Coal: Where We Stand?

Dr. SM Mahfuzur Rahman

The Information Gap & an Unwanted Bottleneck

One of the major limitations of researchers and decision makers in Bangladesh is the difficulty in having complete information related to the issue, which they intend to study or on which they are to take decisions. The case of coal mine in Phulbari is not an exception. Not many among the people, who are now involved in the debate on the mine actually have full information about the

a. Economy of Phulbari and the surrounding area,

b. Geophysical characteristics of the area,

c. Technical details of the possible mining methods that can be applied in Phulbari and their consequences, and

d. Mitigation measures for facing the adverse effects of adopting any particular method or a combination of methods.

Curiously enough, a section of the intelligentsia has taken a very open stand against mining coal in Phulbari apparently having only very scanty information on the above issues. This section of the people smartly ignores the whole agenda of energy crisis in the country. Instead, the leaders of the section are vehemently running the campaign that the mining in Phulbari coal field will cause disaster to the local community and environment and are not at all ready to consider that the various issues, including acquisition of land causing people to leave their ancestral abodes, temporary, or even permanent loss of agricultural land and difficulties in shifting infrastructures on the land acquired of mining the coal resources in Phulbari are to be looked at in a framework of overall analysis of

a. The resources of the Phulbari coal mine and their importance for the economy of the region and of the country;

b. All the different types of social and economic costs and benefits of mining at Phulbari and their magnitude;

c. The available mitigation measures for the possible adverse effects;
d. Anticipated gains for the nation by mining the coal and the losses by leaving it underground for an indefinite period;

e. Opportunities to be missed by postponing any initiative of coal mining in a situation when the country is facing severe energy crisis, the prices of energy resources are soaring high in the international market and the prospects of developing alternative energy sources in the country is very bleak; and

f. An outlook to the country’s coal resources when the regime of carbon trading in the world is changing very fast.

Unfortunately, much before being able to understand the importance of the mine, as well as of the problems and their possible solutions, a part of the Phulbari people had been instigated to organize movement against the mine and the key strategy used in motivating local people in the movement was the psychological play of the arguments that millions of local people will become permanently homeless, that the mine will eat up all the fertile agricultural land of the area and that the mine will cause desertification of the whole region. Obviously, the campaign was based on exaggeration of the ‘threats’ of mining coal in Phulbari for the local people.

Regional Disparity & the Poor Economy of the Coal Rich Area

It is a popular belief in Bangladesh that the north-western part of the country is the victim of prolonged regional discrimination by policy makers which has made the region a relatively backward one. There are many economically backward territories in other parts of the country also, but such territories in other parts are mostly enclaves, while the backwardness in northern Bangladesh stretches widely throughout the region. An important observation in the case is the alleged indifference of the policy makers to the causes of underdevelopment of the northern region of the country and to the need for eliminating the disparity.

A few years ago, people in the northern region of the country started to believe that with completion of the Jamuna Bridge, the region would get a momentum in development. It was expected that the factor mobility created by the Bridge alone would change the economic geography. In fact, the Bridge has a significant contribution to taking the agro resources, including agricultural raw materials from the northern to the eastern part of the country and making development of the eastern part easier. But since the Bridge could only provide the transport facilities and the northern part continued to remain deprived of power or gas supply, there had been no expansion of manufacturing industries in the region and the Bridge could only contribute to a faster drainage of resources from this part of the country to the eastern part. The effect was the increase in prices of agricultural products in the northern region. The local producers at the grassroots level however, did not get the benefit, which was appropriated largely by the middlemen. Most rural markets in the northern region now face scarcity of fish, milk, eggs and seasonal fruits. Because of the easy access to local markets the brokers and wholesale buyers purchase these products at cheaper prices for selling in towns and cities and thus create shortage of them for local consumers. The later now buy products of their own origin at prices much higher than what the urban buyers sometimes pay.

Inadequate power supply is the single most important reason for economic backwardness of the northern region of the country. Bogra, once an emerging industry center of the country, had a few pioneering industry units, which were closed down largely because of the failure in competitions with similar industries in other parts of the country. Most important among the causes was the power factor. Industries in Bogra could have uninterrupted power supply only through a support by producing diesel fuelled electricity. The cost of production of such power is much higher than the gas fuelled power available in the eastern regions. This makes the difference in competitiveness of the Bogra products and ultimately, a cause to the ‘death’ of the Bogra industries.

The scenario is the same in any other part of the northern region of the country and the conclusion is obvious: it is not possible to eliminate disparity between the eastern and northern regions of the country without availability of sufficient electricity in the later region. Discovery of coal deposits in Phulbari, Barapukuria and Dighipara in the southern part of Dinajpur district and in Khalaspir of the adjacent Rangpur district has opened up a great opportunity for providing electricity to the region and also solving the country’s energy crisis in the face of quick depletion of the gas reserves and bleak prospects of developing other energy sources.

The six southern upazilas of Dinajpur district – Parbatipur, Phulbari, Birampur, Nawabganj, Ghoraghat, and Hakimpur – which surround the coal deposits in Barapukuria, Phulbari and Dighipara, cover a total area of 1400 sq. km. and have a total population of about 1 million. Agriculture is the main profession of the local people. Fifty per cent of the area’s total population has farming as the principal (for majority, the single) profession and about one-third of them are agricultural laborers. This means that three-fourths of the people of the area live on agriculture, which was the scenario for the whole country some four decades ago. Employment structure in other regions of the country had changed over time because of the structural changes in the economy. But the employment structure remained unchanged in Phulbari and its surrounding areas, which only indicates that the economy of the sub-region did not have much change over a long period of time. About 2.5% of the people in the area are non-farm laborers, about 11.5% are engaged in business, 5.5% have jobs in private and government offices and the rest are involved in miscellaneous professions. That only a small proportion of people work as non-farm laborers shows that the industry sector has an extremely marginal development in the area.

There is no reliable statistics about the number of the different types of industry units in the six upazilas and also, not much is known about their production capacities, the capital and manpower employed, the technology used, and their contribution to use of local resources and to the economic and social development of the local people, as well as of the people of the country as a whole. This does not mean that the area is rich in industries and it is just a point of non-availability of statistics. The literature is relatively blank on the issue because there is no considerable industrial development except that there are a few automatic rice mills, a number of paddy husking/wheat grinding mills and some bakeries, ice factories, and saw mills and a handful of welding workshops. The area was once rich in traditional workshops of craftsmen such as the goldsmiths, blacksmiths and potters all of which are now in the decay and at present, they have practically no importance as industry units. The area has a great potential for development of agro-based industries which remained unrealized largely because of the poor transport and communication infrastructure and non-availability/acute shortage in supply of power. Less than 10 per cent of the 2700 km road network across the six upazilas are metalled and although the maps show existence of a large number of rivers and their tributaries in the area, they lost navigability long ago and are of no use now as part of transport network.

The area however, is blessed with some modern industrial projects – a railway workshop at Parbatipur, the Barapukuria Coal Mine and a 250Mwt power plant at the Barapukuria mine gate and the Madhyapara Hardrock Mine. It is assumed that the selection of Parbatipur, a large railway junction in the northern part of the country, as the location for setting up the railway workshop was historical. The railway department possessed a huge amount of land at Parbatipur and although the railway workshop might have some contribution to repair and maintenance of the railway wagons and or engines, there is every doubt whether it actually has any effect on the local economy. It was easy for the government to establish the workshop at Parbatipur because there was no resistance from any group of social activists in acquiring such a huge amount of fertile land. Most local people have little knowledge about what the workshop actually does. A significant reason for it is the fact that the workshop has practically no or a very insignificant multiplier effect in the region and it does not create new employment opportunities or could trigger any momentum in the region’s economic development. Unfortunately, neither the media nor any section of the intellectual community and the social workers have ever raised the question whether it is at all justified for the workshop to acquire such vast amount of the fertile agricultural land. But it can be guessed that perhaps the workshop could not be established in some other location of the country in the face of the resistance of the local people of those other places against acquiring the fertile and scarce lands for the purpose.

Coal for Power to the Country & Development of the North-Western Region

Discovery of coal deposits in Barapukuria, Phulbari, Dighipara and Khalaspir has opened up new prospects for development of the North-western region of the country. Coal search and exploration started in the area fairly long ago and a good number of intensive studies have been done on various aspects of mining the area’s coal deposits, including the technical, social, economic and environmental issues. Review of the findings of these studies leads to the conclusion that with fast depletion of the reserves of natural gas, the main fuel for producing electricity and the main raw material for production of fertilizer, there is now no alternative to mining coal of Phulbari, which can solve the country’s energy crisis and provide new engines of growth. Some other major conclusions are:

a. Discovery of coal reserves in the Phulbari area of northern Bangladesh is seen as a blessing in a situation when the country is facing the threat of an inadequate supply of affordable commercial energy including electrical energy.

b. The growth rate to be achieved by Bangladesh in the coming few years for achieving the Millennium Development Goals should be higher than the 5-6% that the country could achieve in the past two decades but the reality for the country is that even the modest target of a sustained 7% economic growth is not achievable without regular supply of electricity.

c. The present installed capacity of around 5500MW of the country’s power plants fuelled about 85% by gas, 3% by hydro, 4% by furnace oil, 4% by diesel and 4% by coal is not sufficient to meet the country’s energy demand, the generation is much lower than the installed capacity and at the existing rate of use of gas in power plants, production of fertilizer, vehicles, brickfields and some industrial units and in household consumption, the reserves of gas will be exhausted in some 15 years, when power production will collapse in the country.

d. Given the fact that the country is not in a position to significantly develop other sources of energy to meet its energy requirements in the near future it has become an obvious necessity for her to mine coal.

