Bangladesh is an energy-starved country, which needs to formulate its power development policy in a very delicate manner in order to satisfy the demands of about 180 million people (projected) by the year 2020. This date is significant because around that time, or soon after that, the country's proven gas reserves might be exhausted, and there is no scope for falling back on local coal reserves or hydroelectric potential.

Natural gas is the only significant non-renewable energy resource of the country, and is the principal source of commercial energy. It is used for the generation of 90 percent of the country's electricity, while the entire fertilizer production is dependent on gas as feedstock. There has been much confusion regarding the proven and probable reserves of gas in the country -- often due to differences in perceptions on exploration and conflict of views of various interest groups.

Official statistics, frequently quoted by the media, state that the country's proven gas reserves are around 13 to 14 trillion cubic feet (TCF). One recent government report (February 2007) gave an even more conservative estimate of the country's proven gas reserves -- around 8.4 TCF. Bangladesh is comprised of the largest fluvio-deltaic-slope fan complex in the world, known as the Bengal Fan.

With an area of some 207,000 sq km (including offshore areas), and a total over 70 exploration wells, Bangladesh ranks as one of the most under-evaluated hydrocarbon provinces in the world. The historical success rate in exploration is 33.8 per cent, which is very high by world standards.

All these facts should make us very hopeful of discovering large gas reserves within our borders, as well as in our territorial waters. However, the reality is that no significant discovery of any large reserve has been made in the recent past, and exploration activities have also been stymied, either due to lack of negotiating (with profit-motivated foreign oil companies) skills or due to opposition by myopic ultra-environmentalists (local).

At the time of independence, the country's daily natural gas consumption was about 50 million cubic feet (MMCF). The major thrust in gas exploration, including expansion of network programs, came after 1981, with the assistance of donor agencies. By 2000, total gas consumption had risen to 900 MMCF per day, while the current consumption is believed to be around 1,500 MMCF, or about 550 billion cubic feet (BCF), per year.

Assuming a steady increase in demand for gas, at an annual rate of eight to ten percent (primarily for the generation of electricity), the total known gas reserves are expected to be exhausted by around 2020 -- unless large reserves are discovered in the coming years.

Looking for alternatives to natural gas, the potential of the coal sector is not bright either. The existence of the largest coal deposit -- at Jamalganj in greater Bogra -- with an estimated reserve of about 1,000 million tons -- has been known to us for several decades; but it is not economically feasible to explore it due to its great depth of over 700 meters.

The other recently discovered coal deposits of bituminous variety in the northwestern greater districts of Dinajpur and Rangpur are available at shallower depths, but have very modest reserves. The estimated reserves of the three coal fields in the northwest viz., Barapukuria, Phulbari and Khalashpir are 390, 570 and 600 million tons, respectively. In contrast, across the border, the Indian coalfields of West Bengal, Bihar and Jharkhand have reserves of more than 40,000 million tons.

In Bangladesh, there is strong opposition to open-pit mining of coal. In open-pit mining, 90 percent of the coal deposits can be extracted, while only about 20-25 percent of the deposits can be extracted by underground shaft mining method.

Arguments against open-pit mining in Bangladesh include loss of agricultural land and the need to relocate settlements -- which is, however, not unique for Bangladesh. The beginning of exploration activity at Phulbari coalfield was cancelled largely on account of opposition on these issues.

On the other hand, underground mining is vulnerable to various types of accidents, like subsidence of the land, gas explosion, flooding of shafts, and emission and trapping of toxic gases. News of such accidents in coal mines in China are not uncommon, and given the track record of mine management in our country, underground mining will continue to be a very hazardous proposition.

In Barapukuria, where underground mining has started to supply coal to generate electricity in the mine-mouth power plant, incidents of gasification, flooding and ground subsidence have already been reported. Excluding the non-explorable Bogra coalfield from any calculation of estimates, the three deposits in Dinajpur and Rangpur amount to around 1,600 million tons -- which will be equivalent to about 38 TCF of natural gas.

Since open-pit mining will not be considered in Bangladesh, and if only 25 percent of those deposits of 1,600 million tons of coal are extracted through underground mining, the total recoverable coal will be less than 400 million tons -- equivalent to some 9.5 TCF of natural gas.

Investing for the extraction of such a small amount of coal (through underground mining), especially in the context of scientifically proven and universally accepted global warming evidence related to coal combustion, will not be a wise proposition.

The scenario of soon-to-be-exhausted gas reserves, and not-so-abundant coal deposits, require Bangladesh to explore the potential for renewable energy sources for the longer term. Hydropower is a renewable and environment-friendly source, but its potential in Bangladesh is extremely limited.

