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Extract hydrocarbons forthwith or risk draining foreign exchange

Bengal delta holds huge gas deposits but govt opts for expensive LNG import, experts tell CPD meet


| Updated: June 28, 2022 10:08:50


Extract hydrocarbons forthwith or risk draining foreign exchange

It's high time the government shifted focus onto harnessing primary energy to avoid squandering forex on LNG imports and to ensure sustainable quality power supply at affordable prices, experts say.

Terming primary-energy dearth a major problem in the country's power sector, they suggest the government should go for massive exploration activities to extract hydrocarbons from potential places of this Bengal Delta where possibility of getting natural gas is too high.

Expressing concern over giving more importance to imported LNG instead of locally produced gas, they fear that the practice could drain away huge amount of foreign reserves per annum.

The suggestions and fears came at a dialogue on Energy and Power Sector in the National Budget for FY2023, held by Centre for Policy Dialogue (CPD) at a city hotel. CPD executive director Dr Fahmida Khatun chaired the event.

Professor at the Department of Petroleum and Mineral Resources Engineering (PMRE) at BUET Dr M Tamim mentioned that the country had gone through severe load shedding in-between 2005 and 2009 due to less production of power.

Thereafter, the country gave utmost priority to power generation but the policy was still on although the problem is changed, he noted.

"Now, the main problem of the power sector lies on primary energy. Power stations having generation capacity of 2000 megawatts (mws) remain idle because of the shortage of natural gas," he told the meet.

Citing national budgets for the last several fiscals, Mr. Tamim, also former energy adviser of a caretaker government, said the government is giving allocation between Tk 180 billion and Tk200 billion for energy sector while the allocation for power sector varies from Tk 250 billion to Tk 260 billion.

"But the problem is now in energy sector. Unfortunately, investment is being made in power sector, ignoring energy. We need to ask why we are not enhancing supply of gas instead of installing new plants," he said.

Professor at the Department of Geology at the University of Dhaka Dr. Badrul Imam hailed the government for achieving success as far as power production is concerned. "But the production capacity keeps declining due to gradual fall in the supply of gas. If it continues for next several years, it would put enormous pressure on electricity production," he said.

Citing geological science on gas and other mineral resources, he said deltas are among the suitable places where the possibility of getting mineral resources is very high.

"Look at Niger Delta, US Gulf Course and Indonesia where huge volumes of gas are explored. Bengal delta is the largest of its kind in the world. Unfortunately, this is least-explored area for hydrocarbons," he said.

Instead of giving serious focus on exploration of natural gas, the government is giving attention to other areas, which intensifies the problem further, Mr. Imam adds.

The expert notes that Bangladesh annually spends Tk 440 billion in importing LNG, which contributes only 25 per cent of the energy, whereas Tk 200 billion is spent a year for natural gas that accounts for 75 per cent of the overall energy.

"So, it shows how LNG drains out our foreign reserves."

Professor Dr M Shamsul Alam, Dean, Faculty of Engineering (FE) at Daffodil International University, said businesses, like in previous years, term the national budget business-friendly.

"Why it is not made consumer-friendly," he asked.

He said the people of the country are not getting power at right prices. Recently, he said, they told the energy regulator that the predatory costs amounting to Tk 400 billion were involved in power production.

"This cost is not logical, then why would we pay? This needs to be stopped."

In a keynote paper, CPD research director Dr Khondaker Golam Moazzem said because of further addition of capacity in FY2022, overgeneration capacity of electricity has increased to 10,764MW from 8,231MW.

Overgeneration capacity has further increased the pressure of capacity payment, he said.

"A major policy shift is required in three accounts -- reducing overgeneration capacity, shifting from fossil fuel- based energy and raising use of renewable energy," he adds.

Mohammad Hossain, Director-General (Power Cell), Power Division, the Ministry of Power, Energy and Mineral Resources, among others, also spoke at the event.

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