The expected benefits of a coal project in Bangladesh are

1. Use of coal as an alternative fuel for generation of electricity and improvement of the energy security and the economic infrastructure as the basis for growth and development of the economy of the country as a whole and the north-western region in particular;

2. Saving natural gas by use of coal in electricity generation and the use of the saved gas in increased production of fertilizer and other beneficial purposes including in industry units and households by expanding the gas supply network and thereby arresting the depletion of forest resources;

3. Supply of coal as a cooking fuel (for example, in the form of briquette) in rural households now dependent on traditional biomass that are becoming expensive and have alternative uses;

4. Working of the multiplier effect of the implementation of coal project(s) and especially, development of derivative industries and the working of export elasticity to economic growth; and

5. Revenues of the government over the lifetime of the project.

Issues Which People Love Talking About, Thinking, Considering

The costs and benefits of mining the coal in Phulbari would significantly vary depending upon the method of mining. Open pit mine would cause loss of agricultural land and displacement of the population and commercial and residential land and structures within the mine footprint area in phases over the years of mining in the area. This type of loss is inevitable in any development work and there are plenty of cases in Bangladesh which are more questionable in terms of the justification of the size of valuable agricultural land acquired or the number of people displaced in the name of development. This does not mean that the coalmine in Phulbari can be allowed to develop causing irreversible damage to people, land and the environment. An extensive investigation and work with local communities are required in identifying households and the land affected by the project, valuation of assets lost, estimation of the compensation and resettlement/rehabilitation requirements and determination of mode of comprehensive arrangements for all losses of assets, structures, lands and the crops, vegetation, fisheries, poultry etc. and training of people to cope with situations created by possible loss of livelihood/professions.

There is however, no reason to believe that coalmines cause permanent losses of all lands and structures. Designers of a coal mine should know how to phase out the mining work and develop a mining plan with provision for removal and storage of the top soil, excavation and mining the coal, backfilling and then restoring the topsoil. The forests and wetlands can be realigned and there are proven technologies of keeping the water table in and around the mining area at normal levels, and also of mitigating environmental degradation. Underground mining would involve costs of managing water inrushes inside the mine beneath the ground, inevitable risks associated with spontaneous combustion of coal with the emissions of hazardous and toxic gas and the high temperature, the risk of land subsidence in the mining area, the cost of holding the roof atop the long walls and the like and more significantly, the loss of major part of coal that would not be possible to extract in the underground mining method.

There is a debate around whether to use the entire coal of the mines in Phulbari or other areas in the domestic economy or a part would be allowed to export. A ‘nationalist’ claim may suggest that there should not be any export at all and the claim apparently looks very reasonable. But once the emotional element in the thinking is eliminated one may take a few points in consideration irrespective of whether the mines are operated as projects of a foreign, or a domestic (government or private) company or of a partnership venture having both government and private (including foreign) ownership. The points are:

(a) What should be the economic size of the projects (i.e., how much should be the annual extraction of coal from a coal mine to match the scale of investment in a project and make the project economically viable);

(b) How much of the coal the country is prepared to absorb within the economy (i.e., the requirement of the new coal based power plants and the plants for production of coal briquettes, use of coal in brickfields and in domestic cooking and the like).

(c) What to do with some grades of coal (for example, the high grade semi-soft coking coal) available in Bangladesh that would possibly have no use within the country in the near future.

The equation is: a coal project may need to produce, say, 15 million tons per year to be an economically viable one (at the given trends in the domestic and international market price of coal and co-products) but the country is ready to absorb say, only 9 million tons per year. Some economists may reasonably consider it wise for the government to allow export of the ‘surplus’ coal (and use the income from the export for settling import bills for machineries and supplies required for operation of the mine and associated infrastructure, as well as for economic development through reduction in pressure on the foreign currency reserves and establishing better commands on balance of payments) instead of asking the project to stockpile it. But the government might possibly gain more by not allowing coal exports. In that case, the government is to create additional coal use capacities in the country (say for example, by establishing new coal fuelled power plants, briquette factories, supplies of coal to brick fields, industries that use coal as fuel and not diesel or petroleum).

This paper assumes that by not implementing the project, the country would face severe energy crisis within less than a decade. It also assumes on the basis of the experience of the Barapaukuria coal mine, which is now in operation around the coal deposits in Phulbari, that although underground mining might apparently look more acceptable in terms of lesser displacement of people and structures or of losses of agricultural land and crops, the method is highly inefficient in terms of resource recovery. Some major problems of underground mining have already been raised above. In addition, the shallow depth of coal deposits at Phulbari, loose soil structure of the surface and sub-surface crust and the thickness of the coal seams do not suggest that the underground mining would be safe and cost-effective. In addition, the extraction of coal by using underground mining would create voids that will inevitably cause land subsidence. There are in fact cases of subsidence in Barapukuria underground coal mine and many among those who are proponents of underground mining in Phulbari now say that if the underground mining method is applied in the project, the land on the surface cannot hold the weight of buildings or relatively heavy structures.

Reduction in coal recovery rates or increase in the costs of mining for measures against the risks would make the project economically non-viable not only for the implementing agency, be it a government, a private, or a joint venture company. A question to consider is: if underground mining ultimately leads to subsidence and subsequently, the loss of the habitat and agricultural land, why shouldn’t the policy makers think of considering open pit method for the project from the very beginning?

The logical point in that context is to make thorough estimates for the losses in settlements and the environmental effects of open pit method of mining in Phulbari and create provisions for compensation and rehabilitation and the protection of environment. Three major concerns are: resettlement, water and the project area economy. The project affected people (PAP) are to be appropriately compensated for the losses they would incur and resettled somewhere and they are to take up land that can be used for production or to have the opportunity of being engaged in gainful alternative livelihoods. Unused land under the possession of Parbatipur Railway Workshop can be an ideal location for the resettlement.

Mining coal in Phulbari would have a substantial impact on the ground water regime and the availability of water for irrigation, fishing and household purposes. There is already proven technology of water management in and around open cut mines in different soil and aquifer conditions in various parts of the world and therefore, it should not be a problem for a coal project in Phulbari to maintain the desirable ground water level and keep the water free of hazardous elements, provided that the investors in such project allocates sufficient attention and resources for the purpose.

The mining would introduce the prospect for three aspects of development that are vital for more rapid development of northern Bangladesh:

(a) Development of agriculture;

(b) Development of industry; and

(c) Development of trade and commerce.

The mining would significantly improve ongoing production in both agriculture (largely because of expanded irrigation support, extension and contract buyers, introduction of new crops and cultivation methods as well as more agro-business to supply inputs, and training of local farmers, if arranged as a part of rehabilitation program for the project affected people) and manufacturing and services sector (directly, by using sustained supply of electricity and indirectly, because of development of derivative industries as the multiplier effect of development of mining activities in the area). There is considerable room for increases in production from a more commercial agriculture using greater inputs and consequently producing higher incomes.

Sitting in the Middle of Nowhere?

There are broader implications of having a coal mine project in Phulbari for development of the country as a whole. The key point here is the manufacturing implications of serving the mine and the urban expansion that will occur as a consequence of the investment. Such project will create impetus to development of trade and commerce in Phulbari and the whole of northern region, as well as in other parts of the country. However, development of the coal mine only is not sufficient for the purpose. Neither will it automatically call for a fast growth of business. What is needed in addition is the improvement in roads, railway and port system, and among many others, improvement in the financial transactions.

The Barapukuria Coal Mine is feeding coal to the 250 MW power plant at the mine gate. How much of the power generated by this plant goes to the national grid is not known but it could be gathered that the office of the Rural Electrification Board in Phulbari is keen to maintain uninterrupted power supply to the fast growing number of deep tube-wells in the area that pay solid revenue to the company and thanks to such business interest of the company, people in the area enjoy regular power supply, at least during the irrigation season. Many however, have strong doubts about the regularity of this supply once the season would be over.

Discovery of coal deposits in the north-western region of the country has attracted a great interest of the nation in the region. But despite the general understanding that the country is facing severe energy crisis and that there are strong potentials of these coal mines in solving the crisis, policy makers continue to hold a strategy of ‘critically reviewing all the different opposing views’ and ‘going slow in taking decisions’. Sometimes, arguments are put in a way that says that the strategy of going slow is justified because there had been public protests against implementation of any mining project in Phulbari and the protest even turned into violence leading to killings. The question is: why can’t the government investigate into the incidence while it has already earned a reputation of investigating into hundreds of different cases. The investigation would not only reveal the motives of the movement and the reason for killing but also pave the way for better understanding of the local community about the various aspects of the Phulbari coal mine, for their informed and meaningful participation in taking decision about mining coal in the area.

The government could investigate into how the so called ‘popular movement’ was organized and whether the motives of its organizers were at all very clean. Such an investigation is necessary for quick ending of the so-called ‘controversy’ over mining coal in Phulbari. Keeping the issue unresolved would only mean that the local people will continue to remain divided in opinions, which only goes in favor of those who want that the country should not develop its own coal mines and are not interested to respond to the question: what the nation would do in just a few years’ time when it will find that there is no electricity around. People now opposing the idea of mining coal in Phulbari may not be available for being held accountable in the critical situation when not only all factories in the county would stop, but also even the fans over the heads would not turn or the bulbs in the rooms or streets would not give lights. Given the present energy situation in Bangladesh and the forecasts for the future, there is no scope of wasting too much time on decision on the country’s coal.

The ‘go slow strategy’ for coal mining decision in north-western Bangladesh helps none but those self proclaimed ‘patriots’ who wish no coal mine in the name of protecting everything in the country. It may be safe for the government to sit and do nothing while ‘watching’ public opinion but possibly, it is not at all safe for the nation to wait for the candles to replace the bulbs or the hatpakha to replace fans and no power for the industry units, especially when oil prices in the world already exceeded $125 per barrel and diesel is no more any good fuel for electricity.

Dr. SM Mahfuzur Rahman: Professor, Department of International Business, University of Dhaka

Source: http://www.ep-bd.com/

How Much Natural Resource Is Adequate For A Country?

Mushfiqur Rahman
A very commonly asked question is “How much natural resource is enough?” In our country there is a popular ongoing debate on coal extraction to meet the present pressing demands for energy versus the suggestion for keeping the resource underground for the future needs, until we will learn how to mine the coal resources without causing any interference with activity on the surface (above the resources) and until we have home grown technology and local financing. Hard to believe? Certainly the recent announcement that the research level in our universities has waned doesn’t instill confidence that we Bangladeshis can do it all alone at least in the foreseeable future. At times a section of people relate the coal extraction issues with the questions of resource adequacy paradigm. A section of activists have successfully established the perception that we have consumed almost all our natural gas resources and only a small amount of coal should be extracted for beneficial use in the future. So we need to promote the strategy of coal extraction only by ‘local miners (?)’ so that the extracted resources can be used locally. At the same time the fact remains unchanged that there is no local miner and investment to facilitate any serious coal mining and we don’t see plans materializing for enough coal (to help solve our energy crisis) to be mined in the foreseeable future.

So the country has been systematically moving from shortages of commercial energy to disastrous crisis, almost like someone is planning to hold back our country’s economic development. Simply put we have an eager workforce and the urge to do better, but without energy industry and human development can’t move forward.

