Glasgow agreement and Pakistan—I

Glasgow Climate Conference has ended with a renewed commitment of 200 nations to climate change goals amid skepticism and criticism by activists of doing too little. The promises of assisting the developing nations with the required climate related financing remain elusive. A major issue that concerns us is that the immediacy on “phasing out” of coal has been softened to “phasing down” coal in the final agreed draft of the agreement, although nearly 40 countries have announced ‘phasing out the coal’. What impact it will have on our coal (Thar) policy and the earlier Chinese announcement that it will not finance coal projects abroad anymore? It may be too early to comment with confidence on the issue, but it appears that the Glasgow agreement does provide indicators on transitional and long-term directions.

Pakistan is among the countries that are likely to be hurt most by climate change and it is in our national interest to contribute and cooperate with the worldwide mitigation and control activities, although our contribution to the problem is less than one percent.

All fossil energy sources like oil, gas and coal generate carbon emissions. Emissions from most of the sectors can be reduced or controlled except agriculture, while bulk of the emissions is from energy generation and consumption. Energy in one form or the other is required in all sectors of human life, namely, agriculture, industry, homes, transportation. World temperature increases due to emission of greenhouse gases, mostly carbon dioxide. The global community wants to reduce carbon emissions to zero by 2050, broadly speaking. The EU and the US have agreed to a target of net-zero carbon emission by 2050, China by 2060 and India 2070.

Non-carbon energy choices are in renewable energy like, solar, wind, hydel (water dams, etc.) and hydrogen. Green hydrogen is a new entrant to the energy scene but has acquired some prominence lately. Grey hydrogen (hydrogen produced from gas and coal) is being already made and used for quite a while, while green hydrogen will be produced out of electrolysis of water by electricity generated from mostly solar and wind power resources. Grey hydrogen is being mostly consumed by oil refining sector and ammonia and fertilizer production. It is mostly produced at site.

While net-zero targets are to be achieved gradually until 2050-2070, a difficult situation has emerged in the meantime; fossil fuels such as oil, gas and coal availability has come down while prices have increased. LNG prices have quadrupled, oil prices increased by 33% and coal’s by more than 100%. The transitional period and process have become very difficult for the poor and under-developed countries. The present has become so hard and difficult that thinking about the future appears to be meaningless. Yet to avoid the repetition of the present conditions, one has to think and plan for the future.

Pakistan has announced not to install coal-based power plants any more other than the ones that are already in the pipeline. However, in an environment conference held in Saudi Arabia lately, the Prime Minister excluded coal gasification from the ‘coal ban’ agenda in his speech. Almost all western countries have announced shunning installation of new coal power plants. The Chinese president has also announced that his country would not finance or install coal- based power plants any more. However, China has not closed the coal option for itself. It is highly improbable that any other country would be available to install coal (Thar)-based power plant in Pakistan. All hopes were tied to China under the China Pakistan Economic Corridor (CPEC) and beyond.

Gas had been touted as a desirable transition fuel by the world community. While the US and Russia are not affected by the gas crisis, most other countries dependent on imported gas are suffering under higher prices. If these conditions continue for long, it would be difficult for poor countries like Pakistan to implement and continue with the coal ban announcements. In fact, it may have to redouble its efforts to indigenize its energy sources irrespective of its carbon impact, at least in the short- to medium-term. The Glasgow agreement has provided an opportunity by softening its stance on coal, although it may be revised next year.

Pakistan’s gas needs

Pakistan’s economy and social life are greatly dependent on gas. Its local gas resources are dwindling consistently; these are projected to be exhausted within a decade. Its effect is already visible. The prospects of finding new oil and gas resources do not appear to be very bright. There has been no major gas find (of 1 TCF or more) in the last many decades. Foreign oil companies have left Pakistan and there are little chances of attracting any major party in near future. There were some prospects in off-shore play but a recent drilling effort by a global company did not bear fruit. Although one should not lose hope in a sector like oil and gas; it is very risky to base any plan on local oil and gas.

High LNG prices cannot be sustained by Pakistan for long. On the other hand, Pakistan cannot afford to do without gas. The whole country cooks and bathes on gas-fired equipment. There are more than 10 million families depending on gas consumption and more families are waiting for gas connections. Politically, it would be very difficult to deny new gas connections and discontinue or reduce existing gas supplies. Furthermore, there is fertilizer sector on which the whole agriculture depends and there is industrial sector which gives employment and brings foreign exchange through exports. There are some opportunities for partial shifting to electricity of which there is purported surplus. But all gas users cannot shift away.

(To be continued)

(The writer is former Member Energy,

Planning Commission)

Copyright Business Recorder, 2021