Aspate of wild speculation and anxiety is being swept across the country since 10th October 2001. The newly appointed Planning and Finance Minister M. Saifur Rahman apparently took advantage of a radio interview with the BBC on the same day to inform the nation about possible gas export from Bangladesh to India. Once again we witnessed that another heavyweight politician decided to communicate with its own people through foreign media. Unhappily, one week later a news item entitled "Saifur hints at gas export" published in The Daily Star on 16 October, 2001 emboldened the vested interest groups, gas lobbies and the international oil companies (IOCs) and they have already started spreading rumours that it is merely an election commitment. However, if this rumour comes to true, one would most certainly take exception to the heinous attempt of the external forces to subvert the interest of country.
Such an attempt to export gas will be anti-people and anti-energy-security of the nation. To start with, most of our citizens are almost starving on account of energy shortages. For instance, it is no secret that even after 40 years of continuous production, almost 96 per cent households do not still have access to indigenous natural gas, the lone commercial energy source available in the country now. It is also disheartening that over 80 per cent people are without electricity and hardly 5 per cent houses are lighted with kerosene lamps. Not only per capita energy consumption of Bangladesh is one of the lowest in the world but also optimum utilisation of the country's only fossil fuel to ensure energy-security and sustainable development is being obstructed due to policy shortcomings of the government.
With the latest thinking of the government to export gas, the country's economic development would surely be jeopardised. In such a desperate energy scenario, self-appointed gas middlemen and pseudo-experts are groping their way to destabilise the nation. It is already known that political insensitivity for long-term energy planning, inadequate institutional capacities both at the planning and implementation level, bad governance, particularly mismanagement have created a crisis in the gas sector.
The present so-called gas diplomacy will only aggravate the energy situation in general and gas situation of the country in particular. Let's consider for a moment: if natural gas was not available, consumption of which is around 8.5 million tons of oil equivalent (Mtoe) in FY 2000-01, the country's exchequer would have drawn down by another $1.5 billion for import of energy to maintain the present pace of economic development, which by no means is an unimportant position.
We presume that the public have been dismayed and shaken by the manner in which the FM has unmasked the subject of gas export in great haste to prove that he is responsive to the public mood, and it demands that "something has to be done". But he hardly realised that the pollution panic reached its apogee within 24 hours of his announcement about gas export to India.
Despite the fact that nobody was actually listening, efforts are being made now to define the issue. The State Minister for Energy Mosharraff Hussain, also an accountant by profession, reportedly attended the SOS signal of the FM and immediately started organising things. The FM was pleased to see that on his (FM's) return from abroad the advocacy part has been accomplished. Apparently, the pioneering assignment was to examine three basic questions: How much gas do we need to export? Where are we going to get it? What changes in government policy or amendment in the Production-Sharing Contract (PSC) would be necessary? Translated from a key bureaucrat in the government, the third question meant: What also should the government do or not do to assure quick development of one or more gas fields to ensure adequate supply through pipeline violating the stipulations of the PSCs signed by the IOCs in early to mid 1990s?
An irate and baffled public, and various Dhaka-based professional organisations already demanded to know why gas export to India is necessary and whether the proposed sales would be economically viable for Bangladesh? The biggest brickbats are yet to come. The government must be prepared to face them. Meanwhile, a smell of conspiracy is floating in the air, based mainly on allegations that the gas deal would make the US government happy and the 10Cs happier.
Indeed, there is much scepticism about the level of gas reserves in the country. One estimate (in 2001) indicates that the country's reserve to production (R/P) may be about 30 years, if not lesser, which was over 350 years in 1974 (gas reserve was 10.09 TCF and consumption was 0.0271 TCF). In the past 27 years, gas production has increased from 46 million cubic feet per day (MMCFD) to around 1100 MMCFD in 2001. The main emphasis for higher gas use during the said period was import substitution. This will continue to rise more vigorously in the next two decades. The most recent demand supply forecast by Petrobangla clearly indicates that the existing estimated remaining recoverable reserves of about 11.00 trillion cubic feet (TCF) from 22 discovered fields would exhaust by 2019.
The World Bank, however, has remained pretentious on the subject and has started promoting a campaign to assure the government that compared with major gas exporters, Bangladesh's R/P ratio is adequate to justify exports (Ref: Bangladesh Energy Strategy Note, 1998). The following examples may be of interest to the readers:
In Canada the National Energy Board (Regulatory agency) defining the minimum level of gas reserves necessary, made a formula of reserves that had to be sufficient to meet domestic demand for 25 years (earlier it was for 50 years). The price was set from time to time, and it allowed the most profitable gas export projects (those providing the highest value of gas at the well-head) to be undertaken.
In Egypt the government defined the level of gas reserves that needed to be proved before gas exports were allowed. It also pre defined the minimum level of surplus reserves required.
The Netherlands has a formal policy requiring that gas reserves equivalent to at least 25 years of production. A 1996 White Paper recommended modifying the reserves policy to include imports, in addition to reserves and exports, to allow a more balanced evaluation of gas reserves strategies.
Note: All the above countries are endowed with varied and adequate natural resources including oil, gas, and hydro resources. Bangladesh, however, is a single commercial energy source country and no comprehensive reserve estimation of all gas fields have been carried out since 1992.
Current annual gas production as well as consumption is 370 billion cubic feet (BCF) or about 1100 million cubic feet per day (MMCFD) from 12 producing gas fields discovered so far. Except Bibiyana and Chatak, all the remaining 8 gas fields have low gas reserves. Bibiyana with estimated 2.4 TCF reserve is a major field, which Unocal is reportedly betting for export. At the same time, it is also necessary to under note that two major gas fields including Titas has an estimated reserve of 2.1 TCF, 90 per cent of which has been consumed in the past 30 years, while from Bakrabad field with an estimated reserve of 0.867 TCF, 65 per cent has been used up during the past 17 years. Without any stretch of imagination one can deduce that both the major gas fields are on the verge of exhaustion. This certainly is an alarming situation for gas development in Bangladesh.
If, notwithstanding the above situation, the government still considers gas export it would do so at its own risk for depriving the people of this country. Perhaps recognising the situation, M. Saifur Rahman earlier stated, " For now the export option should be ruled out." (Daily Star, 21st November 1999). It would also be interesting to note that Dr. Khondokar Musharrof Hussain, one-time energy minister presided over the session in which Saifur Rahman spoke negatively about gas export. If gas export were pursued, it would deprive the citizens of North Bengal from access to natural gas. Technically, for the transportation of gas from the east to west zone, a 30-inch dia gas pipeline built alongside Bangabandhu Bridge is meant for gas supply to western zone and cannot be transported beyond Bangladesh border.
We are presenting these because we appreciate that the present government has rightly reiterated that all major decisions of the State would be adopted through the Parliament. As such, the gas export issue must not be pursued for reasons beyond national interest, nor can it be overwhelmed by rhetorics or mere statements at the insistence of the US government. Otherwise, the entire basis would not only contradict but also violate Petroleum Act, 1974, Petroleum Policy, 1993 and Energy policy, 1995 and the contractual provisions of the Production Sharing Contract (PSC).
Nuruddin Mahmud Kamal is former Additional Secretary and Chairman, Power Development Board; S.K.M Abdullah is former Director-General, GSB and Chairman, Petrobangla; Dr.Mujibur Rahman is former D.G. GSB and Chairman, Petrobangla; Professor Nurul Islam is with BUET, and Dr. Badrul Imam is visiting professor at King Fahad University of Petroleum and Mineral, Saudi-Arabia. The second of this two-part article will appear tomorrow.
Source: The Daily Star: November 5, 2001