ARTICLE
Energy Security: Looking One Step Beyond
Saleque Sufi

Well it is extremely difficult to foresee and predict but what is reassuring that not only the major political alliance but everyone having any stake in the future of Bangladesh has realized that security of supply and availability of energy at affordable cost for general masses is going to be the major agenda of development of Bangladesh in immediate future. The persisting diabolic energy supply situation has caused serious impediment to the growth of economy and almost threatening to bring industrialization to a standstill. There is no time to find excuse and play blame game. Lots of brainstorming and blame game have been played. It is time for action and to undertake crash program to alleviate the situation.

One hopes that future leaders of Bangladesh and aspiring political force to rule the country has taken good lesson for the mistakes of past regimes and will not repeat the mistakes. Good governance, congenial environment of private sector participation in all segment of energy value chain, strong and independent Energy Regulatory Commission, transparent policies, no political interference and above all elimination of corruption through strong political commitment can restore sanity in the near collapsed energy situation. But do we have such committed political force? Can we have visionary leadership which will vow and act to keep energy clean of dirty politics and protect energy sector from the grasp of corrupt evil syndicate?

The present political impasse is bound to be overcome sooner or later. But the struggle of people, their pains and miseries have to be solved at the earliest to give them comfort. If energy situation is not improved in the shortest possible time it will impact every other aspects of national economy and frustration will creep in and ruin the future of the emerging economy.

Immediate past prime minister Khaleda Zia has promised that if voted to power again her alliance government will attach top priority to energy sector. People have very little faith as her government in two terms failed to address the issues miserably. Her last term has created new negative milestones of failure of power sector and has effectively brought it to the brink of disaster. Still if the immediate past ruling alliance has learnt a lesson or two from Kansat, Shanir Akra and other places, they should not dare to repeat the same in future. 

The failure in energy sector alone may be the reason of its failure in election if the people have the opportunity to cast their votes in free and fair election. People have seen how corruption and mismanagement have prevailed and government in 5 years failed to effectively add any thing to power generation. People suffered from massive power load shedding for hours. 

Lack of power supply impacted on water supply, irrigation. People suffered during the month of Ramadan. Sehri and Iftar had to be done in darkness or under candle light. Government could not resolve the Phulbari Mine crisis, mismanaged Tengratilla blowout, extended Niko scandal, failed to meaningfully embark on deep water drilling for petroleum. 

Government appeared to have messed up various restructuring and reform measures due to inconsistency of policy, lack of commitment and widespread politicization.

When the immediate past government started in 2002 the effective power generation was about 3000Mwand average daily demand was around 2800-3000MW. Some large plants were under construction like AES Meghnaghat, Siddhirganj. Several other projects were in the pipeline. 

Due to inaction and ill conceived initiatives only Tongi and Barapukuria plants could be installed apart from completion of the plants at Meghnaghat and Siddhirganj. Everyone knows about the performances of Tongi and Barapukuria plants. Consequently, Khaleda government left office with huge deficit in power sector --a generation capacity of 3200MW against a national demand of 4800-5000 MW. Various high sounding initiatives of Barge /Skid /Trailer mounted plants did not take off. Initiatives at Meghnaghat2, Sirajganj, Kaptai Hydro, Fenchuganj and Khulna were fouled up. 

So with such a dark track records can people rely on the sweet words any more?

On the other hand, the opposition alliance has also included energy issues as one of their top priority in their election agenda. There has been several sugar coated words -- Nuclear, Hydro, Solar, Biodiesel etc. These rosy words will ultimately turn thorny unless there are proper homework and proper vision ready to work upon. There should a visionary leader with strong political commitment and insight as energy minister. He must have the integrity and character to crack the evil energy syndicate which has cast its dark shadow over the sector and have its wings spread among different political forces. PM can not keep it under his/her belt and manage the all important sector like the two immediate past regimes. 

Another prime requirement is to ensure good governance in energy sector. Government must endeavor to keep energy clean of politics. ERC Act must be revisited to tighten loose knots and make ERC a truly independent entity like FERC or NEB. Energy sector will need massive private sector investment in all segments. A truly independent ERC manned by competent young enterprising professionals can ensure a level playing ground for private –public initiatives for healthy growth and development of the sector. 