The discovery of coal resources in our country is not new, but for the last forty years of the knowledge of having coal we could hardly secure much and only one million tonnes has so far been realised from our only commercial coal mining operation. Even then the cost of producing this coal has been enormous and difficult to economically justify. Although this existing coal mine has been dependent on foreign funding, technology and manpower support, its performance demonstrates inadequate studies were carried out and choice of mining method was not made based on proper analysis of the ground conditions and nature of the coal seam(s), especially the large thickness.

There is now speculation that this underground mine which apparently will extract less than five million tones of coal from the total 390 million tonnes coal reserve, will be wound down and the Government may invite new investors to develop the coal deposit using the open pit mine method. This will obviously negate the existing underground operation and its infrastructure will be demolished to make way for a much higher production and recovery of our precious coal. So the coal exploration and mining with its more than forty years history followed inadequate strategies and has failed to secure any practical mining which is economically, environmentally and socially sustainable.

The country has been badly suffering from commercial energy supply shortages but ironically is still sitting on good quality coal resources estimates to be at least 2.5 billion tonnes. So the possession of vital natural resource in the country (remaining safely under the ground) does not necessarily automatically mean the resources will be available for its economic use, ie; that we Bangladeshis will get any benefit. While the people of our country and our Government continue to debate the adequacy of natural resources we are running out of time and denying ourselves the benefit from the coal resource, ie; a reliable new energy supply, new power stations, no load shedding, industrial development and jobs, no problem with power for irrigation pumps, etc etc.

If we recall the natural resource related fundamental studies, we see the longest running issue in natural resource economics is resource adequacy. The conventional approach towards natural resources as ‘input’ to production always leads to the simple conclusion that the existing natural resources are not adequate for any nation and it can never be adequate in the long term. The reason is simple; the growth required for economic development will always require more and more inputs so in time the needs of our future generations will not be indefinitely met by our existing natural resources.

A section of people within the society always try to project the ideas that the existing natural resources are extremely limited specially those which are non renewable. They love to believe that the natural resource scarcities will restrict economic growth in future. In 1914 the US Bureau of Mines estimated that there would be oil left over for only ten year’s consumption. In 1939 the Department of the Interior projected that oil would last only 13 years, and again in 1951 it was projected that oil would run out 13 years later. Even if we were to run out of oil, this would not mean that oil was unavailable. Rather it would become more and more expensive. If we want to examine whether oil is getting more and more scarce we simply have to look at whether oil is getting more and more expensive, ie; supply and demand. A similar analogy can be drawn for other natural resources and their scarcity projections.

Before the industrial revolution when the economic activities were tied more closely to local natural resources, fears for shortages of items like forest resources and water were common. With the industrial revolution becoming obvious through the significant contribution of in 1769 of James Watt’s steam engine invention, the reliance on coal grew manifold. Accordingly concerns shifted to the possibility that the depletion of coal will lead to the collapse of development. In the Twentieth Century coal was partially replaced by oil as it is easier to transport, store and use. As recent as the mid 1970s petroleum crisis there were no shortages of scaremongering about natural resource scarcity and economic collapse.

In 1973 and 1979 a pair of sudden price increases awakened the industrial world to its dependence on cheap crude oil. Prices first tripled in response to an Arab embargo and then nearly doubled again when the Shah’s of Iran Regime was overthrown resulting a major recession worldwide. Many analysts warned this crisis as a proof that the world soon will run out of oil. But the reality was different. The dire predictions were emotional and reactions political. By 1973 the world had consumed only about one eighth of its readily accessible crude oil. The five Middle Eastern countries (members of OPEC) could make the price hike for crude oil worldwide not because the oil was growing scares, but because they had managed to corner 36% of the market. Later, when the demand sagged, the Alaskan and North Sea oil weakened OPEC’s economic firm control, the price curve of oil collapsed. Ever since we have been depending on naturally occurred fuel we have been worried about running out of fuel.

The pessimists are not infamous. We may recall at least Thomas Malthus who became famous for his treaties that human population growth would inevitably outstrip the ability of nature to provide sustenance in ever-increasing amounts. With the assumptions of exponential growth and limited resources, we can easily make a doomsday prophecy.

Our present day energy supply is mainly based on coal, oil and natural gas which were created over millions and millions of years. Many people believe that consuming the wealth created over millions of years within a few hundred years is just not right. We should consume our natural resources in a way that our future generations effectively get their share of these resources through developing our country’s economy and human resources to the best of our ability, and positioning our country and people so that our nation is able to afford whatever is required in the future.

The argument of “sustainable resource use” sounds attractive, however, it is inevitable that at some stage in the future a generation of people will be left with no fossil fuel at all, even if we slow down consumption and use just one barrel of oil a year! The strong counter argument is that although we can’t preserve our natural resources for future generations we have an obligation to leave for them the knowledge and capital such that they can secure a quality of life that is better than ours, ie; this is the definition of ‘progress’. The same argument furthers the logic that if our society, while using coal and other fossil fuels in the near term, can further its technical know-how and economy, then it should be able to develop longer term energy resources (some of which are yet to be identified) to ultimately sustain our nation.

The former Saudi oil minister and founding architect of OPEC genuinely pointed out: ‘the Stone Age came to an end not for lack of stones, and oil age will end but not for a lack of oil’. Thus we can appreciate that eventually better substitutes and superior materials will and do replace the conventionally used natural resources over time. We stopped using stone because bronze and iron were superior substitute materials. The patterns of natural resource use have changed dramatically. History shows that substitution does occur in response to changing conditions, scarcity of supply and price. In the 1970s high energy prices encouraged substitution for energy inputs including the pursuit of energy efficient machines. Today we see this happening in the car industry where we are now able to buy cars that are no longer restricted to use conventional fossil fuel but can run on bio-fuels, battery power and hydrogen.

In the backdrop of the new ‘oil crisis’, analysts say that the world contains enormous caches of unconventional oil that can substitute for normal crude oil, with the rising oil price to making such alternatives profitable to manufacture. The Orinicco oil belt in Venezuela has been assessed to contain 1.2 trillion barrels of sludge known as heavy oil. Tar sands and shale deposits in Canada and the former Soviet Union may contain the equivalent of more than 300 billion barrels of oil.

The United States Energy Information Agency estimates that based on today’s oil price, it would be possible to economically produce about 550 billion barrels of oil from tar sands and oil shale which would have the effect of increasing the present global oil reserves by some 50%. It is further estimated that within 25 years we could be able to access commercially twice as much oil than the world currently has available. The total size of oil shale resources is staggering. It is estimated that globally there is about 240 times more oil shale than the conventional petroleum resources. In addition the development of technology for conversion of coal to synthetic oil, especially the ‘rejected’ low quality coal, will add a volume of oil to the world’s reserve.

Theoretically these unconventional oil reserves could quench the world’s thirst for liquid petroleum as conventional reserves are depleted. The above potential substitutes are an addition to the current conventional oil reserves that (based on existing finds) will last at least another 40 years at present consumption rates. There is also an estimated at least 60 years worth of gas and 230 years worth of coal. Consequently, there is no need for immediate worry about running out of fossil fuels. But the industry will be undergoing difficulties for some time and investment will be needed to ramp up production of unconventional oil.

From a macroeconomic standpoint, natural resources are neither necessary nor sufficient for achieving high growth rates. Countries like Japan, Korea, and Singapore for instance have achieved high growth rates despite relatively poor natural resource endowments. On the other hand, many countries like Nigeria, Venezuela, and Zambia with very substantial resource endowments have not only failed to secure high growth in recent decades but have rather regressed. On the other hand, history clearly shows many examples where natural resource endowments have been instrumental in supporting economic growth. Some countries of the Middle East, for example the United Arab Emirates, have achieved high incomes and significant national development based on their petroleum resources.

Economic growth in any country is related to the growth in its productive capacity and relative to the growth of its population. Productive capacity is a function of several factors including the quality of productive inputs, (labour, traditional capital, natural capital etc.) available to the economy and the productivity of those inputs in turning out useful goods and services. Natural resources may be linked to economic growth and we can consider them as natural capital, the quantities and qualities are gifted by the nature. But the human being is to make use to this natural capital to produce goods and services combining with other inputs.

So the burning issue remains: we will promote using our natural resources to develop our human resources and industrial productive capacity to rocket our economic growth and build the necessary knowledge and financial means for our future generation’s well-being or will we continue our never-ending debate and procrastination thus leaving our natural resources buried and depriving our nation of a better present and even better future?

Mushfiqur Rahman: A mining engineer. The views are of the authors and do not necessarily reflect the opinions or views of the organization where he works or with which he is associated in any form.

Link: http://www.ep-bd.com
Date: 16 June, 2008, Bangladesh

Charting The Way Forward

Professor Ajoy K. Ghose

There is no dearth of debates on whether on not Bangladesh faces an energy crisis of a monumental dimension. It is increasingly becoming apparent however that unless some drastic policy decisions are taken right now, the energy dilemma will exacerbate to a level that will be beyond the control of the nation. Bangladesh’s energy landscape presents some ominous indicators. Gas, which had thus far been the mainstay of the nation’s energy base is, by all accounts, being rapidly depleted and unless the nation strikes it rich with new discoveries in its offshore fields, the energy future appears to be dark and dismal. The recently discovered coal resources in northwest Bangladesh are mired in controversy and organized opposition by civil society is setting up major roadblocks to coal development with the coal policy gathering dust in the files of the government. As energy is the very life blood of a nation, ensuring secure, reliable, affordable supplies of energy is a serious concern for Bangladesh, even though the energy use is very low with a per capita primary energy supply of 0.16 toe/capita(2004 data), possibly the lowest in the region. While traditional biomass meets some 50% of the total energy requirements, especially in rural Bangladesh, this is contributing to large-scale deforestation, besides serious impacts on the health of rural population because of indoor air pollution. Clearly, the dependence on traditional fuels and inefficient technologies, militate against the vision of the Bangladesh Government to provide for “electricity for all” by 2020. Even the per capita electricity consumption at 167 kWh/year falls short of the necessary stimulus required to attain a GDP growth rate of 6-7%.

Energy availability will be central to the development agenda of Bangladesh, as the catalyst for change for a better future. There are serious concerns about the security of energy supplies, investment in energy infrastructure and rising aspirations of the people with energy use continuing to grow inexorably. Even if there are no quick fixes, a road map for the nation’s energy future has to be drawn up and translated into reality if only to kick start the national economy and ward off potential political and social instability.

