Coal is inevitable
Last time we talked to Dr Farid Malik – technical expert in mining, corrosion, materials, etc, and perhaps Pakistan’s most vocal coal advocate – he was about to fly to Pittsburgh for the International Coal Conference. As keynote speaker, he was going to talk about the centrality of coal in diversifying Pakistan’s energy mix.
He has advocated coal for years, but with very little success. Successive governments have been unable, or unwilling, to tap into Pakistan’s large coal reserve which, at 184 billion tones, are the second largest in the world. Number one is USA with 274 billion tones.
And now that he’s back from Pittsburgh, DNA sat down with him one more time; to see if coal industry big shots – Pittsburgh is the coal capital of the world – agreed with his proposals of transforming Pakistan’s energy basket, and whether he still expects the government to come round to his point of view, which is adopt the “common sense approach” and work on our large natural (coal) endowment.
“Unfortunately we have never taken energy security seriously”, he began more or less where we left last time. “We just took it for granted”.
He cited the famous Oil Embargo of the ‘70s to explain the necessity of energy self sufficiency. The Embargo brought the United States, chronically dependent on Gulf oil, to its knees.
“Four people were the principal architects of this Embargo, and two of them were Pakistanis”, he explained, never missing the political background to economic/financial turning points.
“They were Zulfikar Ali Bhutto, the prime minister of Pakistan and Mian Anwar Ali, who was an economist and at that time economic advisor to Shah Faisal. The others, of course, were Shah Faisal himself and Ahmad Sakkaf, his foreign minister”.
He cited the famous Oil Embargo of the ‘70s to explain the necessity of energy self sufficiency. The Embargo brought the United States, chronically dependent on Gulf oil, to its knees
That prompted Jimmy Carter, then US president (and himself an engineer), to promise his nation that there would never again be an energy crisis.
“He formed the department of energy and initiated research on all types of energy at universities across the country. These included coal, shale gas, geo thermal energy, nuclear, wave energy, solar, you name it, and it was there”, he went on.
These technologies were not just developed but also, more importantly, “made commercially viable”.
Now, America has a list of energy options. When oil crosses 100, for example, solar and wind will come into play. When it’s below 100, other options will be more convenient, etc.
“So, not only did the US develop a comprehensive energy plan, but also used its CIA muscle to physically remove all four men who planned the oil weapon”, he said.
“ZA Bhutto was eliminated through judicial murder, Shah Faisal through palace intrigue, Ahmad Sakkaf was murdered and Mian Ali was poisoned. This shows the seriousness of energy”.
Our energy priorities
Pakistan’s story is very different, of course. Dr Malik is still not sure whether it was Pakistan’s good fortune or bad that we struck the world’s largest gas reserves (at the time) in Dera Bugti, Balochistan. This was in ’55, and the reserves stood at 12 trillion cubic feet.
“Luckily some of the founding fathers were still around at the time and they were honest. They developed an energy game plan”, he explained.
This was the development of Pakistan Petroleum Limited (PPL) — which was a joint venture between the government of Pakistan and British Petroleum – to pump and purify the gas, and Sui Northern and Sui Southern gas companies, which transported the gas to the length and breadth of Pakistan.
“Pakistan has one of the best gas distribution networks in the world. It is sate of the art”, he added.
And it was gas that provided us with much needed energy security for roughly 60 years (55-2015).
“Then oil based IPPs came, which was a disaster”.
Now we have no fuel source. We import $14b worth of oil. And we will import $another 2-3b of LNG and $1-2b of coal. “With foreign exchange reserves at around $18b and dwindling, we are literally on the edge”.
He also pointed out, quite seriously, that in Pakistan’s case energy insecurity also compromises food security, since tube wells run on diesel oil.
Energy autarky
“Our energy security or energy autarky is seriously dented,” he went on. “There is no game plan. And now they are running here and there. They are also going to import coal and, making things worse, burn it, which is now obsolete technology”.
That means, that in the 21st century, our government is headed in a direction that the rest of the world is moving away from.
Modern day technology – and he visited a state of the art plant on the tour, in Mississippi – extracts low grade coal (lower than Thar), gasifies it, then makes electricity from the gas. It also makes sulphuric acid and ammonia. The emissions are also captured and given to the oil industry.
“This is clean technology. It is called IGCC – Integrated Gassification Combined Cycle. It has no emissions.”
This technology will now determine the future of coal. The catch here is that it requires high capital investment, double the normal coal project. But the rate of return is also high because of multiple products.
At the end of the day, just like the comparative advantage in gas enabled us to achieve energy abundance more than half a century ago, we will eventually have to exploit our vast coal resource to become self sufficient once again
There is also another technology. In this coal is burnt but all emissions are cleaned before they are released to the environment. This is low capital intensive, but has a higher running cost.
“So our option is to either go for higher capital cost and ensure environmental safety, or take the other route. But I don’t trust them to go for the second option, because it entails higher running cost and they can’t be trusted with cleaning the emissions”, he said.
Inevitability of coal
By 2030, Dr Farid explained, coal will comprise 30 percent of our energy mix. He stressed that it should be domestic coal, for energy security issues.
That would require massive mining operations to extract at a larger scale.
“Which we are not doing at all”, he lamented.
Exploiting coal at such a large extent will also require adherence to stringent safety requirements, which is all the more reason that the IGCC option must be considered.
“If we are going to pursue a coal based approach, then we must put together a thorough game plan. Even if other options are to be considered, like Shale, we must nonetheless have a concrete plan of action”, he stressed.
There’s another confusion that he liked to point out. Coal lobbyists are often taken for anti-damn groups.
“That is not true at all”, he clarified. “In fact I’m an advocate of dams as well. But you must understand that dams only create electricity, not fuel, that too when the spillway opens. But how do we take care of the fuel needs of this nation?”
At the end of the day, just like the comparative advantage in gas enabled us to achieve energy abundance more than half a century ago, we will eventually have to exploit our vast coal resource to become self sufficient once again.
And in this regard, sadly, the government has not done much to write home about. With gas they blundered after using it. With coal, they are blundering even before employing it. But one way or the other, they will have to use coal, since there are few indigenous alternatives.
“Coal is inevitable”, he concluded.
