The sad road from energy-surplus to energy-deficient
Pakistan’s energy story is pretty much like Pakistan’s story itself; born of little, grown to prominence, and then just a long list of disappointments, mismanagement, corruption and waste. It’s not just that we wasted the Sui gas bonanza. It’s that there has never been a serious state effort to understand or exploit our natural coal endowment – a neglect that borders on criminal.
And that brings Dr Farid Malik into the picture. A prominent technical and management expert in mining, corrosion, materials, engineering and high-tech industry, he is perhaps the most vocal proponent of leveraging our huge comparative advantage in natural coal reserves to our advantage; for energy production and related byproducts like fertilisers, chemicals, etc.
He is also the most optimistic coal advocate. Despite years of lobbying for coal – on top of decades of disappointment from first-hand observation of energy waste – he is no stranger to successive governments’ strange reluctance to pursuing coal. Yet he continues to push for what he calls the common-sense approach; as if suddenly someone would take notice, the culture of corruption would correct itself, and Pakistan would be on its way to energy sufficiency once again.
He’s due to explain, in considerable detail, the importance of coal to enhance and successfully diversify Pakistan’s energy mix at the Pittsburgh International Coal Conference due early October. The few people here who follow international commodity markets know that Pittsburgh is called the world capital of coal. And perhaps even fewer people at home know that Pakistan is home to the second largest coal reserves in the world (184 billion tones, behind USA with 274 billion tonnes); hence the special seat at the conference.
Pattern of mismanagement
But coal is not all we have had in abundance. Time was, back in ’55, when the Sui gas find in Dera Bugti, Balochistan, was then, at 12 trillion cubic feet, the largest in the world. That provided the sudden and very welcome push to energy-surplus status. Soon enough, though, there was a gas frenzy in the country. We ran practically everything on gas. And with new reserves not propping up, as was hoped, and the Sui jackpot wasted, we quickly turned into an energy-deficient country.
He’s due to explain, in considerable detail, the importance of coal to enhance and successfully diversify Pakistan’s energy mix at the Pittsburgh International Coal Conference due early October. The few people here who follow international commodity markets know that Pittsburgh is called the world capital of coal. And perhaps even fewer people at home know that Pakistan is home to the second largest coal reserves in the world (184 billion tones, behind USA with 274 billion tonnes); hence the special seat at the conference
“That happened because we did not develop a realistic game plan in light of our resources and needs”, Dr Malik told DNA during an exclusive interview.
This reference to game plan would appear again and again during the interview.
He went on to give the example of the US department of energy; and how it modified after the ‘70s oil shock and prepared for all sorts of contingencies.
“Over time they developed comprehensive short, medium and long term plans and incorporated all alternatives to oil – shale, geo-thermal, wind, solar, etc”, he added. “They also studied their commercial viability to pre-empt fluctuations in oil price”.
When oil price is low, like now, it becomes lucrative. But when it is high – and it has crossed record highs in recent years – then the cost-benefit ratio shifts and alternatives become more feasible. It is important, therefore, to have right ‘game plans’ in place, to be able to posture for unforeseen developments.
Coal story
There was no such foresight, of course, when gas reserves were at record high. And the story of coal is worse. Pakistan, again, has the world’s second largest coal reserves, yet its contribution to the energy mix is less than one percent. That means, without a doubt, that it has received far less official attention than it warranted.
Dr Malik is particularly passionate about Thar. It holds the largest deposit of around 175 billion tones.
“Yet not even one tone has been successfully extracted”, he lamented.
And the reason is not lack of technology, or even opportunity, but rather a lack of political will.
Coal raises environment specific concerns with most large international donors. So the World Bank, ADB, etc, are not realistic funders, unless strict conditions can be met, which is not possible in Pakistan’s case. That is why help from friends like China is important. It is no surprise that $33b of CPEC investment is energy-specific.
“The government needs to realise that such considerations should not put coal away”, he said, adding that “in the 21st century, we can’t use coal as in the 19th century”.
There is far more awareness now, he explained, and mining and refining techniques have improved to minimalise pollution and environmental hazards.
And the Thar deposit poses more problems that the government has been unable to get a handle on.
“Coal there has water above and beneath it”, he explained.
“It has also been found that Thar coal disintegrates when exposed to air”.
To study these attributes in detail, and subsequently develop favourable ways of extraction, Dr Malik advocates test mines and pilot plant studies. Such exercises enable studying peculiarities in isolation; in order to develop a model for large scale mining and extraction.
But the Samar Mubarakmand group had its way. They called for converting coal to gas underground.
“But some years and many billions of rupees worth of investment later we have no results. There’s been no conversion under or above the ground”, he added.
“As a result 175 billion tonnes of coal are held hostage to unproven technology of a nuclear scientist”.
What could, should have been
Presently gas makes up about 48 percent of Pakistan’s energy mix, which is unsustainable; hence the gas load shedding in winters. Oil’s contribution stands at 32.5 percent. There was a plan in 2005 that envisioned keeping gas more or less the same, but reducing the oil component to less than 20 percent, while increasing the contribution of coal by the year 2030.
His persistence brings to light one of our biggest failings. The theory of comparative advantage is central to all development and trade economics. We remain a country that has a natural windfall in a crucial natural resource. Yet we are unable to overcome our own corruption, and lack of an appropriate game plan, therefore we remain paralysed
But, of course, nothing of substance was undertaken to develop coal. So now the government has proposed a new plan. This one sees gas reduced to 30 percent by the same deadline, with coal also contributing 30 percent, and oil cut to 12 percent.
However, with the government still not interested in pursuing the course of coal, it is difficult to understand how such numbers, and vision, can be translated into reality. And it’s not just the federal government is unable to make any headway. The 18th amendment empowered the provinces to lead the way on energy, yet there has been nothing to write home about.
“The provincial governments want ownership of the energy project, but they want the federal government to make all the investments”, he said.
But with the centre just not willing to turn to coal, those investments, even if possible, are not likely in the near future. For the moment the N-league prefers LNG over what Dr Malik considers the more feasible SNG (synthetic natural gas).
It employs a process called Integrated Gasification Combined Cycle (IGCC), which converts the coal into gas above ground. It can employ the gas industry’s extensive pipeline network – approximately 20,000 km – to good advantage. Unfortunately, though, the ambitious plan, so far, remains confined to theory. And Dr Malik remains a lone warrior of sorts.
His persistence brings to light one of our biggest failings. The theory of comparative advantage is central to all development and trade economics. We remain a country that has a natural windfall in a crucial natural resource. Yet we are unable to overcome our own corruption, and lack of an appropriate game plan, therefore we remain paralysed.
The Nawaz government lobbied chiefly on energy, in addition to taxes and security, ahead of the ’13 general election win. So far, its efforts to overcome energy shortage have run into a brick wall. Perhaps it should give Dr Malik’s logic a keen ear. That way, even if a viable plan is set in motion, it can at least be an investment in future votes if not the future of the country.
