In Bangladesh today there are visible plans of a changed landscape in the energy and power sectors. In fact, the country stands at a crossroads of major transition from an underdeveloped energy sector to a more developed one—from a mainly local gas-based mono-energy status to multiple sources in the energy mix. This mix will include local gas and imported LNG, coal, oil, nuclear, cross-border power and renewables. The transition in the power sector is supposed to be massive and quicker than anything before it as the power generation capacity is projected to increase from the present 15,000 MW to 21,000 MW in 2020, then to 32,000 MW in 2030 and to 54,000 MW in 2040 (PSMP 2016).
A major challenge presently faced by Bangladesh is ensuring sustainable primary energy supply for mega power projects and fast-growing industrial installations. In the face of a fast depleting gas reserve and a lack of major initiatives to develop local coal, achieving a sustainable local primary energy source becomes difficult. Yet there are scientific arguments to suggest that the slogan of fast depletion of gas reserves has been overly played while the prospect of new gas discoveries remains underemphasised. A consequence of the above is an increase of dependence on imported energy in policy and planning.
According to estimates, Bangladesh will have more than 90 percent dependence on imported energy sources by 2030. With a major coal reserve in north Bengal underutilised and the full potential of gas not unearthed, the wisdom of going for almost total dependence on imported energy has been debated. Both LNG and imported coal will be priced higher than indigenous gas or coal. Limited, short-term LNG import to tackle the immediate gas crisis seems reasonable, but large-scale, long-term LNG import seems questionable. The present trend of slight rise of oil price in the international market pointedly suggests that the age of low oil price and hence that of LNG is going to be short-lived.
It is understood that a distinct government policy decision depends predominantly on imported energy. A major shift from local to import-based primary energy means the country will have to face huge economic pressure to pay for imported energy. The cumulative cost of large amounts of coal and LNG imports on a long-term basis along with large-scale imported power is likely to raise the cost of power and industrial products.
Is this sustainable? Will it be affordable to the general population? Geoscientists argue that an overwhelming dependence on imported energy is not inevitable and the energy import may be scaled down to a reasonable level by utilising local primary energy sources, mainly natural gas and local coal. An exploration and exploitation programme for local energy sources may change the way Bangladesh's energy policies are designed.
Bangladesh, the largest delta basin, is a proven gas province in the eastern part but its true potentials are yet to be revealed. This is because it is an underexplored country with an immature exploration status by any standard. The gas prospect in this mega delta has been underplayed while the notion of gas depletion has overly influenced long-term policy decisions. Drilling for new gas wells is few and far between and there have been no serious effort to discover new gas reserves over the decade.
Yet geological evaluation suggests Bangladesh has far more gas potential than is presently known. Exploration drilling till date has been confined to simple conventional structural plays and mostly onshore. More subtle stratigraphic plays are yet to be taken on board, not to mention the various unconventional plays. Recently, Bapex launched a campaign of exploratory onshore drilling whose results will depend on how efficiently the technology is applied in geological evaluation to locate drilling points.
Offshore gas exploration in Bangladesh is a little explored area. Yet the adjacent offshore areas of India to the west (Mahanadi basin) and Myanmar to the east (Rakhine basin) have registered significant new gas discoveries lately. In the 1970s exploration in all these areas had failed to achieve success. The return of international oil companies in 2000s in the offshore Rakhine basin and Mahanadi basin with newly interpreted geological and technical models brought a new era with several major gas discoveries, turning offshore Rakhine to one of the most lucrative gas provinces in the region. This has not happened in adjacent Bangladesh's offshore.
There is no natural divide between southeastern offshore Bangladesh and the offshore Rakhine basin; the whole area is a single geological unit which may be referred to as offshore Bengal-Rakhine basin. Therefore, the geological models which led to the discovery of gas in offshore Rakhine should also hold valid in the adjacent offshore in Bangladesh, including deep offshore. But Bangladesh's offshore has disappointingly not seen serious exploration programmes.
Coal is going to be the prime source for power generation in Bangladesh in the next decade and beyond. The present contribution of two percent power generation by coal is likely to jump to 35 percent by 2030. The six or more large-scale (1,300 MW each) coal-fired power plants being actively pursued at present are to be fed totally by imported coal. Demand of coal-fired power plants is expected to increase from less than one million tonnes of coal per year currently to about 30 million tonnes per year by 2030. While all this will generate electricity, the overwhelming dependence on imported coal will raise power prices significantly.
Bangladesh has a reasonable amount of shallow mineable coal reserves in the Dinajpur and Rangpur districts. But development of national coal resource has been slow and has taken a backseat in national policy planning. Geological settings of coal fields in Bangladesh are not very favourable for open-pit mining, mainly because of geological and socio-economic reasons. However, that does not preclude underground mines from developing. The option of building mine-mouth coal-based power plants in north Bengal has not received the attention it deserves. This would significantly ease the pressure which would otherwise fall on our economy should a policy of total dependence on imported coal for power generation is implemented.
Badrul Imam is a professor in the department of geology at University of Dhaka.