The cost of an ill-thought out energy policy is being felt acutely this winter, with a two-month ban on gas supply to CNG stations contemplated in Punjab, gas supply closure to industrial units in Sindh and Balochistan and non-supply of gas to domestic consumers.
The blame, of course, lies in the Musharraf-era policy of promoting a fuel whose reserves were unknown but ignorantly declared abundant, with the result that today demand for gas has soared to eight billion cubic feet (bcf) while supply is a paltry 4.2 BCF. While both consumers and industry are suffering, perhaps the worst affected is the fertiliser industry which uses gas as an essential raw material and has no other alternative.
Load-shedding is merely a stopgap measure and a massively unpopular one at that. The key question is, what energy resources are being developed for future use? At this juncture the government needs to develop a new exploration policy for domestic gas reserves. While Iran has massive gas reserves, the Iran-Pakistan gas pipeline project seems unlikelier by the day, given the current geo-political scenario. The US is strongly opposed to the pipeline and has been nudging Pakistan towards the hopelessly complicated TAPI pipeline project instead. On December 23, the National Bank of Pakistan refused to finance the IPI pipeline because of the threat of sanctions by the US. A recent purchase agreement signed with Turkmenistan has given some hope that a steady supply of gas may be achieved via TAPI by 2016, but that project is marred by numerous security threats.
It is crucial that we start looking to tap other sources of energy to prevent an energy crisis such as the one we are currently facing, from engulfing both consumers and industry in the future. It is imperative that the government exhibits the political will needed to execute both the IPI and TAPI projects. Above all, energy policy needs to be based on sound research after thorough number crunching, not mere bluster.
Published in The Express Tribune, December 29th, 2011.