ENERGY SUPPORT VITAL FOR AGRICULTURE GROWTH

AMANULLAH BASHAR
(feedback@pgeconomist.com)

Aug 6 - 12, 20
12

Widespread impact of energy crisis has not only adversely affected performance and output of the manufacturing sector and other major segments of the economy the dramatic shortfall in natural gas has consequently resulted in forced shutdowns of urea plants in the country. The closure of Urea Plants has a chain effect on the profitability of the agriculture, impact on the hard earned foreign exchange as the government having no option but to cater to fertilizer needs of the agriculture through imports worth millions of dollars this year. So far the Trading Corporation of Pakistan (TCP) has imported at least three lakh tons of urea while the domestic plants are shutter down due to non-supply of the natural gas.

This is certainly a sad story exposing horrifying effects of energy crisis, especially in the backdrop of huge and enormous energy resources lying untapped and unutilized due to poor planning and poor management of energy resources. The escalation of adverse effects of energy crisis is reflected even in the agriculture sector which is considered as the mainstay of Pakistan's economy. The situation calls for immediate remedial steps to ensure the wheels of all fertilizer plants in the country are on the move.

Ali Ansari, President Engro Corporation while talking this ascribe has rightly said that Pakistan has no other alternative except development of indigenous energy resources to combat the current energy crisis faced by Pakistan.

Ali Ansari was looking perturbed due to closure of a newly established Urea plants by Engro Corporation, hence it was quite natural to talk about huge energy potential of Thar coalfield in the face of the worst ever energy crisis being experienced by every citizen of this country.

Thar coal fields which according to authentic assessment have estimated ignite reserves of 175 Billion tons which is equivalent to total oil reserves of Iran & Saudi Arabia combined. These precious coal deposits can be utilized to produce 100,000 MW of power for 200 years.

Primary objective of Thar Coal development is to provide affordable, reliable and sustainable electricity to consumers by relying on indigenous fuel resource. Reliance on indigenous to will help save billions of dollars in foreign exchange which are currently being spent on import of expensive Refined Furnace 0il (RFO). A recent study by Pakistan Business Council estimates the import bill for petroleum products will reach over US $ 720 billion by 2020

The coal based power tariff will be much lower than RFO based power tariff, which means general consumers can get electricity at much cheaper rate than what they are paying right now. Thar Coal is also competitive vs imported coal and LNG

At present Pakistan's effective power generation capacity stands at 14,000 MW. At the current growth rate, Pakistan will require 20,000 MW by 2020 out of which around 10,000 MW can be produced from Thar Coal. Development of Thar Block-II alone would eventually add 4,000 MW to national grid by 2020

Development of Thar will result on immense socio-economic benefits far the region, job creation for skilled, semi skilled and unskilled labor and increase per capita income of people living in Thar region Potential for future downstream industries in Petro-chemical and Fertilizer products presages that Thor Coal is fortune turning proposition for Pakistan.

INFRASTRUCTURE REQUIREMENTS

Thar region being an under-developed area lacks basic infrastructure to support such a large scale industrial project. To start mining work and set up power plant at Thar, some critical infrastructure must be provided. Concurrently, Government is actively working to provide the required infrastructure which includes fresh water supply, effluent disposal scheme, road network and a Transmission Line from Thar to matiari to evacuate power from Than Block-II. Despite curtailment M the development budgets, That Coal development related projects were exempted from these cuts to ensure timely complete on of these projects. A total Of PKI2 10 Billion has been allocated for the development of Infrastructure Projects by Government of Sindh in financial year 2012-13. Sindh Industrial Development Authority (SIDA) is working on the development of Feasibility Study for water supply scheme from LBOD, whereas Consultants have been finalized for Roads Network, Effluent Disposal Scheme and one section of Water Supply Scheme.

Despite having enormous resources the growth rate in Pakistan is extremely disappointing and perhaps it the lowest growth rate when compared growth rate of the countries in the region including Bangladesh, Sri Lanka, India and even much smaller countries.

It is painful to note that not only the present government which is more involved in political issues, the governments in the past also failed to development our energy resources to meet the ever increasing demand for power. The situation may become more serious if the energy shortage started to affect performance of our agriculture sector. Immediate steps are needed to cater to the energy need of the agriculture sector specially supplies of natural gas to the fertilizer industry. It is of vital importance to ensure food security in the country. We can survive with load shedding, rationing of gas or abnormal increase in petroleum prices but it would be hard blow to energy starved nation if we had to depend upon imported food. Currently we are affording the imported fertilizer including urea and DAP, should take preventive measures to avoid any possible risk to our food security. The energy crisis persisting in the country endlessly calls for radical changes in our energy plans especially in respect of development of energy resources. In this respect a commission is needed to inspect the pace of development of proven gas field in Sindh, Punjab & KP to ensure development of discovered gas well as early as possible. The government of Sindh has the opportunity to become the richest province of the country if it takes serious steps for speedy development of infrastructure in Thar coal field because without infrastructure no body would like to invest in a desert without, rail, road, water and power. So it is in the interest of the province and the country that infrastructure facility should be development on war footings in Thar region.