Looming energy crisis

Hagler Bailly, a global management consulting firm had warned Pakistan in 2006 that gas shortfall to start in 2007 and it would continue to grow. If alternative sources were not sought in the next two decades it could lead crippling of the economy. Here we are now.
According to Pakistan Energy Year Book 2010, the country produces nearly 4,000 MMCFD of natural gas. The largest consumers of gas are power (29 per cent) and industrial (26 per cent), followed by domestic and fertiliser (17 per cent) and transport (eight per cent). The book predicts that, gas demand is projected to increase to 13.27 Bcfd against the supplies 2.17 Bcfd thus a shortfall to nearly 11 Bcfd is expected by 2025.
It is suggested that until new reserves are discovered or Thar-coal reserves or Pak-Iran/Tajik gas pipeline projects get operational, existing if shrinking gas reserves have to be used with care. Government needs to priorities distribution of gas as per the socio-economic needs of the country and all stakeholders must get convinced that there is no other way out except capitulating own rights. Media can play an instrumental role and instead of stoking fire they should try educate and convince all stakeholders.
To me, come first the industrial and power sectors because in order to reduce penury, unemployment and social unrest, industry should keep growing fast. Pakistan’s exports and the overall economic growth and thereby jobs are largely dependent upon the industrial growth. And verisimilar is; industry cannot run on intermittent power supply. Domestic or household sector comes next. Cooking and heating are perhaps the two major ends where gas is consumed and unless there is no immediate substitute available, this priority cannot be further negotiated.
The economic managers of the last government were imprudent and blatantly encouraged the use of CNG in the transport sector. They didn’t foresee the supply demand disequilibrium that to come soon. Thus as a cheap and best substitute fuel of oil and diesel, consumption of CNG in vehicles shoot up exponentially. In a recent survey of Gallup Pakistan, it is discovered that more than three fourth of car owners (77 per cent) in Pakistan claimed to have used CNG fitted cars. Hence, the nation is now caught in a severe energy crisis and there is no way out in the short run.
It is also said that Pakistan is now the largest consumer of CNG (vehicles on CNG) and has the largest number of CNG (2941 in 2009) refueling stations in the world. Ironically speaking, domestic gas consumers pay around Rs500 per month (gas bill on avg.), whereas a vehicle consumes Rs500 per day of CNG (on average). Imagine the amount of energy and the money burnt in the air can be saved if the use of CNG is discouraged in the short run.
Hence, someone has to sacrifice to keep the wheels of industry rolling and cooking stoves alive. The transport sector should shoulder the burden then. The flip side of it, the poor commuters can become unhappy but there is a tradeoff when setting the priorities because choice for us is limited in the backdrop of fast depleting gas reserves.
Equally, CNG crisis should not take away our eyes from looming power crisis. Managing demand and distribution of electricity is perhaps the biggest challenge that the government faces today. Line losses are perhaps one of the highest in the world. WAPDA, KESC, PEPCO and other public sector enterprises are riddled with corruption and incompetent staff which is backed by strong union mafia.
Whilst the nation has been asked to pay electricity bills which are hitting the roof now, the issue of free electricity to WAPDA employees cannot be ignored and must be dealt with diplomatically. This disparity must go at all cost. The growing list of defaulters should be cut to a minimum to reduce the circular debt burden. Association of architects, Pakistan Engineering Council and town planners should help, encourage and introduce affordable construction technology which could save both construction cost and use of energy. We as a nation have to tighten our belts if we are determined to fight the crisis. Government alone cannot fight the case.

The author is an Islamabad based freelance contributor and Director SZABIST, Islamabad campus. Views expresses herein are personal. He can be reached at [email protected]