Energy Landscape of Bangladesh

The energy landscape of Bangladesh is a variegated one where biomass fuels account for 52% of the energy consumption. Of the commercial energy resources, natural gas has a dominant share, besides minor contributions from hydro, oil and coal and very limited share of renewables. Natural gas consuming sectors include the power sector, the fertilizer industry, domestic, captive power and transport and the demand has increased manifold over the years. Despite the myth that Bangladesh is “floating over gas”, the prospectivity for striking more gas deposits is high. According to World Energy Congress Survey of 2004, the proved recoverable reserves are estimated at 301 billion cubic metres and the R/P ratio is estimated at some 26 years. With rapidly escalating demand for gas, the reserves are fast depleting and the nation faces a resource crunch, unless new discoveries are made in gas fields. As much of Bangladesh is poorly explored, both off-shore and on-shore, the potential for further discoveries is thought to be substantial and a windfall of a few new deposits of the size of Titas or Habiganj could help ameliorate the energy resource crunch. This calls for extensive exploration efforts with matching investments and recourse to high technology.

The total installed capacity of power plants in 2005-2006 was 5245 MW, and the maximum demand was 3782 MW. The aggregate generation was 23,703 MkWh, of which the share of gas was 81.5%, hydro 4.3%, furnace oil 5.3%, diesel 4.07% and coal 4.74%. The access to electrical energy was only around 42%, despite the targeted 100 per cent electrification of all 84,000 villages in the country.The discovery of coal in northwest Bangladesh in 1960’s has opened up a new energy source which could provide a boost, if not a reinforcement, to the energy scenario of the country .This marks in fact a major milestone in sustainable energy development, given appropriate policy support. Five major coal deposits have been delineated in the recent past which include Jamalganj, Barapukuria, Khalaspir, Phulbari and Dighipara with an aggregate resource base of 3300 million tonnes, of which Phulbari and Barapukuria have been explored in detail with reserves estimated at 572 million tonnes and 303 million tonnes respectively. Developed with Chinese assistance, Barapukuria coal mine commenced production in Sepotember, 2005. The choice of underground method of exploitation has been fraught with serious consequences; the recovery is low and the bulk production has fallen short of the planned target production of 1million tonnes per year. The coal deposits discovered so far in Bangladesh are characterized by a sequence of 6 or 7 seams, some of which are thick to very thick.

The coal seams are overlain by Upper and Lower Dupi Tila formations which are highly water-bearing aquifers which pose serious problems of dewatering. At Barapukuria, a water inrush in 1996 led to significant sterilization of coal reserves. Currently, Barapukuria is producing around 0.3 to 0.4 million tonnes /year, but the recovery will not exceed 10% of the aggregate proven reserves. It is time to re-think the exploitation strategy and convert the underground operations to an open pit operation which besides improving recovery, safety and lowering cost of production would also permit of high production volume. The Phulbari coal deposit has been planned for exploitation by an open pit mine, with an ultimate pit depth of 330 m, for a production volume of 15Million tonnes per year. The project has encountered severe opposition from the civil society on the grounds of possible impacts on groundwater resources in the region, the problems of displacement of project affected people and likely damage to valuable agricultural land.

Much of the opposition is grounded on imaginary/unreal arguments; the displacement of the people would certainly call for a sensitive handling of the situation with a well-conceived R & R plan, providing for fair compensation and resettlement entitlements, training and provision of jobs for “locals” and building up appropriate social infrastructure for the people. The feasibility report of the Phulbari project has been submitted to the Government and is awaiting approval; the project has already received appropriate environmental clearances.

Both Khalaspir and Dighipara coal deposits need to be explored in depth to justify the mining plans. It should be possible to work them by open pit method to circumvent the problems likely with underground exploitation under aquifers. It would be in the interest of Bangladesh to examine the prospects of these deposits by open pit exploitation using the current shelf of strategies and state-of-the-art knowledge around the world and the Government would be well advised to set up a committee of experts rather than having the issues discussed and debated endlessly by civil society, who are oftentimes very ill-informed of coal mining technology per se.

The coal deposit at Jamalganj is a deep-seated one, with depth varying between 640 to 1160 m, and could be an ideal candidate for underground exploitation. However, keeping in view the escalating costs of underground mining from depth, lack of precedent experience in Bangladesh, one could conceive of different strategies for recovering the heat content of the coal seams such as recourse to underground coal gasification (UCG) at Jamalganj.

The coal resources of Bangladesh open up a new window of opportunity for staving off the energy crisis in the foreseeable future. The coal seams are of high quality and will provide fuel for thermal power plants to meet the crying need for electricity. One could even conceive of conversion of coal to liquids using such coals, keeping in view the skyrocketing oil prices, which could touch $150 per barrel within 2008 itself.

A well-conceived sustainable coal development plan for Bangladesh needs to be worked out identifying the share of coal in the national energy mix. It should be possible to accelerate coal development through joint ventures for Khalaspir and Dighipara and approving the feasibility report for Phulbari. By 2015, Phulbari could produce 12-15 million tonnes per year, while Barapukuria(if converted to an open pit operation) and Khalaspir and Dighipara augment the coal production by 5 million tonnes. Thermal power generation, given appropriate investments, should be possible for a capacity of 3000MW, using 9 million tonnes of high quality coal from Phulbari, and Barapukuria. The focus on power generation for the urban sector has led to a neglect of distributed generation, especially of renewables. If the vision of 2020 has to be met, the rural sector must receive a higher priority.

Sustainable Energy Development – The Way Forward

Bangladesh faces a daunting challenge in meeting her “energy hunger”, and overcoming the glaring rural-urban disparity in terms of access to energy. By 2020, the vision of “electricity for all” has to be realized and the per capita electricity consumption has to be raised to at least 750 kWh per year, if only to lift the nation by the bootstrap out of energy deprivation for a new economic future. With the skewed diversion of investments and human resources to urban energy supplies, the rural sector has been ignored and the situation can only be corrected by massive increase in the national power generation capacity and focus on accelerated rural electrification. Much of the new generation capacity could be based on coal, if the road blocks to coal development are lifted. The investment in power generation could be partly offset by exporting coal. The exploitation of coal in Bangladesh would herald the beginning of new energy and economic era and deserves the support of the Government in full.

link: http://www.ep-bd.com
Date: 16 June, 2008

Denial of Everything

EP Report

Expectations from the military-backed caretaker government of Dr. Fakhruddin Ahmed knew no limit simply because of their high sounding dreams they showed the nation since the 1/11 changeover. Intentional or unintentional, the so-called politics of the non-party government made things so complicated that now the windows of opportunities for the branded “political thieves” are opening up that they will come out tomorrow, if not today, as “political heroes”. Political analysts think “political game” of putting the two key leaders of the two main political parties behind the bars marred the opportunities to streamline the politics.“Since 90 percent of people of Bangladesh are supporters of the two parties, the two ex Premiers should have been given the benefit of doubt to allow them to bring their parties on the right tracks,” an analyst said adding “the belated call from the Chief Advisor of national consensus would have witnessed a success had he sat with the two leaders within first couple of months and convinced them about the consensus, alongside carrying out the anti-corruption drive.”
“Now the opportunities are missed if we don’t want to fall into another deep crisis again,” said the analyst.

Like super structure, the country missed opportunities in the basic structure too. If the caretaker government did not mishandle the two key political players of the country, it one side could ensure commitment from them of peaceful politics in future without hurting the economy; and on other could concentrate more on economic affairs — not only the day to day matters, but also by preparing a roadmap for economic upliftment in next 10 years with participation from all concerned quarters and again realizing the commitment from the politicians that they will work together to materialize the plan.

Anyway, Bangladesh lacks in visionary leadership and the caretaker government was no exception. Bangladesh missed the opportunity after the independence, then after overthrowing autocrat Ershad in 1990 and now following the 1/11 in 2007.

If the political roadmap progresses properly, the national election will be held in the third week of December. The country is expected to embark with an elected government in 2009. Now it’s clear that the qualitative change in politics is a far cry not for anyone else but due to the previously high ambitious “minus 2” plan of the caretaker government itself. Now it appears that the government will not able to bring minimum change in politics as now they had to “manage 2” formula as the “minus 2” boomeranged. “Had the government didn’t go for the minus 2 certainly certain changes could have been possible through the two leaders themselves,” another analyst said, adding “end of the day we’re going to have a big zero after all these high sounding changes following the 1/11 changeover.”

So, when the government of Fakhruddin Ahmed will hand over power to the elected government almost everything will be similar it was earlier. Even the changes expected in other sectors like economy are not being possible. Energy sector is no exception. According to latest official statistics, per capita power consumption in Bangladesh is 140 kilowatt hour (kwh). The per capita power consumption in Sri Lanka is 325 Kwh, Pakistan 408 Kwh, India 663 Kwh, European countries 7,500-8,000 Kwh, Australia around 8,000 Kwh and in USA it is 10,000 Kwh.

Bangladesh not only remains at the bottom of the list of power consumption, it keeps electricity out of reach of 70 percent people of the country. The power sector master plan suggests that the country requires 43,000 megawatt (MW) electricity to ensure power for all by 2025. According to the plan, 76 percent of the requirement or 33,000 MW will come from coal although now the percentage is only 5. In USA coal contributes to over 50 percent of total power generation, in India it is 70 percent and the figure for fast growing China is similar.

On the other hand, 87 percent of Bangladesh’s power generation depends on natural gas. But, the future of gas for Bangladesh is bleak and the existing fields are depleting. According to United States Geological Survey (USGS), the prospect of gas resources with 50 percent probability is 32 TCF while it is 42 percent as per study carried out by the Norwegian Petroleum Directorate (NPD). But, in terms of 90 percent probability it is not over 8 TCF. Whatever the prospect is, nothing has been done in public sector to explore the prospect after 1990. After the major discovery of Bibiyana in 1998, a good discovery by an IOC was Moulvibazar in 1999 and then a small discovery in Bangura. Many might be surprised witnessing the silent role of the IOCs in last one decade while it is considered that 93 percent of gas discovery in the country was by the IOCs.

