Phulbari Energy News

Open Pit Mining must start in Phulbari

2009-03-16T23:30:00.000-07:00

ET Report
Prof. Hossain Mansur of Geology Department of Dhaka University said that appropriate initiative must be taken without delay to explore and exploit coal as alternative fuel to ensure the required power generation in accordance with the election pledge of Awami League. For this, he said, the decision for open pit mining to extract coal from Phulbari is required to be taken on priority basis."But to work out the modality, the government must set up a high powered committee now comprising of representatives of Asia Energy, civil society who are opposed to mining at Phulbari and line professionals," he told the Energy & PowerThe EP Editor Mollah Amzad Hossain took the interview of Prof. Hossain Mansur, who is also an ex chairman of Petrobnagla. Following are the excerpts:

EP: What's your observation about the energy infrastructure development plans or guidelines of Awami League-- having proven track record of successfully managing energy sector from 1996-2001-- which has returned to state power?

HM: Let us have an objective view of election agenda before making subjective analysis. Possibly this is for the first time since liberation of Bangladesh any political party formally declared well defined short, medium and long term planning for developing energy infrastructure to confront prevailing and emerging energy crisis.It has been planned to generate additional 5000 MW power in the next 5 years. Generation from different viable alternatives-- natural gas, coal, nuclear and renewable source have been envisioned in the plan. Party energy vision till 2021 has also been included there. Government has spent only about 50 days in state power. There cannot be any doubt about the competence of the persons entrusted to implement the plan. Moreover, Prime Minister herself is monitoring it. But for this the implementing agencies have not been restructured yet. I hope this will be done soon.Everyone is aware about prevailing crisis of competent professionals in the energy sector. Resolving this crisis is also a major challenge for the new government. Engaging an energy expert as advisor of energy sector during caretaker government was also a right decision.

EP: Do you think the government's plan to engage an expert committee for this sector will create positive impact?

HM: I think it to be a good initiative of the Prime Minister. Committee formed with real energy experts of the country will definitely bring positive impact.

EP: There are court cases against PM Sheikh Hasina and ex PM Khaleda Zia regarding NIKO-BAPEX joint venture for marginal gas field development. What are your views about it?

HM: Head of the government has prerogative to approve any decision in the greater interest of the country. PMs considered this agreement as beneficial for the country. These cases are purely political. If there has to be any genuine case of corruption in energy sector that has to be for leasing out Jalalabad gas field. BNP government handed over a discovered gas field to Occidental for a mere 22 million US dollars. But the government now has already purchased 24,000 US$ worth of gas from this field.

EP: Oil Gas & Port Protection Committee claims that there had been major irregularities in Niko agreement. You are associated with their movement. Now you are telling there was no irregularity. Then why you are still with their movement?

HM: Look the committee has several unreasonable demands like opposing offshore exploration; open pit coal mining. Niko is also one such. I don't agree with the committee on these. It is not possible as an expert to agree with them on these issues. But I worked with them to resist export of natural gas. I am with them on this. I am trying to make them understand their mistakes.The left politicians who are staging agitation on oil, gas and port protection know it very well that they will never come to state power. That is why they have taken negative stand on reasonable issues.

EP: Let us again discuss on election pledges of Awami League. Do you think it is possible for the government to realize the pledge?

HM: Look in 1996 when Awami League came to power the government also inherited similar crisis situation in energy sector. Concurrently with expediting ongoing projects government encouraged massive gas exploration initiatives. Moulvibazar gas field was discovered. World Class Bibiyana gas field was also discovered. Sangu offshore gas field was brought into production. BAPEX developed Salda Nadi Gas Field.On the other hand new power plants were set up after finalizing IPP policy within very short time. Side by side private sector power plants were also set up. For these actions generation increased from effective capacity of 1,500 to 3,000 MW. Consequently first three years of BNP government did not witness any crisis although they failed to set up a new plant during that time.Now when Awami League led government is again in power the installed capacity of power is 5,450 MW. Some of the aging plants are derated so the real installed capacity is now reduced to 4,950 MW. For ongoing maintenance 680 MW can not be generated. Gas supply crisis also impedes generation of about 500-700 MW. So the available effective generation capacity is now 3,600-3,800 MW. This is not much different to what Awami League government left behind in 2001.During the last term of Awami League government there was no crisis of gas supply. There was demand supply balance… I mean security of supply in the national gas grid. But now when public and private sectors have plans to set up power plants having capacity of 3,000 MW Petrobangla can not guarantee gas supply to more than 1,000 MW generation. So power generation as per its declared vision is a great challenge for the government. So not only actions for increasing power generation but also actions to source fuel for power are also major challenge. Even a single day must not be wasted in hesitating and sitting on decisions.In my opinion if the government sincerely intends to realize its election pledge in energy sector it must take decision for offshore exploration in the Bay of Bengal as soon as possible.On the other hand, appropriate planning needs to be made reviewing the situation whether gas supply will be possible to all planned gas based power plants. If there is uncertainty these must be dual fuel plants.As a geologist I am optimistic that more gas fields will be discovered in Bangladesh. But natural gas alone can not meet the requirement of power generation. We must diversify fuel option. We need coal. This is our only major viable option. Import of hydro electricity is another option. There is scope for nuclear power generation also. We have to work on renewable power generation. But renewable energy cannot be a substitute for fossil fuel based power generation.Government alone do not have resources or capacity for required power generation. We have to rely on private sector investment from both local and foreign sources. So we must identify areas of energy value chain for foreign direct investment keeping our national interest above everything.

EP: Will you elaborate your opinion on feasibility of alternative fuels other than coal that you have mentioned.

HM: There is very little scope to expand our own hydroelectricity generation. But hydroelectricity import is only possible through regional initiatives. It has to come from Nepal and Bhutan. Both the countries have enormous hydroelectricity generation potential. India is currently importing power from them.Bangladesh has to take political decision and try to catalyze four-nation joint initiative to import hydroelectricity. It is a long-term option.The government has taken some initiative for nuclear power generation. But environmentalists are divided in opinion on nuclear power generation. Government must keep this into consideration also.

EP: You have said that coal is the only feasible option. But we are locked in various debates regarding coal exploration. How exploration can start resolving the current impasse?

HM: Please remember Bangladesh has 2.5 billion tonnes of proven coal reserves. It is possible with available technology to extract at least 1 billion tonne. Exploration from the largest reserve Jamalganj is not commercially viable in traditional method. We are mining coal from Barapukuria by underground method. But due to wrong decision we can only extract about 5 million tonne by 2011. This underground mine will create massive depression and subsidence in the mine area. It can never be restored and rehabilitated. The subsidence process has already commenced. Due to wrong decision it will not be possible to even extract 20-25% coal in place. It will be unwise to set up any new coal fired power plant based on Barapukuria coal.

EP: So you are saying exploration of coal in Barapukuria by underground method is a wrong decision?

HM: Look I am a geologist. Bangladesh geology in the mine area does not support underground mining. If we like to mine commercially it has to be open cut method only for shallow coalmines. Water management is major challenge here. Open pit mining can support recovery of 90% coal in place. In 5-10 years most of the mine area can be restored to original state. Only the final pit about 20% can be converted to a sweet water lake. This will be a massive asset for Bangladesh, a major source of power generation and other use.It should be mentioned here that 1,400 crore taka has already been spent to develop Barapukuria mine and 1,600 crore taka has been spent to set up mine mouth power plant. But due to inappropriate mining method the investment is under great risk. The property and assets of the people of the region are endangered.

EP: You are telling Bangladesh should follow open pit mining method to explore coal. But, the Oil, Coal and Port Protection Committee is opposed to it.

HM: Look the movement was not against open pit mining. The committee movement was basically due to lack of trust on the then government. Actually it was not mining method rather it was lack of trust on the 4 party alliance government which crystallized the movement.

EP: But it is being told resettlement is a huge problem in case of open pit mining. How do you think about it?

HM: There is international law. Bangladesh also has land acquisition rule. Our neighbour India has extensive experience of open pit mining. In Bangladesh about 3-3.5 lakh people may need to be rehabilitated from mining region for open pit mining for development of all the mines. For a democratic government it may not be a major challenge considering the overall national benefits that availability of huge coal resource and its manifold use would bring about good impacts.

EP:You are suggesting steps to start coal mining must be taken without wasting a day even. How it is possible? Where exploration should start at first?

HM: I believe action to set up coal based power plant installation must start if possible from today. To make coal based power available mining must start at Phulbari first. The reason behind this is that only Phulbari mine is now ready after discovery and other extensive studies.I also believe that exploration of natural resource will invariably have environmental and social impacts. There will not be any exception here also. But all actions must be taken to mine coal making minimum impact on environment and protecting the rights of affected population.

EP: In that case which company will implement Phulbari Mining? The government has an agreement with Asia Energy.

HM: After signing an agreement there is no scope to disoblige it. It could be more appropriate if an agreement like PSC with provision for cost recovery and exploration-exploitation could be concluded. That would have better protected Bangladesh interest. On the other hand it has to be decided upon discussion whether Asia Energy or government will carry out open pit mining at Phulabri. But we must keep in mind that extensive government support is a must for mining by Asia Energy or any other company at Phulbari.

EP: Then what you suggest to make the start?

HM: Decision should be taken by the government constituted high powered committee comprising of Asia Energy, agitating civil society representative right now on Phulbari mine development. If necessary the government may seek assistance from Australia, Germany and of India who have vast mining experience. These countries have extensive expertise and experience of coal mining.Simultaneously the government must finalize the coal policy eliminating provision of coal export. There is no scope to waste time waiting for coal policy anymore.

EP: So are you talking about mining at Khalaspeer and Dighipara also?

HM: Not at all. I have talked about Phulbari only. The alliance government awarded the lease permission to a Bangladeshi-Chinese JV for Khalaspeer without inviting tender. This must be investigated. No initiative should be taken for mining before proper investigation. Petrobnangla has also signed MOU with a Korean Company for mining at Dighipara. It should also be investigated. Without tender no mining lease should be given to anyone anymore.

EP: What are your views on proposed tri-nation gas pipeline and other regional energy cooperation initiatives?

HM: It was a wrong decision for Bangladesh not to proceeding with the tri-nation gas pipeline initiative. Besides, Bangladesh must actively participate in other SAARC, BIMSTEC, Central Asian and Middle Eastern energy ring and grid projects. This must be done in view of our long-term energy security.

Courtesy: Energy & Power

Source: Weekly Economic Times

Date: March 15, 2009

“Social and Environmental Impacts of Mining-Australian Lessons on Mitigation”

2008-10-26T01:59:00.000-07:00

Khondkar Abdus Saleque

Recently the author had opportunity to read a report on Phulbari Open pit Coal Mining of Bangladesh, “Open Pit Mining for Coal: Horror Feeling Shrouds Northern Bangladesh.” It will not be prudent to challenge the contents of the report. But there are ways to mitigate the social and environmental impacts associated with coal mining, any mining. Exploration and exploitation of any natural resource has some form of impacts. These need to be managed and mitigated. A country like Bangladesh with finite natural resources cannot have the luxury to keep its resources buried for ages and continue to suffer from energy crisis. Some sacrifices need to be made unfortunately for greater gains of community. Some decisions need to be taken from head keeping the heart open.
Bangladesh as we all know is on the grip of the worst ever energy crisis. For various reasons its predominantly monofuel energy generation, supply is on the verge of collapse. Industrial growth has almost become stand still; authorities are struggling to meet the demand of existing consumers. Crisis still persists even after making various load management and adjustments. Government does not have many options. It is extremely difficult for a developing economy like Bangladesh to import all its energy needs from very expensive and competitive world energy market. Extensive exploration and development for Petroleum may discover a few more gas reserves or expand the existing reserves. But these may not be enough to ensure the long term energy security of a country which can achieve a double digit growth for several years if only smooth supply of energy could be ensured. Bangladesh is believed to have about 65-70 tcf equivalent very high quality (High heat content, low ash content) bituminous coal reserve in the northern part of the country. Some of the discovered mines are at relatively shallow depth.

The prevailing geology (water saturated Dupitilla Overburden above coal layer) makes these ideal for surface — open pit mining. The other traditional option underground mining may be risky, uneconomic and not viable. We all know that surface mining can produce 85-90% coal in place while underground mining can produce only 20-25%. Both options have extensive environmental and social impacts. Surface mining will obviously impact the people of the region. They will need to the relocated, adequately compensated, properly rehabilitated. Other environmental concerns and impacts are to be appropriately mitigated.
Bangladesh, a resource constraint country has very limited capacity of its own to take up mining with its own technical and financial resource. What can Bangladesh do? Can it wait and let its economy suffer irreparable damage or should it start mining in the most appropriate and economic method to explore most of its coal addressing all environmental and social issues as far as practicable? Bangladesh is not the one and only country of the world where these kinds of issues exist which complicate decision-making. But the countries have taken initiative to mine and mine economically taking the most appropriate economic mining options addressing all social and environmental impacts. Environmental groups are stronger in other countries. But government is also pro active and very alert to the people’s well fare. Mining proceeds without much fuss and national economy benefits from appropriate mining methods. But in Bangladesh government remains perplexed, hesitates to take decision, national energy security continues to go from bad to worse. Why the government is not trying to learn?
Many non-resident Bangladeshis are engaged in appropriate research in reputed universities on environmental and social impacts of mining; few Bangladeshi professionals are also working in similar active mines. Instead of hearing from horses mouth why Bangladesh Government is getting confused from various myths and propagandas of a motivated section of society when business community and local entrepreneurs are urging government to take immediate decision on coal mining? The author has talked with few line professionals and some researchers in Australia and is presenting the lessons learned about the impacts of mining and mitigation measures.
A unique readiness to develop and deploy new technologies has enabled Australian minerals industry to endure the tough times, reap the benefits of the current resources expansion, and confront the industry’s pressing environmental responsibilities. The Australian mineral industry does more than use of technology to mine smarter. It is a world leader in the actual development of new mining technologies aimed at improving the industry’s performance. Beyond the discovery of the more effective and efficient ways of finding and extracting minerals, this innovation results in better ways of reducing environmental impacts, more effective ways of rehabilitating areas disturbed by mining, safer an healthier ways of working in the mines and more efficient ways of marketing and exporting products and services.
Mining & Sustainability
Some people say that the concept of “sustainability is increasingly emptied by unsustainable activities such as mining. Mining provides number of goods but it is base on the extraction of non-renewable resources and is unsustainable. Despite opposition from anti-mining campaigners, mining has been officially declared as “sustainable” in the world summit on Sustainable development. Humanity definitely needs certain amount of minerals to satisfy basic needs and it is also equally true that over consumption in one part of humanity may cause adverse impact on the livelihoods and environments of the other humanity, at the receiving en of mining. What is required is a perfect balance. Mining is an activity that needs to very properly planned with all probable and possible impacts identified, evaluated and mitigation planned. Mining is an activity that needs strict monitoring and control at every stage. People living in mining areas should have the capacity to take fully –informed decisions on the permissions to mine in the territories or decide on how to carry out activity and ensure environmental conservation and social justice.

