Coal: waiting for a call
THE key elements of the unprecedented energy crisis that has engulfed Pakistan include a massive gap between energy demand and supply, a receding share of indigenous resources in the total supply mix; energy insecurity, unaffordable energy prices for the masses, and enormous stress on the country’s fiscal system imposed by energy imports.
One of the appropriate candidates that can substantially help Pakistan overcome its energy challenges is coal.
In the electricity generation mix, coal can make a substantial contribution. The total coal reserves of Pakistan as reported by the Geological Survey of Pakistan (GSP) are estimated to be around 185bn tonnes. Of these, nearly 175bn tonnes are located in the Thar desert as discovered in 1992. In terms of quality, the coal found in Pakistan falls in a range between bituminous and lignite.
Vague estimates have been made on the scope of these coal reserves for meeting the country’s energy requirements. The GSP, for example, quotes these resources to be sufficient for meeting the country’s energy needs for ‘centuries’. Such an enormous amount of coal definitely holds great potential of bringing about a positive change in the country’s energy scenario for a considerably long period of time.
However, despite all these theoretical calculations and the projected rosy picture, the energy supply mix of the country has not yet seen any notable shift towards coal. All that coal has contributed so far is a mere 150MW in the total generation capacity of the country (amounting to over 19,000MW). The only purpose coal is being used for is to fire the brick-kilns — nearly 80 per cent of the total annual production (three million tonnes) is consumed by kilns. This implies that coal reserves in the country are virtually untapped.
In Pakistan, during the 1990s, thermal power found itself in the limelight. In an attempt to avert an approaching energy crisis, the government decided to take thermal generation on board. The private sector — termed the Independent Power Producers (IPPs) — was invited to invest in power generation. Subsequently, in a matter of four to five years, thermal power generation grew by multi-gigawatts. The whole IPP saga apart from its benefits also came under attack from numerous critics and for various reasons.
Without going into the controversies raked up by vested interests, it is crucial to take note of a related tactical error that unfortunately is set to have a lasting impact on the sustainability levels of the country’s energy system. It is the brutal use of natural gas for the purpose of power generation. Ignoring coal that has reserves to sustain power production for hundreds of years, the policymakers opted for natural gas that holds a humble reserve that promises production for 20 years.
The price of diverting bulk supplies of limited gas reserves with limited production capacity to the power sector is now being paid by household consumers. Gas is now in short supply for the most basic of needs, namely, the preparation of food. Extensive and infuriating gas disruptions have become a norm. Gas reserves are now set to run out much faster than otherwise would have been the case. In the presence of untapped massive coal reserves, this day in and day out burning of gas in power plants is not a very realistic approach.
Ironically, this is not only an unsustainable choice, it is also an uneconomical one. As per Wapda’s 2006 figures, the cost of production of electricity from gas was nearly double that of producing from coal. The respective cost for the two fuels has been reported to be equivalent to Rs2.4/kWh and Rs1.3/kWh.
Here it is important to cite some eye-opening features and global developments with respect to coal. Coal is an established and leading part of the world’s electricity mix contributing a staggering 40 per cent to the total generation. Other major shareholders are nuclear power (over 16 per cent), natural gas (15 per cent) and hydro (19 per cent). Like other technologies, coal has also come of age.
The time is past when coal power plants used to operate at 20 per cent efficiency. With technical advancements and improvements, the thermal efficiency of modern coal power plants has been greatly enhanced. Much higher pressure and temperature conditions for steam, coupled with advanced materials (i.e. usage of composite alloys in the highest temperature regions of the super-heater, re-heater, turbine and pipe-work) has allowed modern coal plants to operate at an efficiency level of over 35 per cent.State of the art coal plants in China have a thermal efficiency of above 40 per cent. In view of the ongoing research and development and best practised boilers and turbines, the European Union has set a target to develop the next generation of coal power plants with an efficiency level of 50 to 55 per cent. These factors will ensure a respectable share for coal in future global energy scenarios.
According to the latest EU and UK energy directives, by 2030 it is estimated that nearly 1400GWe of new coal-fired capacity will be built worldwide, with two-thirds of the new capacity in developing countries. Coal-fired power plants are expected to provide about 38 per cent of global electricity needs in 2030 — close to today’s share of global electricity supply needs. In terms of quantitative reserves, compared to other fossil fuel family members, oil and gas, coal has a major advantage.
According to the Energy Information Administration’s 2006 statistics, the reserves-to-production ratio both for oil and gas is estimated to be around 60 years worldwide, while the same ratio for coal is 200 years.
These credentials duly make coal a key player in energy markets of a large number of countries. China, for example, produces 75 to 80 per cent of its electricity from coal. The share of coal in the total electricity mix of various other countries is as follows: India 55 per cent, the US 50 per cent, Germany 48 per cent, Australia 45 per cent and the UK 33 per cent. Interestingly, not all of these countries are self-sufficient in coal.
Contrary to that, Pakistan with 185bn tonnes of coal lying in its own backyard is content with a share of 0.7 per cent in the electricity mix. In recent years, there were reports in the local media that a 1,000MW coal-based power project is being planned for which feasibility work has also been undertaken. But again, more recent reports suggest a deadlock over the project for one reason or the other — the usual story.
