OGPC’s Road March: What For?

Engr Khondkar A Saleque

The “National Committee to Protect Oil, Gas & Port” (OGPC) held a road march from Dhaka to Cox’s Bazar in protest against what it said the present democratic government’s bid for leasing out some offshore exploration blocks in the Bay of Bengal for petroleum exploration. The government has overwhelming peoples’ mandate to rule the country for five years. Obviously they are mandated to take decision for exploration and exploitation of natural resources for fuelling national economy. There are government organizations responsible for carrying out assigned tasks and there are well-documented approval procedures to handle such issues. The parliament is very much active to talk issues of national interest and elected representatives can any time raise questions concerning national interest.

The nation is now suffering from serious energy crisis, fuel supply crisis. At this moment all patriotic citizens must support government efforts to explore national resources and create power generation facilities without creating any unnecessary barriers. Bangladesh has unexplored gas and oil in the offshore. It has substantial volume of high quality coal at shallow depths in around 100 sqkm in onshore area. But, energy security of 150 million people is at stake.

When the nation needs to explore natural resources for future energy security the OGPC wants ban on open pit mining for coal. They want all moves to lease some offshore blocks to selected IOCs in the Bay of Bengal.  At a time when nation needs quick access to own resources the self-destructive actions of a certain identified group of vested interest must not be taken lightly. Conspicuously this group remain silent when legal and illegal means are taken to import dump ash coal in Bangladesh from a neighbouring country or when India and Myanmar encroach our maritime boundary. They even do not bother about subsidence impact of Barapukuria mining. They do not talk about wastage of 34000 crore taka in uneconomic venture of underground coal mining at Barapukuria.

Some so-called left leaning political leaders and some columnists have also joined the chorus. These politicians should try to win election and speak in the elected Parliament. In the backdrop of above let us discuss the situation in some depths.

Bangladesh proven gas reserve is running out although there should not be any genuine concern that our entire gas resource is going to be exhausted. Bangladesh is still the least explored country. Vast onshore area and almost the entire offshore remain unexplored. So far there has been no serious attempt to explore for petroleum in the deepwater. Most of our major gas fields like Titas, Habiganj, Bakhrabad, Kaillastilla, Rashidpur, Feni, Chattak and Haripur were discovered by international oil companies. Our own OGDC (now Petrobangla) and Bapex discovered some small gas fields. Then again IOCs discovered Sangu, Bibiyana, Jalalabad, Moulavibazar and Bhangura gas fields. Our own capacity was never grown to any stage that we could invest and explore for oil & gas applying modern technology. But at the same time there is no denial that no genuine efforts were made to professionally make our own companies competent.

Government of Bangladesh is not in a position to make significant investment in exploration and exploitation of natural resources. So it mostly relied on lending of development partners to develop discovered resources and IOCs to explore petroleum resources. Continued negligence to BAPEX has reduced the company now to a weak and sick company not capable to accomplish assigned tasks with required urgency. It can not carry out offshore exploration. We have no option but to engage IOCs for it at this stage.

We should have started offshore exploration at least from 1990s. But even two democratic governments since 1991 till 2001 did not take necessary initiatives. India and Myanmar carried out extensive explorations and discovered some major resources. Bangladesh started its efforts in late 2005. The draft PSC was updated professionally. Offshore exploration is a pure gamble. So any PSC document must have required incentives to attract IOCs. Updated PSC draft is still available in the websites. PSC document is not a document on which a Tom, Dick or Harry can make comment professionally. An elected government does not require to seek people’s opinion every now and then on all issues. In addition the political government has its responsibilities to implement its election pledges.

But, certain quarters are misleading people. It has been ensured that an IOC will be able to export 80 percent of its portion’s gas (not from the share held by Petrobangla) in LNG form only if Petrobangla refuses (which is highly unlikely) to buy it.