What is Mining?

Mining refers to the discovery and extraction of n minerals, metal or non metal , lying under the surface of the earth .Metals are mixed with many other elements , but occasionally large quantities of certain metals concentrate in a relatively small area are as deposit. The impacts of mining are related to mining itself, which frequently involves or produces hazardous substances.
Mines vary in size according to extraction/ production per day. The method of mining specific mineral depends on the type, size and depth of the deposits and economic and financial aspects of the undertaking. Underground mining used to be the most commonly use method to extract large deposit until the middle of the 20th century. Technological progress and development of larger and more powerful machinery after the Second World War promoted opencast mining. The underground mines generally have less visible impacts on the environment than opencast mines. There is less disturbance of the grounds surface but it can affect the water by contaminating with acids and metals and by intercepting aquifers. The workers are exposed to more hazardous situations than those working in opencast mines. Progressively underground mining is being abandoned due to problems of profitability. Presently 60% of the materials mine in the world is extracted by opencast method causing devastation of ecosystem.
Opencast mines look like a series of terraces arrange in great deep wide pits in the mile of a desolated and stark landscape, lacking any living resources. Quarries are surface mines, very similar to open cast mines, resulting in a desolated landscape with deep trenches between wide steps. Chemicals are used in leach mining to dissolve the metals from the mineral containing it, obtaining a very high rate of recovery. The chemical contaminates the surface and ground water.
Environment and social Impacts of Mining

Mining is short-term activities with long-term effects. It is carried out in various stages, deposit prospecting and exploration stage, mine development and preparation stage, mine exploration stage and treatment of mineral stage-each involving specific environmental impacts. Preparation of access routes, topographic and geological mapping, geophysical work, hydro-geological research, deforestation of the land and elimination of vegetation affecting the habitats of hundreds of endemic species, consequent erosion and silting of the land, reduction of water table, contamination of the air, water and the land by chemicals such as cyanides, concentrated acids and alkaline compounds and air pollution caused by dust, gases and toxic vapour can have diverse affect on the environment and health and social life of the local communities.
Sulphur dioxide released from the mine causes acid rain, carbon dioxide and methane released by burning fossil fuels are the two greenhouse effect gases causing climate change. The sound of the machinery and the blasting in mining conditions that may become unbearable for local people and the forest wildlife.

The Impacts of Mining on Women:

Mining also has distinct impacts an added burden on women. The women are deprived of the access to the benefits of mining developments, especially money and employment. Women become marginalised as the traditional roles of food gatherer, water providers, care – givers and nurturer are very much affected. Many women are pushed to enter into informal economy to find additional sources of income as the adverse impact to the environment caused by large –scale mining decrease the productivity of the fields and poisoned wild foods, marine life and animals. Alcohol abuse, drug addiction, prostitution, gambling, incest and infidelity increase in many mining communities which worsen cases of family violence against women, active and often brutal discrimination of the women in the workplace that is sanctioned or ignored by judicial and political institution.

Lessons To Be Learnt From Australia:

Mining of coal and other mineral resources are one of the major backbones of Australian economy. Australians are no less environmental conscious nation than any. This is a country where freedom of speech, independent press, very transparent policies, and equal rights are prevalent. So it should not be considered irrelevant if one prescribes to follow Australian way of addressing and mitigating the social and environmental impacts of mining. Bangladesh can be immensely benefitted if it learns from Australian experience and trains its mining professionals in Australian mining industry.
Let us have an insight into the sustainable planning for managing the impacts of mining at Moranbah and Bowen basin in Queensland, Australia.
Coal Reserve in the Bowen Basin
• The Bowen Basin coalfield is one of Australia’s primary coal mining areas.
• Sufficient known reserves exist in the Bowen Basin for over 200 years at current extraction rates.
• The coalfield has some 20 operational mines, with a further 10-15 under consideration or in the early development stage.
• Future development activity over the next 5-10 years is likely to be concentrated in the Moranbah and Nebo areas.
Issues to be Managed
• Expansion of mining operations
• Increase in workforce to support expansion
• Rapid increase in Moranbah’s population — permanent and transient
• Accommodating the workforce/population growth
• Constraints on town expansion — coal reserves
• Balancing local and State interests – valuable coal resources versus town expansion
• Immediate, short, medium and long term management issues.
• Mine expansion issues:
– Environmental Impacts
• Air quality
• Noise
• Water
• Land disturbance
• Mine rehabilitation
• Mine subsidence
• Methane gas emissions
Managing the Issues
Ÿ The Minister for Environment, Local Government, Planning and Women decided that the State will assist the Belyando Shire Council in resolving the issues associated with growth at Moranbah by:
– establishing a Moranbah Growth Management Group (MGMG); and
– preparing a Mining Town Sustainable Management Framework.
The main task of the Moranbah Growth Management Group is to assist the Belyando Shire Council to prepare and achieve broad agreement to a Master Plan for short, medium and long-term options for sustainable management at Moranbah.
• Membership of the Group is to comprise
– Jim Pearce, MP (Chair);
– Belyando Shire Council;
– Department of Local Government, Planning, Sport and Recreation;
– BMA;
– Anglo Coal;
– Department of Natural Resources, Mines and Water;
– The Office of the Coordinator-General; and
– Others as required.
• The Moranbah Growth Management Group will identify issues, policies and options, which may be taken to the Coal Industry Taskforce for consideration. The Coal Industry Taskforce regularly reports to Cabinet Budget Review Committee on the progress of the Coal Infrastructure Program of Actions and will incorporate reporting on the Moranbah Growth Management Group into these reports.
Issues identified by MGMG
– The need to identify options to manage immediate and short term growth
– The timing and sequencing of development options to manage growth, which may also influence a correction in the housing market
– The need to consider medium and long term issues to ensure sustainable management of Moranbah
– Water supply
– Management of the cumulative impacts of the current expansion of mining operations and any future plans to establish open cut mining operations in close proximity to Moranbah
Sustainable Management in Mining Towns
Planning for Sustainable Communities
– Managing the cumulative social, economic and environmental impacts
– Managing cultural impacts
– Managing the urban lifecycle - stages of growth (urbanization), decline (suburbanization), and rejuvenation (reverse urbanization)
– Managing risks
– Collaborative approach
– Corporate Social Responsibility
– Balancing a productive mining industry and sustainable and vibrant communities
– Capacity for economic diversification
Sustainable Management Outcome Statement
Protecting social, economic, cultural and environmental values and economic growth for the State for future generations in meeting community and mining industry interests. Through the State and local governments, the mining industry and communities are working collaboratively to support sustainable and vibrant communities and a productive mining industry.
Sustainable Management in Mining Towns
Planning for Sustainable Communities
– Managing the cumulative social, economic and environmental impacts
– Managing cultural impacts
– Managing the urban lifecycle - stages of growth (urbanization), decline (suburbanization), and rejuvenation (reverse urbanization)
– Managing risks
– Collaborative approach
– Corporate Social Responsibility
– Balancing a productive mining industry and sustainable and vibrant communities
– Capacity for economic diversification
In the past, Australian mining industry has had to overcome problems associated with harsh physical conditions and remote locations. Advanced technologies have been employed to reduce the high cost of operating in such adverse circumstances. A powerful motivating factor encouraging the use of new technologies has been the need to minimise the environmental impact of minerals industry activities. Such adoption and adaption of innovation has enabled the mining industry to survive decades of tough times, when it barely recovered the cost of investment capital. The industry has been able to employ technology to increase supplies even when prices were down, environmental and social stewardship responsibilities increased.
Advanced Technology in Exploration
Air borne geophysical techniques are important in modern exploration. Remotely sensed data obtained from platforms in space and in air provide high-resolution images of the earth’s crust. When these are combined with other data in sophisticated imaging and modelling softwares, they enable the identification of targets for detailed ground investigation.
Innovative Technology for Extraction and Processing
In mining and mineral processing, Australia is leading the world in harnessing new technologies such as biotechnology, ICT and e-commerce.
Examples includeThe continual refinement of mine shapes and designs using advanced computer-modelling software. Use of intelligent robotic ore loaders in mining processes. Australia is also a world leader in the development of a comprehensive industry wide policy to improve heath and safety, both mineral operation and surrounding communities. Projects have aimed to improve the safety of drilling equipment, examine wear and tear of plant and equipment, develop risk analysis methods for the running of mine side operation and employ behavioural studies to examine issues such as fatigue management and impact of shiftwork on sleep management.

Environment Impact Mitigation Measures

The Australian mining industry is committed to achieving continual improvement in its environment management performance. This is demonstrated through strategic leadership initiatives such as “Enduring value- the Australian Minerals Industry Framework for Sustainable Development”
Some of the key technologies assisting the industry to minimise resource use and mitigate contamination risks are:Dust suppression and soil stabilising products, which save up to 80% of the water normally used while also reducing labour and equipment costs.Oxygen probes develop by CSIRO, capable of assessing levels of gaseous or dissolve oxygen concentrations in soil, ground water, bioreactors and tailing storage facilities in order to monitor potentially toxic waste.Bio -fixation treatment system, which remove most contaminants and pollutants from waste water, effluent or soil, minimising environmental impact and providing a low n-cost treatment for the removal of suspended solids, ammonia and nitrogen.Gas, ground water, aquifer and subsidence management in minesNew technology for the revegetation and rehabilitation of mined environments, such as Ecosystem Function Analysis technique developed by CSIRO.
Bangladesh sooner or later will have to start coal exploration. Given the geological, geophysical reality of the mine belt underground mining at least in Barapukuria and Phulbari will never become economically viable. Pursing this will be waste of time, energy and money. The population directly impacted can be relocated, compensated and rehabilitated. There are proven technologies to address all the perceived environmental impacts. Bangaldesh must realise the domestic coal industry will take 20 years to develop skills and capacity to even plan, manage mining and operate. We have to engage major mining companies, which have greater skills, appropriate technologies and greater all-round capacities to address and mange all challenges of mining in Bangladesh. Our policy must have adequate incentives to encourage major mining companies. Small companies with inadequate resources and technology will take us for rides like the Chinese company in Barapukuria .It will benefit a particular section of society to squeeze benefit. Delay in coal mining will frustrate our efforts to attain energy security. It will benefit the coal importers and smugglers and their beneficiaries who want our coal to remain buried. Will facilitate neighbouring country to continue dumping poor quality coal to pollute our environment. Will Bangladeshi patriotic politicians judge the situation in its truest perspective?
Source: http://www.ep-bd.com/news.php?cat_id=9&archive=11&namee=ARTICLE

Date: 20 October 2008, Bangladesh

"ENERGY NOW NUMBER ONE PROBLEM"

2008-09-24T01:22:00.000-07:00

Posted by phulbarinews on September 22, 2008

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: http://www.ep-bd.com/news.php?cat_id=5&archive=9&namee=INTERVIEW
Date: 16 September 2008, Bangladesh

"Develop Phulbari coal mine to resolve power crisis"-Chamber leaders urge govt

2008-08-31T03:18:00.000-07:00

UNB,DHAKA

Business leaders of different chamber bodies of northern districts at a discussion at a city hotel yesterday 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 organised the discussion on 'Industrialisation in Rangpur-Dinajpur: Energy availability' at Sheraton Hotel 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.Our Staff Correspondent adds: Different political and student organisations yesterday observed the second anniversary of the Phulbari Day.On this day in 2006, seven people were killed as police open fired to the people of Phulbari and adjoining upazilas who joined a peaceful programme to lay siege the office of Asia Energy Corporation (AEC) in Phulbari. The National Protection Committee for Oil, Gas Minerals and Port placed floral wreaths at the Central Shaheed Minar commemorating the sacrifices of the martyrs of Phulbari movement, observed one-minute silence there and held a brief rally.The leaders at the rally demanded the ousting of Asia Energy, banning export of coal, ensuring cent percent ownership of people on the country's energy resources and implementation of Phulbari accord signed between the people of the area and the government.Communist Party of Bangladesh, Workers Party of Bangladesh, Bangladesh Samajtantrik Dal, Bangladesh Shamyabadi Dal, National Awami Party, Left Democratic Front, Democratic Left Alliance, Revolutionary Workers Party, Gano Shanghati Andolan, Bangladesh Paribesh Andolan, Bangladesh Jubo Union, Bangladesh Chhatra Union (BCU), Pragatisheel Chhatra Jote (PCJ), Samajtantrik Chhatra Front (SCF), Biplobi Chhatra Maitri, Green Voice and other organisations also placed wreaths at the Central Shaheed Minar.Meanwhile, PCJ, BCU and SCF held processions and rallies on the Dhaka University campus demanding the cancellation of the draft coal policy terming it anti-national interest policy and implementation of the Phulbari accord.Shangskritir Naya Shetu, a non-political student organisation, also arranged a poster and paper clippings exhibition and staged a street drama at Ducsu premises.