Our policymakers should realise that coal is abundant, indigenous and cheap and thus has a major role to play in the energy equation of Pakistan. It already has been unduly delayed for decades. Had timely attention been paid to coal, quite a few of the complications in the current energy scenario of Pakistan could have been avoided. The more the meaningful exploitation of coal is delayed the tougher the energy crisis will become.
The writer is a lecturer in renewable energy at the Glasgow Caledonian University, UK.
The shadow of Tet
FORTY years ago this week, the American public realised that the United States was not going to win the Vietnam war. Lulled by assurances that ‘progress’ was being made in the fight against the insurgents, Americans had patiently borne five years of growing military casualties in Vietnam, but the Tet offensive shattered their illusions. Could the same thing happen this year in Iraq?
Paradoxically, the Tet offensive was a military disaster for the Viet Cong, the locally based communist rebels who had borne the brunt of the fighting in South Vietnam until then. They threw 45,000 of their most experienced soldiers into simultaneous attacks in more than 100 cities and towns on Jan 31, 1968, believing that they could trigger a nationwide popular uprising against the Americans and their local collaborators.
Intense fighting raged all through February of 1968. In the first hours of the offensive, a Viet Cong suicide squad fought its way into the US embassy compound in Saigon.
South Vietnam’s third-biggest city, Hue, fell to the insurgents on the first day, and US forces did not reconquer it for over three weeks. But in the end, the Viet Cong lost all the ground they had gained, and at least half of their best troops were killed.
There was no national uprising in South Vietnam; the communists had overestimated their support in the cities. After Tet, the Viet Cong was so weakened that the North Vietnamese regular army had to take over more and more of the fighting, infiltrating its troops south down the Ho Chi Minh trail. It was a grave military defeat for the Vietnamese communists — but it was a decisive political defeat for the United States.
1968, like 2008, was an election year in the US, and Tet made it plain to American voters that, while the Vietnamese insurgents might not be able to drive the Americans out, they could go on fighting them indefinitely. By the end of March, 1968, President Lyndon Johnson had abandoned his re-election campaign and offered to open negotiations with the North Vietnamese. When Richard Nixon won the presidency that November, he did so on a promise to withdraw American troops from Vietnam (although it took him five years to keep it).
Many people in the West believed at the time that the wily Vietnamese communists had foreseen all this, but they didn’t. General Tran Do, one of the planners of Tet, later said: “In all honesty, we didn’t achieve our main objective, which was to spur uprisings throughout the south... As for making an impact in the United States, it had not been our intention — but it turned out to be a fortunate result.”
The lesson of Tet, incorporated into the doctrine of every insurgent movement on the planet and taught in every military staff college, is that western troops fighting in ‘Third World’ countries can win every battle with their superior technology, but they are terribly vulnerable on the political front.
The insurgents don’t have to win. They only have to show that they can go on fighting indefinitely, because the western country involved always has the option of cutting its losses and bringing its troops home. The insurgents are not really going to ‘follow us home’ (as President Bush occasionally argues), so sooner or later the option to withdraw will be exercised.
Something like the Tet offensive, even if it fails militarily, can be a catalyst for that kind of shift in opinion on the occupying power’s home front. So who in Iraq might be tempted to try a ‘Tet’ offensive in this US election year?
Not the Sunni Arabs who did most of the fighting against the US occupation in 2003-2007, for they have now been drawn into anti-Al Qaeda, anti-Shia militias that are backed and paid for by the US. They may turn on their paymasters again eventually, but not yet.
Not the traditional Shia religious parties that now dominate the Iraqi government, either. They already have most of what they want, and they still need American protection from their many enemies. Certainly not the Kurds, the one pro-American group in Iraq. But how about Moqtada al-Sadr and his Mahdi army, the largest militia in the country?
Iraq, with all its ethnic and sectarian divisions, lends itself far more readily to imperial policies of ‘divide and rule’ than the homogeneous Vietnamese did, but al-Sadr embodies the aspirations and resentments of the poorer Shias, who probably account for almost half of the entire population. They are not persuaded that the current government shares their agenda, and they could be mobilised for revolt.Al-Sadr will go on being marginalised by the conservative Shia establishment unless he can position himself as the patriot who defied the Americans while everybody else was playing along with them. His Mahdi army has observed a self-imposed ceasefire since last August, but he could break it at any time.
If the Mahdi army launched an Iraqi version of the Tet offensive, it would be defeated as badly as the Viet Cong were, but everybody who knows that history, understands that military defeat can lead to political victory. The temptation is there, but al-Sadr won’t do it now. August or September, however, could be another matter entirely.
The writer is a London-based independent journalist.
Economics and politics
PAKISTAN must be one of the strangest countries in the world. With elections to be held in a matter of days, the entire electioneering process seems to be devoid of any politics. There is certainly a great deal of posturing and rhetoric, threats and promises. Yet, the absence of any substantive issue in the electioneering process reflects sadly on the state of democracy and politics in Pakistan.