But, the OGPC is telling people that the IOCs will own 80% of the gas of offshore discovery. It is a deliberate misinterpretation of PSC provision; it is a propaganda to drum up peoples support. IOCs will offer production sharing split from 50%-80% to PB. IOCS will also offer its share of gas to PB. It is only if PB refuses to buy gas then  IOCs may export 80% of their share of gas in the form of LNG. In the present situation such situation will not arise as PB desperately needs gas.

It is a crime to misguide people. The road march of OGPC was not to serve people or country’s interest but to serve interest of neighbouring countries, which want to create barriers for our offshore exploration.

OGPC also opposes exploration of our own high quality less polluting coal in the most technically appropriate manner to extract maximum resources. They challenged Engr Mahmudur Rahman in 2005-06, they challenged Dr M Tamim in 2007-08 and now they are challenging Sheikh Hasina government. Who are they? Some paper tigers, some failed politicians, some parasites. Other than making sarcastic statements every now and then did they make any substantial contribution ever in the development of energy sector?

Bangladesh has five discovered coal-fields in greater Dinajpur and Rangpur districts. The mines actually cover about 100 sqkm. About 3 billion tonnes explorable coal are there which if properly mined can generate about 20,000 MW power for 25 years. For the energy security of 150 million Bangladeshis it is a massive resource. Modern mining methods adopted in many countries can perfectly address all myths and propagandas, can manage professionally all impacts.

Bangladesh imports polluting inferior quality coal from neighbouring country. This coal is seldom used even in that country. They dump it to Bangladesh, which pollutes our environment. Coal merchants and the beneficiaries make huge profit. Our self styled patriots of OGPC do not speak against them. If BAPA is so much concerned about environment then why they do not protest against import of dirty coal?

Source:http://www.ep-bd.com/news.php?cat_id=31&archive=36&namee=COMMENT

Date: 01 August 2009, Bangladesh

Khalashpir Coal Mine Project-Hosaf’s sketchy study raises questions

Govt spends $95,000 for review of study by ex-consultant of Hosaf

Sharier Khan

The techno-economic feasibility study for Khalashpir coal mine project by Hosaf Consortium has finally been trashed by a foreign consultant questioning the study’s scientific basis, methodology and raising a host of other questions, sources said.

British consultant IMCL in the first of its kind review of a coal mine feasibility study notes that there are fundamental geological issues regarding the Khalashpir deposit which the company must address before framing realistic and financially viable mining business plans.

The consultant found that Hosaf had done inadequate geological work and had deployed no accredited geologist for the job. Its study offered no detailed outline for environment or resettlement issues, and all these work should be done again before submitting such a study report.

The IMCL, which used to be represented by Hosaf in Barapukuria coal mine project from the nineties and had worked for Hosaf in the same Khalashpir project a few years back, was appointed a few months ago for such a unique review through a tender floated during the last caretaker government’s tenure. Interestingly, the Hydrocarbon Cell of the energy ministry that deals with oil and gas-related policy issues gave the appointment.

The cell last week made a presentation on the IMCL review to the energy secretary and formally submitted the full review to the ministry Sunday. Khalashpir coal field was discovered by Geological Survey of Bangladesh (GSB) in 1989.

The then BNP-led alliance government on October 11, 2003, secretly gave Hosaf the licence to explore Khalashpir coal zone in 2,500 hectares of land. Hosaf applied for mining lease for the area in the same year for mine development.

Hosaf does not have mining experience. The company in association with Shandong Ludi Xinwen Mining Group of China in July 2006 submitted the feasibility report to the Bureau of Minerals Development (BMD) with a plan to develop an underground mine. The report was prepared by China Jinan Mining Development Corporation engaged by Hosaf. During the study, Hosaf took help of Geotech-India, NamNam of North Korea, Geo-Mineral Engineering of China and IMCL.

Many officials and experts had then pointed out that the Hosaf study was a copy of that for Barapukuria coal mine project in which it acted as the local agent, questionably, for all the contractors involved. “The Techno Economic Feasibility Study was prepared mainly on the basis of Geological Survey of Bangladesh’s (GoB) geological reports published earlier and subsequent exploration work (no internationally acceptable standard was followed and the exploration activities were carried out without any kind of monitoring by the GoB),” one expert said.