Source: The Daily Star

27 August, 2008

Link:http://www.thedailystar.net/story.php?nid=52084

Govt.’s indecision is the main problem for coal extraction -Sanchita Seetu

2008-07-27T03:39:00.000-07:00

The main problem for coal extraction is the indecision of the govt. The speakers took part in the debate over coal extraction and said there is no alternative of coal extraction and the govt. need to take decision immediately in this regard. But, few of them opined to approve the coal policy first. Dr. Badrul Imam, Prof of Geology at Dhaka University said all the issues like investment proposal, royalty, private-public partnership etc are incorporated in the coal policy, so the coal policy should be finalized first. The other issues, not included in the policy can be resolved through discussion. Mr. Kamrul Islam Siddique, former Chairman of PDB said there are three investment proposals for coal mine development have been awaited for govt.’s approval. These proposals should be approved reviewing the existing Environment Act and Minerals Rules without any delay. Dr. Izaz Hossain, Professor of Chemical Engineering at BUET said a small but economically viable pilot project which is acceptable to all can be started after govt.’s approval; and large scale mining will be commenced minimizing the difficulties arises in the pilot project. The country’s coal reserve can be used to generate electricity of 20,000-MW over a period of next 20 to 30 years. Therefore, coal needs to be extracted depending not on gas only. SM Mahfuzur Rahman, Prof. of Economics at Dhaka University said the crisis for gas is alarmingly increasing day by day, and it may happen that coal will to be extracted using candle light. Renewable energy is not sufficient to meet the energy crisis. Dr. M Tamim, Special Assistant to CA for Power, Energy and Mineral Resources said the coal policy has been sent to the Advisory Council, and the present investment proposals will be approved by open tendering process following approval of the Advisory Council.

Edited by: M A Hossain

Source: Amader Shomoy

Date: 27/07/08

Link: http://www.amadershomoy.com/online/content/2008/07/27/news0267.htm

Govt stresses coal as a fuel for electricity generation

2008-07-14T02:42:00.000-07:00

R Akter

The government plans to stop using natural gas for electricity generation after 2011, as it faces shortages of fossil fuel..At present 85 percent of electricity is produced by natural gas. Because of the gas shortage, Tamim suggested use of coal as a fuel for electricity generation.Bangladesh has five coal fields with more than 2.55 billion tonnes of reserves, officials said. "To meet the 300 times more demand for electricity we will require to invest up to $10 billion over the next 20 years," Tamim said. He said entrepreneurs from Bangladesh will be allowed to invest 51 percent in state-run plants to modernise them, which will help to raise power generation by at least 2,000 MW.The reserves of natural gas are depleting fast and the country is now facing up to 150 million cubic feet (mmcfd) of gas shortages every day," said Jalal Ahmed, chairman of Petrobangla, government oil and gas agency.Only 30 percent of Bangladesh's more than 140 million people have access to electricity, he said."The present per capita electricity consumption is 117 KWH (kilo-watts hour), nearly 6 percent of the world average," he said. Because of old plants, Bangladesh on average can produce only 3,200 megawatts (MW) of electricity, against an installed capacity of 5,200 MW, officials said."Over the next 20 years as we plan to become a middle income country by raising our economic growth to at least 10 percent from 6 percent now, the country will have to produce about 13,000 MW," Tamim told a meeting attended by senior officials, business leaders, representatives of development partners and energy experts.Natural gas is the prime feedstock for producing fertiliser, vital to raise grain production to ensure food security in the country. Also government plans to open its power sector to private investment to help it out of a long-running and deepening crisis, official said."A policy is being finalised to give private sector full support, which will enable them to invest even in the state-run power plants and make then more productive," said M. Tamim, special assistant to the chief of Bangladesh's caretaker government, responsible for power, energy and mineral resources.

Source: The Weekly Economic Times

Date: SUNDAY 13 JULY 2008

Link:http://www.weeklyeconomictimes.com/news-details.php?recordID=1326

Phulbari Coal Resource of Bangladesh - Bangla (Part-3)

2008-07-10T03:38:00.000-07:00

http://www.youtube.com/watch?v=f5v74v-uaJw&feature=related

India eyes B’desh energy resources

2008-07-08T00:44:00.000-07:00

ET Report

Indian Foreign Minister Pranab Mukherjee said, Indian policy towards Bangladesh is changing. In fact, right time and environment is required to improve relations between the two countries.He refrained from explaining the state of just time and environment while holding talks with a group of journalists last week at the Syed Nausher Ali Hall of Bidhan Shabha in Kolkata. It was, however, the first time that he did not raise old complaints again. While Bangladeshi journalists expressed the opinion that exploration of oil and gas in Bangladesh will face setback due to objections raised by India regarding demarcation of maritime boundary he simply said, we are trying to finish the maritime demarcation work promptly.He put emphasis on setting rail link over Bangladesh to other side of India and building energy cooperation between the two countries.West Bengal Chief Minister Buddhadeb Bhattacharjee , who is know for his claiming existence of terrorist camp in Bangladesh, was present in the same meeting. He kept complaints hidden and said, the two countries need to be saved from unnecessary doubts. India needs some resources from Bangladesh and Bangladesh also needs some resources from India. We should use the resources through joint programmes.Responding to a question by a senior journalist as to whether 'some resources' in Bangladesh include coal and gas he said West Bengal needs several thousands mw electricity, but it has no scope of coal production. We want to utilise the huge coal from Dinajpur in Bangladesh. It would be more comfortable to get coal from Bangladesh than that from China or Indonesia. The proposal of Tata remains pending. Besides, we want to use gas. It is, therefore, there is a link between the dispute over maritime line and the joint use of Bangladeshi resources.It may be mentioned that there is a similarity between the versions of the anti-oil, gas, coal exploration campaigners in Bangladesh and Indian objections. Many people know it but do not express. The persons involved in anti-mining campaign in Bangladesh have close relations with the CPI (M) government in West Bengal. Those who are active in anti-mining campaigns in Dinajpur maintain close contacts with a section of leftist leaders in West Bengal.

Source: Weekly Economic Times

Date: Sunday, 06 July, 2008

Link: http://www.weeklyeconomictimes.com/news-details.php?recordID=1300

India searching for new friends

2008-07-07T23:02:00.000-07:00

Shaokat Mahmud

The special editorial prepared focusing on the recent conference among the journalists of Bangladesh & West Bengal’ organized by South Asia Free Media Association (SAFMA) that held on 30th June to 2nd July 2008 at Shantiniketon, India. The writer referred to the speech of Indian foreign minister Mr. Pronab Mukhargee who said in the inaugural ceremony of the conference that appropriate time and environment is required to upgrade the relationship between India & Bangladesh. In reply to an opinion of Bangladeshi journalists that offshore oil-gas exploration of Bangladesh will be hindered due to objection by India regarding demarcation of maritime boundary, Mr. Mukhargee only told that they are trying to solve the dispute soon. He also put emphasis on to establish the rail-road transport and cooperation for energy between two countries. Mr. Budhadev Bhattacharia, Chief Minister of West Bengal said Bangladesh possess such resources that India requires for, and India also possess such things that Bangladesh needs on a vice-versa. He also clarified that India wants to use the huge coal resource of Bangladesh deposited in Dinajpur to generate several thousands Mega Watt electricity in the West Bengal. Mentioning the investment proposal by TATA which is under consideration of the govt. of Bangladesh (GoB) he told that they also need gas from Bangladesh. The writer wants to mention here that the Indian objection regarding demarcation of maritime boundary is analogous to the protesting by a certain quarters against exploration and extraction of oil-gas and coal in Bangladesh. There is intimate relationship between the CPI (M) Govt. and the Party of West Bengal and the protesting leftist political wing in Bangladesh. In addition, there is also a very close relationship between a part of the leftist wing of West Bengal and the extremist, former Nakshal followers who are involved in terrorism and anti-mining campaign against the western companies working in the Dinajpur coal mine area. However, the Bangladeshi journalists expressed in the conference that India possesses more responsibility as a big neighboring country to upgrade the relationship. But, unfortunately India is not playing such role. Whereas, open conspiracy is going on from the Indian side against Bangladesh. Mr. Zahiduzzaman Faruk, Secretary General of SAFMA Bangladesh; Abul Asad, Editor of Sangram; Columnist Amanullah Kabir; Shaokat Mahmud, President of National Press Club; Shyamol Datta, Editor of Bhorer Kagoj; Rezowanul Haque, News Editor of Ntv; Tushar Ahmed from UNB among others were present in that conference from Bangladesh side.

Source: Amardesh

Date: 05 July, 2008

Link: http://amardeshbd.com/sub_section.php?issueID=842&sub_section_id=18&NewsID=183342&NewsType=bistarito&oldIssueID=2008/07/05

Why open cut coal mine in Bangladesh

2008-07-07T02:40:00.000-07:00

In the Vision Statement Bangladesh, the government has declared that ‘Electricity for All’ will be ensured by 2020, writes Shaidur Rahman Khan

The energy demand of Bangladesh is increasing day by day and people need more and more energy to pass their life comfortably and conveniently. The need for electrification of entire Bangladesh remains just as vital today. At the present time, the United States has the World’s largest economy. Since all industrial and other economic activities rely on electricity or other means of power, the primary energy production can be considered as an indicator of a country’s economic strength. The USA has about 6% of world’s population, but consumes more than 30% of the world’s energy. On the contrary, India has 15% of the world’s population and consumes only 1% of the world’s energy. Bangladesh has about half of the USA population and about 1/8 of the India’s population. However, the energy production in Bangladesh is not a match to either of these countries. The Power generation of Bangladesh is mainly depends on gas but the gas reserve of Bangladesh is depleting very rapidly. According to experts in the hydrocarbon industry, the demand and supply gap will continuously be widening as the government failed to make a move in proper time considering the situation. At present, the country produces about 1,700 million cubic feet (mmcf) of gas per day against a demand for 1,800 mmcf. The shortage is about 100 mmcf a day. The demand is growing at 8-10 percent per year while the gas production is not rising proportionately for constraints on the exploration and transmission side. The government has moved for holding 3rd round gas-block biding. But it takes at least 7- 9 years to get gas from any block to be allocated through the latest bidding. Despite such a situation in view, the country does not have any dependable option to rapidly increase production to cope with the demand side. If this situation remains unchanged, within few years the gas based power plant and fertilizer factories would be seriously sufferings. Then agriculture and other industries would be in threaten condition. So Bangladesh urgently needs alternative energy source and coal is the only source to meet the long term energy demand of the country.

In the Vision Statement Bangladesh, the government has declared that ‘Electricity for All’ will be ensured by 2020. As, it would be difficult to supply gas in any new power plant with the present reserve, then coal is the only option left for power generation. For generation of 20,000 MW power about 60 million tones of coal per annum (Barapukuria quality) is required. Bangladesh coal reserve is around 2500 million tones. Underground method can extract maximum 20% of the resource, In Bangladesh experience it is likely to be less than 10%; so by underground method of mining only 250 million tones can be extracted. Whereas it can be mined more than 90% by open pit method. Considering the demand of Bangladesh, open pit mine is the only viable option.

Now the geological and other considerations: The coal deposits of Bangladesh are mainly concentrated in three districts (Dinajpur, Rangpur and Joypurhat). The generalized stratigraphy of the coal basins of that region is Madhupur Clay at the top which is between 3m to 15 m thick and beneath this layer high water bearing Upper Dupi Tila Formation having thickness of more than 100m followed by Lower Dupi Tila Clay comprising of mainly impermeable clay layer.
Permian Gondwana sediments underlying by the Dupi Tila Formation are hosted the coal basins such as the Barapukuria and Phulbari. The Permian Gondwana sediments are underlain by Basement rocks.

Coal seams of northwestern part of Bangladesh is believed to be connected with the overlying Dupi Tila aquifer through fractures and fissures and in some cases there is no confining layer between coal and Dupi Tila aquifer. Also the immediate roof rock is not strong enough to support the overburden. So considering the geological, hydrogeological conditions and position of the resources of the northwestern part of Bangladesh, it is assumed that open pit mine would be suitable for that region except Jamalganj Coal Field (1053 m depth).

Coal seams in the northwestern part of Bangladesh are very thick. Underground mining is not appropriate method of mining for very thick coal seams as it leads to unsafe and poor recovery of resources, inevitable surface subsidence. Specially in the conditions of northern Bangladesh where coal fields are located, difficult geological, geotechnical and hydrogeological conditions will inevitably lead to flooding and water inrush, roof collapse, spontaneous combustion of coal with lethal Carbon monoxide emissions, methane gas concentrations in mine environment threatening explosions and permanent loss of land over the mining areas. Barapukuria mine for example mined so far only approximately 400,000 tonnes of coal where subsidence is already reported. More mining will invite permanent loss of land, displacement of people and leading the subsided area to be a waterbody.

Barapukuria mine also demonstrates how much dangerous and unsafe working conditions are prevailing there ; already 6 people are killed in the mine so far including expatriates; Very high temperature (42°c & 52°c above and below the coal seam VI ) and 100% humidity offers low productivity, rapid loss of equipment, non functional electronic devices due to humidity, problem of retaining workforce, high waterflow (Barapukuria mine pumps 280 litres per seconds of water to prevent mine flooding), problem of uninterrupted power supply; shortages of timber supply (underground mine development needs timber supply for roof support ) and very difficult pillar less mining in the inclined and thick seam conditions.

