Decision on coal policy this month likely

Shamim Jahangir

The Government is likely to take a major decision on ‘Coal Policy’ this month to ward off controversy on open pit and underground cave method of coal mining, sources in the Ministry of Power, Energy and Mineral Resources said.
Besides, the Energy Ministry will also arrive at a decision on ‘Third Round Offshore Bidding on Oil and Gas Search’ this month for offshore gas exploration, sources added.
Prime Minister Sheikh Hasina directed the Energy Ministry officials recently to take immediate steps about the ‘Coal Policy’ and Third Round Bidding on oil and gas search in offshore after series of sitting, informed sources in the Ministry said.
“The Energy Ministry has already taken preparations for coal and third round bidding on oil and gas exploration in the sea following the direction of the Prime Minister,” a senior official of the Ministry told the New Nation yesterday.
“As per direction, the ministry will arrange a meeting to seek opinion of the experts for finalising the coal policy this month,” an official said.
The Adviser to the Prime Minister on Power and Energy Dr Tawfiq-e-Elahi Bir Bikram will present the planned coal mining city map before the experts to seek their opinion in this regard, sources said.
Prof Patwari Commission had placed proposed Coal Policy before immediate past Caretaker Government. But the present Awami League government is yet to finalise the policy following the controversy over open pit and underground cave method of coal mining.
Bangladesh has now only one active Production Sharing Contract (PSC) on block 16 for oil and gas exploration in offshore. There were five blocks till February this year. Four oil companies have abandoned Bangladesh’s offshore blocks for poor gas reserves.
The government has not taken any decision to award nine offshore blocks to two international oil and gas exploration companies despite offshore bidding over a year ago, sources added.
The US oil and gas giant ConocoPhilips was selected for eight offshore blocks and Irish Tullow for one block under the country’s last offshore bidding round in February 2008.
Both the companies sought to know the government position about awarding of the gas blocks. US Ambassador to Dhaka James F Moriarty recently met with the state minister for power and energy Shamsul Haque Tuku in this regard.
Bangladesh has not signed any PSC for offshore hydrocarbon exploration over the past decade whereas its neighbours India and Myanmar awarded offshore blocks in the Bay of Bengal and discovered large natural gas reserves.
Gas production of the country is between 1870 million cubic feet per day (mmcfd) and 1900mmcfd at the present against the demand of over 1920mmcfd.
The country’s proven gas reserve is now 7.36 trillion cubic feet which would burnt out by 2011 at the present level of consumption, a recent report of Energy Ministry said.
The country’s lone offshore block (Sangu) out of 23 blocks is now contributing 3.0 per cent or 55 mmcfd of the total gas production while the rest of 97 per cent is being produced from the onshore blocks, sources said.

Source: The New Nation , Bangladesh

Link : http://nation.ittefaq.com/issues/2009/06/04/news0103.htm
Date: 04 June 2009

Take immediate decision on coal mining

ET Report

Experts have urged the government to speed up coal mining policy, without which coal extraction is not possible. “We cannot afford to sit idle on huge coal reserves of our own due to only lack of a decision about the ways of extraction,” said Aminul Haque, a professor at the Bangladesh University of Engineering and Technology.
Bangladesh has five coal fields with around 2.55 billion tonnes of reserves but is unable to extract them until a national coal policy has been finalised. The government has already completed negotiation with the Japan International Cooperation Agency (JICA) for conducting a Master Plan Study on Coal Power Development, officials said.
Sources said, Bangladesh is to build five 500 megawatt (MW) coal-fired electricity plants at a total cost of nearly $3.5 billion to tackle electricity supply problems. The process for setting up of the plants has already been started and it will take four years to finish the job. The tender will be floated soon to build the plants, which when completed will greatly ease the nagging power crisis. Both local and global firms will be eligible to participate.
Coal for the new plants may be imported from India, Indonesia or Australia, the official said, adding the government had committed to raise power generation to 7,000 MW in 2014 from 5,000 MW now. About 80 percent of electricity in Bangladesh is produced by natural gas, but at present the country with 13.54 trillion cubic feet of proven and recoverable gas reserves faces up to 250 million cubic feet of gas shortages a day, officials say. At present the country faces a daily electricity shortage of up to 2,000 MW a day.