The experts also questioned quality of the study and claimed that Hosaf had drilled only three boreholes to come to its conclusions. But the company claimed to have drilled 14 boreholes. Even Hosaf’s own claims do not stand as a strong basis for such a study as the feasibility study of Asia Energy was done on the basis of 108 such holes. Hosaf’s study remained shelved, but the BMD did not cancel its licence for Khalashpir coal zone. The caretaker government last year initiated the process of reviewing Hosaf’s study through the Hydrocarbon Cell. The caretaker government had awarded several power contracts to enterprises owned by Hosaf chief Moazzem Hossain, who is an accused in the sensational corruption case concerning Barapukuria coal mine.

Some officials expressed surprise that the government spent about $95,000 to pay IMCL for reviewing a private company’s feasibility study. “When Asia Energy submitted its study report, the government formed a committee headed by Buet Professor Nurul Islam to review that study. There was no cost involvement. But the Asia Energy study was much bigger and detailed that needed professional scrutiny. The Hosaf study is visibly a sketchy report,” noted an official.

Explaining why Hydrocarbon Cell was given such a job when it should have been done by the BMD, one source said, “ BMD did not have enough funds to carry out a review. Hydrocarbon Cell had some Norwegian donation.”

IMCL observations
Sources said IMCL in its review suggested that additional drilling should be carried out by a reputable and proven drilling contractor with modern and well-maintained equipment, who is qualified to operate in accordance with Joint Ore Reserve Committee (JORC), an internationally acceptable coal resource assessment code.

The review says previous boreholes that yielded unacceptable levels of core recovery should be re-drilled; an additional exploration must be carried out in accordance with internationally acceptable standards such as JORC utilising downhole geophysical logging in every hole as Hosaf drilled holes without logging; samples should be taken, logged and prepared as per JORC and supervised by a JORC- accredited senior geologist; analysis of collected samples should be undertaken by at least two accredit international laboratories observing the standard rules of analysis.

IMCL further says some coal samples indicate that coal at Khalashpir might have metallurgical coking properties and should be re-tested with fresh samples; underground mining would be preferred method of coal extraction particularly with respect to the surface environmental and social considerations; the Hosaf study’s production design parameters are out of date with respect to current longwall technology, or inappropriate to meet the overall production targets; spontaneous combustion and air temperatures are likely to be the dominant underground environmental issues which interact, and it is to be reflected in the design process.

The company should have made environmental and social impact studies for construction, operation and mine closure stages, and the relevant department has to consult the local people to consider problems threatening the environment in and around the mine, the review says. Further professional studies are needed to address hydro-geological issues including hydraulic conductivities and aquifer behaviours. There is no information about Acid Mine Drainage in the study, IMCL notes.

Mining subsidence impacts should be addressed during Environmental Impact Assessment (EIA) and engage the local population and all stakeholders in open discussions to ensure that land owners and workers are fully informed at all stages of project development and implementation; the surface layout of the study is based on Barapukuria mine surface facilities. Many of these facilities are unnecessary, IMCL observed.

Hosaf’s study
In its study, Hosaf claimed that Khalashpir coal reserve occurs at depths between 257-480 metres with an estimated total reserve of 451 million tonnes — proven 277 m tonnes and indicated 174 m tonnes. Of the reserve, seam I, II and IV are considered to have a potential for mining 277 m tons.

The IMCL review puts this estimate at 337 million tonnes for seam I, II and IV, showing that Hosaf’s assessment is grossly different. Hosaf suggested underground mining with initial production target of two million tonnes a year, which would be raised to four million tonnes in the 10th year of production.

Regarding underground mining risks and environmental impact assessment, the study said the spontaneous combustion and subsidence risks are high, including high methane emission and high underground mine temperature hazards. But it gave no details of management plans for the mining hazards and environment issues, stating ‘proposed damage and hazards, reclamation plan etc have been duly undertaken.’