By developing open-cut mine in the northwestern part of Bangladesh, the country would get high quality coal resource which would ensure long term energy security at affordable price. The open-pit mine development in that region would be one of the largest developments in Bangladesh and has the potential to bring significant benefits to the country. Local and regional benefits directly attribute to the mine development including public revenue; employment opportunities, infrastructure development (rail, road, international port facilities), security of energy resources, reduce demand on declining gas reserves; improve access to sanitation, health and educational facilities. Coal mining would provide opportunities for increase economic growth through both private investment and direct employment.
But we can not ignore social and environmental impact by the open-cut mining activities. There are technologies best practices for the environmental impact mitigation. Also proper compensation, rehabilitation and resettlement framework are needed for the affected people by the mining activities. Before implementation of the open-cut mine, it would be an urgent need for ensuring the implementation of appropriate technological measures for environmental impact management and proper rehabilitation of the project affected people. The writer is a geologist

Source: The News Today

Date: 27/04/2008

Link: http://www.newstoday-bd.com

Future Energy for Bangladesh

2008-06-29T03:40:00.000-07:00

Zubayer Zaman

While the country is facing severe power crisis, public life is shattered for unbearable sufferings of load shedding; experts are busy with debate and discussion over extraction of alternative energy source coal. The use of this valuable underground resource for the benefit of the country is becoming uncertain for emotional debate over various issues associated with coal sector development. The government is still indecisive about the coal extraction issue. Many concerned that if this indecisive situation continues, the country will soon face severe energy crisis; economic development will be threatened. Even Chief Adviser's Special Assistant for Energy Dr M Tamim expressed his concern that the country would face a tremendous power crisis after three to four years if proper decisions are not taken and implemented. The situation is not very encouraging; time to act now. Otherwise the country will pay the price for this inaction and indecision.

Power Generation & Demand
A big majority of the people are still to have access to electricity. Only 40% are enjoying the facility. With this situation, a major initiative with visionary planning would be required to ensure reliable access of electricity to every citizen. According to the government statistics, the peak hour electricity demand of the country is around 5000MW. Against this demand scenario, the installed power generation capacity of govt. and private power plants together is around 5,212 MW. But PDB could not generate power according to the installed capacity as most of the power plants lost their installed generation capacity. Moreover, at least a dozen of power plants always remain under maintenance works for their poor state. Fuel crisis also force to reduce generation of many power plants. Therefore PDB generates on an average 3,500MW against peak demand, making a 1,500MW power deficit, which brings unbearable load shedding and sufferings to public life. Transmission and distribution problem also makes the situation worse. General people have been facing this serious power crisis for decades. This has been always the subject of debate and discussion but still to find any reasonable solution. People find it very difficult to cope with the situation but it seems there is no relief or improvement of the situation in the near future.
Gas --The Major Source of Power Generation
Our power generation is heavily dependent on gas with minimal contribution from other sources. Only a 250MW coal based power generation started in 2005 dependent on Barapukuria coal mine, which often face interruption for technical difficulties or regular supply of coal. Hydropower generation capacity is 230 MW and around 200MW comes from imported oil sources. According to the estimates of 2007, about 80% of the power plants are gas based. Sector wise gas consumption according the Petrobangla estimates is power generation 42%, fertilizer industry 17%, captive power 12%, industry 14%, domestic 12% and others 3%. CNG use in the transport sector is also increasing rapidly with sky rocketing oil price in the international market. This statistics shows how heavily we are dependent on gas and how venerable we are regarding energy security. Any major reduction or interruption in gas supply would create serious crisis in power and industrial sector. The proven and probable gas reserve in all the gas fields operated by Petrobangla and International Oil Companies (IOCs) is approximately 15 TCF, of which 7 TCF has already been used. The gas demand is increasing at a rate of 10%. But the exploration and development of infrastructure were not initiated simultaneously with growing demand. At present the country is having 100 mmcf shortages of gas against 1800 mmcf demand daily. A significant numbers of industries couldn’t start operation due to lack of gas supply. Chittagong region is the worst sufferer of this crisis. The government has already stopped providing new gas connections in Chittagong and adjacent areas and has been maintaining a cautious approach in allowing new connection in Dhaka and adjacent areas because of gas shortage. Petrobangla has also informed Power Division about their inability to supply gas in any future big power plant. Recently the government has started gas rationing in various sectors and urged the industrialists/businessmen to be sensible in gas uses.
Coal
Bangladesh is blessed with a substantial amount of high quality coal in the northwest Bangladesh. The estimated resource in the five discovered coal fields is around 2500 million tonnes, which has heat value equivalent of 70 TCF gas. Among the discovered coal fields only Barapukuria and Phulbari coal resources are confidently defined, others are inferred only and significant efforts will be required to define the mineable reserve of those coal fields. But coal sector with all its potential has never been in the serious considerations parallel with gas sector development. Our policy makers never realized the importance of diversification of energy sources to reduce dependency on gas for long term energy security of the country.
Our only achievement in the coal sector is the development of a small-scale underground coal mine at Barapukuria with Chinese financial and management support. But the mine is having trouble to feed the nearby 250 MW coal fired power plant making the expectation bleak for significant contribution in coal based power generation. Phulbari, another coal field near Barapukuria with a reserve of 572 million tonnes is ready to start mining operation after completion of all relevant studies. The UK-Australia based mining company Asia Energy is involved with the development of Phulbari coalfield. The company has submitted its Scheme of Development to the government in October 2005 and has been waiting for the decision in this regard from the Government.
Coal Sector Development: Debate-Controversy
Nobody was looking into the potential of coal before the Phulbari Coal Project coming into the scene. Very seldom energy expert, policy makers, or pressure group/activists were seen talking or aware about the severe energy crisis that might be created for the sole dependency on gas. Actually the debate started after the declaration of 572 million tonnes of coal at Phulbari Basin by the foreign company Asia Energy. We have seen the active or even violent role of some activist groups against Phulbari Coal Project. Some international NGOs and activist groups are also seen very actively campaigning against this project. But those who are opposing extraction of coal or open pit mining don’t offer any feasible option to the nation to overcome this severe energy crisis.
Those who are opposing open pit mining are arguing that coal extraction by this method will create desertification in the whole northern region and its environmental consequences will be severe and there will be a permanent loss of huge amount of agricultural land. Others favoring this method with the logic that resource recovery is very high in this method, more than 90% comparing to 10-20% in underground mining which is vital for our energy security. Open pit mining will also allow extraction of some other valuable co-products which have high demand in the country. There are well tested mitigation measures in the world to manage the environmental impacts of open pit mining. The loss of agricultural land is temporary and can put back to productive uses after reclamation and rehabilitation. Threat of desertification is a mere propaganda to create panic in public mind against open pit mining. The extraction of groundwater over a period of few decades in Dhaka and surrounding areas has lowered the water table significantly to some 50-60m. If groundwater extraction of much larger scales (some 75,000 litre/sec) doesn’t make any sign of desertification in and around Dhaka City then why mine dewatering with a much smaller scale (5000-6000 liter/sec) would create desertification over the whole northern region? Moreover determination of mining method is not a general policy decision issue; it is very much site specific. Geological, geotechnical reality of the coal field and economic viability should dictate the decision. There is also a sharp difference in opinion over royalty rate, export issue and involvement of foreign companies and investment in coal sector development. But the question is how long we would continue the debate over coal extraction leaving the country in a severe power crisis.
Who will be benefited from this debate or delay in the process of coal sector development? Although our contribution to green house gas emission is very insignificant, there is a growing concern over global warming. The rapid economic growth of India and China increases burning of fossil fuel tremendously. China almost every week is setting up a new coal based power plant to meet the growing demand. There might be international agreements in future limiting the use of coal to control the emission of green house gases responsible for polluting the atmosphere. Bangladesh shouldn’t be left with a lot of coal in the ground that has no value due to these usage restrictions. So, whatever the reasons or interest behind this opposition, an acceptable and reasonable solution of all those issues raised is important for immediate development of a healthy coal sector.

Coal: The Reliable Future Energy
Coal is the most abundant fossil fuel in the world with recoverable reserve in around 70 countries. At current production levels, proven reserves are estimated to last for more than 150 years. Many countries are heavily dependent on coal for power generation. It is the single largest source of power generation of the world with 40% contribution in this sector. World steel industry also consumes significant amount of coal. Approximately 12% of the total hard coal production is currently utilized by the steel industry.
The substantial amount of high quality coal presents unparallel opportunity for Bangladesh to diversify fueling of the power sector, reduce dependency on gas and thus improve energy security. A mine with 10-15 million tonnes annual production capacity can feed few large 500MW power plants for next 30-40 years. Reliable long term supply of coal will also attract local and foreign investors in coal fired power generation. The preferred power generation strategy for Bangladesh would be to shift the base load of the power system to coal and save gas either for peak loading or for other valuable uses. Use of coal to fire large power plants would be one of the keys to rapid improvement in the power sector over the next decade. The coal for its semi-soft coking properties also has the potential to use in steel making industry along with other domestic and industrial uses. Coal has another potential use in briquette making. Coal briquette is widely used in many countries for domestic cooking and in small industries. It could a good option mainly for the north-western Bangladesh, where the forest resource is depleting rapidly for the dependency on fire wood for domestic cooking in absence of other alternative fuel sources.
We already have the experience of underground mining. Barapukuria mine clearly demonstrates how difficult it is mining in underground condition. Considering the energy situation and geology of the coal basins, Bangladesh has to go for large open pit coal mining adopting modern technologies and `best practice’ mitigation measures. The coal extraction has to be economically viable to manage all social and environmental issues associated with mine development. But to see the coal on the ground within next 2-3 years and use it for power generation to overcome the severe power crisis, decision has to be taken right now. Bangladesh cannot effort to loose time further for indecision.

Source: Energy and Power

Date: 16 June, 2008

Source:http://www.ep-bd.com/

Coal: Where We Stand ?

2008-06-29T03:27:00.000-07:00

Dr. SM Mahfuzur Rahman

The Information Gap & an Unwanted Bottleneck
One of the major limitations of researchers and decision makers in Bangladesh is the difficulty in having complete information related to the issue, which they intend to study or on which they are to take decisions. The case of coal mine in Phulbari is not an exception. Not many among the people, who are now involved in the debate on the mine actually have full information about the

a. Economy of Phulbari and the surrounding area,
b. Geophysical characteristics of the area,
c. Technical details of the possible mining methods that can be applied in Phulbari and their consequences, and
d. Mitigation measures for facing the adverse effects of adopting any particular method or a combination of methods.

Curiously enough, a section of the intelligentsia has taken a very open stand against mining coal in Phulbari apparently having only very scanty information on the above issues. This section of the people smartly ignores the whole agenda of energy crisis in the country. Instead, the leaders of the section are vehemently running the campaign that the mining in Phulbari coal field will cause disaster to the local community and environment and are not at all ready to consider that the various issues, including acquisition of land causing people to leave their ancestral abodes, temporary, or even permanent loss of agricultural land and difficulties in shifting infrastructures on the land acquired of mining the coal resources in Phulbari are to be looked at in a framework of overall analysis of

a. The resources of the Phulbari coal mine and their importance for the economy of the region and of the country;
b. All the different types of social and economic costs and benefits of mining at Phulbari and their magnitude;
c. The available mitigation measures for the possible adverse effects;
d. Anticipated gains for the nation by mining the coal and the losses by leaving it underground for an indefinite period;
e. Opportunities to be missed by postponing any initiative of coal mining in a situation when the country is facing severe energy crisis, the prices of energy resources are soaring high in the international market and the prospects of developing alternative energy sources in the country is very bleak; and
f. An outlook to the country’s coal resources when the regime of carbon trading in the world is changing very fast.

Unfortunately, much before being able to understand the importance of the mine, as well as of the problems and their possible solutions, a part of the Phulbari people had been instigated to organize movement against the mine and the key strategy used in motivating local people in the movement was the psychological play of the arguments that millions of local people will become permanently homeless, that the mine will eat up all the fertile agricultural land of the area and that the mine will cause desertification of the whole region. Obviously, the campaign was based on exaggeration of the ‘threats’ of mining coal in Phulbari for the local people.

Regional Disparity & the Poor Economy of the Coal Rich Area
It is a popular belief in Bangladesh that the north-western part of the country is the victim of prolonged regional discrimination by policy makers which has made the region a relatively backward one. There are many economically backward territories in other parts of the country also, but such territories in other parts are mostly enclaves, while the backwardness in northern Bangladesh stretches widely throughout the region. An important observation in the case is the alleged indifference of the policy makers to the causes of underdevelopment of the northern region of the country and to the need for eliminating the disparity.

A few years ago, people in the northern region of the country started to believe that with completion of the Jamuna Bridge, the region would get a momentum in development. It was expected that the factor mobility created by the Bridge alone would change the economic geography. In fact, the Bridge has a significant contribution to taking the agro resources, including agricultural raw materials from the northern to the eastern part of the country and making development of the eastern part easier. But since the Bridge could only provide the transport facilities and the northern part continued to remain deprived of power or gas supply, there had been no expansion of manufacturing industries in the region and the Bridge could only contribute to a faster drainage of resources from this part of the country to the eastern part. The effect was the increase in prices of agricultural products in the northern region. The local producers at the grassroots level however, did not get the benefit, which was appropriated largely by the middlemen. Most rural markets in the northern region now face scarcity of fish, milk, eggs and seasonal fruits. Because of the easy access to local markets the brokers and wholesale buyers purchase these products at cheaper prices for selling in towns and cities and thus create shortage of them for local consumers. The later now buy products of their own origin at prices much higher than what the urban buyers sometimes pay.

Inadequate power supply is the single most important reason for economic backwardness of the northern region of the country. Bogra, once an emerging industry center of the country, had a few pioneering industry units, which were closed down largely because of the failure in competitions with similar industries in other parts of the country. Most important among the causes was the power factor. Industries in Bogra could have uninterrupted power supply only through a support by producing diesel fuelled electricity. The cost of production of such power is much higher than the gas fuelled power available in the eastern regions. This makes the difference in competitiveness of the Bogra products and ultimately, a cause to the ‘death’ of the Bogra industries.