There is no doubt that the elections are being held in our very own age of terrorism, with constant and real danger and threat to the lives of politicians and citizens. Nevertheless, the opportunity for the contesting parties to effectively mobilise citizens and voters, and to politicise issues, continues to be wasted. The deteriorating condition of the economy is one area in which the electoral process could have been transformed into a political, even a democratic one, but the opportunity has gone wanting and will be back to haunt whichever party forms the government after Feb 18. In some ways, we are back to 1988.
While concerns about security and the law and order situation are very real and, in many ways, affect all Pakistanis, there is nothing more real than the rising cost of living signified by the rise of the price of atta and roti. With food inflation reaching close to double digits and the prices of all very basic necessities rising at a pace not seen for over a decade, there is growing consensus that Pakistan’s economy is headed for a marked downturn, and the days of shining Pakistan, with around seven per cent growth in GDP, are over. In order to link the economic with the political, it is worth highlighting the weaknesses in the economy, and to reveal where and how parties contesting elections, could have made political interventions.
The first downward revision for fiscal year 2007-08 by the State Bank of Pakistan in the expected growth rate in the economy was a warning that the political events of 2007 had begun to take their toll on economic sentiment and Pakistan’s image, affecting investment, local and the much hyped ‘foreign’ investment. Pakistan’s main economic indicators for the current fiscal year are already way off target, and far worse is expected to follow.
For example, the GDP growth rate has been scaled down from the over-optimistic 7.5 per cent to closer to 6.5 per cent, although I am quite sure that it will be closer to six per cent by the end of June. Inflation, already nearing eight per cent, is way above the original target set for the year, and with the inevitable rise in petroleum prices, will be higher by the end of the fiscal year. Similarly, the fiscal deficit target, the targets for exports and investment as well as tax revenue along with the current account deficit, are all far worse than originally anticipated.
These sets of figures are related only to the first few months of fiscal year 2007-08, and do not include the impact of the events following the assassination of Benazir Bhutto. Already, economists are talking about a fall in GDP by two percentage points in the short-term, with a medium-term decline from the trend rate of around one to 1.5 percentage points. Despite the fact that more than 40 per cent of Pakistanis have mobile phones and the roads are clogged with new cars and motorcycles in all the cities of the country, one can safely conclude that the sheen is gone from whatever was shining in Pakistan. Worse is to follow.
In a fairytale, make-believe world, the previous government of Shaukat Aziz, thought that it would be re-elected in partnership with some other so-called enlightened moderates, and would ensure the continuity of retired General Musharraf’s eight-year rule. Precisely because they were playing politics, the Musharraf-Shaukat Aziz government failed to take critical and timely economic measures, living in a world clouded by an artificial, very temporary, boom.
While the so-called economic miracle following the windfall after 9/11 resulted largely in real estate and stock prices rising, because substantial measures were not taken to ensure long-term growth and stability in the economy, the downturn has come about sooner than anticipated.
The severe current winter power shortages and the shortfall in gas are just two of the many indicators which suggest a lack of foresight in planning and development and, most of all, suggest that worse is still to come. However, the biggest political and economic mistake that the previous government, as well as the incumbent caretaker government, made was not to gradually adjust domestic petroleum prices in line with the astronomical rises in its global price.
What is surprising also is that this process of the decline in the economy which began some months ago was not anticipated by politicians or their group of economic advisors, for had they wanted, they could have used the deteriorating economic condition to their political and electoral advantage. Perhaps what is most surprising is that even today when the cost of living is probably at its highest in the last decade, or at least that is what people feel, political parties have not been able to capitalise on this issue.
With some impromptu demonstrations taking place over the lack of availability of flour or the absence of power and gas, political actors, many of them contesting elections within three weeks, are conspicuous by their absence. Elections and politics seem to be divorced from the real lives of the people. Why should one elect a candidate when he or she is not concerned with the real life conditions of those from whom they seek votes?
A political transition will take place in a few weeks. The government of the retired general and the present caretaker set-up will hand over some administrative charge, though perhaps not enough power, to a new government shortly. They will also hand over an economy which is coming undone and is now, along with the state, also on the track of failure.
No matter how well-meaning and enlightened the next government will be, it will have to take a number of very unpleasant decisions and will be faced with hard choices. It will have to raise petrol prices, perhaps cut development expenditure, allow the rupee to depreciate further, all resulting in higher inflation, a worsening current account deficit and lower investment. Poverty, on the decline since 2001, will also begin to re-emerge once again. These are all very political, as much as they are economic, issues.
In some ways, 2008 is similar to 1988. A military regime passed on government to a democratically elected popular party. The economy in the 1980s had seen a boom, but when the new government took over, not only was the cupboard bare, a huge debt burden had also been inherited. Importantly, the economic collapse of the 1990s was blamed on civilian, democratic governments.
The two main political parties who suffered as a consequence in the 1990s, ought to have learnt their lessons well. The only way to deal with terrorism, militarisation and an economy showing signs of a potentially serious crisis is for the main parties to join together and form a consensus government. Not only will this be the best form of politics, it will also strengthen the process of democratisation in the country, pushing back the remnants of authoritarianism, both religious and military.
|© DAWN Group of Newspapers, 2008|