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Tapping Energy Resources

According to Global “Economic Prospects”, South Asia Region growth declined from 7.4% in 2011 to an estimated 5.4% in 2012, mainly due to a sharp slowdown in India. Home to many of the developing world’s poor, the economic future of the region depends upon (1) Regional cooperation bringing about the Asian Century (2) supporting regional networks to promote cooperation and (3) focusing on trade in goods, services, and electricity, people-to-people contact, and cooperation in water resources management.

To give impetus to the key challenges facing the regional countries in having access to adequate, reliable and affordable energy, EastWest Institute (EWI) organized a Conference in Islamabad from September 2 to 4. Representatives of regional governments, parliaments and the private sector as well as experts from China, United States and Europe gathered with the aim to identify productive opportunities for economic growth based on Afghanistan’s potential as a transit route for energy supplies from Central Asia to energy markets in South Asia.

Ambassador Beate Maeder-Metcalf, Regional Director, EWI Brussels, set the tone for the Conference emphasizing EWI determination to hold the “Abu Dhabi Process” consultations in Pakistan despite the security situation. She welcomed expert participation from 12 countries, its importance highlighted by the presence of Shahid Khaqan Abbasi, the Federal Minister for Petroleum and Natural Resources at the Opening Session. Khaqan Abbasi underlined the importance of securing energy for the present and future, giving details of Pakistan’s own resources and that available in adjoining region. The Federal Minister was very positive about the outcome of the Conference, commending EWI for holding “the Abu Dhabi Process” series in Islamabad despite security apprehensions. Chief Minister (CM) of Punjab, Shahbaz Sharif was meant to be the Keynote Speaker but had to cancel out without notice, most unfortunate given that energy is a key factor in his plans and the participants were looking forward to having inter-action with the CM.

Energy transit routes are of crucial importance for mutual benefit of both exporting and importing states. Analysts cautioned about barriers in using “Afghanistan as Energy Route”, the civil war and political instability making possible routes in secure. Not only a historical but a natural trade corridor, it has a great potential for economic growth. Energy is of fundamental importance to any country for its economic progress and industrial development, private sector involvement in energy trade can mitigate the risk on non-recovery of cost of import. South Asia encompasses 1/5th of global population, Energy trade can be an influential tool for economic integration in the contemporary environment. Three most important projects in this sector are Iran-Pakistan gas pipeline (IP), Turkmenistan Afghanistan Pakistan and India gas pipeline (TAPI) and Central Asia South Asia (CASA) – 1000. These projects will benefit Central Asian republics by provide them with new markets.

Mr Sartaj Aziz had to leave for Karachi for the special Federal Cabinet meeting on “Karachi” in a hurry, nevertheless he made it a point to attend the Day’s Concluding Session. The Advisor on Foreign Affairs and National Security emphasized good relations with all the neighbours, the countries of the region could never achieve economic prosperity. He said Intra-regional and inter-regional energy trade helping to overcome the energy demand and supply gap in the region and economically stabilize the region. Political disturbances and civil war can be setback to development as in the case of TAPI, but its construction will certainly be undertaken once the situation gets better. Dr Frederick Starr (John Hopkins University) was very excited at Pakistan’s determination to go ahead with TAPI. One of the early proponents of the TAPI pipeline, Dr Starr said, “Obviously, serious challenges will remain, the greatest of which will be to design the project (TAPI) so that it is viable in free market terms. Doubts abound, but there are now sober optimists as well,” unquote.

The environmental friendly nature of renewable energy compels humans to focus on unconventional and reliable energy sources other than oil and gas. To overcome socio-economic growth being hindered, Pakistan must look into the potentiality of solar, wind, bio fuels, and hydro power as renewable resources. Given the disadvantages of burning fossil fuels, renewable energy has become the need of the time. As a result of political nature of hydel energy Pakistan is forced to import large quantities of oil and oil products, even then many cities have to undergo severe loadshedding for more than 12 hours a day. This increases trade deficit, high inflation, unemployment, depreciation of rupee, etc. this reducing the people’s living standards. The gap between demand and supply is increasing by the day despite the fact that there is tremendous potential of renewable energy sources in Pakistan.

Discussing “Central Asia Energy Resources and Potential for Trade”, speakers highlighted Central Asia becoming one of the world’s top five oil producers within the next decade. Ranked 15th in the world its proven gas reserves, Kazakhstan has become a net exporter of natural gas in 2009. Uzbekistan is planning a major expansion of its domestic electricity infrastructure, it plans to raise $3.5bn between 2009 and 2014 to finance the increasing of capacity by around 2,700 megawatts. Turkmenistan holds the world’s fourth largest reserves of natural gas amounting to 7.504 trillion cubic meters. Kyrgyzstan and Tajikistan are less attractive to investors in terms of fossil fuel reserves.

An expert panel focused on “Afghanistan as Energy Importer and Producer”, the country being critical to development of inter-regional cooperation. Despite many differences, Pakistan and Afghanistan are moving towards joint management of common rivers starting with the proposed construction of a 1500 MW hydropower project on Kunar River.

“Towards Regional Cooperation for Energy Security” focused on the increasing realization within South Asian countries about the importance of regional cooperation in the area of energy. Importing electricity from Nepal and Bhutan, are on for talks of India providing electricity to Pakistan. In the field of energy security, China is cooperating with Turkmenistan in the construction of the gas pipeline opened in 2009.

Pakistan’s primary power supplies from conventional energy sources cannot meet the country’s demand. Pakistan’s electricity generation has become dependent largely on petroleum fuels and it faces a huge gap of 4500 MW between demand and supply that is having far reaching consequences on development, renewable energy alternatives must be developed urgently. Despite the enormous potential of indigenous energy resources, Pakistan’s remains energy deficient, relying heavily on the imports of the petroleum products to satisfy its present day need. A recent study by Energy Information Administration (EIA) based on a study done by Advance Resources International (ARI) has estimated Pakistan’s recoverable shale gas at 105 Trillion cubic feet (TCF) (up from the 24 TCF) and the oil estimates has increased dramatically 30 times from 300 million barrels to 9.1 billion barrels. In contrast, India is estimated to have 96 TCF and 2.7 billion barrels of oil recoverable from share oil reserves.

The EWI initiative to have its energy conference in Pakistan despite the critical security situation here has focused the need of the country, energy is crucial not only to meet socio-economic challenges but the inter-dependability inherent in the acquisition process will further the cause of peace and amity in the region.


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