The scenario is the same in any other part of the northern region of the country and the conclusion is obvious: it is not possible to eliminate disparity between the eastern and northern regions of the country without availability of sufficient electricity in the later region. Discovery of coal deposits in Phulbari, Barapukuria and Dighipara in the southern part of Dinajpur district and in Khalaspir of the adjacent Rangpur district has opened up a great opportunity for providing electricity to the region and also solving the country’s energy crisis in the face of quick depletion of the gas reserves and bleak prospects of developing other energy sources.

The six southern upazilas of Dinajpur district – Parbatipur, Phulbari, Birampur, Nawabganj, Ghoraghat, and Hakimpur – which surround the coal deposits in Barapukuria, Phulbari and Dighipara, cover a total area of 1400 sq. km. and have a total population of about 1 million. Agriculture is the main profession of the local people. Fifty per cent of the area’s total population has farming as the principal (for majority, the single) profession and about one-third of them are agricultural laborers. This means that three-fourths of the people of the area live on agriculture, which was the scenario for the whole country some four decades ago. Employment structure in other regions of the country had changed over time because of the structural changes in the economy. But the employment structure remained unchanged in Phulbari and its surrounding areas, which only indicates that the economy of the sub-region did not have much change over a long period of time. About 2.5% of the people in the area are non-farm laborers, about 11.5% are engaged in business, 5.5% have jobs in private and government offices and the rest are involved in miscellaneous professions. That only a small proportion of people work as non-farm laborers shows that the industry sector has an extremely marginal development in the area.

There is no reliable statistics about the number of the different types of industry units in the six upazilas and also, not much is known about their production capacities, the capital and manpower employed, the technology used, and their contribution to use of local resources and to the economic and social development of the local people, as well as of the people of the country as a whole. This does not mean that the area is rich in industries and it is just a point of non-availability of statistics. The literature is relatively blank on the issue because there is no considerable industrial development except that there are a few automatic rice mills, a number of paddy husking/wheat grinding mills and some bakeries, ice factories, and saw mills and a handful of welding workshops. The area was once rich in traditional workshops of craftsmen such as the goldsmiths, blacksmiths and potters all of which are now in the decay and at present, they have practically no importance as industry units. The area has a great potential for development of agro-based industries which remained unrealized largely because of the poor transport and communication infrastructure and non-availability/acute shortage in supply of power. Less than 10 per cent of the 2700 km road network across the six upazilas are metalled and although the maps show existence of a large number of rivers and their tributaries in the area, they lost navigability long ago and are of no use now as part of transport network.

The area however, is blessed with some modern industrial projects – a railway workshop at Parbatipur, the Barapukuria Coal Mine and a 250Mwt power plant at the Barapukuria mine gate and the Madhyapara Hardrock Mine. It is assumed that the selection of Parbatipur, a large railway junction in the northern part of the country, as the location for setting up the railway workshop was historical. The railway department possessed a huge amount of land at Parbatipur and although the railway workshop might have some contribution to repair and maintenance of the railway wagons and or engines, there is every doubt whether it actually has any effect on the local economy. It was easy for the government to establish the workshop at Parbatipur because there was no resistance from any group of social activists in acquiring such a huge amount of fertile land. Most local people have little knowledge about what the workshop actually does. A significant reason for it is the fact that the workshop has practically no or a very insignificant multiplier effect in the region and it does not create new employment opportunities or could trigger any momentum in the region’s economic development. Unfortunately, neither the media nor any section of the intellectual community and the social workers have ever raised the question whether it is at all justified for the workshop to acquire such vast amount of the fertile agricultural land. But it can be guessed that perhaps the workshop could not be established in some other location of the country in the face of the resistance of the local people of those other places against acquiring the fertile and scarce lands for the purpose.

Coal for Power to the Country & Development of the North-Western Region
Discovery of coal deposits in Barapukuria, Phulbari, Dighipara and Khalaspir has opened up new prospects for development of the North-western region of the country. Coal search and exploration started in the area fairly long ago and a good number of intensive studies have been done on various aspects of mining the area’s coal deposits, including the technical, social, economic and environmental issues. Review of the findings of these studies leads to the conclusion that with fast depletion of the reserves of natural gas, the main fuel for producing electricity and the main raw material for production of fertilizer, there is now no alternative to mining coal of Phulbari, which can solve the country’s energy crisis and provide new engines of growth. Some other major conclusions are:

a. Discovery of coal reserves in the Phulbari area of northern Bangladesh is seen as a blessing in a situation when the country is facing the threat of an inadequate supply of affordable commercial energy including electrical energy.
b. The growth rate to be achieved by Bangladesh in the coming few years for achieving the Millennium Development Goals should be higher than the 5-6% that the country could achieve in the past two decades but the reality for the country is that even the modest target of a sustained 7% economic growth is not achievable without regular supply of electricity.
c. The present installed capacity of around 5500MW of the country’s power plants fuelled about 85% by gas, 3% by hydro, 4% by furnace oil, 4% by diesel and 4% by coal is not sufficient to meet the country’s energy demand, the generation is much lower than the installed capacity and at the existing rate of use of gas in power plants, production of fertilizer, vehicles, brickfields and some industrial units and in household consumption, the reserves of gas will be exhausted in some 15 years, when power production will collapse in the country.
d. Given the fact that the country is not in a position to significantly develop other sources of energy to meet its energy requirements in the near future it has become an obvious necessity for her to mine coal.

The expected benefits of a coal project in Bangladesh are

1. Use of coal as an alternative fuel for generation of electricity and improvement of the energy security and the economic infrastructure as the basis for growth and development of the economy of the country as a whole and the north-western region in particular;
2. Saving natural gas by use of coal in electricity generation and the use of the saved gas in increased production of fertilizer and other beneficial purposes including in industry units and households by expanding the gas supply network and thereby arresting the depletion of forest resources;
3. Supply of coal as a cooking fuel (for example, in the form of briquette) in rural households now dependent on traditional biomass that are becoming expensive and have alternative uses;
4. Working of the multiplier effect of the implementation of coal project(s) and especially, development of derivative industries and the working of export elasticity to economic growth; and
5. Revenues of the government over the lifetime of the project.

Issues Which People Love Talking About, Thinking, Considering
The costs and benefits of mining the coal in Phulbari would significantly vary depending upon the method of mining. Open pit mine would cause loss of agricultural land and displacement of the population and commercial and residential land and structures within the mine footprint area in phases over the years of mining in the area. This type of loss is inevitable in any development work and there are plenty of cases in Bangladesh which are more questionable in terms of the justification of the size of valuable agricultural land acquired or the number of people displaced in the name of development. This does not mean that the coalmine in Phulbari can be allowed to develop causing irreversible damage to people, land and the environment. An extensive investigation and work with local communities are required in identifying households and the land affected by the project, valuation of assets lost, estimation of the compensation and resettlement/rehabilitation requirements and determination of mode of comprehensive arrangements for all losses of assets, structures, lands and the crops, vegetation, fisheries, poultry etc. and training of people to cope with situations created by possible loss of livelihood/professions.

There is however, no reason to believe that coalmines cause permanent losses of all lands and structures. Designers of a coal mine should know how to phase out the mining work and develop a mining plan with provision for removal and storage of the top soil, excavation and mining the coal, backfilling and then restoring the topsoil. The forests and wetlands can be realigned and there are proven technologies of keeping the water table in and around the mining area at normal levels, and also of mitigating environmental degradation. Underground mining would involve costs of managing water inrushes inside the mine beneath the ground, inevitable risks associated with spontaneous combustion of coal with the emissions of hazardous and toxic gas and the high temperature, the risk of land subsidence in the mining area, the cost of holding the roof atop the long walls and the like and more significantly, the loss of major part of coal that would not be possible to extract in the underground mining method.

There is a debate around whether to use the entire coal of the mines in Phulbari or other areas in the domestic economy or a part would be allowed to export. A ‘nationalist’ claim may suggest that there should not be any export at all and the claim apparently looks very reasonable. But once the emotional element in the thinking is eliminated one may take a few points in consideration irrespective of whether the mines are operated as projects of a foreign, or a domestic (government or private) company or of a partnership venture having both government and private (including foreign) ownership. The points are:

(a) What should be the economic size of the projects (i.e., how much should be the annual extraction of coal from a coal mine to match the scale of investment in a project and make the project economically viable);
(b) How much of the coal the country is prepared to absorb within the economy (i.e., the requirement of the new coal based power plants and the plants for production of coal briquettes, use of coal in brickfields and in domestic cooking and the like).
(c) What to do with some grades of coal (for example, the high grade semi-soft coking coal) available in Bangladesh that would possibly have no use within the country in the near future.

The equation is: a coal project may need to produce, say, 15 million tons per year to be an economically viable one (at the given trends in the domestic and international market price of coal and co-products) but the country is ready to absorb say, only 9 million tons per year. Some economists may reasonably consider it wise for the government to allow export of the ‘surplus’ coal (and use the income from the export for settling import bills for machineries and supplies required for operation of the mine and associated infrastructure, as well as for economic development through reduction in pressure on the foreign currency reserves and establishing better commands on balance of payments) instead of asking the project to stockpile it. But the government might possibly gain more by not allowing coal exports. In that case, the government is to create additional coal use capacities in the country (say for example, by establishing new coal fuelled power plants, briquette factories, supplies of coal to brick fields, industries that use coal as fuel and not diesel or petroleum).
This paper assumes that by not implementing the project, the country would face severe energy crisis within less than a decade. It also assumes on the basis of the experience of the Barapaukuria coal mine, which is now in operation around the coal deposits in Phulbari, that although underground mining might apparently look more acceptable in terms of lesser displacement of people and structures or of losses of agricultural land and crops, the method is highly inefficient in terms of resource recovery. Some major problems of underground mining have already been raised above. In addition, the shallow depth of coal deposits at Phulbari, loose soil structure of the surface and sub-surface crust and the thickness of the coal seams do not suggest that the underground mining would be safe and cost-effective. In addition, the extraction of coal by using underground mining would create voids that will inevitably cause land subsidence. There are in fact cases of subsidence in Barapukuria underground coal mine and many among those who are proponents of underground mining in Phulbari now say that if the underground mining method is applied in the project, the land on the surface cannot hold the weight of buildings or relatively heavy structures.

Reduction in coal recovery rates or increase in the costs of mining for measures against the risks would make the project economically non-viable not only for the implementing agency, be it a government, a private, or a joint venture company. A question to consider is: if underground mining ultimately leads to subsidence and subsequently, the loss of the habitat and agricultural land, why shouldn’t the policy makers think of considering open pit method for the project from the very beginning?

The logical point in that context is to make thorough estimates for the losses in settlements and the environmental effects of open pit method of mining in Phulbari and create provisions for compensation and rehabilitation and the protection of environment. Three major concerns are: resettlement, water and the project area economy. The project affected people (PAP) are to be appropriately compensated for the losses they would incur and resettled somewhere and they are to take up land that can be used for production or to have the opportunity of being engaged in gainful alternative livelihoods. Unused land under the possession of Parbatipur Railway Workshop can be an ideal location for the resettlement.

Mining coal in Phulbari would have a substantial impact on the ground water regime and the availability of water for irrigation, fishing and household purposes. There is already proven technology of water management in and around open cut mines in different soil and aquifer conditions in various parts of the world and therefore, it should not be a problem for a coal project in Phulbari to maintain the desirable ground water level and keep the water free of hazardous elements, provided that the investors in such project allocates sufficient attention and resources for the purpose.

The mining would introduce the prospect for three aspects of development that are vital for more rapid development of northern Bangladesh:

(a) Development of agriculture;
(b) Development of industry; and
(c) Development of trade and commerce.

The mining would significantly improve ongoing production in both agriculture (largely because of expanded irrigation support, extension and contract buyers, introduction of new crops and cultivation methods as well as more agro-business to supply inputs, and training of local farmers, if arranged as a part of rehabilitation program for the project affected people) and manufacturing and services sector (directly, by using sustained supply of electricity and indirectly, because of development of derivative industries as the multiplier effect of development of mining activities in the area). There is considerable room for increases in production from a more commercial agriculture using greater inputs and consequently producing higher incomes.

Sitting in the Middle of Nowhere?
There are broader implications of having a coal mine project in Phulbari for development of the country as a whole. The key point here is the manufacturing implications of serving the mine and the urban expansion that will occur as a consequence of the investment. Such project will create impetus to development of trade and commerce in Phulbari and the whole of northern region, as well as in other parts of the country. However, development of the coal mine only is not sufficient for the purpose. Neither will it automatically call for a fast growth of business. What is needed in addition is the improvement in roads, railway and port system, and among many others, improvement in the financial transactions.

The Barapukuria Coal Mine is feeding coal to the 250 MW power plant at the mine gate. How much of the power generated by this plant goes to the national grid is not known but it could be gathered that the office of the Rural Electrification Board in Phulbari is keen to maintain uninterrupted power supply to the fast growing number of deep tube-wells in the area that pay solid revenue to the company and thanks to such business interest of the company, people in the area enjoy regular power supply, at least during the irrigation season. Many however, have strong doubts about the regularity of this supply once the season would be over.

Discovery of coal deposits in the north-western region of the country has attracted a great interest of the nation in the region. But despite the general understanding that the country is facing severe energy crisis and that there are strong potentials of these coal mines in solving the crisis, policy makers continue to hold a strategy of ‘critically reviewing all the different opposing views’ and ‘going slow in taking decisions’. Sometimes, arguments are put in a way that says that the strategy of going slow is justified because there had been public protests against implementation of any mining project in Phulbari and the protest even turned into violence leading to killings. The question is: why can’t the government investigate into the incidence while it has already earned a reputation of investigating into hundreds of different cases. The investigation would not only reveal the motives of the movement and the reason for killing but also pave the way for better understanding of the local community about the various aspects of the Phulbari coal mine, for their informed and meaningful participation in taking decision about mining coal in the area.

