Energy crisis in bangladesh! What energy crisis?

M Asaduzzaman

Is Bangladesh in the grip of an energy crisis? Many would concur, but probably not all of those who really matter in this country. Oil price had jumped to US$ 70 a barrel, something nobody could believe that it might happen. It may increase further, as feared by the International Energy Agency, due to Hurricane Katrina which has put many US-based oil installations out of commission for some time. The Government of Bangladesh has responded by raising prices. But not all in the Government, according to newspaper reports, would have wanted that. And they may have a valid political reason for their discomfort. The election is in about a year's time. No sane person would like to commit a political hara-kiri at this time. But the Finance Minister was under pressure from the big donors to behave. Unfortunately, the public authorities in Bangladesh always opt for the easy way out. Cutting down wasteful consumption, streamlining operations and raising standards of service are never their first or even second choice to face the realities. Secondly, they love to live in a Rip van Winkle world and rise from slumber only when the crisis breaths hard down their necks, not beforehand.

Raising oil prices will not create problems for the politicians and bureaucrats who move in vehicles run on government money. But this will create tremendous economic dislocation. Movement of people and goods will be costly. No body disputes that. Least of all the consumers, be it the man on the street, or the budding entrepreneur in a small town or the owner of a large group of companies. But when the problem of energy is discussed, the most they grumble about, and the Government also seems to talk about is how far prices of oil need to be pushed up, whether gas is running out; or, if there is frequent outage of electricity. This is so because the authorities who matter have failed over the last several decades to properly plan for energy development, although from time to time we hear of all kinds of crash programmes which not surprisingly crash to the ground, not to take off again. The point to be made at this stage is that these much talked-about energy issues are definitely very serious and may increasingly be so, as the country urbanizes, industrial and commercial activities further gear up, and the economy is expected to grow at 6-7% in the foreseeable future. However, I would argue that all these well-meaning people have shut their eyes to the rural energy crisis, which I would like to call the “real” energy crisis in the country.

An energy economist in the late nineteen seventies, while referring to the then Indian food and energy situation, stated that Indian citizens one day shall have enough food grain to eat but he wondered if her people would have enough fuel to cook the food. The same may be true of Bangladesh. Let me move more specifically on this and other related aspects. How to delineate the relationship between energy and economic development and poverty reduction?

There is a chicken and egg problem in identifying the relationship between energy and economic development. By and large, energy is an intermediate product, which means that it is an input into the production process. And so are many others. What is so special about energy? The uniqueness of energy is that practically no work, be it making biscuits, or transporting mangoes from Rajshahi to Dhaka, or this author typing this paper in his computer, can be done without consuming some energy. In the case of biscuits, heat energy is obtained from firewood or gas, or other combustible materials.

For transporting mangoes, one uses trucks that burn diesel or petrol, while the computer has to run on electricity. Very few activities can be done without the input of some amount of energy. It comes as no surprise therefore that it has been found that there is a strong correlation between economic growth and energy consumption. Of course, energy is used not just for economic activities but also for direct final consumption mainly at home and for preparing food, the most basic need of human beings. It is also used for personal transports, lighting and amusements, which are not inputs into any direct productive process but which raise the welfare of the people and improve their quality of life. It is in this area, more particularly in the rural Bangladesh that, I believe, the real energy crisis of the country has already started, nay, it has been there for quite a long time. But nobody bothered because the rural people, specifically the rural poor have little or no voice.

The crisis remains hidden to the policy makers, to the itinerant observer and even to the NGOs (except one or two notable exceptions) that claim to be the champion of the poor. In relevant government documents, such as the plans of the yesteryears or the PRSP, one hardly finds any mention of it, let alone its analysis as a guide to the resolution of the issue. The chapters on energy in these documents dwell at length on power, gas and, to an extent, on oil, but practically never on biomass, the energy carrier for the majority of the people. If there is any discussion at all, it is relegated to the forestry section of the chapter on agriculture. This “invisibility” of the issue has allowed it to assume a major drag on the welfare of most of the people of the country over time. To understand the gravity of the problem, I shall now dwell at some length on certain aspects of the rural energy crisis. This is contextualized with reference to the over-all energy situation in the country.

Bangladesh is one of the lowest energy consuming countries of the world. In 2002, according to International Energy Agency, one of the most authoritative sources of energy-related information, Bangladesh consumed just about 0.15 tons of oil equivalents (toe) per capita, the lowest in the world. Comparative figures for other countries within South Asia are 0.51 toe for India, 0.45 toe for Pakistan, and 0.43 toe for Sri Lanka. Nepal at 0.35 toe consumes more than twice what we do. Other countries such as Malaysia (2.13 toe), the Philippines (0.53) and Thailand (1.35 toe) are far ahead of us. If electricity consumption is considered, then again we become a member of the league of the lowest consuming nations. In 2002, the electricity consumption was just 108-kilowatt hours (kwh) per capita. For India it was 421 kwh, for Pakistan 384, and for Sri Lanka 300 kwh. Only Nepal's was lower at 69 kwh. As Bangladesh fails to supply one of the most critical factors of production, it comes as no surprise that she is a laggard in the race for economic growth.

