WITH oil price rising consistently in the wake of an insatiable appetite for energy by emerging global economic powerhouses like China and India, the demand for natural gas as an alternative has been on the rise in recent years. China and India in particular are now tapping all possible avenues to ensure availability oil and gas to meet their future demands. The members of the organisation of petroleum exporting countries (OPEC) have beefed up supply of oil in recent months. But that had virtually no effect on the price situation.
In such a global energy scenario, coal -- once regarded as black gold -- has apparently started to regain its lost glory. The demand for coal has been on the rise in the international market. And the turnaround in the future of coal has made a number of international energy companies interested in extracting coal deposits in the northern part of Bangladesh. Even some years back, such companies did not bother even to make a query, in spite of the fact the Bangladesh coal is of very high quality and the size of the deposit is reasonably large. A UK-based mining company -- the Asia Energy Corporation -- submitted Sunday a feasibility study and a development report to the government on the extraction of Phulbari coal, having an investment plan of $12 billion over a period of 30 years. The company has already spent $18 million on the reports.
After submitting the reports, the Bangladesh chief of the Asia Energy informed newsmen that the government would earn revenues estimated at $7.0 billion as taxes, royalties, duties and rail and road charges during the lifetime of the coalmine project. The company also expects to make a profit of another $7.0 billion. The most part of the coal would be exported by the company concerned. Since Bangladesh neither has the resources nor the expertise to engage itself in the extraction of coal, it has no option other than engaging foreign companies for the purpose. Moreover, there is no use of keeping oil, gas or coal reserves unexploited when vigorous efforts are on, in the developed world to evolve alternatives to non-renewable energy sources. But what is important is that the government should carefully examine the pros and cons of the mining project, before striking a deal with regard to the exploitation of Phulbari coal. It should first protect national interests and then the interests of the people residing in the project area. The deal with Niko resources remains a glaring example of how a faulty deal can make the nation pay heavily.
The government needs to make the best use of the coal for the generation of electricity in the private sector. The massive interest shown by the private sector in setting up small power plants recently does indicate that the private entrepreneurs would be equally interested in coal-fired power plants. The other important aspects that the authorities do need to take into due cognisance are the resettlement need of the population of the coalmine project area and the environmental protection side. These issues have cropped up because the Asia Energy has proposed to use open-pit method for extraction of coal. At least 40,000 people would have to be relocated and a large part of the Phulbari Township dismantled, if the government accepts the project proposal of the Asia Energy. The open-pit system of mining is the most efficient method of extracting coal. But the basic disadvantage of the method is that it necessitates the resettlement of population over a large area and creates serious environmental dislocation. Despite the fact that development has its own cost, the government must weigh properly all aspects of the project proposal submitted by the Asia Energy before arriving at a decision. Nothing should be done in haste.