Analysts found the indecision of the government for such a situation. The IOCs didn’t find any clear indication from the government that what it will do with the discovered gas if an IOC makes the discovery investing millions of dollars. In fact, that was the reason that the IOC had wanted that gas is exported from Bangladesh. But, the government neither could decide in favor of gas export not could assure the IOCs that its discovered gas will have market inside the country. In fact, that’s the reason the IOCs backtracked from the exploration activities and the country did not any discovery by them. Experts said had the government dared to export a portion of the gas from the Bibiyana, not only Chevron but also other IOCs would get encouraged to go for new exploration. If export was not possible due to political reasons, the government could go for major power projects creating market for the gas discovered by the IOCs. Still, the government sat idle and the result is that the country is now experiencing serious power crisis in one hand and on the other gas shortage, too.

Lately, the government went for third round bidding for offshore blocks. Still, the response is not overwhelming. Also, the High Court has issued show cause notice upon the government. If one asks why the dismal situation of the country’s gas sector, the answer is simple: Denial of everything. A civil society group that could be an effective pressure group emerged as sycophantic elements that opposed everything. Without realizing own capacity in terms of both technology and investment these people are opposed to any kind of foreign investment in the energy sector. Although the cell phone companies are sucking billions of dollars of common people in the name `days talks’ and `night talks’ and the country’s state-run BTTB had the capacity to go for such mobile phone networks, these “patriots” would not utter a single word. But, they are ready to sacrifice their lives if a foreign company invests in Bangladesh, obviously they are not charity organizations… profit is their main objective, and by the investment the company otherwise helps the country to ensure energy security these formerly leftists will threaten to collapse the country no matter whether they have the ability or not.

Similarly, they opposed the gas export idea showing only one side the coin. The intellectuals would never say what the objective when a national committee had suggested to export of portion of IOCs gas, that was to encourage the foreign companies to invest more for more discoveries and more energy security. The idea to oppose the gas export bid was popular, but in reality now the government and people of the country are feeling the heat of power crisis due to gas shortage. The same people who once burnt jute godowns after the independence in the name of Maoist revolution are now shedding tears for jute industry of the country. Their present bid to “protect oil and gas” is also that kind of patriotism. These intellectuals are “so far sighted” that only a few years back they couldn’t understand the value of coal and thus forgot to incorporate the word coal in their organizational banner. Suddenly they woke up and now their main concentration is coal although they had launched the “crusade to protect oil and gas”.

The group had incorporated their bid to protect the port and after the caretaker government brought revolutionary changes in Chittagong Port, now it is clear that what kind of port the formerly leftists had wanted and what should be it in reality that is now we are watching. Bangladesh’s present gas crisis could be overcome had there be the much-talked-about Myanmar-Bangladesh-India tri-nation gas pipeline. It would help Bangladesh to import gas in case of necessity. But, this was also not welcomed by the “sole protectors” of the country and the result is in hands. But, the dangerous thing is that the past government almost bowed down to the irrational demands and finally could not take any courageous decision. In fact, it is also true that a government that was sunken by the corruption does not have the courage to take apparent unpopular decisions and show the people the fruit after a few years.

As the country fell behind in terms of gas exploration, now the golden opportunity for the country is coal prospect. The recoverable coal reserve in the country is 2.0 billion tonnes which is equivalent to about 65 TCF of gas. The Phulbari coal field, having a recoverable reserve of 572 million tonnes is ready for development. But, again the problem is a Dhaka-based group supported by some international NGOs who by misleading information could convince the people around the coal field. The group at first campaigned that they would lay down their lives, but would not allow any mine. Later they said that the mine has to be underground. Once they campaigned that the entire area around Phulbari would be deserted if there is any coal mine over there. Now their campaign is that the agreement with the foreign company is anti-state, so the mine has to be developed by a local company.

The debate over method of the mining has been continuing for past few years. Unfortunately, the debate is not concentrated within the experts. Rather, it became an issue of a few people who hardly could manage a few hundred people in their support, but maintain regular presence in local and foreign media. The Barapukuria itself proved that the geology of Bangladesh is not suitable for underground mining even if we consider that underground mine can give at best 20 percent of total reserve while an open pit mine will ensure at least 95 percent. Just consider that production from second slice of the Barapukuria might not be possible, which is scheduled from 2011. Also, consider the frequent accidents that take place in underground mines in China and the accidents witnessed by Barapukuria, too.

Interestingly, the group coupled with some environmentalists are opposed to development of coal production in Bangladesh although the share of coal in power generation in the most developed USA is above 50 percent. It is 80-82 percent for China and 75 percent in India. And for Bangladesh it is not over 5 percent. Surprisingly, the statement of the “protectors” is similar to that of the developed countries who are interested to buy Bangladesh’s carbon credit.

Bangladesh is passing through a critical juncture in the political arena. Also, energy is the biggest challenge for the country specially when the oil price reached US$ 139 per barrel and projected to be $ 200 by the year end. For survival of the country, country’s people and the economy there is no alternative to ensure energy security. And if the country sits idle keeping coal reserve equivalent to 65 TCF of gas beneath the soil it’ll be simply living in the fool’s paradise. So, the question is whether the country will be continuing to live in the fool’s paradise or come out paradox of denial of everything for better future of the people of the country? It’s the best time to launch a true campaign for energy for people, not depriving them in the name of their protection.

The role of politicians in this regard is very vital. They have to understand the ground reality and come of the years old practice of denial of everything only because they are in the opposition.

Link: http://www.ep-bd.com

Date: 16 June 2008, Bangladesh

Core Library- A Wealth of Information

Zubayer Zaman
Energy and mineral resources exploration is a multi-disciplinary involvement- a venture of millions of dollars. This starts with searching for indications of minerals, large scale and detailed mapping aided by interpretative analysis of remotely sensed and aero geophysical data, followed by ground geophysical survey, geochemical prospecting and understand the subsurface geology through pitting, trenching and finally by drilling. Drilling gives final confirmation- discovery of a resource. Drilling gives both undisturbed cores and disturbed flushed cuttings. These samples especially the core samples are an important scientific and economic resource. But collecting cores is expensive and once collected has to be cataloged and stored properly. Preservation of this valuable geological information is very important for future reference and research. It may help in reassessing the old investigations in the light of advanced scientific knowledge and superior analytical facilities. It may also help in planning future investigations and R & D programs. A modern core repository will make this valuable information something permanent, that would otherwise be lost and would never be recollected again.

Establishment of core library for safe preservation of geological core samples is a well practiced method and getting importance worldwide. Even private oil, gas and mining companies along with the government initiatives are contributing to ensure proper preservation of this valuable information. In February 2007, Chevron Corporation donated $ 1.5 million, along with 1,500 tonnes of material collected over 60 years in 120 countries, to the Bureau of Economic Geology at The University of Texas at Austin’s Jackson School of Geosciences to ensure their safekeeping, enhances it the largest publicly available collection of geological cores and cutting in the world. Geological Survey of India has realized the importance of preservation of valuable core samples and modern core libraries are being developed at Bhubaneswar, Nagpur, Lucknow, Shillong, Hydrabad, and Joypur.

But Bangladesh is still to realize the importance of a modern core library as a repository of geological information. The history of oil, gas industry is more than 50 years but there is no modern core library for preservation of these valuable cores. And whatever the preservation system is these are not easily accessible to geologists, students, researchers. The development of Barapukuria underground coalmine and Maddhyapara Hardrock mine have produced a significant amount of core samples. But the preservation and management of these cores are very poor. Wooden boxes core trays are stacked on each other making the access/retrieval difficult for any interested students, geologists and researchers. Sometimes the environment is not even safe, poor management makes the condition something like a safe den for snakes, and other animals.

Phulbari coal field is being intensively explored by Asia Energy. The company during its detailed feasibility study drilled more than 100 boreholes to define the resource and collect other geological, geotechnical, hydrogeological information. This resource definition process produced huge core samples and flush cuttings. Realizing the importance of these samples for future reference, geological research, the company developed a well-organized, world-class core library for safe and systematic preservation of the samples in its Phulbari core yard. The core samples of the boreholes were preserved in GI boxes stacked in steel racks in permanent core shed. Entire core/flushed cuttings of one representative borehole drilled especially for display purposes was also preserved. The core trays were arranged in so orderly manner that it was possible to locate and retrieve any core of a particular depth of a borehole quickly. This core shed was a popular destination of visitors, geologists, university graduates and researchers.
Unfortunately, that valuable geological information was destroyed deliberately during and after the 26 August incident. We became witness with horror of the destruction of the core samples in the electronic media by the angry mob knowing nothing what destruction they have done without any intervention of law enforcing agencies. Recollection of such a large volume of core samples and systematic preservation is not only a matter of huge investment but also practically impossible. The wealth of geological information that could be used for future mine development study, research and reference are being destroyed by the angry mob most likely was instigated and guided by the people who don’t want to see the development of coal sector in Bangladesh. The people who led the mob behind to destroy the core samples were very calculative in their act and became successful to materialize their dreams but that mindless destruction has deprived the nation from the service of valuable geological information. But by committing such mindless activities the nation suffered from the huge losses of information treasures. Our nation does not deserve it.

Link: http://www.ep-bd.com/archive/19th-issuee_08/index.html

Coal Now the Best Option

EP Desk

Bangladesh should go for extraction of coal ensuring highest degree of environmental safety as well as paying attention to the interest of the local people who are affected in the mining process. Speakers came up with the observations at the inaugural session of the Training Workshop for members of the North-Bengal Mineral Resources Reporters Forum organized by Weekly Economic Times at Press Institute of Bangladesh recently. The two-day workshop was participated by 51 newsman of the northern region. The speakers said that coal is the best option now for generation of electricity not only for the northern region but also for the country as gas is likely to scarce in the days ahead.

Inaugurating the workshop, Prof M Tamim, Special Assistant to the Chief Adviser for Energy Ministry, said the country needs to secure the sources of its energy as well as diversify those right now because it will be of no use sitting on heaps of money if we are unable to find energy in the future. Ataus Samad, Advisory Editor, Amar Desh and Member Coal Policy Advisory Committee, Kamrul Islam Siddique, Chairman, World Water Forum, Engr. Mainul Ahsan, former Director Petrobangla, Kr. Kamruzzaman, Assistant Professor of Geology of Rajshahi University, Iqbal Sobhan Chowdhury, Editor, The Bangladesh Observer and former President of Bangladesh Federal Union of Journalists, Shaukat Mahmood, Editor, Weekly Economic Times and President, National Press Club and Mollah Amzad Hossain, Editor, Energy & Power and Chairman of Forum for Energy Reporters Bangladesh, among others, addressed the inaugural session of the workshop focusing on the development of the northern region.