Source: Weekly Economic Times, Bangladesh

Link : http://www.weeklyeconomictimes.com/home-news-details.php?recordID=3915
Date: 01 June 2009

US companies to invest in coal sector

R Akter

US companies are keen to invest in Bangladesh’s coal sector, another promising energy turf after natural gas where foreign firms, including US-based oil majors, are doing brisk business. State Minister for Power and Energy Shamsul Haque Tuku informed about the proposals following US Ambassador James F Moriarty’s meeting with him at his Energy Ministry Wednesday.
He said the US envoy apprised him that American energy companies are interested to help Bangladesh in developing energy sector. They particularly want to invest in coal mining after finalization of the coal policy by the government. Following the meeting, the envoy said that he discussed many issues regarding the development of energy sector in Bangladesh and also the assistance for the victims of very recent cyclonic storm AILA that hit the country’s southwest coastal belt.
He noted that the United States would provide necessary assistance for the victims if Bangladesh side sought any help. A number of US companies, including oil-major Chevron, have been operating in the country’s energy and power sector. But this is first time it was learned that US energy companies are also interested in the coal mines.
Bangladesh has about five coal mines in the country’s northern region, having a total coal deposit of 2.5 billion tons. A draft coal policy is now being reviewed by the government. But it has been a great debate-and some spot disturbances too-whether Bangladesh should pursue open-pit coal mining or underground mining to extract the coal for meeting its requirements in power generation.
However, it’s not clear what kind of method the US companies want to apply in coal mining in Bangladesh. A British company, Asia Energy, faced fiery protests from locals for planning open-pit mining. Tuku said a wide area of energy sector’s development was discussed with the US diplomat, which covers the 3rd-round international bidding for hydrocarbon exploration in the offshore and deep-sea areas.
“We’ve sought cooperation in renewable energy sector’s development, like hydropower, solar and wind. They can help us through providing renewable energy technology,” Tuku told. Replying to a question, the power and energy state minister said that the US envoy discussed latest position on the 3rd-round international hydrocarbon bidding which remained pending with government’s top policymaking body.
One US-based company, Conoco Philip, responded for 8 deep-sea blocks in the bidding. We informed him that the issue now in a decision-making process. Soon we’ll take the decision. He also said the Petrobangla-Chevron dispute over a pipeline wheeling charge also came up for discussion.
Replying to another question, he said the government is discussing the issue of readjustment of petroleum-fuel prices. Anytime, a decision may come on this issue although the government is yet to decide whether it will be upward or downward adjustment.

Source: Weekli Economic Times, Bangladesh

Link : http://www.weeklyeconomictimes.com/home-news-details.php?recordID=3912
Date: 01 June 2009

Use environment-friendly technology to extract coal: Hasina

Unb, Dhaka

Prime Minister Sheikh Hasina yesterday underscored the need for using environment-friendly state-of-the-art technology in extracting coal from Barapukuria coalmine so that local villagers do not suffer any kind of loss from soil subsidence. She made the remark when an eight-member delegation of the consortium company of Barapukuria Coal Mine, Xuzhou Coal Mining Group Corporation, China, led by its Chairman Huang Xinhai called on the Prime Minister at her official residence Jamuna.