Government must reassess the role of various energy entities like PDB, Petrobangla, BPC, and restructure and realign these along functional lines. Too many regulatory bodies create confusions and impediments and gives of wrong signal to investors. A politically elected government having people’s mandate is not required to be dictated by theoreticians for major policy decisions .If government can amend the ERC act to make it a strong independent entity and engage competent professionals it can play its role of regulation, pricing and environment and safety control, standardization of construction and operation. Government’s role should be restricted to policy making and monitoring the operations.

National Energy Policy needs updating. Gas Act and Coal Policy can be part of updated NEP. PSC for deep exploration must be completed and tender may be let out as soon as possible .We have to properly assess our resources, harness and exploit in the most economic way. It is sheer irony that we debated over our reserve, resource potential of natural gas for many years but could not organize a proper reservoir study unit or undertake a proper initiative to ascertain an acceptable starting figure as yet. We have huge unexplored frontiers in deep sea and shallow water. We have extensively assessed our major reservoirs. So reservoir study and exploration must be one of our erotized actions. It will require FDI and private sector will require transparent policies and strong commitment to downstream utilization, transparent pricing policies. While Petrobangla can reorganize reservoir study division for reservoir management, pricing and utilization control should be vested on ERC.

Government may seriously look into the reasons why Petrobangla loses all arbitration with contractors. There is no basic competent unit to manage and monitor PSCs. Petrobangla being owner of production companies and partner of IOCs in PSc cannot regulate or manage IOCs. Incumbent government must give deep thought over it. As a case study they may scrutinize what went wrong with us as we lost arbitration with Shell-Cairn for Sangu development, what are the intriguing issues in Unocal-Maxwell arbitration.

The energy sector will require trained professionals of proper discipline.We do not have enough petroleum engineers, reservoir specialist, mining engineers, petroleum geologists, competent accountants, petroleum lawyers, contract administrators. Human resource development was completely ignored. Due to improper job environment and political bias, huge brain-drain of competent professionals have almost made the operating companies barren. BPI must be made a full fledged training institute to train professionals. Recruitment policies must be reviewed. Proper compensation packages must provided at all levels of energy sector officials to attract and retain competent professionals. Mining engineering discipline must be included in our engineering institutions.

While ensuring proper work environment for the officials there should be proper and transparent way of work monitoring. Provision for punishment and reward for good and bad performance must be ensured. Effective action plans must be implemented for controlling the system loss and accounts receivable of energy companies. Theft and pilferage must be severely dealt with.

Natural gas will continue to dominate our energy security for a while. We must harmonize exploration and production with transmission and distribution. We have to remove bottlenecks wherever necessary to ensure that there is security of supply of national gas grid to ensure proper supply to power plants and fertilizer plants. However, simultaneously we must initiate strong actions for diversifying energy basket. High quality coal option must be exploited in the most economic way to create long term energy security. 

Government must objectively analyze exploration options considering economic viability and energy needs. Phulbari and Barapukuria can be compared without any prejudice, myths and hyperactive political misgivings. We need to utilize our maximum available resource in the safest and proven mechanism. It is far easier to rehabilitate 50,000 people than to leave billions of dollars worth of coal below the ground unexplored. 

However, the percentage of royalty, export issues can be come under negotiation. But the best possible way of exploring coal in shallow mines must be open pit. We must not have prejudice. Government must find out whether we gained anything in underground coal mining at Barapukuria and what price we paid for it.

In this age it is unthinkable that we can think of resolving our long term energy security in isolation. Various regional initiatives could not progress partially due to indecision of immediate past government. A regional gas grid linking Myanmar, Thailand, Bangladesh, India and a regional power grid linking Bhutan, Nepal, Bangladesh and India should be vigorously perused.

Well next couple of weeks will decide which direction Bangladesh will be heading. Let’s hope that the country having immense potential will ultimately overcome delicate political issues to people’s benefit. A very strong political government will strong political will and commitment will govern the future in a proper pro-people and democratic manner. We dream of a very lively and vibrant energy future for Bangladesh where Bangladeshi energy experts staying abroad can also contribute in many different ways.