The government could investigate into how the so called ‘popular movement’ was organized and whether the motives of its organizers were at all very clean. Such an investigation is necessary for quick ending of the so-called ‘controversy’ over mining coal in Phulbari. Keeping the issue unresolved would only mean that the local people will continue to remain divided in opinions, which only goes in favor of those who want that the country should not develop its own coal mines and are not interested to respond to the question: what the nation would do in just a few years’ time when it will find that there is no electricity around. People now opposing the idea of mining coal in Phulbari may not be available for being held accountable in the critical situation when not only all factories in the county would stop, but also even the fans over the heads would not turn or the bulbs in the rooms or streets would not give lights. Given the present energy situation in Bangladesh and the forecasts for the future, there is no scope of wasting too much time on decision on the country’s coal.

The ‘go slow strategy’ for coal mining decision in north-western Bangladesh helps none but those self proclaimed ‘patriots’ who wish no coal mine in the name of protecting everything in the country. It may be safe for the government to sit and do nothing while ‘watching’ public opinion but possibly, it is not at all safe for the nation to wait for the candles to replace the bulbs or the hatpakha to replace fans and no power for the industry units, especially when oil prices in the world already exceeded $125 per barrel and diesel is no more any good fuel for electricity.

Dr. SM Mahfuzur Rahman: Professor, Department of International Business, University of Dhaka

Source: Energy & POwer
Date: 16 June,2008
Link: http://www.ep-bd.com/

Law Ministry for change in present law before adopting coal policy

2008-06-29T03:16:00.000-07:00

The law ministry has asked the energy ministry to amend the present "Mines and Minerals Rules Act-1968" before adopting the coal policy as it is contradictory to the proposed draft coal policy."The energy ministry can recommend to the law ministry for enacting a new law in this regard and send it to the advisory council along with the proposed coal policy. However, the energy ministry will decide what they will do but this change is a must for the sake of justice", a joint secretary from law ministry said at an inter-ministerial meeting yesterday.The law ministry's representative told the first inter-ministerial meeting on draft coal policy that some points in the draft are 'contradictory' to the present rules under which the mining sector is being governed now. So the energy ministry should recommend to the law ministry to reform those law first or make new law in this regard. Otherwise, it would not work, meeting sources said. The energy ministry held the interministrial secretary-level meeting yesterday. M. Mohsin, secretary, energy ministry presided over the meeting. Representatives from environment, land, agriculture, power ministries and NBR were present.Although the government committee on draft policy has already suggested the energy ministry to amend some laws and rules in this regard but some crucial parts of the draft coal policy including royalty, mode of awarding coal field, mining method, foreign investment policy remain unresolved. Law ministry's official said that according to the mine and minerals rules the royalty is fixed and it is awarded on the basis of "first come first serve." But the draft says that royalty would be decided by a committee and coal field should be awarded through tendering process which is contradictory, law ministry official told the meeting. "The present government policy has encouraged the privatisation and foreign investment policy. But the draft is virtually narrowing the path of foreign investment as well as privatisation", meeting sources told The Independent quoting law ministry official.Meeting sources further said none of the representatives submitted any observation on the policy in writing rather they raised some issues which have already been elaborately discussed."Yes it is law ministry's observation, the environment ministry has also raised some issues which we discussed. Whatever the observation we get from them we will send those along with the coal policy to the advisory council", M. Mohsin, secretary, energy ministry, told The Independent.The energy ministry has finalised the coal policy recommending formation of "Khoni-Bangla", a management body to oversee the country's mineral resources including coal, hardrock, lime stone, silica sand, etc. It is alsolearnt that the energy ministry has finalised the policy without making major changes in the draft policy prepared by country's renowned experts and following the secretary-level meeting it will be sent to Chief Adviser Dr Fakhruddin Ahmed along with the committee's observation, for approval.The committee did not say anything about the coal extraction method. The issue should be specially on coal field. It may be mentioned that the committee suggested to the government to examine the pros and cons of open-pit mining and that the government should go for open pit on a limited scale. The policy has not mentioned anything about it.It is learnt that the energy ministry in the draft policy suggested the land reclamation issue be kept under government's jurisdiction. However, the committee suggested to give the land to its owner. The country has a known reserve of 2.7 billion metric tons of coal but there is no specific policy on coal development, although there are some rules and regulations to lease out coalfields to foreign companies.

Source: The Independent

Date: 27/06/08

Link:http://www.theindependent-bd.com/archive.details.php?nd=2008-06-27&nid=87585

How Much Natural Resource Is Adequate For A Country?

2008-06-26T02:27:00.000-07:00

Mushfiqur Rahman

A very commonly asked question is "How much natural resource is enough?" In our country there is a popular ongoing debate on coal extraction to meet the present pressing demands for energy versus the suggestion for keeping the resource underground for the future needs, until we will learn how to mine the coal resources without causing any interference with activity on the surface (above the resources) and until we have home grown technology and local financing. Hard to believe? Certainly the recent announcement that the research level in our universities has waned doesn't instill confidence that we Bangladeshis can do it all alone at least in the foreseeable future. At times a section of people relate the coal extraction issues with the questions of resource adequacy paradigm. A section of activists have successfully established the perception that we have consumed almost all our natural gas resources and only a small amount of coal should be extracted for beneficial use in the future. So we need to promote the strategy of coal extraction only by ‘local miners (?)’ so that the extracted resources can be used locally. At the same time the fact remains unchanged that there is no local miner and investment to facilitate any serious coal mining and we don't see plans materializing for enough coal (to help solve our energy crisis) to be mined in the foreseeable future. So the country has been systematically moving from shortages of commercial energy to disastrous crisis, almost like someone is planning to hold back our country's economic development. Simply put we have an eager workforce and the urge to do better, but without energy industry and human development can't move forward. The discovery of coal resources in our country is not new, but for the last forty years of the knowledge of having coal we could hardly secure much and only one million tonnes has so far been realised from our only commercial coal mining operation. Even then the cost of producing this coal has been enormous and difficult to economically justify. Although this existing coal mine has been dependent on foreign funding, technology and manpower support, its performance demonstrates inadequate studies were carried out and choice of mining method was not made based on proper analysis of the ground conditions and nature of the coal seam(s), especially the large thickness. There is now speculation that this underground mine which apparently will extract less than five million tones of coal from the total 390 million tonnes coal reserve, will be wound down and the Government may invite new investors to develop the coal deposit using the open pit mine method. This will obviously negate the existing underground operation and its infrastructure will be demolished to make way for a much higher production and recovery of our precious coal. So the coal exploration and mining with its more than forty years history followed inadequate strategies and has failed to secure any practical mining which is economically, environmentally and socially sustainable. The country has been badly suffering from commercial energy supply shortages but ironically is still sitting on good quality coal resources estimates to be at least 2.5 billion tonnes. So the possession of vital natural resource in the country (remaining safely under the ground) does not necessarily automatically mean the resources will be available for its economic use, ie; that we Bangladeshis will get any benefit. While the people of our country and our Government continue to debate the adequacy of natural resources we are running out of time and denying ourselves the benefit from the coal resource, ie; a reliable new energy supply, new power stations, no load shedding, industrial development and jobs, no problem with power for irrigation pumps, etc etc. If we recall the natural resource related fundamental studies, we see the longest running issue in natural resource economics is resource adequacy. The conventional approach towards natural resources as ‘input’ to production always leads to the simple conclusion that the existing natural resources are not adequate for any nation and it can never be adequate in the long term. The reason is simple; the growth required for economic development will always require more and more inputs so in time the needs of our future generations will not be indefinitely met by our existing natural resources. A section of people within the society always try to project the ideas that the existing natural resources are extremely limited specially those which are non renewable. They love to believe that the natural resource scarcities will restrict economic growth in future. In 1914 the US Bureau of Mines estimated that there would be oil left over for only ten year's consumption. In 1939 the Department of the Interior projected that oil would last only 13 years, and again in 1951 it was projected that oil would run out 13 years later. Even if we were to run out of oil, this would not mean that oil was unavailable. Rather it would become more and more expensive. If we want to examine whether oil is getting more and more scarce we simply have to look at whether oil is getting more and more expensive, ie; supply and demand. A similar analogy can be drawn for other natural resources and their scarcity projections. Before the industrial revolution when the economic activities were tied more closely to local natural resources, fears for shortages of items like forest resources and water were common. With the industrial revolution becoming obvious through the significant contribution of in 1769 of James Watt’s steam engine invention, the reliance on coal grew manifold. Accordingly concerns shifted to the possibility that the depletion of coal will lead to the collapse of development. In the Twentieth Century coal was partially replaced by oil as it is easier to transport, store and use. As recent as the mid 1970s petroleum crisis there were no shortages of scaremongering about natural resource scarcity and economic collapse.In 1973 and 1979 a pair of sudden price increases awakened the industrial world to its dependence on cheap crude oil. Prices first tripled in response to an Arab embargo and then nearly doubled again when the Shah's of Iran Regime was overthrown resulting a major recession worldwide. Many analysts warned this crisis as a proof that the world soon will run out of oil. But the reality was different. The dire predictions were emotional and reactions political. By 1973 the world had consumed only about one eighth of its readily accessible crude oil. The five Middle Eastern countries (members of OPEC) could make the price hike for crude oil worldwide not because the oil was growing scares, but because they had managed to corner 36% of the market. Later, when the demand sagged, the Alaskan and North Sea oil weakened OPEC’s economic firm control, the price curve of oil collapsed. Ever since we have been depending on naturally occurred fuel we have been worried about running out of fuel.The pessimists are not infamous. We may recall at least Thomas Malthus who became famous for his treaties that human population growth would inevitably outstrip the ability of nature to provide sustenance in ever-increasing amounts. With the assumptions of exponential growth and limited resources, we can easily make a doomsday prophecy. Our present day energy supply is mainly based on coal, oil and natural gas which were created over millions and millions of years. Many people believe that consuming the wealth created over millions of years within a few hundred years is just not right. We should consume our natural resources in a way that our future generations effectively get their share of these resources through developing our country's economy and human resources to the best of our ability, and positioning our country and people so that our nation is able to afford whatever is required in the future. The argument of "sustainable resource use" sounds attractive, however, it is inevitable that at some stage in the future a generation of people will be left with no fossil fuel at all, even if we slow down consumption and use just one barrel of oil a year! The strong counter argument is that although we can't preserve our natural resources for future generations we have an obligation to leave for them the knowledge and capital such that they can secure a quality of life that is better than ours, ie; this is the definition of 'progress'. The same argument furthers the logic that if our society, while using coal and other fossil fuels in the near term, can further its technical know-how and economy, then it should be able to develop longer term energy resources (some of which are yet to be identified) to ultimately sustain our nation.The former Saudi oil minister and founding architect of OPEC genuinely pointed out: ‘the Stone Age came to an end not for lack of stones, and oil age will end but not for a lack of oil’. Thus we can appreciate that eventually better substitutes and superior materials will and do replace the conventionally used natural resources over time. We stopped using stone because bronze and iron were superior substitute materials. The patterns of natural resource use have changed dramatically. History shows that substitution does occur in response to changing conditions, scarcity of supply and price. In the 1970s high energy prices encouraged substitution for energy inputs including the pursuit of energy efficient machines. Today we see this happening in the car industry where we are now able to buy cars that are no longer restricted to use conventional fossil fuel but can run on bio-fuels, battery power and hydrogen.In the backdrop of the new ‘oil crisis’, analysts say that the world contains enormous caches of unconventional oil that can substitute for normal crude oil, with the rising oil price to making such alternatives profitable to manufacture. The Orinicco oil belt in Venezuela has been assessed to contain 1.2 trillion barrels of sludge known as heavy oil. Tar sands and shale deposits in Canada and the former Soviet Union may contain the equivalent of more than 300 billion barrels of oil. The United States Energy Information Agency estimates that based on today's oil price, it would be possible to economically produce about 550 billion barrels of oil from tar sands and oil shale which would have the effect of increasing the present global oil reserves by some 50%. It is further estimated that within 25 years we could be able to access commercially twice as much oil than the world currently has available. The total size of oil shale resources is staggering. It is estimated that globally there is about 240 times more oil shale than the conventional petroleum resources. In addition the development of technology for conversion of coal to synthetic oil, especially the ‘rejected’ low quality coal, will add a volume of oil to the world's reserve. Theoretically these unconventional oil reserves could quench the world's thirst for liquid petroleum as conventional reserves are depleted. The above potential substitutes are an addition to the current conventional oil reserves that (based on existing finds) will last at least another 40 years at present consumption rates. There is also an estimated at least 60 years worth of gas and 230 years worth of coal. Consequently, there is no need for immediate worry about running out of fossil fuels. But the industry will be undergoing difficulties for some time and investment will be needed to ramp up production of unconventional oil.From a macroeconomic standpoint, natural resources are neither necessary nor sufficient for achieving high growth rates. Countries like Japan, Korea, and Singapore for instance have achieved high growth rates despite relatively poor natural resource endowments. On the other hand, many countries like Nigeria, Venezuela, and Zambia with very substantial resource endowments have not only failed to secure high growth in recent decades but have rather regressed. On the other hand, history clearly shows many examples where natural resource endowments have been instrumental in supporting economic growth. Some countries of the Middle East, for example the United Arab Emirates, have achieved high incomes and significant national development based on their petroleum resources. Economic growth in any country is related to the growth in its productive capacity and relative to the growth of its population. Productive capacity is a function of several factors including the quality of productive inputs, (labour, traditional capital, natural capital etc.) available to the economy and the productivity of those inputs in turning out useful goods and services. Natural resources may be linked to economic growth and we can consider them as natural capital, the quantities and qualities are gifted by the nature. But the human being is to make use to this natural capital to produce goods and services combining with other inputs. So the burning issue remains: we will promote using our natural resources to develop our human resources and industrial productive capacity to rocket our economic growth and build the necessary knowledge and financial means for our future generation's well-being or will we continue our never-ending debate and procrastination thus leaving our natural resources buried and depriving our nation of a better present and even better future?