What are our sources of supply of energy and for what do we use it? The Bangladesh Bureau of Statistics (BBS) is the only integrated source at present for this type of information. The Economic Review of 2005 prepared by the Ministry of Finance tells nothing about an integrated picture of energy. The latest available information indicates that 70-75% of the energy we use is in the form of biomass such as fuel wood, tree residues, agricultural residues and animal residues, such as cow dung. Much of it is used in the rural areas and mainly for cooking food and a little for related activities, such as parboiling. A recent large-scale survey conducted by the Bangladesh Institute of Development Studies provides some of the relevant information.

First, all households consume biomass and non-biomass types of energy. Most households use firewood, tree leaves, crop wastes and cow dung (except in Chittagong division). Rice straw is the most frequently observed crop residue (55% of households) used for energy purposes. This is followed by rice husk (41%), rice bran (23%), jute sticks (28%), dried plants (12%), wheat straw (9%), dhaincha (8%), dried sugar cane tops and leaves (7%) and bagasse (3%). Nearly 3 metric tons of biomass is used by an average rural household (of an average of 5 members) in a year. Almost 90% of the biomass is used for cooking.

Among non-biomass energy, kerosene is the most widely used fuel followed by electricity. Just about a third of the households have an electricity connection, which is characterised by pronounced regional variation. The incidence of grid electricity is the highest in Dhaka division (45%) closely followed by Chittagong. The incidence in Khulna is 12%, the lowest. Diesel and electricity are used also for irrigation machines and power tillers, which have become ubiquitous in the villages. Business enterprises in the villages use electricity much more frequently compared to households. So does a substantial proportion of the educational and other institutions. On an average, the value of the energy consumed within a household is Taka 425 or thereabout a month, while the average consumption expenditure is Taka 5111. Energy thus constitutes 10-11% of the proportion of total expenditure in rural households.

Energy consumption is strongly influenced by several factors such as level of income, ownership of land, extent of homestead land, education of family members and nearness to grid line (for electricity). Because of its importance, I reproduce below the pattern of average consumption of various energy carriers by level of household income. It is clear that, in most cases, not simply is there a clear monotonic relationship between the level of income and the level of energy used, but the inequity in energy use is also very much apparent. For example, the highest income households consume almost 3 times firewood and almost 15 times electricity compared to the lowest income households. A similar situation obtains in case of land ownership, although here the differences between largest land owners and the landless are not as great as in case of income. The importance of homestead land lies in the fact that larger homesteads mean more homestead trees which positively influence the use of firewood.

One may think that, as the poor consumes only a trifle compared to the rich, they must be using it more efficiently than others. Unfortunately, that is not the case. While the patterns are not monotonic, there are indications that as either income or land ownership increases, the average firewood use for cooking a meal for a person falls. Thus, those who can afford it less use more fuel for cooking a meal.

Much of what is consumed is supplied from three sources, own production, gathering and purchase from the market, all of which being important sources for biomass. For firewood, only a little is from own production, while just about one-half is gathered and nearly 40% is purchased. Firewood is purchased most in Dhaka division (68%) and the least in Chittagong division (24%). Tree leaves, crop residues and cow dung are either gathered or supplied from own production, purchase is much less observed in these cases. Kerosene and electricity are, of course, bought.

Given that gathering is such a major part of total supply, the opportunity cost of the time spent in the activity should be understood for policy purposes. Usually, women have been found to gather firewood. If the opportunity cost of their time is considered, the estimated cost of biomass use goes up by 40% or so while for firewood it is higher by 50%.

Quite obviously, there is a shortage of biomass for cooking and more so for the poorer households. It is no surprise, therefore, that more than 80% of the households eat at least one cold meal everyday. The proportion is the highest in Khulna, almost 97% and the lowest in Chittagong, nearly 60%. The nutritional adverse implications and the susceptibility to disease are likely to be high in these households.

The nature of the rural energy crisis should be clear by now which is that a very large segment of the people has access to only a little energy and not to speak of quality energy for its use for the most basic need i.e., preparation of food. They have also only very limited access to the quality energy, such as electricity, and whatever access there is that is spatially highly inequitably distributed. Unless these aspects of the energy crisis are looked into and taken most seriously, the apparent eradication of poverty despite higher assumed growth in the future will be of little beneficial effect for the poor.

Before I bring this discussion to a close, it would be a travesty of truth to mention that nothing has been done in the country so far to remedy the problems. Some moves by way of afforestation, home gardening, and diffusion of solar photo voltaics have been taken as well as the efforts by the Rural Electrification Board (REB) to reach electricity to the villages. The REB's achievements after so many years still remain low and there also appears to be a highly inequitable spatial pattern in its activities, as stated earlier. Other efforts have still remained sporadic, despite some successes by Grameen Shakti and others. The upcoming coal production from one or other of the North Bengal mines may be available for domestic purposes. But that is still a matter for the future, while the use of coal itself has to be considered keeping in view of issues such as increased green house gas emission. What is needed in this situation is a concerted effort at informed policy making and its implementation. The current Energy Policy is 10 year's out of date and a revised policy is still in draft form. But even the draft of the proposed revised policy does not give any clear indication that the scales in the eyes of the policy makers have been shed finally.

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The author is Research Director, Bangladesh Institute of Development Studies, Dhaka.