Thar Coal ProjectBy Shanzeh Iqbal • Nov 4th, 2010 • Category: Politics, Worth A Second Look • 18 Comments
Thar coal reserves, outstrip the stymie bottlenecks
The Thar desert of Pakistan has one of the largest coal reserves which have been discovered yet. These reserves are explored on an area of 10,000 square kilometers. World’s largest coal fields were discovered in Thar, Sonda and Lakhra.
The Thar Coal Field, should it be developed, will yield over 200 billion ton of coal used to produce electricity, it will give way to sufficient power to make Pakistan self-sufficient in electrical power. Dependence on hydro projects and gas will be minimized.
In 1992, the Geological Survey of Pakistan (GSP) discovered more than 185 billion tons of lignite reserves in Thar coalfield. The GSP completed coal-resources evaluation in the four specific blocks of the coalfield with an area of 356 square kilometers. On the basis of GSP studies, the required coal potential of a minimum of 500 million tons in each block has been established. It is found that there is presence of 9 billion tonnes of coal in four blocks.
The deposits are also found across the border and India is mining these deposits in Rajasthan
Thar coal reserves are estimated at 850 trillion cubic feet of gas. But unfortunately very little work is done on this.
Coal was used as an energy source. It is assumed that it became one of the reasons of the industrial revolution and increased use of electricity.
But when huge reserves of oil and gas were explored especially during the seventies, there was a shift from the use of coal to gas and oil.
It is a pity that Pakistan is a gifted country and has copious natural assets. Apart from coal Pakisan has copper, gold reserves, But still there is such a scarcity of even the basic vital needs and despite being rich in natural minerals, Pakistan is facing jagged poverty. The precarious situation is making Pakistan suffer a lot. The burgeoning external debt has reached 56 billion dollars.
Coming to the bottlenecks, there is an absence of regulatory authority of Thar coal. Hence the tariff for coal fired power plants which will be set up in Thar could not be determined. That was the reason that a federal department had refused tariff to a Chinese company which wanted to set up a power plant at Thar. Shenhua did a preliminary feasibility of Thar coal. It demanded for a tariff of 5.7 US cents per unit for the Thar project but they found the power tariff rate offered by Pakistan insufficient. There is also lack of political will and a realisation to understand how much important this project could be for Pakistan in the coming days. Then it is also said that there is absence of any regulatory approval concerning the public private partnership in Thar Coal project. On the contrary the government must encourage such partnerships.
The causes for delay in this project include the paucity of funds, sloppy attitude of the officers in the upper echelons, kleptocratic delays and the poor funding by the international agencies and donors. For instance World Bank refused to finance the Thar Coal project on the plea of global warming and carbon emissions. However according to Khalid Mansur, CEO of Sindh Engro Coal Mining Limited “We are one of the least polluters. Our energy mix includes 33 per cent of power generation from dams and another 33 per cent from gas. There is a need for proper lobbying,”
Several foreign and local companies prepared feasibility reports in the past and confirmed availability of coal deposits, but they were reluctant to start power generation because of an unfair pricing formula for coal-fired power generation.
Pakistan did not even include the Thar coal as its future source of energy in the annual report to be submitted to the World Bank. This fact is its own comment. Saner element must prevail in the policy formulations and they must be designed keeping in perspective the long term benefits.
It would be interesting to note that if 544 million tones of coal are mined then it will lead to the production of 101,800 MW of electricity a day. If these resources are properly tapped and used for the good of Pakistan we can become financially self-sufficient. These reserves promise opportunities for investors as well.
Dr Samar Mubark Mand who is the head of Thar coal gasification project has requested the government authorities to invest in this area. While speaking at a forum he revealed that coal must be treated as a matter of national security. Highlighting the bleak energy situation he said that the current energy crisis is causing losses amounting to Rs 230 billion and 400,000 jobs per year. His suggestion was very erudite that in order to tackle this energy fix, the power generation plants must be converted from furnace oil to gas oil. He said that Thar reserves can help Pakistan to make 50,000 MW of electricity for 800 years.
The government should comprehend the value of this extremely advantageous project. A new revolution of energy will be in the picture. The government should also fully exploit this potential not only to become self-sufficient in energy, but also to export the surplus coal to other countries and earn more foreign exchange. It is also argued that the coal reserves of Pakistan are equivalent to 618 billion barrels of crude oil while at present the Saudi crude oil reserves are equal to almost 260 billion barrels.
As far as the issue of pollution is concerned there is this injection technique by which the coal would be converted into methane. Thar Coal has low sulfur content and hence it is environment friendly.
Sindh Irrigation and Power Minister Syed Murad Ali Shah has said that this project should be included in the government energy policy. In the three day energy summit which was held in April of this year it was decided that 8,000 megawatts will be generated from Thar coal by 2015.
One another suggestion is that the South Asian countries must pool their resources and launch a mega industry so that the financial restraints impeding the energy projects may be overcome.
According to an expert opinion if the power is produced from coal gasification then it would be much cheaper. Already South Africa and China are producing diesel from coal.
As gas fields in Pakistan are rapidly depleting so the effective use of the available coal will help us reduce dependence on imported oil.
The natural gas reserves have started to get diminished therefore the Thar Coal Field must be developed at the earliest to make Pakistan self sufficient in electrical power production. International financing is vital for coal extraction.
It is said that coal is a cheap source of producing electricity. If it is used then according to an estimate almost 405 million rupees per year will be saved for a plant producing 3000 ton of cement per day. In this manner this project will also save the cement industry. The power generation in this way will save the foreign exchange apart from creating avenues for more and more employments.
There is a need to develop the coal industry and from an environmental and local point of view, it must be ensured that clean-coal technology is employed and that the people of the area benefit directly and fairly from the exploitation of Thar’s coal resources.
The development of Thar coal reserves must be included in the priority list of the Task Force. Studies with geological explorations must be carried out. Policies regarding feasibility studies and proper investigations ought to be planned to save the economy which is in the grip of jeopardy and is running into snags. The use of coal is very cost effective as well.
Experts in Pakistan stress the need for developing a uniform pricing formula for electricity purchase to ensure that foreign investor is attracted.
Shahrukh Khan, the chief executive officer of the UK-based Oracle Coal Fields while allaying doubts about the veracity of Thar reserves, said that “In common with most lignite mines, Thar will need to be dewatered. The water abstracted may be used for the planned power station, after suitable treatment”.
The government must embark on exploiting the huge potential of these resources on exigency basis as it is latent to sustain the economy which is in dire straits.