A topic central in every economic discussion today in Pakistan is energy. The pains of an ever growing shortfall are being felt throughout the economy. While the once abundant natural gas supply is being rationed for domestic consumers in much of the country, industrialists consider the lack of energy as the chief culprit behind dwindling industrial output.
Pakistan today faces a shortfall of 4000 MW between its energy demand and what the existing infrastructure can produce to meet that need. A steadily growing energy demand, driven not only by economic development in the preceding years but also by an increasing population has been met with half hearted planning with little or nothing to show in real terms.
With the fast depleting gas reserves at home, the need to kick start the Iran-Pakistan gas pipeline becomes imperative with every passing day. The project has been long overdue; it was way over two decades when the idea was first floated in the eighties - ever since the two countries have just been confined to the signing of an agreement.
These are desperate times and they call for desperate measures, not the ideal ones. Certainly, getting gas from Iran is no ideal option either as it is costlier than the local gas. But it is not all bad as it remains the most viable option when weighed up against the international gas tariffs that are even higher than the Iranian gas, 20 percent on an average.
What has caused such an overstretched delay in the execution of the IP deal perhaps doesn have an easy and a definitive answer. Industry experts contend that the largest claimant of the friends tag of Pakistan, i.e. the USA has at some level tied its aid to Pakistan with the abandonment of this deal. The growing pressure on many countries in the region to isolate Iran provides ample hint to some substance in this notion.
It is time to have a reality check and look for alternate measures if the IP deal does not materialize, which isn a remote possibility. Pakistan fortunately is not short of options and coal tops the list of the available alternatives.
Pakistans Thar coal reserves estimated at 185 million tons are amongst the largest coal deposits in the world, having a potential to generate 20000 MW of electricity for as long as 40 years, according to a Planning Commission report.
The government has instituted a development board for the Thar coal but being a provincial subject, the never-ending provincial wrangling is getting the better of the potentially enormous opportunity.
There has been little progress in building up hydroelectric capacity in recent years. Over the years, construction of dams has been announced by governments but no concrete results have been witnessed.
Another area with massive potential is the renewable energy which sadly has underachieves so far. The AEDB, set up more than two years ago, has failed to live up to the expectations as the share of renewable energy in the power mix is almost next to nothing.
The countrys coastal belt and the south western corridor provides it with enormous potential, but a lot more needs to be done on the policy level to lateralize what seems an optimistic dream of having a 12 percent contribution of renewable energy by 2022.
The progress on the LNG imports has been smooth and although it is quite costly in comparison to the natural gas, it is still cheaper than the other imported fuel i.e. oil. The policymakers need to ensure that the imported gas is channeled to the right direction and is used to enhance the industrial output and not to bridge the shortfall for the domestic segment.
It is time that those in Islamabad start thinking long term instead of going for short term fixes to temporarily plug in the energy deficits. The untapped potential is enormous; it is just a matter of having a clear cut long term vision with a strong political will and sense of ownership - if Pakistan has to avert what could be a disastrous energy shortage in the years to come.
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