LNG dependence spells disaster for economy

Energy policymaking over the last decade or so has revolved around charting an easy route, or going for the "low hanging fruits". The master plan power kept getting either amended or wilfully ignored. Years have been wasted to suit the needs of the few over the many. Now, time is up. Little has been done to address the critical problems of energy wastage on the one hand, and then opting for an imported fuel-based policy, prices of which we can neither control nor influence.  

While it made perfect sense (back in 2010) to expedite the introduction of power plants run on oil, what reason is there to continue with contracts that make "capacity payments" for inability of the government to purchase power from these plants? Having failed to explore own natural resources, the country is embarking on yet another folly, only this time, the economy may not be able to recuperate from the decisions made today. 

The Centre for Policy Dialogue recently organised a virtual dialogue titled 'Gas-LNG debate in Energy Supply: Costs and Consequences of LNG Import for the Power Sector'. It brought together experts, academia and others to discuss the financial impact of the fossil fuel on the economy of Bangladesh in the medium and long terms. Although the presentation made there dealt with a number of other issues, here focus is directed to LNG (liquefied natural gas). 

The international market forecasts for acquiring LNG are extremely bleak. Whether it has dawned upon our policymakers or not is another question. But as pointed out by Dr. M Tamim (Professor, Department of Petroleum and Mineral Resources Engineering, BUET) during the discussion, gas exploration needs to be expedited. There is hardly any time to start a serious debate about whether we should do this with BAPEX or with foreign companies. Time is of the essence here. The issue of gas exploration was emphasised upon by Dr. Badrul Imam (Honorary Professor, Department of Geology, University of Dhaka) also, who has rightly pointed out that an inordinate amount of time has been wasted because our priority was not to extract our own natural resources. 

Yet the authorities are saying that both LNG and gas should be used to generate electricity. There are discussions on nuclear technology. The fact is, there is no clear-cut idea about which road to follow. Industries are clamouring for reliable energy and power, neither of which seems to be available in abundance. Not too long ago, the people were given an idea that Bangladesh was "floating on gas". That may well be, but there is no way of knowing it since no concerted effort is visible to get to this gas. The country's recent failure to procure a few cargo-loads of LNG from the international Spot Market comes as no surprise. LNG is a precious commodity these days. Europe wants most of it and is willing to pay a premium price for it. So, it is the number one customer of choice for LNG suppliers everywhere. Since Europe pays top price, and there will be no Nord Stream pipelines in the future, Europe will be consuming the bulk of global LNG production, at least for the short to medium term. Another thing should be pointed out here. LNG is not crude oil; its supply isn't abundant. 

It is time, as the saying goes, to "wake up and smell the coffee". Forget about LNG and get a move on domestic exploration. Or do nothing, and face the music. 

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