The two day training workshop ended with a call for extracting coal immediately for the highest benefit of the nation. In the concluding session, the participants opined freely at the quires & questions event, and the guests responded making clear everything. The working journalists focused on the problems faced by the local people and also the reluctance of the authority to pay heed to the grievances. They fervently appealed to the concerned authority to come forward and solve the problems including the rehabilitation of the evicted villagers in and around the mining areas.

Petrobangla Chairman Jalal Ahmad attended the concluding session as chief guest. He said coal could play a pivotal role in energy sector to meet the ever-increasing demand of the nation. To meet this demand, extraction of coal is a must as coal can be used as a fuel to generate power in the country. He assured the mineral reporters to extend his cooperation in arranging training sessions so that they can play their due role in creating awareness among the local people side by side the bridging up the relations between government and the people.

Citing the sweet memories achieved in his official duties performed in northern areas, the Chairman said he assumes a lot of natural and mineral resources are available in that area. If any extraction done there, he would feel proud. Seeing a host of reporters hailed form those areas, he said that reporting on mineral resources in an important task now.

News Today Editor Reaz Uddin Ahamed said the initiative for the mineral reporters’ professional development taken by the Economic Times is really praise worthy, this type of initiative should be taken more, he hoped. PeoplTel Managing Director Major TIM Nurunnabi (Retd) said his organization would arrange a package program in which professional training and ways of earning should be included. He would take initiatives in this regard soon.

BFUJ Secretary General Ruhul Amin Gazi said the journalists working in Muffassils should get their due shares inscribed in the latest Wage Board. He assured to ensure their just demands. In his presidential speech, Editor of the weekly Economic Times & the President of National Press Club, Shaukat Mahmood said nation can’t be enriched if coal could not be extracted in just time. Debate on this point should be stopped for the sake of national interest. He called upon the mineral resources reporters to utilize their knowledge and experiences acquired from the two-day training workshop in their professional performances.

North Bengal Mineral Resources Reporters Forum President Morshed Manik thanked Shaukat Mahmood for arranging a nicer event like two-day training workshop on mineral reporting. Later the Chief guest distributed the certificates among the reporters on mineral resources who participated in the workshop.

Link: http://www.ep-bd.com/archive/18th-issuee_08/index.html

Bitter Coal Business or Benefit from Coal

Farid Hossain
As the saying goes, however hard you try you can’t clean coal. One thing, however, is certain: you can burn coal to make energy. Or you can burn it for nothing _ may be just for pleasure. According to experts Bangladesh is supposed to have a solid reserve of coal to the north of the country. There is a strong debate whether we should extract the coal and burn it for electricity. Or better to leave it where it is for the generations that will follow us. One school of thought is for extraction of the coal to make electricity that the country so badly needs for industrialization and to reach power to as many homes as possible. This group argues if we want electricity to reach every home or at least majority of homes then we must produce more electricity. If Bangladesh wants to raise its annual economic growth to 7 percent, it will need to add at least 2,000 MW of electricity to the national grid every year. Where the electricity is going to come? We can get electricity from natural gas. In fact we are already making electricity from gas. But gas has a limit. Officials say Bangladesh’s natural gas reserve is depleting fast and the country will face a serious crisis by 2011 unless we prospect more gas fields.

This group has opponents. They insist that extraction of coal will take Bangladesh to development. Neither it will benefit the people of Bangladesh. The extraction of coal either at Barapukuria or at Phulbari will benefit only the foreign companies and a handful of local agents. It is better to keep the reserve untouched. This group further argues that extraction of coal will displace thousands of people from their ancestral land and damage agricultural land as well as the environment. Residents of Phulbari have already demonstrated what local resistance can do. They did not hesitate to die for a cause they think is good for them.

People who will be affected by coal mining seem to be helpless as the controversy rages.

At a recent roundtable on the development of coal, organized by Energy and Power magazine and the UNDP, four representatives from Birampur and Dinajpur spoke out. They said they were not opposed to coal mining if that brings benefit to the local people. Villagers who will be affected by the coal mining must be consulted before the government makes any deal with a foreign company. Unfortunately, the government does not always take the locals into confidence before making deals with companies _ foreign or local. That explains why Phulbari exploded into protests that forced Asia Energy to leave the area. The company has since then been waiting for a return to the area. It is uncertain how soon it will be able to get the deal.

Coal is already being extracted at Barapukuria. There is already a coal-fired power plant at the coal mining field, operated by state-run Petrobangla. But its performance has been slow and poor. Also the project had been hit by controversy from the start. The original cost doubled allegedly for corruption. Barapukuria has become a subject of corruption case involving former PM Khaleda Zia and 15 others, including 10 former ministers.

This shows that our experience in coal business has so far been bitter. Such corruption allegations are helping the anti-mining lobby. If the extraction of natural resources benefit only a handful of people _ not the majority of the people _ it is better then to keep them untouched. Resources are not unlimited. There will always come a time when we will run short of the resources no matter how plenty these are. A big problem is: who will give us electricity if we don’t explore for gas and coal and use them.

Link:  http://www.ep-bd.com/archive/18th-issuee_08/index.html

Royalty Debate of Coal & Foreign Investment

Zubayer Zaman

The potential for coal sector development of the country has become the topic of discussion once the declaration of 572 million tones of coal discovery in the Phulbari Coal Basin was made. Thanks to Phulbari Coal Project – as it has initiated many debates. Surely we need to unlock our coal resources and guide our country to a new era of economic development. One of the contentious issues now – whether positive or negative – is the much talked about subject of `Royalty’ for coal mining.

The Mines and Minerals Rules, 1968 (amended up to 2004) sets the royalty rate for numerous minerals and coal, and defines how it is to be calculated and when it is to be paid. The coal royalty is set at 6% for open pit mining and 5% for underground mining. Some consider this rate is too low and it is against the interest of the country. But they fail to suggest the ‘ideal royalty rate’ that would protect the national interest and will match with the international mine financing practices.

Some people are trying to give explanation of royalty stating that- 6% royalty rate means that government and people of Bangladesh will get only 6% share and the remaining 94% or the coal project earning will go into the investor’s pocket. Maybe there is some gap in understanding the royalty issue. Maybe it is a deliberate attempt to try to circulate wrong information/explanation on mineral royalty to create a negative impression about coal mining with foreign investment. Simple fact is that the royalty can’t be viewed in isolation of other earnings from mining and it has to be seen as part of an overall benefit package.

In the recent past there was an attempt in the debate by illustrating the royalty exercise as a violation of country’s constitution. As stated allowing the mining rights to the foreign company with royalty provision would compromise ownership of the property rights of the country.

The reasons for confusion in the royalty debate possibly is linked with some kind parallel drawn with “production sharing contract” arrangement, ie; only 6% share for the government and 94% for the investor. Under production sharing contract arrangements such as in place for the gas sector in Bangladesh, companies get the benefit of full capital and operating cost recovery and pay no taxes (either corporate or personnel income tax), royalties or duties. The Bangladesh Government typically gets about a 50:50 share of the gas produced after the cost recovery.

On the otherhand, mining in Bangladesh is not covered by production sharing contract arrangements. Those involved in mining are expected to pay corporate tax (currently 40%), income tax for personnel, VAT, duties, royalties, and other government service charges. To enable some off-setting of the large capital development costs the government through its Board of Investment (BoI) offers a range of fiscal incentives for investors. There is no provision for any cost recovery for exploration and mining industry including for coal and the full financial risk is taken by the investor.

All of these debates, mostly with negative approach, in a view to mislead people deserve some explanation: what does royalty mean? Does royalty of coal in Bangladesh is too low? What is the royalty rate in other coal producing countries?

Royalty is a form of tax, special to mine. The intent of the tax is to charge the producer of the mineral for the right to mine the minerals produced. There are different types of royalty that have been practiced in the world mining industry: unit based royalty, value based royalty or ad valorem royalty, profit based or income based royalty etc.

Unit based and value based royalty both are payable irrespective of whether the mine is making a profit or losing money. However, value based royalty fluctuate following commodity prices. Thus when prices are high, the government will enjoy more revenue than the prices are low. Some nations have moved away entirely from assessing royalty and rely instead only on the general corporate and income tax revenue streams, eg; Greenland, Mexico, Sweden and Zimbabwe do not impose a royalty.

All types of royalty have associated advantages and limitations but whatever the types and rate; royalty is a well practiced mechanism of tax collection in world coal producing nations. The provision of royalty rate for coal in Mines and Minerals Rules, 1968 of Bangladesh is in line with the world’s practices and at 6% is not at all a low rate. Though the royalty rate was only Rs. 2.50 per tonne in the Mines and Minerals of 1968, and for unknown reasons it increased to 20% in 1989. It had no applicability and was amended in 1995 to 6% reviewing royalty rates of different countries through a high level committee to make it realistic with the world’s perspective and to attract foreign investment in this investment intensive sector. Later two amendments of Mines and Minerals Rules in 1999 and 2004 also kept that royalty rate.

Different countries practice different royalty rates but the difference is not significant and is within the range of 1-8%. It is true that Indonesia has the highest royalty rate (13.5%, as per amended laws of 1996) in the world but Indonesian coal is at relatively shallower depth (in some instances at the surface and exposed in water courses), of good quality and moreover easy to transport to the international market directly by sea going large vessels. On the other hand, though the coal resources of Bangladesh (Barapukuria, Phulbari, Dighipara) is of good quality and is within reach of open pit mining operation, a considerable amount of overburden must be removed before first coal is achieved which involves large continuous operating costs and large capital injection. Moreover transportation of coal to international market involves huge investment for infrastructural development including rail network up gradation, building coal terminal in Khulna, deep sea cargo facility, dredging of outer sand bar to maintain the navigability of the channel etc. Compensation, resettlement, rehabilitation and related cost will also be higher as population density is relatively high comparing to other countries.