Mushfiqur Rahman: A mining engineer. The views are of the authors and do not necessarily reflect the opinions or views of the organization where he works or with which he is associated in any form.

Source: Energy & Power

Date: 16 June,2008

Link:http://www.ep-bd.com/

Charting The Way Forward

2008-06-26T02:20:00.000-07:00

Professor Ajoy K. Ghose

There is no dearth of debates on whether on not Bangladesh faces an energy crisis of a monumental dimension. It is increasingly becoming apparent however that unless some drastic policy decisions are taken right now, the energy dilemma will exacerbate to a level that will be beyond the control of the nation. Bangladesh’s energy landscape presents some ominous indicators. Gas, which had thus far been the mainstay of the nation’s energy base is, by all accounts, being rapidly depleted and unless the nation strikes it rich with new discoveries in its offshore fields, the energy future appears to be dark and dismal. The recently discovered coal resources in northwest Bangladesh are mired in controversy and organized opposition by civil society is setting up major roadblocks to coal development with the coal policy gathering dust in the files of the government. As energy is the very life blood of a nation, ensuring secure, reliable, affordable supplies of energy is a serious concern for Bangladesh, even though the energy use is very low with a per capita primary energy supply of 0.16 toe/capita(2004 data), possibly the lowest in the region. While traditional biomass meets some 50% of the total energy requirements, especially in rural Bangladesh, this is contributing to large-scale deforestation, besides serious impacts on the health of rural population because of indoor air pollution. Clearly, the dependence on traditional fuels and inefficient technologies, militate against the vision of the Bangladesh Government to provide for “electricity for all” by 2020. Even the per capita electricity consumption at 167 kWh/year falls short of the necessary stimulus required to attain a GDP growth rate of 6-7%.
Energy availability will be central to the development agenda of Bangladesh, as the catalyst for change for a better future. There are serious concerns about the security of energy supplies, investment in energy infrastructure and rising aspirations of the people with energy use continuing to grow inexorably. Even if there are no quick fixes, a road map for the nation’s energy future has to be drawn up and translated into reality if only to kick start the national economy and ward off potential political and social instability. Energy Landscape of Bangladesh The energy landscape of Bangladesh is a variegated one where biomass fuels account for 52% of the energy consumption. Of the commercial energy resources, natural gas has a dominant share, besides minor contributions from hydro, oil and coal and very limited share of renewables. Natural gas consuming sectors include the power sector, the fertilizer industry, domestic, captive power and transport and the demand has increased manifold over the years. Despite the myth that Bangladesh is “floating over gas”, the prospectivity for striking more gas deposits is high. According to World Energy Congress Survey of 2004, the proved recoverable reserves are estimated at 301 billion cubic metres and the R/P ratio is estimated at some 26 years. With rapidly escalating demand for gas, the reserves are fast depleting and the nation faces a resource crunch, unless new discoveries are made in gas fields. As much of Bangladesh is poorly explored, both off-shore and on-shore, the potential for further discoveries is thought to be substantial and a windfall of a few new deposits of the size of Titas or Habiganj could help ameliorate the energy resource crunch. This calls for extensive exploration efforts with matching investments and recourse to high technology.
The total installed capacity of power plants in 2005-2006 was 5245 MW, and the maximum demand was 3782 MW. The aggregate generation was 23,703 MkWh, of which the share of gas was 81.5%, hydro 4.3%, furnace oil 5.3%, diesel 4.07% and coal 4.74%. The access to electrical energy was only around 42%, despite the targeted 100 per cent electrification of all 84,000 villages in the country.The discovery of coal in northwest Bangladesh in 1960’s has opened up a new energy source which could provide a boost, if not a reinforcement, to the energy scenario of the country .This marks in fact a major milestone in sustainable energy development, given appropriate policy support. Five major coal deposits have been delineated in the recent past which include Jamalganj, Barapukuria, Khalaspir, Phulbari and Dighipara with an aggregate resource base of 3300 million tonnes, of which Phulbari and Barapukuria have been explored in detail with reserves estimated at 572 million tonnes and 303 million tonnes respectively. Developed with Chinese assistance, Barapukuria coal mine commenced production in Sepotember, 2005. The choice of underground method of exploitation has been fraught with serious consequences; the recovery is low and the bulk production has fallen short of the planned target production of 1million tonnes per year. The coal deposits discovered so far in Bangladesh are characterized by a sequence of 6 or 7 seams, some of which are thick to very thick.
The coal seams are overlain by Upper and Lower Dupi Tila formations which are highly water-bearing aquifers which pose serious problems of dewatering. At Barapukuria, a water inrush in 1996 led to significant sterilization of coal reserves. Currently, Barapukuria is producing around 0.3 to 0.4 million tonnes /year, but the recovery will not exceed 10% of the aggregate proven reserves. It is time to re-think the exploitation strategy and convert the underground operations to an open pit operation which besides improving recovery, safety and lowering cost of production would also permit of high production volume. The Phulbari coal deposit has been planned for exploitation by an open pit mine, with an ultimate pit depth of 330 m, for a production volume of 15Million tonnes per year. The project has encountered severe opposition from the civil society on the grounds of possible impacts on groundwater resources in the region, the problems of displacement of project affected people and likely damage to valuable agricultural land.
Much of the opposition is grounded on imaginary/unreal arguments; the displacement of the people would certainly call for a sensitive handling of the situation with a well-conceived R & R plan, providing for fair compensation and resettlement entitlements, training and provision of jobs for “locals” and building up appropriate social infrastructure for the people. The feasibility report of the Phulbari project has been submitted to the Government and is awaiting approval; the project has already received appropriate environmental clearances.
Both Khalaspir and Dighipara coal deposits need to be explored in depth to justify the mining plans. It should be possible to work them by open pit method to circumvent the problems likely with underground exploitation under aquifers. It would be in the interest of Bangladesh to examine the prospects of these deposits by open pit exploitation using the current shelf of strategies and state-of-the-art knowledge around the world and the Government would be well advised to set up a committee of experts rather than having the issues discussed and debated endlessly by civil society, who are oftentimes very ill-informed of coal mining technology per se.
The coal deposit at Jamalganj is a deep-seated one, with depth varying between 640 to 1160 m, and could be an ideal candidate for underground exploitation. However, keeping in view the escalating costs of underground mining from depth, lack of precedent experience in Bangladesh, one could conceive of different strategies for recovering the heat content of the coal seams such as recourse to underground coal gasification (UCG) at Jamalganj.
The coal resources of Bangladesh open up a new window of opportunity for staving off the energy crisis in the foreseeable future. The coal seams are of high quality and will provide fuel for thermal power plants to meet the crying need for electricity. One could even conceive of conversion of coal to liquids using such coals, keeping in view the skyrocketing oil prices, which could touch $150 per barrel within 2008 itself.
A well-conceived sustainable coal development plan for Bangladesh needs to be worked out identifying the share of coal in the national energy mix. It should be possible to accelerate coal development through joint ventures for Khalaspir and Dighipara and approving the feasibility report for Phulbari. By 2015, Phulbari could produce 12-15 million tonnes per year, while Barapukuria(if converted to an open pit operation) and Khalaspir and Dighipara augment the coal production by 5 million tonnes. Thermal power generation, given appropriate investments, should be possible for a capacity of 3000MW, using 9 million tonnes of high quality coal from Phulbari, and Barapukuria.
The focus on power generation for the urban sector has led to a neglect of distributed generation, especially of renewables. If the vision of 2020 has to be met, the rural sector must receive a higher priority.
Sustainable Energy Development – The Way ForwardBangladesh faces a daunting challenge in meeting her “energy hunger”, and overcoming the glaring rural-urban disparity in terms of access to energy. By 2020, the vision of “electricity for all” has to be realized and the per capita electricity consumption has to be raised to at least 750 kWh per year, if only to lift the nation by the bootstrap out of energy deprivation for a new economic future. With the skewed diversion of investments and human resources to urban energy supplies, the rural sector has been ignored and the situation can only be corrected by massive increase in the national power generation capacity and focus on accelerated rural electrification. Much of the new generation capacity could be based on coal, if the road blocks to coal development are lifted. The investment in power generation could be partly offset by exporting coal. The exploitation of coal in Bangladesh would herald the beginning of new energy and economic era and deserves the support of the Government in full.

Source: Energy and Power.
Date: 16 June, 2008
Link: http://www.ep-bd.com/

Denial of Everything

2008-06-26T00:55:00.000-07:00

EP Report

Expectations from the military-backed caretaker government of Dr. Fakhruddin Ahmed knew no limit simply because of their high sounding dreams they showed the nation since the 1/11 changeover. Intentional or unintentional, the so-called politics of the non-party government made things so complicated that now the windows of opportunities for the branded “political thieves” are opening up that they will come out tomorrow, if not today, as “political heroes”. Political analysts think “political game” of putting the two key leaders of the two main political parties behind the bars marred the opportunities to streamline the politics.
“Since 90 percent of people of Bangladesh are supporters of the two parties, the two ex Premiers should have been given the benefit of doubt to allow them to bring their parties on the right tracks,” an analyst said adding “the belated call from the Chief Advisor of national consensus would have witnessed a success had he sat with the two leaders within first couple of months and convinced them about the consensus, alongside carrying out the anti-corruption drive.”
“Now the opportunities are missed if we don’t want to fall into another deep crisis again,” said the analyst.
Like super structure, the country missed opportunities in the basic structure too. If the caretaker government did not mishandle the two key political players of the country, it one side could ensure commitment from them of peaceful politics in future without hurting the economy; and on other could concentrate more on economic affairs -- not only the day to day matters, but also by preparing a roadmap for economic upliftment in next 10 years with participation from all concerned quarters and again realizing the commitment from the politicians that they will work together to materialize the plan.
Anyway, Bangladesh lacks in visionary leadership and the caretaker government was no exception. Bangladesh missed the opportunity after the independence, then after overthrowing autocrat Ershad in 1990 and now following the 1/11 in 2007.
If the political roadmap progresses properly, the national election will be held in the third week of December. The country is expected to embark with an elected government in 2009. Now it’s clear that the qualitative change in politics is a far cry not for anyone else but due to the previously high ambitious “minus 2” plan of the caretaker government itself. Now it appears that the government will not able to bring minimum change in politics as now they had to “manage 2” formula as the “minus 2” boomeranged. “Had the government didn’t go for the minus 2 certainly certain changes could have been possible through the two leaders themselves,” another analyst said, adding “end of the day we’re going to have a big zero after all these high sounding changes following the 1/11 changeover.”
So, when the government of Fakhruddin Ahmed will hand over power to the elected government almost everything will be similar it was earlier. Even the changes expected in other sectors like economy are not being possible. Energy sector is no exception.
According to latest official statistics, per capita power consumption in Bangladesh is 140 kilowatt hour (kwh). The per capita power consumption in Sri Lanka is 325 Kwh, Pakistan 408 Kwh, India 663 Kwh, European countries 7,500-8,000 Kwh, Australia around 8,000 Kwh and in USA it is 10,000 Kwh.
Bangladesh not only remains at the bottom of the list of power consumption, it keeps electricity out of reach of 70 percent people of the country.
The power sector master plan suggests that the country requires 43,000 megawatt (MW) electricity to ensure power for all by 2025. According to the plan, 76 percent of the requirement or 33,000 MW will come from coal although now the percentage is only 5. In USA coal contributes to over 50 percent of total power generation, in India it is 70 percent and the figure for fast growing China is similar.
On the other hand, 87 percent of Bangladesh’s power generation depends on natural gas. But, the future of gas for Bangladesh is bleak and the existing fields are depleting.
According to United States Geological Survey (USGS), the prospect of gas resources with 50 percent probability is 32 TCF while it is 42 percent as per study carried out by the Norwegian Petroleum Directorate (NPD). But, in terms of 90 percent probability it is not over 8 TCF.
Whatever the prospect is, nothing has been done in public sector to explore the prospect after 1990. After the major discovery of Bibiyana in 1998, a good discovery by an IOC was Moulvibazar in 1999 and then a small discovery in Bangura. Many might be surprised witnessing the silent role of the IOCs in last one decade while it is considered that 93 percent of gas discovery in the country was by the IOCs.
Analysts found the indecision of the government for such a situation. The IOCs didn’t find any clear indication from the government that what it will do with the discovered gas if an IOC makes the discovery investing millions of dollars. In fact, that was the reason that the IOC had wanted that gas is exported from Bangladesh. But, the government neither could decide in favor of gas export not could assure the IOCs that its discovered gas will have market inside the country.
In fact, that’s the reason the IOCs backtracked from the exploration activities and the country did not any discovery by them. Experts said had the government dared to export a portion of the gas from the Bibiyana, not only Chevron but also other IOCs would get encouraged to go for new exploration. If export was not possible due to political reasons, the government could go for major power projects creating market for the gas discovered by the IOCs. Still, the government sat idle and the result is that the country is now experiencing serious power crisis in one hand and on the other gas shortage, too.
Lately, the government went for third round bidding for offshore blocks. Still, the response is not overwhelming. Also, the High Court has issued show cause notice upon the government.
If one asks why the dismal situation of the country’s gas sector, the answer is simple: Denial of everything. A civil society group that could be an effective pressure group emerged as sycophantic elements that opposed everything. Without realizing own capacity in terms of both technology and investment these people are opposed to any kind of foreign investment in the energy sector.
Although the cell phone companies are sucking billions of dollars of common people in the name `days talks’ and `night talks’ and the country’s state-run BTTB had the capacity to go for such mobile phone networks, these “patriots” would not utter a single word. But, they are ready to sacrifice their lives if a foreign company invests in Bangladesh, obviously they are not charity organizations... profit is their main objective, and by the investment the company otherwise helps the country to ensure energy security these formerly leftists will threaten to collapse the country no matter whether they have the ability or not.
Similarly, they opposed the gas export idea showing only one side the coin. The intellectuals would never say what the objective when a national committee had suggested to export of portion of IOCs gas, that was to encourage the foreign companies to invest more for more discoveries and more energy security. The idea to oppose the gas export bid was popular, but in reality now the government and people of the country are feeling the heat of power crisis due to gas shortage.
The same people who once burnt jute godowns after the independence in the name of Maoist revolution are now shedding tears for jute industry of the country. Their present bid to “protect oil and gas” is also that kind of patriotism. These intellectuals are “so far sighted” that only a few years back they couldn’t understand the value of coal and thus forgot to incorporate the word coal in their organizational banner. Suddenly they woke up and now their main concentration is coal although they had launched the “crusade to protect oil and gas”.
The group had incorporated their bid to protect the port and after the caretaker government brought revolutionary changes in Chittagong Port, now it is clear that what kind of port the formerly leftists had wanted and what should be it in reality that is now we are watching.
Bangladesh’s present gas crisis could be overcome had there be the much-talked-about Myanmar-Bangladesh-India tri-nation gas pipeline. It would help Bangladesh to import gas in case of necessity. But, this was also not welcomed by the “sole protectors” of the country and the result is in hands.
But, the dangerous thing is that the past government almost bowed down to the irrational demands and finally could not take any courageous decision. In fact, it is also true that a government that was sunken by the corruption does not have the courage to take apparent unpopular decisions and show the people the fruit after a few years.
As the country fell behind in terms of gas exploration, now the golden opportunity for the country is coal prospect. The recoverable coal reserve in the country is 2.0 billion tonnes which is equivalent to about 65 TCF of gas. The Phulbari coal field, having a recoverable reserve of 572 million tonnes is ready for development.
But, again the problem is a Dhaka-based group supported by some international NGOs who by misleading information could convince the people around the coal field. The group at first campaigned that they would lay down their lives, but would not allow any mine. Later they said that the mine has to be underground. Once they campaigned that the entire area around Phulbari would be deserted if there is any coal mine over there. Now their campaign is that the agreement with the foreign company is anti-state, so the mine has to be developed by a local company.
The debate over method of the mining has been continuing for past few years. Unfortunately, the debate is not concentrated within the experts. Rather, it became an issue of a few people who hardly could manage a few hundred people in their support, but maintain regular presence in local and foreign media.
The Barapukuria itself proved that the geology of Bangladesh is not suitable for underground mining even if we consider that underground mine can give at best 20 percent of total reserve while an open pit mine will ensure at least 95 percent. Just consider that production from second slice of the Barapukuria might not be possible, which is scheduled from 2011. Also, consider the frequent accidents that take place in underground mines in China and the accidents witnessed by Barapukuria, too.
Interestingly, the group coupled with some environmentalists are opposed to development of coal production in Bangladesh although the share of coal in power generation in the most developed USA is above 50 percent. It is 80-82 percent for China and 75 percent in India. And for Bangladesh it is not over 5 percent.
Surprisingly, the statement of the “protectors” is similar to that of the developed countries who are interested to buy Bangladesh’s carbon credit.
Bangladesh is passing through a critical juncture in the political arena. Also, energy is the biggest challenge for the country specially when the oil price reached US$ 139 per barrel and projected to be $ 200 by the year end. For survival of the country, country’s people and the economy there is no alternative to ensure energy security. And if the country sits idle keeping coal reserve equivalent to 65 TCF of gas beneath the soil it’ll be simply living in the fool’s paradise.
So, the question is whether the country will be continuing to live in the fool’s paradise or come out paradox of denial of everything for better future of the people of the country? It’s the best time to launch a true campaign for energy for people, not depriving them in the name of their protection.
The role of politicians in this regard is very vital. They have to understand the ground reality and come of the years old practice of denial of everything only because they are in the opposition.

