up coal-fired power plant at the mine mouth would be made mandatory for developing any coalmine it recommended further.
During the meeting of the council of advisers some felt that there should have some guideline before the proposed committee for fixing royalty rate.Some also opined that mined land should be returned to owners while others felt returning the land to the owners would be a complex and huge task. They were also of the opinion to ensure environmental safeguard out of coalmining.
Source: Weekly Economic Times, Bangladesh
Date: 07/09/08
Develop Phulbari Coal Mine to Resolve Power Crisis
Business leaders of different chamber bodies of northern districts at a discussion in the capital urged the government to move to develop the Phulbari coal mine without any further delay. They saw the huge coal reserve at the Phulbari coal mine as the only option now to deal with future energy crisis, particularly in power generation. “We can easily produce 3,500MW of electricity from the coal to be extracted from the Phulbari mine,” said Rangpur Chamber President Mostafa Azad Chowdhury, adding that as the country’s gas reserve is depleting fast, coal is becoming the only option for power generation.
Greater Rangpur-Dinajpur Industry-Business Development Forum organized the discussion on ‘Industrialization in Rangpur-Dinajpur: Energy Availability’ with President of the forum Nazrul Islam in the chair. Former PDB member Fazlul Haque presented a keynote paper on the topic. Former lawmakers Mizanur Rahman Manu and Asaduzzaman Noor, leaders of eight chambers of the northern districts — Rajshahi, Dinajpur, Rangpur, Lalmonirhat, Nilphamari, Gaibandha, Panchaghar and Joypurhat — also spoke at the function.
The speakers, supporting the open pit mining at Phulbari coal mine as it provides more than 80 percent extraction of resources, urged the government to ensure proper compensation to those who would be affected by the development of the mine. “The authorities concerned have to ensure that the affected people would be properly compensated and rehabilitated,” said former LGED chief engineer Monwar Hossain Chowdhury.
If the government fails to take the decision in proper time to extract coal from Phulbari mine, Bangladesh might lose the opportunity to use its coal, as there might be a bar on coal extraction worldwide in future, he added. Former BGMEA president Tipu Munshi expressed his frustration over the poor attention of the government to the development of mineral resources of the northern region. He further said the people of the northern region should not be deprived of coal resources due to the antipathy by a section of people.
Forum leader MA Majid termed the opposition to coal extraction in Phulbari an international conspiracy. Editor of the Bangladesh Observer Iqbal Sobhan Chowdhury suggested that those who oppose open pit mining and those support open pit should sit together to reach a consensus through a logical debate.
Greater Rangpur-Dinajpur Industry-Business Development Forum organized the discussion on ‘Industrialization in Rangpur-Dinajpur: Energy Availability’ with President of the forum Nazrul Islam in the chair. Former PDB member Fazlul Haque presented a keynote paper on the topic. Former lawmakers Mizanur Rahman Manu and Asaduzzaman Noor, leaders of eight chambers of the northern districts — Rajshahi, Dinajpur, Rangpur, Lalmonirhat, Nilphamari, Gaibandha, Panchaghar and Joypurhat — also spoke at the function.
The speakers, supporting the open pit mining at Phulbari coal mine as it provides more than 80 percent extraction of resources, urged the government to ensure proper compensation to those who would be affected by the development of the mine. “The authorities concerned have to ensure that the affected people would be properly compensated and rehabilitated,” said former LGED chief engineer Monwar Hossain Chowdhury.
If the government fails to take the decision in proper time to extract coal from Phulbari mine, Bangladesh might lose the opportunity to use its coal, as there might be a bar on coal extraction worldwide in future, he added. Former BGMEA president Tipu Munshi expressed his frustration over the poor attention of the government to the development of mineral resources of the northern region. He further said the people of the northern region should not be deprived of coal resources due to the antipathy by a section of people.
Forum leader MA Majid termed the opposition to coal extraction in Phulbari an international conspiracy. Editor of the Bangladesh Observer Iqbal Sobhan Chowdhury suggested that those who oppose open pit mining and those support open pit should sit together to reach a consensus through a logical debate.
Source: Energy & Power, Bangladesh
Date : 01.09.08
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