IS NATURAL GAS THE NATURAL SOLUTION TO ENERGY PROBLEMS?

SHAMSUL GHANI
(feedback@pgeconomist.com)
Sep 27 - Oct 3, 20
10

The CIA Factbook places Pakistan at 26th position among 100 world countries that owned mentionable natural gas reserves as of 1st January 2009 - the time when the estimates were made.

TABLE-1: CIA'S ESTIMATES OF PROVED NATURAL GAS RESERVES

S.NO

COUNTRY

GAS RESERVES IN BILLION CUBIC METERS

S.NO

COUNTRY

GAS RESERVES IN BILLION CUBIC METERS

1. Russia 47,570 16 Norway 2,313
2. Iran 29.610 17 China 2,265
3. Qatar 25,260 18 Uzbekistan 1,841
4. Turkmenistan 7,940 19 Kuwait 1,794
5. Saudi Arabia 7,319 20 Egypt 1,656
6. US 6,731 21 Canada 1,640
7. UAE 6,071 22 Libya 1,540
8. Nigeria 5,215 23 Netherlands 1,416
9. Venezuela 4,840 24 Ukraine 1,104
10. Algeria 4,502 25 India 1,075
11. Iraq 3,170 26 Pakistan 885
12. Indonesia 3,001 27 Australia 850
13. Kazakhstan 2,401 28 Azerbaijan 850
14. Malaysia 2,350 29 Oman 850
15. EU 2,318 30 Bolivia 750

According to the Pakistan Economic Survey 2009-10, Pakistan's gas reserves, on 1st January 2010, stood at 28.33 trillion cubic feet, The CIA estimates, when converted to equivalent volume unit, stood at 31.264 trillion cubic feet. Pakistan's gas consumption and supply patterns are summarised in table-2.

TABLE-2: CONSUMPTION-SUPPLY PATTERNS (MILLION CUBIC FEET)

 

CONSUMPTION

             

YEAR

HOUSE-HOLD

COMMER-CIAL

CEMENT

FERTILIZER

POWER

INDUSTRY

TRANS-PORT

TOTAL

SUPPLY

1997-98 134,500 18,764 12,092 147,752 179,042 115,250 490 607,890 699,709
1998-99 131,656 21,468 7,988 167,474 183,694 121,431 2,182 635,891 744,942
1999-00 139,973 21,712 8,558 177,152 227,364 134,916 2,426 712,101 818,342
2000-01 140,899 20,618 6,977 175,393 281,255 138,503 4,423 768,053 857,433
2001-02 144,186 22,130 7,063 177,589 314,851 151,416 7,369 824,604 923,758
2002-03 153,508 22,776 3,445 180,611 335,636 164,968 11,320 872,264 992,589
2003-04 155,174 24,192 7,711 185,350 469,738 193,395 15,858 1,051,418 1,202,750
2004-05 172,103 27,191 13,383 190,409 507,398 226,116 24,443 1,161,043 1,344,953
2005-06 171,109 29,269 15,335 198,175 491,766 278,846 38,885 1,223,385 1,40,026
2006-07 185,533 31,375 14,686 193,682 433,672 306,600 56,446 1,221,994 1,413,581
2007-08 204,035 33,905 12,736 200,063 429,892 322,563 72,018 1,275,212 1,454,194
2008-09 214,113 35,536 7,305 201,100 404,140 319,003 88,236 1,269,433 1,460,679
2009-10
*Jul-Mar
184,525 28,600 1,650 162,525 264,825 246,125 71,225 959,475 1,109,360
*= estimated

Pakistan's gas consumption pattern has been somewhat erratic during the last seven years. After recording an increase of 21 per cent in 2003-04, consumption growth came down to a negative of 0.1 per cent in 2006-07. When seen on an annualised basis, the increase in gas consumption during 2009-10 remained limited to just 0.8 per cent. Even if we keep the gas consumption constant at the current level, the reserves are not going to last for more than 20 t0 22 years.

Pakistan's gas economy is closely related to real sector and external economies. Its use by the cement, fertiliser, power and industrial sectors makes it an important component of the cost of real goods produced. Further, being an alternate power generation and auto fuel source, it reduces pressure on furnace oil and petrol import bills. Having a critical position in country's energy generation and consumption mixes, natural gas needs greater attention than what it has been getting. A sizeable resource allocation for finding new gas deposits has to be made. It will, however, be a mistake if coal and hydropower sectors are ignored for the sake of gas and oil sectors. The known vast coal reserves need to be developed into a vibrant economic power at the earliest possible. Equally important is the strengthening of fragile water resource management system in the country through construction of new dams and modernisation of the existing ones. New investments in oil and gas will be meaningful only if coal extraction and water resource managements are geared up simultaneously. Development of nuclear and alternate energy programs will further enrich the energy mix.

Chinese and Indian economies are heavily dependent on coal-based power generation. India has made no secret of its resolve to acquire foreign coal assets. The ex-US Fed chairman Alan Greenspan spells out the importance of coal as world's important energy source in the following words:

"Long-term shortages of gas and oil have inevitably stimulated renewed interest in the expansion of coal, nuclear power, and renewable energy sources, the most prominent of which are hydroelectric power from dams and the energy generated through the recycling of waste and by-products from industry and agriculture. Solar and wind power have proved economical in small-scale and specialised uses, but together account for only a tiny fraction of energy use.

The United States has large reserves of coal, primarily dedicated to electric power generation. But, the burning of coals in power plants has been restrained by concerns about global warming and other environmental damage. Technology has already alleviated some of these concerns, and given the limited range of alternatives, coal is likely to remain a major fallback in the energy future of the United States."

United States, being the largest oil consumer and a highly developed economy is far more environmentally conscious than Pakistan's small and under-developed economy is. Pakistan's huge coal reserves and industrial world's state-of-the-art technology can combine together to provide a long-lasting energy solution. The ignored hydropower capacity of 50 to 100 thousand megawatts, when put to practical use, can free the nation from the destabilising energy concern for a number of decades.