The world is very much open now and anyone can browse internet to get the latest information about coal royalty in different countries of the world. Here is some information about royalty rates and taxes in different countries of the world:

Country	Royalty Rate (%)	Corporate Tax Rate (%)	Customs (%)
China	0.5-4	30	0
Indonesia	Up to 13.5	30	0
Laos	2.5	20-33	0
Malaysia	5	34	-
Mongolia	2.5	40	0-5
Vietnam	1-8	25	0
Peru	0	30	0
Australia	2.5-7.5	30	5
Brazil	3	30	-
Chili	0	35	-
Pakistan	1	35	5
Ghana	3-12	-	-
Uzbekistan	5.4	-	-

India, the 3rd largest coal producing country in the world had the royalty rate variable with state to state from Rs. 65 to Rs. 250 per tonne depending on the grade and coal fields. Recently on 01 August 2007 India reviewed its royalty rate and introduced a new formula for royalty calculation (coal with similar heating value of Bangladesh Coal requires to pay approximately Rs.102-Rs.133 per tonne royalty depending on coal fields). With that new provisions of the regulations, the royalty rate of coal will be subject to coal quality variations and dependant on coal fields and their locations. It may be mentioned that the increased royalty rate in India will not be applicable for West Bengal coal mines.

The Coal Policy Review Committee shows its dilemma while fixing the royalty rate. The last few weeks discussions were mostly concentrated on royalty rate. The committee is still to come to a conclusion. From the media reports it reveals that some of the committee members are in favour of increasing the royalty rate as high as 30% ignoring the commercial reality; others favour for keeping the existing royalty rate unchanged or bring it down. The Managing Director of the country’s sole underground coal mine strongly opposed the idea of increasing the royalty rate. He expressed this view to coal policy review committee that Barapukuria coal mine has been facing trouble with the existing 5% royalty rate and economic existence of the mine will be in danger if the rate is increased further.

As an operator of the mine with practical experience the MD of Barapukuria mine has realized the economic reality. Increasing royalty doesn’t ensure more profit for the Government. It will automatically increase the production cost of coal which obviously will increase power generation and other costs and ultimate sufferer will be the consumers. Higher coal price will encourage other users to go for import of inferior quality coal from neighboring country. These inferior quality imported coal mostly used in the brick kilns cause serious environmental pollution.

Coal mining is a capital intensive sector (more so than oil and gas)of investment and Bangladesh does not have technology, trained manpower and financial capability to develop the sector alone. Bangladesh just can’t compare its coal sector with Indian coal mining industry and introduce what they are practicing now for the development of this sector. We must take into consideration that Indian coal mining history which is more than 200 years old and has established huge infrastructural facilities and skilled manpower. On the other hand the coal sector in Bangladesh is in its very early “pioneering” stage and needs to be nurtured properly. The coal policy should be such that will create an investment friendly environment, a win-win situation for the investor and the government and people of Bangladesh. The adoption of a pragmatic coal policy will attract the investors to develop the coal sector protecting the national interest ensuring capacity building of local human resource and expertise.

Link: http://www.ep-bd.com/archive/13th-issue_07/index.html
Date: 16-31 December 2007, Bangladesh

Sustainable Energy & Environment in Bangladesh

Malek Mukul

Now a days, energy becomes a burning issue in Bangladesh. Actually, nobody can understand the importance of any common issue without facing crisis of it. Now it needs not to inform anyone about power crisis and everyone realize that energy can affects all aspects of development i.e. social, economic and environmental including livelihoods, access to water supply, agricultural activities etc. of a country. No development can be met without improvement in quality & quantity of energy facilities in any developed or developing countries.

We know that the United States has the world largest economy & has about 6% of world’s population, but consumes more than 30% of world’s energy. India, on the other hand, has 15% of world population and consumes 1% of world’s energy. So, there is no debate that energy is the key for sustainable development of a nation. Therefore, a tremendous improvement in energy sector is mandatory for overall development of the country. Without energy, the country will become a car without wheels.

Literally, energy can be defined as the ability to do work. Without energy none can do a little. That’s why energy is closely related with development. Bangladesh still remains as an agrarian country. But its cultivable land is decreasing gradually because of its fast population growth. Average 220 ha of agricultural land is going to non-agricultural use everyday. Due to its fast population growth the land is used for urban development, industrialization, roads & high way construction. Therefore, there is no other choice to shift from an agrarian economy to an industrial one. Consequently, to be a country of industrial economy, power generation has to be increased taken as the top priority compared to other important developments of the country.

Bangladesh is the most densely populated agricultural country in the world and falls among the lowest per capita energy users. However, the demand for energy in the country is already growing at a rate of 10% annually and how the demand will be met is influenced by govt. policies. It is not that the country is not able to meet the energy demand. There are large reserves of natural gas & coal in the country. But due to mismanagement and lack of policy, the resources couldn’t use properly. There is constrained to make policy due to environmental barriers. But we should remember that the technology has modernized and could help us to overcome the environmental barriers. Let’s discuss for sustainable energy & environment in Bangladesh.

Energy

There are two types of energy-potential & kinetic and some different forms. As we know ‘energy can’t be lost’, it being transform from one to another. All forms of energy are stored in different ways in the energy sources that we use everyday. These resources are also divided into two groups-Renewable energy sources (an energy source that can be replenished in a short period of time) solar energy, wind, geothermal energy, biomass from plant, hydropower & ocean energy and Non-renewable energy sources (an energy source that we are using up and cannot recreate in short period of time) oil, natural gas & coal; they’re also called fossil fuel. Another nonrenewable energy source is the element; Uranium, whose atoms split through a process called nuclear fission to create heat and ultimately electricity.

All the renewable and nonrenewable energy sources can be used to produce secondary energy source i.e. electricity which we use & is the pre-requisite for our national development.

There is least opportunity to boost our energy sector by renewable energy sources. Because the solar energy is still expensive, the strength of wind varies seasonally, lack of geothermal energy in the country, biomass is harmful for environment and there are little suitable places in the country to set up hydro-plant etc. Therefore, we have to use our reserve nonrenewable energy sources to boost the improvement of the country’s energy sector.

Among the nonrenewable energy sources in the country maximum (most of all) electricity is generated using natural gas. But recently, it is predicted that the natural gas could met demand of energy of the country up to 2012 if no new gas field will discover. But still the country steps far from use of discovered coal reserve. There are five discovered coal basins which cumulatively reserve is about 2.7 billion tonnes equivalent to about 53 Trillion Cubic Feet (TCF) of natural gas. So, this is the one and only energy source which can contribute country’s sustainable energy demand. Therefore, without any hesitation the govt. should take initiatives to start coal extraction immediately and should use the coal resources to generate power for sustainable industrial development of the country.

The energy demand of the country is growing at a rate of 10% per year. In this growing demand, the country will need 9,000-10,000MW of power by 2013 when the natural gas will be finished. Then for sustainable supply of power in the country, we may completely depend on coal as an energy source. In this situation we can make a simple & rough calculation that approximately how much coal will be required to generate 9,000-10,000MW power. If we consider, whole power will be generated using coal, then…

Electricity (MW)	Required coal for electricity generation in the year of 2013
	Per day (tonnes)	Per Month		Per Year
		(tonnes)	Million tonnes (Mt)	(tonnes)	Million tonnes (Mt)
250	2500	75000	0.075	900000	0.9
1000	10000	300000	0.3	3600000	3.6
2000	20000	600000	0.6	7200000	7.2
3000	30000	900000	0.9	10800000	10.8
4000	40000	1200000	1.2	14400000	14.4
5000	50000	1500000	1.5	18000000	18
6000	60000	1800000	1.8	21600000	21.6
7000	70000	2100000	2.1	25200000	25.2
8000	80000	2400000	2.4	28800000	28.8
9000	90000	2700000	2.7	32400000	32.4
10000	100000	3000000	3	36000000	36

About 36 Mt of coal will be required to generate 10,000MW of coal in 2013. But depending on the quality of coal it may varies. If we assume that 0.7 Mt of coal needs to generate 250MW power per year then it will be about 28 Mt. It can also said that about 14-18 Mt of coal will be required per year if produce half of the total demand of energy in the country. Then we should start development of coal basin from just now so that coal can be produced by 2012. But there is environmental constrained to develop coal basin and global energy system has to faces many challenges in this century. Though the world has already entered in the coal era many years ago, the environmental laws & modern technologies have greatly reduced coal’s impact on the environment.

Environment

Coal, like all other sources of energy has a number of environmental impacts, from both coal mining and coal use. Without proper care, mining can destroy land and pollute water & air. Coal mining-particularly surface mining requires large areas of land to be temporarily disturbed. This can also raises a number of environmental challenges including soil erosion, dust, noise & impacts on local biodiversity and above all rehabilitation. But mining is only a temporary use of land and is not a big problem now, because steps are taken in modern mining operation to minimize all these impacts. Today, restoring the land damaged by surface mining is an important part of mining operation. Because mining activities often come into contact with water resources, for which coal producers must go to great efforts to prevent damage to ground and surface water.

The water pollution can prevent installing a water treatment plant where pollute water is first dosed with lime to neutralize the acid and then passed through setting tanks to remove sediment and particulate metals. Dust levels can be controlled by spraying water continuously on road, stockpiles and conveyors. Other steps can also be taken, including fitting drills with dust collection systems and purchasing additional land surrounding the mine to act as a buffer zone. Reclamation is another important activity for surface mining. Mine reclamation is undertaken gradually-with shaping and contouring of spoil piles, replacement of topsoil, seeding with grasses and planting of trees on the mined out areas. So technological innovation can allow to meet the demand of coal without an unacceptable environmental impact. The wider deployments of clean coal technologies have a significant impact on environmental performance of coal in both developed and developing countries.

The use of coal whether to generate power or use in steel or in any other manufacturing industries creates some environmental hazards. The primary environmental issues relating to the use of coal are:-particulate emissions, trace elements, oxides of nitrogen & sulfur, waste/by-product and CO2. The modern technologies could reduce most of all impacts on environment and most of the technologies are developed many years ago, commercialized and widely applied in many developed countries. All these technologies are well practiced through-out the world including USA, Australia, Germany, South Africa etc. The technological responses are:-

· Electrostatic precipitators and fabric filters control particulate emissions from coal-fired power stations. Both have removal efficiencies of over 99.5%

· Particulate control devices, fluidized bed combustion, activated carbon injection and desulphurization equipment can all significantly reduce trace element emissions.

· Oxides of nitrogen (NOx) emissions can be cut by the use of specialized burners, advanced combustion methods, catalysts and ’selective non-catalytic reduction’. Over 90% of NOx emissions can be removed using existing techniques.

· Technologies are available to minimize oxides of sulfur (SOx) emissions by removing the gas from the waste stream or by using advanced power generation methods. Emissions can be reduced by over 90%.

· Waste can be minimized before (by coal cleaning) and during (using high efficiency systems) coal combustion. Residual waste can be reprocessed into construction materials.

