Energy security

2020 dawned with war fears. The US-Iran tensions are mounting in the region. Michael Kugelman wrote earlier this week that Pakistan and India are edging closer to a war in 2020. Pakistan needs to have strategic petroleum reserves to combat any war like situation. With country's growing reliance on imported energy, port development should be the top priority. In the 1965 War, India attacked the Attock Refinery in north. In 1971, the Karachi Port came under attack by the same enemy country.

What if a similar incident happens in the near future? The consequences could be disastrous. Pakistan has zero strategic oil (or petroleum) reserves. Such reserves are prepared for war-like situations. The US has 90 days of reserves. Indian strategic energy reserves are of 10-12 days and are being increased further. Apart from that, Indian refineries have 65 days of operational reserves. Pakistan refineries are living on clutches. The operational reserves are not more than 15-20 days. They are operating on age-old technology and are becoming financially infeasible without government's active support.

The situation in Pakistan is different from what it was in 1965 or 1971. Over the period of time, country's reliance on energy needs is increasing on the imported fuel options. The demand is growing whilst domestic natural gas reserves are depleting. The gas production at home is reduced by almost 20 percent in the past four years. Pakistan does not have adequate port infrastructure to handle growing imported energy reliance. Almost a two-third of country's oil is imported at Karachi port. Most of country's crude and petrol are handled at Karachi port. Port Qasim is equipped to handle Furnace Oil (FO) and Diesel. The import of FO is almost over. The strategic reliance is highly skewed towards Karachi port.

The storage and handling capacity at Karachi port is chocking. Two of the three oil piers are non-functional at this moment. The port is operating 24/7. Tankers are filled and moved round the clock. Ports are not supposed to be this busy. Any accident could create a serious energy shortage in the country. Some fear that security protocol is not fully followed. The petrol storage tankers have floating roofs to prevent fumes catching fire. Some private tankers are using non-safe equipment for transporting and handling petrol. What if a tanker catches fire?

Any operational delay can choke the country's energy supplies. Some of you may remember that mishandling in petroleum imports at KPT created an acute shortage of petroleum products up north in Jan 2015. Situation has gone worse since then. There are three oil piers at KPT to handle oil import. Oil Pier-3 is not working since second half of 2018. In Dec-19, Oil Pier-1 became non-functional too. At this point, a two-third of country's oil import is handled by mere one pier (Oil Pier-2). One of the two non-functional oil piers is scrapped. The other can be operationalized in a few months. What if something happens to functioning of Oil-Pier 2?

Every port has its natural life. Karachi port has lived it. With area becoming populous, not much can be done with the port. Due to illegal construction and slums dwellings, natural mechanism to clean water through tides is diminishing. It has environmental concerns for Karachi inhabitants. The need of the hour is to build new ports. Keti Bandar could be one, and there are other options too. Developing Gwadar could reduce the load on Karachi port. Port management is a federal subject. Which new ports are under consideration to develop? What is the government preparation to ease the load on Karachi port? What are the plans to make Oil-Pier 1 operational?

With natural gas reserves at home fast depleting, the need is to build gas storage facilities too. Pakistan's strategic gas reserves are thin. Floating Storage Regasification Unit (FSRU) has storage of mere 5-6 days. The reliance on RLNG from Qatar is increasing and this might halt in days of war. The onshore gas storage is simply missing. Building strategic gas reserves is a federal subject too. What are the efforts to build requisite storage?

The other important element is to build strategic oil and products reserves. Energy security in Pakistan is extremely vulnerable. It should be the top security agenda. There are things to do beyond fighting war on the Internet.