Source:Energy & Power
Date: 16 June, 2008
Link:http://www.ep-bd.com/

Govt alone won't go for big investment in power generation, says Tamim -Star Business Report

2008-06-19T03:17:00.000-07:00

The government says its involvement in future power generation will be on the basis of a public-private partnership.

Govt alone won't go for big investment in power generation, says Tamim
Star Business Report. The government alone will not go for big investment in power generation system anymore, said the special assistant to the chief adviser for the power and energy ministry. "What we change in the power sector is that government is not going to invest in a big way in power generation anymore. All government involvement in the future will be a public-private partnership," Professor M Tamim told a discussion in Dhaka yesterday. The discussion on Need of Energy Producers and Government Perspective was organised by the International Business Forum of Bangladesh (IBFB) at a city hotel. Tamim said formulation of an energy policy is now under process, which will lift the universal subsidy that benefits the consumers who do not need it. "It's the state's responsibility to provide power to the poor. But today, everybody is not poor. The people who can afford do not deserve subsidy and that has to be lifted. This type of consumers has to be separated. We are in the process of doing it," he said, adding that merchant power plant by both local and foreign entrepreneurs will be allowed under the new policy. "The free market economy allows such a power plant concept. Anybody can generate power. But the government will neither ensure fuel nor purchase that power," Tamim categorically said, urging the entrepreneurs to find market and fix the price of their produce. "If you find anybody to purchase your electricity at the rate of Tk10, please go ahead, produce electricity and make business of Tk4 out of Tk10. I have no problem. But don't ask me for fuel, because government cannot provide fuel or gas," he said. To mitigate the power crisis, the present government has decided to replace the country's oldest inefficient power plants, the special assistant said. He assured the local entrepreneurs that they would be awarded the task of rehabilitating any power plant that falls inefficient. "The local entrepreneurs can bid on the basis of price. If anyone likes to replace the Ashuganj power plant, a 20 percent efficient one, the government will ensure gas supply and also purchase the electricity produced there,” Tamim went on, pointing it out that the equity share between the government and the private sector would be on 49-51 percent basis. Mahmudul Islam Chowdhury, president of IBFB, Jalal Ahmed, chairman of Petrobangla, M S Islam head of international cooperation of Grameen Shakti, Steve Wilson, president of Chevron Bangladesh, and Ajay Nambiar, director (commercial) of Cairn Energy Bangladesh, also spoke on the occasion. They laid emphasis on new investment on energy sector, suggesting a search for alternative energy to mitigate the increasing demand

Source:The Daily Star
Date:19.06.08
Link:http://www.thedailystar.net/story.php?nid=41776

If not coal, what?

2008-06-15T23:17:00.000-07:00

FORREST COOKSON

The widespread attack by foreign NGOs against use of coal and the Phulbari Coal Project in particular is highly irresponsible. The basis of the attacks are five assertions repeated over and over:1. Open cast coal mines are bad.2. Coal mines cause a lot of dislocation of people.3. Mines will destroy valuable farm land that should be kept in agriculture.4. Private foreign investors exploit Bangladesh so should not be allowed.5. ADB should not participate in coal projects.These websites call for people to tell the ADB not to support the Project. Note that the Bangladesh government has not yet made a decision on the use of coal but these NGOs are trying to pressure ADB to reject participation, before the government’s views are known! This attack partially worked as ADB has now put aside its monitoring of the Phulbari Coal Project until the government decides what it wants! The ADB has not dropped its potential participation but is, properly waiting the government’s decision. In the meantime the NGOs are trying to build up international groups to oppose support by ADB for coal development in Bangladesh. The Bangladesh government should certainly listen to interested parties, but as a sovereign nation the leaders must decide what is best for Bangladesh. Neither the donors nor the NGOs have a right to try to force the government to act as they wish.The difficulty with these attacks by the NGOs is that they completely ignore the most important question: “How will Bangladesh fuel its electricity needs?” The answers to this question floating around are:1. Use natural gas instead of coal – but, of course, there is an acute shortage of gas that will take at least ten years to solve. The pressures by NGOs to stop mining of coal have already caused a two year delay in achieving any significant step towards developing Bangladesh’s coal sector. While there is potential for more gas in Bangladesh it has not yet been discovered. Until a hole is drilled and commercial gas quantity proven, it is prudent to diversify the sources of fuel for power plants. Furthermore, the best way to run the power system is to put the base load on to coal fired plants and handle the peaking demands using gas.2. Let Bangladeshis develop the coal resources without foreign participation: In Bangladesh there is very limited availability of experienced technical staff in designing and operating large coal mines (open cast or underground). The capital requirements for such mines are immense. Proponents of this idea know very well this is not feasible but it appeals to Bangalee nationalism. Of course in time Bangladeshi citizens will play a greater and greater role in the provision of skilled staff and capital for developing the coal sector but it will take a long time. The belief that there is staff and capital sitting around ready to implement coal projects is simply wrong. This path will slowdown the development of coal fired plants by at least a decade. If enforced for both coal and gas it is two decades!3. Develop nuclear power: This can only be achieved with use of foreign capital and technicians. Furthermore to build up to 8000 MWs will take 10 nuclear power plants. This cannot be done in 15 years. Using nuclear power will result in very intrusive safeguards and provide years of argument over the environmental impact. It is important to go forward with nuclear power but it cannot solve the problems of the next 10 to 15 years.4. Renewable energy: It is a particularly silly idea to think all of Bangladesh’s additional energy requirements can be met by renewable sources. Renewable energy is very expensive and its use in Bangladesh in solar form is heavily subsidised. Wind power potential is limited and wind power remains much more expensive than hydrocarbon based electricity. Just as for nuclear power renewable energy use should be encouraged but only hydrocarbon based power will provide needed electricity for the next 10 to 15 years. All these approaches proposed by foreign NGOs are simply wrong for Bangladesh! It is outrageous that these organisations should be undermining Bangladesh’s development efforts. Their position is “It is better to be poor than to develop the coal resources.”The position is so simple: Economic growth needs cheap electrical energy available only from use of coal and gas. Renewable energy is too expensive for mass use. The opposition by JACSES (Japan) or AID Watch (Australia) to development of energy in Bangladesh is a deeply immoral act. People sitting in developed countries using electricity at a high rate generated by coal, gas and nuclear plants are preaching to Bangladesh not to produce electricity with the coal and gas Bangladesh has! Let these people come and live in Bangladesh for five years without electricity at the income level of the median rural household. Perhaps they would then understand the urgency of expanding the power sector and accelerating economic growth. Expanding electricity availability for rural households is one of the most important tasks to be achieved; it is unfortunate that these foreign NGOs, judged by their actions, are working to keep this from happening.No doubt greater use of gas and coal will have some negative input on the environment. Should Bangladesh sacrifice its economic growth to reduce this adverse impact? Bangladesh does far less damage to the environment than either Australia or Japan. Let these NGOs clean up their own houses.Turning now to the objections.Open cast coal mines are bad: There is no alternative to the open cast mine. The technical problems [water regime, acceptable environment recovery] are manageable according to the world class mine design engineers engaged by Asia Energy. The government must insure that the vendor takes care of the environment. Rather than attacking open cast mines one should ask “How can we achieve this while protecting the affected population and the environment?” Open cast mines are necessary to build up Bangladesh power sector; otherwise not enough coal is available from underground mines. The target is 12 million mt per annum for power; this can never be achieved with underground mines. In any event expert opinion is that the coal deposits are only marginally suitable for underground mining.Coal mines cause a lot of dislocated of people: The critics miss the point, Asia Energy has to agree to resettle all affected persons in such a way that people are better off financially than before the resettlement. It does not matter who is right about the number. The government must make agreements with the coal companies to insure this happens. Difficulties are not a reason not to do the project, but rather a reason to be particularly careful and to work to overcome difficulties. The government must insure that resettlement is done according to its rules protecting the financial position of these affected. The NGOs efforts to drive out ADB will adversely effect the poor in the project area. The hypocrisy is breath taking. The coal projects will use up valuable farm land that should be kept in agriculture: This is true but the project will make an enormous contribution to the economy. Land is lost to agriculture continuously and if Bangladesh is ever to become a middle income country it has to maximise return to the land through industrial development. The future of Bangladesh does not rest with rice farming but through industrial development.Private foreign investors exploit Bangladesh, so should not be allowed: Many believe this and hence argue such investment should be banned. But others say: Environmental NGOs are bad and should be banned. This is the level of this argument! Noise not fact. Self righteous behaviour is best replaced with some humility and doubt. Of course foreign investors are trying to make money! The question is the word “exploit.” The earnings are large became the investments are large. Private foreign investment in the Bangladesh energy sector has been beneficial for both the nation and the investor. It has provided gas at less than $1 per thousand cubic feet and electricity at less than 3 ¢ US per kwh. For all the accusations and claims the Bangladesh government through good management and encouraging competition did very well using foreign investors in gas and electricity.ADB should not participate in coal projects: I do not know if the government will approve the Phulbari Coal Project. But if the government does Asia Energy faces no difficulty in financing the project from private sources or sovereign wealth funds. The government should welcome ADB participation to strengthen achievement of high standards for resettlement and environmental management.Anyone genuinely interested in the Bangladesh peoples’ welfare wants the power and influence of the ADB on the side of the people. Indeed the implementation of large coal projects in Dinajpur will accelerate the growth of this part of Bangladesh raising incomes, providing employment and attracting people from surrounding areas. Asia Energy does not need ADB for financing the Project; it is the Bangladesh government that can use ADB to strengthen its hand! Open debate about the pros and cons of energy projects and strategy is of great benefit to Bangladesh. But for NGOs to interfere in the relationship of ADB and the government seems questionable behaviour. This argument needs to be based on truth and analysis not misrepresentations and unsubstantiated claims.

Date:15.06.08

Source: The Independent

Link:

http://www.theindependent-bd.com/archive.details.php?nd=2008-06-15&nid=86328

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