The Advisor to Caretaker Prime Minister and Chairman of the Pakistan State Oil (PSO), Sardar Yaseen Malik, has said that Pakistan has enough coal reserves to meet its energy requirements over the next 350 years. There is nothing new in what the Advisor has said, though estimates of the size of this huge untapped energy treasure trove have varied from government to government.
The current estimate is 175 billion tonnes, which is said to put us at par with any two major oil producing countries of the world. Why successive governments have failed to tap this inexpensive and almost inexhaustible source of energy, remains a mystery, particularly when many foreign companies have, over the years, shown interest in developing the coalfields.
After hydropower, coal has a substantial edge over other non-renewable sources of energy as a relatively cheaper mode of electric power generation. Pakistan has emerged as the seventh country among the world's top 20 after the discovery of huge lignite coal deposits in Sindh.
Experts have estimated that Pakistan's energy requirements over the next five years are likely to grow at the rate of 7.4 percent per annum, largely because of the ambitious GDP targets set by the government. This is a big challenge which the country will have to meet in the coming years.
However, what is rather surprising is that progress has remained rather disappointing on statements of qualification submitted by such reputed multinationals as Sumitomo of Japan, Siemens and Reinhaul of Germany, AES Corporation of the US, Al-Jumaih Group of Saudi Arabia and Malakoff of Malaysia for setting up a 1000-1200 megawatt power project in Sindh.
It will be recalled that the Chinese company, Shenhua Group, which was working on a 600-megawatt power plant at Lakhra, after carrying out extensive feasibility studies and surveys had abandoned the project mid-way on failing to negotiate power tariff with Wapda in 2006. There is no word on what became of the Lakhra project. (The government should issue regular updates on the status of each mega energy project it has launched.)
According to available data, Pakistan has 175 billion tonnes of coal deposits out of which 3.3 billion tonnes are in the measured category, and about 11 billion tonnes are indicated as reserves. Further, our current total mine-able coal reserves are estimated at 2 billion tonnes, which is 60 percent of the measured reserves. Numerous studies conducted over the years have confirmed the high quality of Sindh coal.
In fact, our domestic coal has a very strong case to be given maximum possible share in the energy mix on the ground of relatively lower investment/growth rate co-efficient and of much larger employment potential it will provide in comparison to oil and gas. Secondly, the use of coal in power generation and cement manufacturing is amply justified on economic grounds.
(Coal used to be a major source of energy before large-scale discoveries of oil and gas.) The use of coal in developed countries had initially declined due to environmental concerns, changes in social attitudes and the introduction of new technologies.
However, its large-scale use has since been revived in many countries, including USA and Western Europe where it is already showing a steep increase, thanks largely to use of "cleaning technologies." It is now projected that coal will play a major role in these countries by the end of the present century.
The US currently has the highest production and consumption of coal in the world and according to predictions, coal consumption in the US will rise at an average rate of three percent per annum until the end of the century, mainly for power generation.
Viewed at a global scale, steam coal, which accounts for about 10 percent of the total energy in industrial sector (excluding steel) is likely to increase its share to about 15 percent towards the end of the century. The electricity generating facilities in the US now consume about 20 percent of the coal used by the whole of US industry. After the US, Asia and Western Europe are the next largest consumers of coal.
However, coal has the disadvantage of high carbon emissions, though technologies have since been developed to drastically cut down carbon emissions. The expenses incurred on these "clean technologies" are comparatively only nominal. Secondly, the immense size of Thar coal reserves makes it an economically viable option for an energy-starved country like Pakistan. (It is estimated that Thar coal reserves can produce energy equivalent to 400 billion barrels of oil or 850 trillion cubic feet of gas.)
The coal mining industry in Pakistan requires extensive restructuring before any reliance can be placed on it for sustained large-scale supplies at competitive rates. Reform in the coal industry requires maximum encouragement to the private sector, which implies curtailment of bureaucratic redtape. At present Pakistan meets its energy requirements of over 75 percent from domestic resources.
Around 50.4 percent of the country's energy needs are met through use of indigenous gas, 28.4 percent through domestic and imported oil, and 12.7 percent by hydro electricity. The contribution of coal and nuclear energy in the total energy mix is limited only to 7.0 and 1.0 percent, respectively, which needs to be substantially increased.
And finally, a silver lining. While the widening gap between energy supply and demand remains a huge challenge for Pakistan, it has also opened up viable investment opportunities for both local and international investors, which they ought to avail.
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