· In the short to medium term, substantial reductions in greenhouse gas emissions can be made by increasing the efficiency of coal-fired generation.

· Near zero emissions technologies enable the separation and capture of CO2 from coal-fired power generation for permanent and safe storage underground.

In Bangladesh, after natural gas, coal will continue to play a vital role in electricity generation. The discovered reserve of coal in the country is about 2.7 billion tonnes equivalent approximately 53 TCF natural gas which able to provide secure and reliable supplies of affordable energy to boost the country’s sustainable development and to shift the country from an agrarian economy to an industrial one. The clean coal technologies have already achieved major advances in environmental performance and new technologies are under development towards a ‘zero emission’ future.

Recently, the International Atomic Energy Agency (IAEA) has allowed Bangladesh to set up nuclear reactor for power generation. It is good as well as very danger news for Bangladesh. Because it’s a big challenge for Bangladesh to invest in such type of risky sector, its require billions of dollar to set up a nuclear reactor and also require experienced work forces to operate & maintenance which is limited in this country. Moreover, as a densely populated country, a nuclear accident will be a catastrophe of epic proportions in Bangladesh.

Therefore, it is suitable for Bangladesh to extract its coal resources immediately and use in power generation so that the country could meet the energy demand and boost its industrial development. Because, for sustainable development, a nation need continuous/smooth supply of energy through-out the country. And Bangladesh can easily go for the development of coal basins under blessing of modern technologies in mining sector.

Source : The Weekly Economic Times, 29 July 2007

Dewatering in Open Pit Mining: Concern or Benefit?

Zubayer Zaman
Bangladesh has significant amount of good quality bituminous coal resources and has the potential to provide long-term sustainable solution for the alternative energy source, which the country is seeking desperately. So far, five coalfields have been discovered with an estimated reserve of about 2,500-3,000 million tonnes. Only Barapukuria and Phulbari coalfields have confidently estimated the coal reserves of some 1,000 million tonnes reserves for the others are inferred only from limited number of boreholes. Bangladesh entered the mining era relatively recently through development of the Barapukuria underground coalmine. However, coal mining has a very long history and importance in terms of world development. While other coalfields remain at the early exploration stage the Phulbari coal basin has been extensively explored and a scheme of development has been submitted to the Government for Phulbari Coal Project. Based on an extensive analysis of environmental and social issues, depth and thickness of the coal deposit, and the nature of the water bearing aquifer overlying the coal, it was concluded that open pit mining was safest, most reliable and most economic way to extract the coal and to ensure abundant affordable coal for the Bangladesh market.

With the proven gas reserve of the Country being quoted by the Government as being 8.93 TCF, enough for only another 6 years, there is in urgent need to source alternative energy and the proven coal reserve of Phulbari is the only really immediate hope for the country to get access to a new energy source that can be used for significant power generation.

There are debates over mining methods and also a growing concern for groundwater dewatering impacts for open pit mining method as groundwater is required to be extracted extensively during the mining operation. Is this really a problem or rather an opportunity to gain access to good quality water? Are there any mitigation measures? What are the practices in other open pit mines in the world? Are those measures are suitable for our geological conditions?

Groundwater management is a critical issue for the successful operation of any open pit mine. It is a challenge for underground mining also. The water level needs to be lowered as the floor of the mine is dug deeper to maintain dry and safe working condition. Bangladesh should take comfort in the fact that there is plenty of international experience with groundwater management built up from hundreds of open pit mines in the world operating that are successfully managing groundwater under a wide variety of climatic and geologic complexities.

Hydrogeology of the north-western region

The hydro-geological conditions of the coalfields will play an important role in mine planning and design. As shown in the Conceptual Hydrological Model for the Phulbari coal basin, there are three aquifer systems in the regional setting: Upper Dupi Tila sand unit (UDT), sand layers near the base of the Lower Dupi Tila (LDTs) and fractured coal sequence. The Madhupur clay, Lower Dupi Tila clay and the Upper and Lower Gondwana sequence are considered as impervious layers or aquitards. The flow direction in all aquifers is inferred from north to south direction.

Conceptual hydro-geological model for the Phulbari coal basin

Upper Dupi Tila aquifer is the principal aquifer in the region. It is high yielding, porous, very permeable and regionally extensive unconfined to semi-confined aquifer. The aquifer is approximately 100m thick with groundwater levels varying seasonally from 2 to 9m. The UDT is primarily recharged through rivers and streams that have cut through the impervious Madhupur clay which restricts recharge to this aquifer. In fact it is the Madhupur clay that plays host for agriculture and forests and for most of the year water to support these activities comes from direct rainfall and inherent soil moisture and not from the aquifer. The aquifer is routinely tapped to supply clean water supply for households and for irrigation water during the dry season. Although this UDT aquifer will require dewatering for open pit mining, the actual area affected can be restricted to a few kilometers from the mine by injecting some of the water back into the aquifer.

Pumping the groundwater from the aquifer to permit mining actually becomes a benefit for the community because the water is of high quality and could be used for reticulated village and town water supply and piped to nearby farmers for irrigation. At the same time some water could be released to rivers and wetlands to generally improve the environment. Incidentally the water in the Phulbari coal basin area has been tested and key parameters were found to be well within the acceptable limit for drinking water, eg; it has low salinity, neutral pH and low turbidity, and arsenic very low and generally less than the detection limit.

Why mine dewatering?

The groundwater level must be pulled down to create dry conditions in the mining area so that the generally low strength aquifer sequence materials (sands, gravel and clays) can be safely excavated. Mine dewatering is usually undertaken for a variety of geo-technical (material strength considerations), mining and safety reasons:

Geo-technical Issues

• Increased material strength;
• Reduction in seepage forces;
• Decreased hydrostatic pressure;
• Reduce chance of piping failure;
• Increased wall and bench stability;
• Reduced weight of porous rocks; and
• Prevention of liquefaction.

Mine Production Considerations

• Reduced drilling and blasting costs;
• Reduced wear on equipment;
• Reduced haulage costs for unsaturated material;
• Reduced corrosion of equipment; and
• Improved trafficability.

Safety Issues

• Improved road conditions;
• Reduced risk of slope instability during and after excavation; and
• Reduced risk of water inrushes.

Mine dewatering can be achieved by pumping continuously from a ring of dewatering tube wells around the mine and on benches, and installing pumps in special sumps on the mine floor to remove any surface water. This is a well-proven way to maintain dry working conditions, prevent flooding and ensuring the stability of the mine walls and mine haulage road pavements.

Dewatering impacts and mitigation measures

Pumping to lower the groundwater level in an open pit mine in the Bangladesh situation will over the life of the mine produce an abundance of good quality water. If all of this water was simply discharged into rivers and streams, then nearby households and villages would have difficulty accessing water through shallow tube wells for drinking and irrigation. In fact the water pumped from the aquifer is of great benefit for the community and there is a range of well proven mitigation measures that could ensure the area affected by the water level lowering is restricted to a few kilometers from the mine area and that adequate water is delivered through pipes to the town and farming communities.

Aquifer injection to restrict area of water level lowering

Aquifer injection is a well-tested method to limit the area of water level draw-down. This involves injecting water from the dewatering operation into the aquifer at a certain distance (around 5 km) from the mine to hydro-logically isolate the mine dewatering area from the regional aquifer. Experience shows up to 30% of water from the mine dewatering operation can be injected into the aquifer with this system. Certain geological and hydro-geological criteria are required for successful operation of the injection system:

• A really extensive, thick, sedimentary sequence
• The target aquifer preferably overlain by a confining layer; and
• A simple geological structure

The overlying UDT layer of the coal bearing sequence of Bangladesh is much thicker and extensive throughout the region and suitable for such operation.

RWE Mine of Cologne Germany has been successfully using this method for many decades under Germany’s strict environmental rules and regulation, in the same geological and groundwater conditions to Bangladesh. RWE has been conducting its operation for last 50 years and currently produces more than 100 million tones/year of low quality lignite coal, which contributes 30% of Germany’s total power generation. The RWE’s mining experience is a demonstration that the aquifer injection technique can be used successfully in Bangladesh to minimize the impacts of water level lowering. It is known that Asia Energy Corporation has proposed this technique in the Phulbari Coal Project and is planning to involve RWE expertise to assist in its implementation.

Water supply for irrigation and domestic uses and monitoring

Groundwater is the major source of irrigation water during the dry season and a substantial number of shallow tubewells used for irrigation purposes will not be functional within the influence area of dewatering operation. Availability of water must be ensured so that lowering of water layer doesn’t hamper the crop production. There will be an abundance of water from the mine dewatering operation and certain portion of it could be delivered to the farmers by large diameter pipelines and trenches/canal and if required in some areas deep tube wells can be installed to ensure the supply of water. Farmers have been affected by recent increasing fuel cost and shortage of electrical power, both making crop production and life in general difficult. Having a reliable supply of water throughout the year from the mine area will allow farmers to reliably produce three crops a year and will thus both increase crop production and reduce the production cost.

Groundwater is also the primary source of drinking water to the rural villages and township and safe drinking water must be ensured to the affected households. A reticulated water supply system could be developed to supply a portion of water from the mine dewatering operation to the affected households. Deep tube wells can be installed in isolated villages far off from the mine operation area to source water for reticulated water supply system. This will improve the water supply quality to the affected rural households.

Water may also need to discharge to surrounding water bodies from the dewatering operation to maintain current seasonal water levels and quality. Any surface water pumped from the floor of the mine must be treated to ensure it meets national water quality standards before releasing to the neighboring environment. A comprehensive monitoring system could be developed to monitor the impacts of dewatering, aquifer injection performance, water chemistry etc and appropriate mitigation measures to be implemented to rectify the impacts.

Bangladesh desperately needs alternative energy source and coal is the only source to meet the long-term energy demand of the country. But maximum extraction of this valuable resource must be ensured and Barapukuria experience suggests that underground method is not viable option for the coal deposits in this country. Open pit mining can ensure >90% extraction of the coal resource and impacts related to this type of operation can be mitigated using well-tested internationally practiced mitigation measures. To eliminate the concern of the people, an independent monitoring system can be developed with data reviewed by some of Bangladesh’s renowned hydro-geologists to ensure the impacts of water level lowering are being managed and the benefits of the abundant water supply are being delivered.

Link; http://www.ep-bd.com/archive/2nd-issue_07/index.html