Maria Kuusisto, an energy and mining analyst with the Eurasia Group, warns that the development of the Thar coal reserves requires long-term bureaucratic and technical commitment. “Even coal needs a huge investment,” she says. “In fact, top-notch technology is needed to process Thar coal. This hikes up the price. A lot of money is needed for infrastructure because mining it is a complex process. You also need to build high-tech plants, and you need to do all this before generating power or money.” Kuusisto cites the example of a Chinese group who were interested in developing and using Thar’s lignite coal. “They were interested, but they left the project. They failed to come to an agreement on tariffs for power generation.”

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The 1970s changed the face of power generation in this country. After a decade of outstanding growth in the 1960s, energy surpluses started to dwindle. Looking ahead, though, the government of the day understood that major, long-term initiatives were desperately needed if Pakistan was to return to a path of strong growth. Those initiatives led to the construction of the Mangla and Tarbela dams. “For a number of years, the Water and Power Development Authority (WAPDA) was a model public sector institution in the developing world for undertaking development works,” writes Burki in an essay in Powering Pakistan. WAPDA not only presided over the construction of these massive projects but it managed their growth: over the years generation capacity grew from 636MW to 7,000MW. This is a Pakistan-energy success story.

The Kalabagh dam should have been another. Speaking over the phone from Singapore, Burki doesn’t hesitate to drive home how necessary the Kalabagh dam project is for Pakistan’s energy security. “Vital. Critical. We’ve known this for 20 years. The United Nations Development Programme had published a report in the early 1980s. It was very elaborate, very professional. And it stated the necessity of Kalabagh.”

Pervez Musharraf

Pervez Musharraf agreed. When the general took over the presidency in 2001, he pushed for Kalabagh, says Burki. But as the project became more and more controversial, with opposition from different provinces over a range of issues and fears, he started to waiver. “Over time he became very sensitive to criticism. His decisions became politicised. And soon, he was not prepared to pursue Kalabagh.”

Today, WAPDA has major projects in the pipeline. One is the Diamer Bhasha Dam. With 6.4 million-acre-feet of capacity for water storage, this mega project will benefit local agriculture and generate 4,500MW of electricity.

Not everyone is thrilled about large hydroelectricity (hydel) projects. “The useful life of a dam such as Tarbela is about 100 years, for which approximately 100,000 people were displaced, not to mention the inundation of 23,000 hectares of arable land,” writes Saleem H. Ali in his essay contribution to the book Powering Pakistan. “Even the increase in cultivable land requires further ecological study in cost-benefit analyses, since in many cases mismanagement of the irrigation schemes led to salinity and water-logging, and an eventual loss of arable capacity in 22% of the Indus Basin.”

Ali also writes that the 2005 Kashmir earthquake should jolt planners in Pakistan into being concerned about the vulnerability of dams to seismic activity. They need to look no further than China for an example of a catastrophic dam failure, he writes. In 1975, a typhoon dumped a year’s worth of rain (1,060mm) in one day, causing the rising levels of rainwater to breach the Banqiao Reservoir Dam. Massive flooding killed at least 26,000 people, with the death toll rising by another 145,000 in the following weeks. Over 10 million people were displaced.
His list of risks for large hydel projects doesn’t end there. The belief that large dams are “emission free” is also losing support, he writes. “There is potential for methane generation from dam reservoirs.” As methane is a greenhouse gas, dams larger than 10MW are losing favour internationally.

This doesn’t mean hydel should be ruled out of the energy mix. It simply means think small. Smaller hydel projects are more flexible to engineering redesign and can be constructed along some of Pakistan’s smaller rivers, such as the Kunhar, Swat and Chitral, writes Ali.

Maria Kuusisto agrees. “Hydro is renewable, clean and abundant. But small hydro is preferred,” she says. “Mini projects can provide significant supplies, especially in local areas. They are less politicised and easier to implement.” Pakistan, with the help of the Alternative Energy Development Board (AEDB), has already set up 253MW of micro- to small-sized hydel plants, producing less than 50MW each.

There are plenty of things the government can and has been doing to help diversify the energy mix further. The AEDB has been busy trying to advance renewable energy sources and technologies in Pakistan. However, alternative energy will be no panacea to our energy shortages: it will probably only cover about 2% of the energy demand by 2025. The country is also moving ahead with more domestic oil and gas production, auctioning off blocks for exploration in late August. Nuclear energy is a more controversial area given Pakistan’s internal strife, but there are still opportunities (though none to help in this present crisis).

