Bangladesh economy seems to have been taking cue from emerging Asia. During the first five months of the current fiscal year, the economy is on a rebound phase, according to the Editorial of the current News Bulletin of International Chamber of Commerce-Bangladesh (ICCB) released on Monday. By all indications, the country weathered the global crisis largely unscathed and is ready for a robust expansion of output and investment; as one of the Emerging Market Economies.

According to projections, growth during the current fiscal is expected to be 5.0 to 6.7 per cent. However, it was earlier projected that with adequate energy supply and certain physical infrastructure in place, Bangladesh could attain double digit growth; over a shorter period, it says.

The ICCB News Bulletin mentioned that inadequate supply of gas has compelled a number of industrial units to convert power generating units from gas to diesel, requiring uncalled for additional investment.
Stand-by generators in many industries are operating round-the clock, causing serious break down, due to power cut. Besides, suspension of gas supply to KAFCO and other fertilizer factories are causing drain of foreign exchange as well as shortfall in export earnings.

The editorial says the main source of energy for industrial growth in Bangladesh is the natural gas.
There have been various estimates of the size of the natural gas reserve of Bangladesh. In mid-2004, Petrobangla estimated the proven gas reserve at 15.3 TCF.

Survey conducted by US Geological Survey in 2000 had estimated that Bangladesh has a 15.3 TCF additional “undiscovered reserve.”

On the other hand, the study of the Hydrocarbon Unit of the Energy Ministry and the Norwegian Petroleum Directorate, the (proven plus probable) gas reserve of the 22 gas fields was estimated at 28.4 TCF.

Currently, Bangladesh is producing around 2000 mcft of gas daily against the demand of 2500 mcft. The average annual demand of gas has increased at 8 per cent in last few years.

To meet severe gas crisis, the government announced the continuation of suspension of new connections to industries, commercial and household consumers. Instead, liquid petroleum gas (LPG) will be promoted as an alternative for household use. The ICCB News Bulletin says Petrobangla has also planned to increase LPG production including additional bottling plant but there is no time-line. Besides, steps are underway to explore new sources like oil and gas from the Bay of Bengal.

But, over the last two years no mentionable steps were taken for exploration to add additional gas into the national grid.
Petrobangla is expected to go for fresh gas block bidding by June and the Energy Ministry will organize different road shows at home and abroad from July.

But the outcome of previous road shows is unknown. Practical measures have to be undertaken without further loss of time, to harness gas to feed country-s movers of growth.

It mentioned that Petrobangla in two years failed to explore and develop any new gas field. Only recently BAPEX has started some drilling works and is expected to add additional 25mcft gas into the national grid.

But continued failure of GTCL in implementing Gas Transmission infrastructures will prolong gas crisis. Therefore, expeditious implementation of high pressure gas pipeline compressor project and other gas infrastructures of GTCL are urgently needed. The ICCB Bulletin says the port city of Chittagong is also suffering from chronic gas and induced power crisis.

The Government has abandoned the LNG import programme as it was not cost-effective. Instead, there are now plans to set up LNG plant at Maheskhali. Again the question arises whether the multi-billion dollar investment programme is economically viable and who is going to deliver and when?

It mentioned that the plan of procuring coal mines and gas fields abroad seems very ambitious thinking which even India and China cannot afford. Instead, immediate steps should be taken for utilization of huge quantity of coal in the country, which is considered to be one of the best but could not be utilised for cheap politics of so-called environmentalists. In India 64 per cent of power comes from coal, in China 81 per cent, in Australia 76 per cent, in the USA 49 per cent and in South Africa it is 94 per cent.

The message from global analysts is that Bangladesh can become an export powerhouse provided it can get its act together and seize the prevailing opportunities in the neighbouring countries, India and China.
Therefore, immediate actions are called for oil, gas, coal exploration through open competitive and most transparent bidding, where BAPEX could also participate. The editorial of ICCB News Bulletin concludes: If we really desire to become a middle income country, we must aim for a GDP growth of 8 per cent or more and that is possible only if there is assured energy supply and related physical infrastructure.