Pakistan’s criminal gas wastage and IMF

Two recent — extremely important though isolated — developments merit review in the context of the noise being raised in the name of climate change.

In yet another decision inconsistent with Pakistan’s commitments on reducing hazardous emissions at the Glasgow Summit, the Oil and Gas Regulatory Authority (Ogra), on 12^th February 2022, increased the ratio of Unaccounted for Gas (UFG) for utility companies up to 300 per cent on LNG, and for SNGP to 18.28 per cent from 12.32 per cent.

All this happened under the directions of the Lahore High Court (LHC). One would assume the court was a) cognizant of Pakistan’s commitments at Glasgow Summit, and b) relied on experts’ for reaching the conclusion.

A little earlier, an IMF country report also touched on the effects of climate change on Pakistan. Pakistan is among the top ten worst affected countries (in terms of damage), even though the country’s contribution to the global greenhouse gas (GHG) emissions is a mere one per cent. According to the IMF report, since year 2000, as many as 120 recorded events in Pakistan entailed an estimated $22 billion worth of material damages and killed 11,000 people. Cumulatively, these events have affected 55 million people in the country.

The objective of the report was to highlight the adverse impact of the climate change. However, one wonders whether the LHC ruling and the IMF noise on the subject will be able to contain the monster of UFG which is affecting the lives of tens of millions of Pakistanis.

The UFG results mostly from deteriorating pipelines, eroding cathodic protection, under-size network designing, lack of advanced metering that can measure the calorific value of gas, and detecting theft. Illegal suction pumps at residences — or even at CNG stations — account for such leakages.

UFG benchmarks in Canada, Germany, Ukraine and New Zealand range between 2.16 per cent to 2.65 per cent but back in 2019-20, Ogra had fixed a 6.98 per cent benchmark on the total gas injected in the network. Ogra also calculated 12.32 per cent UFG for SNGPL against the claimed percentage of 12.20. In the same financial year, Ogra revised the benchmark upwards to 18.28 per cent UFG for SNGPL.

And herein lies the devilish detail: the dilapidated gas distribution network across the country — 13,452 kilometers long transmission pipelines and 177,029 kilometers long distribution network — carries an environmental hazard i.e. methane which is a 90% component of natural gas.

The silent killer methane — about 25 times as potent as carbon dioxide at trapping heat in the atmosphere — is the second most abundant anthropogenic GHG after carbon dioxide, accounting for about 20 per cent of global emissions.

Coupled with approximately one BCF (billion cubic feet) daily gas seepage from the Khyber-Pukhtunkhwa province alone, Pakistan is now one of the biggest methane emitters.

The current government made some efforts to control theft, but according to reports, the UFG of SNGPL reached around 11.9 per cent and of that of SSGC 16 per cent in the financial year 2020-21 against the permissible limit of 7 per cent.

The UFG calculated for the fiscal year 2019-20 was around 126 billion cubic feet annually. This means the economic value of UFG is almost $4 billion — equivalent to Rs710 billion — per annum. The high value of UFG is creating more dangerous circular debt in the gas sector that the one in the power sector.

The IMF has proposed mitigation policies — increasing carbon taxes and reducing fuel subsidies — but we would like to remind the international lender that all participants of the UN Climate Change Conference in November 2021 committed to cutting 30 per cent of methane emissions by 2030. Action is required in that direction and not fiscal measures.

Pakistan also committed to tackling methane from livestock and flare gas capture but one wonders how far that commitment takes into account the issue of the deadly methane emissions (from UFG and gas seepages) that millions of Pakistanis inhale.

Although the United Nations, the World Bank and other international agencies have poured billions of dollars into climate change, sycophant experts in Pakistan have largely failed in quantifying the causes of climate change and the damage thereof.

Plugging methane emissions and leakages would hardly require $500 million. Is the IMF ready to help Pakistan fulfil its pledges on methane emissions instead of asking for monetary measures that not only inflict more pain on people but also ignore the hazards associated with the massive UFG altogether?

Such an IMF grant for cutting methane emissions would not only enhance Pakistan’s exports but also help the donor agency meet commitments to its global mission of a green and clean environment.

Published in The Express Tribune, February 18^th, 2022.

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