The Chinese delegation also assured the prime minister of using the best technology in extracting coal that will not harm the locals. Prime Minister’s Press Secretary Abul Kalam Azad briefed newsmen after the meeting.
The chairman of the Chinese company told the prime minister that they will make the best application of their company’s experience of ‘127 years’ to save the people from any big loss of their property.
The consortium will also share the compensation to be made to the villagers, the delegation told the prime minister. The delegation also informed the premier that they will visit the Barapukuria Coalmine site today. Huang Xinhai said the prospect of the Barapukuria Coalmine is “very bright”.
The prime minister informed the Chinese delegation that the present government has planned to set up several power plants to rid the country of power crisis. She also called for Chinese investment in larger volumes in Bangladesh’s power and electricity, gas and other infrastructure sectors.
In reply, the Chinese delegation members also expressed their keen interest in making more investment in Bangladesh. “China so far has made significant contribution to the socioeconomic development of Bangladesh, including to the road communications. We attach due importance to the existing friendly relations of Bangladesh with China. We also hope that the bilateral relations will be further strengthened in the days to come,” she said.
Power and Energy Adviser to the Prime Minister Taufiq-e-Elahi Chowdhury, Prime Minister’s Office Secretary Mollah Waheeduzzaman and Energy Secretary Mohammad Mohsin were present. The mine will produce 1 million tones of coal per annum when
commercial production will commence. Some 65 percent production will be used in 250 MW coal-fired power station and remaining 35 percent in brickfields and other domestic purposes.

Source: The Daily star, Bangladesh

Link : http://www.thedailystar.net/story.php?nid=90376
Date: 29 May 2009

Extract coal from Phulbari without wasting time

R Akter

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, experts said.
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. Meanwhile, energy adviser, Tawfiq-e-Elahi Chowdhury said that prime minister, Sheikh Hasina, has directed to finalize the coal policy, as the country needs alternative energy sources to produce electricity. The energy ministry will soon hold an open discussion on the draft coal policy with different stakeholders for finalizing the policy on a priority basis.
When asked why another meeting was needed with stakeholders when controversy was raging over the coal policy for the last three years, Tawfiq said, ‘Every government has its own policy and philosophy. Of course, we will consider the investment issues, local people’s concern and electricity generation while finalizing the coal policy.
The previous BNP-led government that first prepared a draft of the coal policy and then the caretaker government held half a dozen open meetings with stakeholders but could not finalize the draft because of controversy surrounding the mining method and fixation of royalty. 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 been dragging its feet on the issue of coal extraction from the Phulbari coalmine. Accoring to expetts, 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.
Meanwhile, speakers at a roundtable at CIRDAP auditorium recently suggested the government to finalize the coal policy immediately through political consensus for setting up of coal-based power plants to address the power crisis. “The government should go for coal-fired power plant even if based on imported coal,” they said.

Chairman of Parliamentary Standing Committee on Power and Energy and Mineral Resources Ministry Maj Gen (retd) Shubid Ali Bhuiyan said that the government should go for coal-based power plant through a political understanding for finalizing coal policy. “If necessary the government should import coal for this purpose,” he added.
State Minister for Power, Energy and Mineral Resources Shamsul Haque Tuku called upon the Oil, Gas and Bandar Protection Committee to refrain from their movement in the interest of the country. The sate minister urged the committee not to obstruct the government’s activities with the support of outsiders.
Former State Minister for Power and Energy Iqbal Hasan Mahmood Tuku said that the present electricity crisis was created 20 years ago when the World Bank and the Asian Development Bank (ADB) withdrew their financial support in the name of promotion of the power sector through the private entrepreneurs. “The government must come out from the World Bank prescriptions to ensure sustainable development in the power sector,” he said.
He also observed that the lengthy bureaucratic process was the main hindrance to improve the power sector. Former State Minister for Energy AKM Mosharraf Hossain said the earlier the alliance government had made a move to go for offshore gas block bidding. “We could not get success because of non-cooperation of India and Myanmar at that time,” he claimed.
“We may have many options for power generation, but coal should be the best option in the present perspective as we are not in a position to go for offshore exploration of gas immediately,” Dr Ijaz Hossain of BUET told at his keynote paper. He said that the country with its 2.0 billion tons of coal reserve can generate 10,000 MW electricity for next 50 years. The Energy and Power magazine organised the roundtable, which was moderated by its editor Mollah Amzad.

