Bravo Ogra!

Ogra has, un-typically, rejected the LNG option in its recommendations to ECC. There is a sound logic behind it. LNG would result in gas prices which will be four times the existing gas prices. People are resisting the 14 percent proposed increase in the existing gas tariff. What will happen when LNG arrives? It would be as expensive as oil, and would be marred with transparency problems and issues.
Ogra has recommended going for local and foreign coal. They have estimated local coal energy cost to be 3.23 cents per kWh and imported coal to be 5.56 cents per kWh. Furnace Oil based power plants produce electricity at 15 cents and LNG would be producing almost the same as Furnace Oil. In that case what is the logic of LNG? Monopoly capitalist circles are pushing for soft options which are not only costly but would increase dependence and would negatively affect Pakistan's energy security. The existing cost-plus approaches are the bane of the problem. Commercial companies push for all kind of impossible projects, being assured of a fixed and hefty return. LNG interests are asking for all kind of incentives and guarantees. If LNG has some worth in it, it should compete in the free and unregulated market. Nobody would have or should have any objections to the imports and use of LNG.
However, importing coal in a country which has one of the largest coal deposits in the world, would be a pity. Coal imports can be justified only as an alternate for balancing and emergency or blending requirement. Or, in the intervening period, when many users especially oil-fired power plants are planning to convert to coal.
On the other hand, people talk about importing coal because Thar coal project does not move despite window dressing announcements by the relevant bureaucracy and departments. Provincial autonomy does not appear to have helped. There appears to be lingering political, legal and financial issues or the capacity and inertia problem. The infrastructure projects (water and transmission) have not even crossed the PC-1 stage. Without cooling water, there is no power. However, it is good to come to know of creative approaches adopted by government functionaries. They are developing LBOD saline water for Thar coal power usage. LBOD water's salinity is one-tenth that of the seawater that is normally desalinated and thus it should cost much less than conventional desalination, in addition to providing water that is getting scarcer by the day.
Besides producing power from Thar coal, gas and fertiliser could be produced as well. The idea of coal gas is not new. It used to be widely practiced before the advent of natural gas and oil. It has been improved since. Dr Samar Mubarakmand is working on it and is expected to demonstrate its feasibility. Recently, TV channels reported a breakthrough in this respect. Upscaling would remain an issue and thus contracts with experienced foreign companies must be made. Up to now, focus has been only on electricity.
Many of us keep wondering as why we do not develop our domestic resources, which may be cheaper and more reliable and sustainable. Local production of gas is an example, which is 50 percent cheaper than international price. Gas resources are dwindling and no new discoveries have been made, although there is vast potential to make discoveries and increase the output, if investments and domestic climate improve significantly. However, it is a big if. The second more feasible option is Thar coal. Both gas and power could be produced from Thar coal.
A two-thirds of Pakistan's electrical requirements is being met from oil and gas. 30 percent of natural gas production goes to the power sector. Power and fertiliser sectors together consume almost 50 percent of domestic production of gas. Due to imported oil, energy is getting expensive and beyond the purchasing power of most consumers. The government does not have the money to pay for subsidies to the energy sector and circular debt problem is creating supply and liquidity problems. Higher energy import bill also contributed to currency devaluation.
Alaska and China are facing the same problem as Pakistan due to dwindling gas supplies. In both the places, existing gas-fed fertiliser plants have been converted to coal. Instead of cracking natural gas and producing hydrogen. Hydrogen is produced from burning coal with steam and oxygen under high pressure and temperature, under sub-stoichometric conditions (constrained supply of oxygen). With full or excessive air/oxygen, coal burns to CO2, while with lesser oxygen, a mixture of CO+H2 is produced in the presence of steam. In South African Company under Lurgi and other licenses and technology has produced gas as well as gasoline from coal and markets the products competitively. China has more than 15 plants producing ammonia/fertiliser from coal, utilising GE and Shell technologies catering to 60 percent requirement of ammonia. In New Zealand and Australia also, coal and lignite are being used to produce fertiliser (urea).
These plants would cost the same as pipelines (Iran) and LNG regasification, but would result in lesser product cost due to cheap local coal. And would save precious foreign exchange and deliver us from rising and undulating oil prices. Engro and even other fertiliser plants are in an enviable situation, as Engro is located close to Thar area (100-200 kms) and also has interests in energy production. An ideal combination is a 600 MW pulverised coal power plant and a two to three million tons per year of coal conversion into hydrogen and ammonia. Fauji Fertiliser should also consider entering in coal gas business ala Engro, as they have the same portfolio.
About one-third of our gas consumption goes to fertiliser production. In fact, we had a fertiliser plant that used to produce from coal, which was closed down due to cheaper gas (then). No more, is gas cheaper. And thanks to LNG, the curse God may save us from, fertiliser production would also become expensive. Although, currently gas is sold to fertiliser plants literally free, which must go. Fertiliser producers should be asked to prepare themselves to convert to coal. It takes about three years to implement such conversions. Fortunately fertiliser plants are located relatively close to Thar. Coal can be taken to fertiliser plants or coal gasified in-situ and transported to these plants. Presently, there is a strong case for negotiations with the fertiliser (urea) producers for a reduction in their gas supplies quota. The resulting fertiliser shortfall could be imported. There would be an issue of subsidies adjustment that would have to be handled. Cement industry has converted itself to coal for quite some time now, and reaping its benefits. There was a time when cement sector used to be a major consumer of oil and gas.
There are other initiatives that could be taken towards utilisation of Thar coal and meeting the energy demand. Thar's lignite coal could be converted to briquettes and be supplied to industry for its energy needs. Textile and other extractive industry could benefit from it. Some small mining can be initiated at Thar instead waiting for large infrastructure projects to materialise. Greece, a tourism country, extensively utilises its lignite in briquette form.
Concluding quick-fix expensive approaches should be shunned in favour of sturdy local options which are very much there. These are cheaper, affordable and long lasting. This would require leadership on the part of government and its ministers and higher bureaucracy. If we continue following short-term approaches, we would never be able to come out of the fire-fighting approaches.