It means we are fast becoming totally dependent on oil to meet our growing power, transport and industrial needs. And oil is fast becoming both too expensive and too scarce. Our petroleum import bill increased from about $3 billion in 2004 to nearly $8 billion in 2007 –– a nightmarish scenario for our future purchases.
In a sense, we are entering a blind alley as our new democratic leadership assumes power and jumpstarts the country’s stalled progress in agriculture, trade and industry. Some estimates show Pakistan’s total energy requirement would increase by 48 per cent, to 80 million tons of oil in 2010 from 54 tons at present. And a major shortfall is seen in the natural gas supplies whose current share in energy consumption is 50 per cent, as its demand would increase by 44 per cent by that year.
It is a grim situation. But what is more disappointing is that no significant initiatives are being attempted to somehow bridge the huge gap. It is here that biofuel as an alternate energy source assumed importance. It has already seized the attention of governments and industry in both developed and developing countries and has generated an extraordinary momentum and enthusiasm although it can hardly replace the fossil oil. It can only supplement, in a meaningful way, the efforts for reducing dependence on oil.
Two recent events are worth noticing as a trend. One, a private British airline flew an experimental flight from London to Amsterdam by using biofuel, made from coconut, as one of the components of its aviation fuel and the flight landed safely and comfortably. Although its share was insignificant, it was a display of sheer determination that dependence on fossil fuel can be and needed to be reduced.
Two, a sugar mill in Punjab has entered into an agreement with Faisalabad Electric Supply Company (Fesco) to provide it seven megawatts of electricity per day for a year. It is a rare happening in an electricity-starved country showing how alternate and innovative means of generating power can be explored. The distribution company intends to supply electricity it will obtain from the sugar mill to its consumers in Jhang.
The mill, Shakarganj Sugar Mill, is hence the first plant of its kind in the sugar sector to have set up a powerhouse which produces electricity from molasses and meets its requirements and is able sell the surplus power as well. It can produce 200 to 300 megawatts. Incidentally, the powerhouse does not emit carbon dioxide and keeps the environment clean. The mill does not use any amount of fossil fuel for generation of power and its operation is based on a fully clean development mechanism.
In the backdrop of these two events, one feels uncomfortable to see a report carried by this newspaper that over one million tons of molasses is being exported to European countries in the days ahead to earn five to six million dollars in foreign exchange. A bumper sugar cane crop of around 60 million tons is expected this year and it will yield about 2.5 million tons of molasses. Pakistani exporters have received substantial orders and a brisk activity is already going on at the Karachi port for loading molasses onto ships. The remaining quantity of 1.5 million tons of molasses will be distilled to convert it into ethanol which carries a good price in the international market because of its use for energy purposes.
Until recently, the bulk of the raw molasses and ethanol have found their way to offshore markets, mostly European countries, where Pakistan had been the second biggest exporter after Brazil. The amount of exports ranged between 0.70 million to 1.75 million tonnes and since it was a no-tax regime (a concession under anti-narcotics policy) the earnings were lucrative. This came to an end in 2005 when Pakistanis were found indulging in dumping ethyl alcohol in the market. The post-2005 exports are subject to higher tariffs.
Sugar industry is the second largest after textiles in Pakistan and is strongly inclined, as others are, to export most of its raw produce or finished products to earn foreign exchange and any domestic shortages or other uses in national interest would not change this orientation. That many countries are making productive use of ethanol to meet their population’s energy needs raises little interest. The same is the mindset of our bureaucracy and leadership. An experiment of E-10, blending gasoline with ten per cent of ethanol, in 2006 was allowed to fizzle out after six months by the government at the behest of oil lobby.
The shift towards ethanol-blended fuels around the globe is now a normal trend and a preferred practice with a view to shed dependence on fossil oil. Today, ethanol blends account for more than 35 per cent of all automotive fuels sold in the United States. Brazil is making even ethanol only cars. In 2000, about 15 million tons of America’s maize crop was turned to ethanol. This year’s likely quantity is 85 million tons. Though the US is the largest exporter of maize, it now uses more of its crop for ethanol.
The E-10 blend has been approved for use by every major automobile manufacturer in the developed world and has been found to be compatible with the existing service station infrastructure which means there is no additional cost for consumers as far as maintenance is concerned. As is evident, the world is now moving ahead with the idea of using ethanol as a full-scale alternative fuel. The E85 blend — 85 per cent ethanol mixed with just 15 per cent of regular gasoline — is the first step in that direction. Currently, it can only be used in flexible fuel vehicles which number over five million in the US alone and the manufacturers are known to have committed themselves to increasing production to two million a year by 2010.
In India, 52 sugar mills from nine states recently offered to provide 1,061.04 million litres of ethanol to oil marketing companies for the purpose of blending it with petrol. The government had earlier announced its plan to make available ethanol-blended gasoline in 20 states and four union territories for a period of three years. To begin with, it will be E-5 or only five per cent share of ethanol in gasoline and to make the experiment successful, petrol depots would require around 565 million litres annually or about 1,700 million litres of ethanol for the entire period. Though sugar companies can at present supply about 70 per cent of this quantity, they are speeding up production to meet the shortfall in due time.
This can serve as a lesson as well as a challenge to Pakistani establishment for whom lagging behind India is hardly acceptable. But it seems it is quiet content with mere export of ethanol to quickly earn dollars instead of making a better use of the large quantity the distilleries are able to produce. The price differential between regular gasoline and ethanol blends may not be encouraging enough to promote the product but for the national economy it is a matter of billions in view of possible reduction in the annual oil import bill.