The country's lone hydroelectric plant is located at Kaptai, with an installed capacity of 230 MW. There are no other potential sites in the country for hydropower development, except two in the Sangu and Matamuhuri rivers (150 MW and 75 MW respectively), which are not considered for development because the socio-environmental costs far outweigh the benefits to be gained from them.

Hydropower is a clean fuel, and can be transmitted over long distances through an integrated power grid. North of Bangladesh are located the two Himalayan countries of Bhutan and Nepal, with huge potential for hydropower generation.

Bhutan has a hydropower potential of around 30,000 MW, while Nepal's potential is even much larger -- about 83,000 MW, of which 43,000 MW are techno-economically feasible for development. In fact, the eastern Himalayan rivers of the Ganges-Brahmaputra-Meghna (GBM) region are one of the richest sources of hydropower in the world, although a very small proportion of that potential has been exploited so far.

The harnessed proportion of the potential in the case of Bhutan is less than two percent, while for Nepal it is less than one percent. It indicates the enormous scope for Bangladesh to import clean hydroelectricity from the two Himalayan countries.

Since Bangladesh is separated from Nepal and Bhutan by Indian territory (30 km and 55 km respectively), the cross-border power trade will have to be coordinated with India through a tri-lateral arrangement. It will not only promote sub-regional cooperation, but is also in conformity with the declared intentions expressed in almost all Saarc summits (including the most recent one held in New Delhi) in favour of tri-or multi-lateral development efforts within the Saarc ambit.

Extensive power trade exists between Bhutan and India, while Nepal and India have limited power trade arrangements. Bhutan has been a major power exporter to India since its Chukha hydroelectric plant (336 MW) on the Wangchu river was commissioned in 1988. (Electricity from Chukha is used in the eastern and northeastern states of India).

In fact, the hydroelectric power sector is the single biggest revenue earner of Bhutan, and the country is determined to develop its hydropower potential and gain positive impact on the economy through power export. In 2003, the former King of Bhutan had declared that: "Water is to us what oil is to the Arabs."

Bhutan, in its endeavor to develop hydropower potential, has entered into joint investment projects with India. Bhutan's largest hydroelectric project -- Tala project (installed capacity: 1,020 MW) -- located downstream from the Chukha project, started supplying electricity from the first of its five units to the northern states of India since August 2006.

In addition, Bhutan already has about a dozen proposed power projects at planning or feasibility study stages, and Bangladesh could start getting involved in their development under negotiated cost-sharing or investment formats, with a medium to long term view of importing electricity for the country.

Nepal too, is another neighbouring country from where Bangladesh could plan to import electricity in the longer term. In this regard, the prospect lies in future power trade, when the proposed Sapta Kosi multipurpose high dam (installed capacity: 3,000-3,500 MW) is implemented in eastern Nepal.

This project has been under consideration for over half of century, and several feasibility studies have also been completed. The project's geographic proximity to Bangladesh (located only 107 km from the Bangladesh border) makes it a potentially attractive site for power trade arrangements between the two countries. The possibility of importing power from Nepal is considered advantageous for the additional reason of having seasonally opposite peak and low demands in the two countries.

An important aspect for the consideration of cross border power import is the compatibility of transmission lines. The current electricity transmission system in Bangladesh operates at 230 KV and 132 KV levels, and these voltage levels are believed to be adequate to meet the needs for the short term. However, in the long term time frame, higher voltages of 400 KV might be considered for interconnections in the sub-regional context for the evacuation of larger quantities of electricity.

If energy security means that "sustainable power supply is available at affordable prices," then planning for future hydroelectricity sources for Bangladesh should start immediately. Import of power from Bhutan and Nepal in the medium and long terms should remain a crucially important goal for Bangladesh, in order to meet the country's power demand after 15 or 20 years. Since the gestation period for negotiation and establishing infrastructure for such cross border trade is usually long (often three to six years), it is essential that efforts to this end are initiated without any delay.

Non-governmental researchers had been advocating in favour of integrated power trade in the GBM region for over 15 years, but the successive governments did not take any initiatives toward that end. It is refreshing to note that the current caretaker government has officially expressed the interest of Bangladesh in seeking and exploring possibilities of entering into power trade agreements with our Himalayan negihbours, and has included it in the agenda for sub-regional cooperation in the Saarc forum.

Dr Rasheed is Professor of Geography and Environment, University of Dhaka (currently on LPR).