Shifting the country’s overall energy mix significantly may sound impossible. In 2005, the Planning Commission projected that the percentage share of the total energy pie for different energy sources would shift only slightly by 2025. Specifically, the shares for oil and gas in the overall mix would each drop by 4% over 20 years, with small increases for coal, hydel, renewables and nuclear energy. Kugelman, of the Asia Programme at the Woodrow Wilson International Center for Scholars, says an overhaul of the energy mix would be about politics – and the obstacles would be daunting. “We need to ask questions about political feasibility: Would Pakistan push forward with increased hydro production, knowing full well the outcry this would elicit from riparian communities and other opponents of large dams? Would Pakistan increase coal production and risk the backlash from environmentalists?” And would Pakistan be prepared to overhaul the structure of subsidies so as to create a level playing field for all?

Because it’s impossible to just stop and reverse the direction of the policy, Pakistan will have to continue to find ways to shore up supply from abroad for decades. That’s why regional integration with its resource-rich neighbours with unexplored oil and gas reserves is a must. Maria Kuusisto has studied Pakistan and travelled the region, and says between Iran and Turkmenistan, Iran is the better bet for Pakistan. Turkmenistan is a former Soviet state and Russia behaves as though Turkmenistan is still in its sphere of influence. Still, integrating with Iran is not without its risks, says Kuusisto. “The security and political situation in Balochistan will create obstacles in the implementation of the project, potentially hindering fulfilment.” Also of concern is the fact that the oil and gas network is hugely underdeveloped in Iran.

Photo: AFP

Pakistan’s energy future is filled with many uncertainties. As such, a comprehensive strategy for seeing the country out of this mess requires more than hoping and praying that the price of oil stays down. Changing the country’s energy mix by exploiting domestic natural resources more effectively will be key to the country’s energy security, limiting future energy deficits that need to be filled by expensive imports. Estimates of the energy deficit in 2025 could surpass 50% of total energy demand. That means that over 50% of energy needs may need to be imported.

However, the country can’t make the shift by itself. While Pakistan’s legal environment is very international investor-friendly, says Kugelman, outside energy investors are unlikely to bring their capital to Pakistan’s security-challenged landscape. International energy investors also like to see the existence of worthy privatised energy programmes. “Given the recent experience of KESC, investors will not exactly be emboldened on this front either,” he says. Throw in the fact that IPPs are selling to a government who can’t pay, and things won’t look very attractive to foreign eyes.

Volatile politicians screaming on television don’t help either. In July, a PML-Q senator appeared on a current affairs show and proclaimed that if the crisis didn’t improve soon, it would trigger a civil war. The display was probably more of a case of political melodrama and grandstanding. Though Kugelman does, however, see the possibility for more violence if the crisis worsens and exacerbates the various fault lines that already threaten to tear Pakistan apart. “The energy crisis, if it continues, could also conceivably precipitate a series of ominous developments – shuttered factories, rising unemployment, even more water shortage – that could in turn spark prolonged periods of public unrest. Public unrest, however, is far from a prelude to civil war.”

Imtiaz Gul seems to think that we should be worried, though. “Half the country is spending sleepless nights without power,” he says. “This is not a recipe for stability and peace.”

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From where Pakistan stands today, things look bad. Commercial electricity generation grew 48% between 2000 and 2007. However, over the course of fiscal year 2007-08, generation actually fell 2.5% compared to the previous year. That was the first decrease in annual power generation since 1991. And for 2008-09, the trend looks like it is worsening. For the first nine months of the last fiscal year, generation had fallen 18% over the same period a year earlier.

It didn’t have to be this way.

Remembering back to that meeting in Islamabad in March 2005, Shahid Javed Burki recalls the phone call General Musharraf made to Shaukat Aziz. “I don’t know what the prime minister said, but I know he was made aware of the fact that this was a major crisis.” As a result, a lot of the responsibility lies with him. “The PM was a disaster. He did not focus on strategy.” That mismanagement of the crisis was only part of the problem, though. Back then, the PM always gave the impression that things were going well, that the country was on a strong, upward growth trajectory. “He made it sound like we were like the East Asian countries,” says Burki.

There’s little we can do about that now, though. Today a new government must tackle this problem decisively. As Newsline went to press, Federal Minister Raja Pervez Ashraf announced a major meeting for August 5 with the Special Committee on Energy Crisis that aimed to discuss the available plans of action. As politicians argue over the merits and demerits of all the alternatives, Pakistanis can only hope that their focus starts to shift from short-term band-aid solutions to long-term strategic planning. But that involves being honest with all the stakeholders, thinking of the needs of all Pakistanis and having the political will to do what is best for the country, both today and tomorrow.

Pakistan can’t afford a re-run of 2009’s energy saga – ever.

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Pakistan’s Energy Stats By the Numbers

6 The current generation capacity of the Zorlu wind farm in megawatts.
95 860 Total gigawatt-hours of electricity generated in Pakistan in 2008.
80 Percentage of the world’s primary energy supplies that come from fossil fuels: oil, gas, coal.
185 Billion tonnes of coal deposits in Thar.
7 874 Number of off-grid villages in Sindh and Balochistan that the AEDB wants to electrify.

The following post was a sidebar in the print version of this article:

Energy Policy is Not Gender Neutral