Source: Weekly Economic Times, Bangladesh

Link : http://weeklyeconomictimes.com/news-details.php?recordID=3858
Date: 24 May 2009

House panel for immediate coal extraction from Phulbari

ET Report

A parliamentary watchdog, Estimate Committee, has suggested immediate extraction of coal from the five mines including the much-talked about Phulbari coal field. But the committee, which makes estimates on public affairs, made no recommendations on the mining methods-open-pit or underground.
“The committee has recommended that coal from our five mines should immediately be extracted for producing energy,” H N Ashequr Rahman, the chairman, said following latest meeting at parliament building. He said the committee suggested the energy ministry find ways to extract coals at “minimum cost”, but made no mention of the environmental aspects of coal extraction.
The chairman said energy-hungry Bangladesh needed coal immediately for power generation, a precondition for development. “We have asked the ministry to submit a report on which method would be viable to extract coal from the fields,” said the chairman. Bangladesh has five coal mines-Barapukuria, Phulbari, Khalashpir, Dighipara and Jamalganj.
The government is in dilemma over coal extraction from Phulbari filed in Dinajpur. The Phulbari people resisted a move of the UK-based Asia Energy to collect coal through open-pit mining on the grounds that it would make them homeless and destroy environment. In Aug 2006, three people were killed as law enforcers fired on the protesters who demanded the government scrap its deal with Asia Energy.
In the face of strong protest, the government announced closure of Asia Energy’s activities in Phulbari. Some groups supported mainly by the left parties have been waging movements to stop extraction of coal by open-cut method by foreign companies.

Source: Weekly Economic Times, Bangladesh

Link : http://weeklyeconomictimes.com/news-details.php?recordID=3876
Date: 24 May 2009

Govt plans to build five coal-based power plants at $3.5b to end crisis

FE Report

The government has started working on a plan to set up five coal-based power plants with combined capacity of 2,500 mega watt to solve the country’s crippling electricity crisis for the long term, officials said Friday. Power Development Board officials said the five power plants would cost around US $3.5 billion and would take at least four years to complete if the government commences tender processing work this year,
“We have already begun preliminary planning work of the five coal-based power plants with each having capacity of 500 mw. They all will use imported coals,” PDB chairman SM Alamgir Kabir told the FE. “One each could be set up at Mongla and Chittagong. We have done some work in this regard. Two plants could be set up at Meghnaghat and the rest at the location of soon-to-be built Padma Bridge,” he said.
The PDB would send a full proposal on the power plants to the ministries for further consultation, he said. The move comes after the gas crisis started taking toll on overall power generation in the country and the state-owned energy corporation Petrobangla projecting emptying of the present reserve by 2019.
With the gas crisis getting worse every month, the government has already decided to keep provision for dual fuels for all the future power plants in the country. Kabir said in the short-term gas can be used for a few more smaller power plants having combined capacity no more than 400 mw.
“The government could also build a few more smaller plants based on furnace oil or liquid fuel, but these in no way can solve the country’s power crisis in the medium to long term.” “Addition of this new gas-based power plants will ease the situation this year. But for a long term solution of the power crisis, coal is the only answer,” he said.
The plants are expected to be built by independent power producers, i.e by global or local companies, with PDB buying their entire generation, through Private Public Partnership (PPP), a financing mechanism popular in India, or by the PDB alone. “In case of PPP, the PDB will own a fraction of the share by offering land and infrastructure. There is a lot of interest among companies about coal-based power plants,” an official said.
Officials said each of the five power plants would cost around $700 million and they would generate power at a cost of Tk 4.0-4.5 per unit, up more than one taka than the electricity generated by the existing gas-based power plants. The estimate is based on the price of coal ranging between $60 and $80 per tonne in the international market. The price may come down if the country can successfully use the coals of its own mines in northern Bangladesh.
Officials said if the projects go ahead as per the PDB’s plan, the five plants would greatly reduce the power crisis to a great extent during the tenure of the Awami League government.

Source: The Financial Express, Bangladesh

Link: http://www.thefinancialexpress-bd.com/2009/05/23/67389.html
Date: 23 May 2009