Source: http://www.thedailystar.net/story.php?nid=100425

Date: 08 August 2009, Bangladesh

Time to Ignore National Committee for Protection of Oil, Gas and Ports

Saleque Sufi

One very disturbing news appeared in media report. So called National Committee for Protection of Oil, Gas and Ports (OGPPC) of Bangladesh has announced a program to seize Petrobangla Head Office on 2nd September ,2009as a mark of protest to lease out offshore blocks to IOCs for exploration of Petroleum.

It may be mentioned here that

On August 24, Bangladesh approved offshore oil and gas exploration deals with the two companies in three sea blocks in the resource-rich Bay, although the deals stipulated that they would not be permitted to operate in any disputed waters in the areas.

The media report says

Quote.
The group, calling itself the ‘national committee to protect oil, gas, mineral resources, power and ports’, said the prime minister’s approval of offshore oil and gas exploration deals in the Bay of Bengal to two international companies, ConocoPhillips and Tullow Oil plc, ran counter to her pre-election pledges.

“The government is trading on the nation’s assets by allocating oil and gas rights in the Bay to a multinational companies,” Sheikh Shahidullah, the group’s convener, told reporters at a press briefing at Mukti Bhaban in the city.

“We won’t let a single drop of oil or gas leave the country,” said Shahidullah.

In addition to the planned siege at state-owned Petrobangla’s Kawran Bazar headquarters, Shahidullah said protests would also be held out at UNO offices around the country.

Unquote

Present Government of Bangladesh is given mandate to rule the country for 5 years. They are accountable to the nation through sovereign parliament. There are specific government organisations responsible for dealing with Energy issues. Petrobangla and Energy Ministry are responsible bodies to explore and exploit all natural resources for energy generation. Elected Peoples representatives are mandated to take decisions. Prime Minister is also the energy minister. She and her cabinet are jointly responsible to the parliament. There are set rules and policies to deal with energy issues. Draft PSC that formed the basis of recent Award was formulated by line professionals, scrutinised and vetted by eminent Energy Lawyer, vetted by Ministry of law and approved by relevant government authority. The IOCs were selected through open transparent competitive bidding. Any true energy expert having hands on experience and knowledge of PSCs in operation elsewhere will opine that draft PSC based on which the approval for ward is made is pretty standard practised everywhere. Moreover PSCs are not yet signed. There is scope to negotiate all issues.

Moreover, the issue will definitely come out for discussion in the parliament and in the parliamentary standing committee. Myanmar, India, Thailand, Malaysia, Indonesia, Philippines, Vietnam have engaged IOCs are PSC. It is nothing unique for Bangladesh.

But this group of vested interest backed up by parasite political parties are creating hue and cry. They recently staged road march. In Bangladesh hundreds of unemployed people crowd around when snake charmers play snakes or monkey charmers play monkeys. So road march also attracted some on lookers. The fact that some people came to see them on the way does not mean that they support tem. So there is no reason to believe that OGGPC agitation has any public support. They are getting money from some NGOs to serve the cause of some neighbouring countries who do not want Bangladesh explore in the Offshore.

Media report also Quoted a leader saying

“The present government has decided to allow 80 percent export of our resources by multinational companies ConocoPhillips and Tullow Oil on a tender based on the anti-public interest model, devised during the tenure of the previous unelected government,”

This statement is complete misinterpretation of PSC provision. The term export in LNG plants or Chemical plants does not always mean export to foreign countries. Whatever usually goes out as end product of a chemical plant is technically termed as export. We have a multinational KAFCO plant. When KAFCO sales Urea Fertilizer to Bangladesh Government it is termed export also.

IOCs winning offshore blocks will first carry out seismic surveys and extensive study of resources base on which they will carry out exploration. The question of setting up LNG plant will only come up if there is a significant discovery (5-6Tcf). The LNG plant may be set up in Bangladesh onshore or offshore. If any IOC discover a gas field 200KM from Bangladesh coast the offshore pipeline will be very expensive investment. But anyway say LNG plant is built and say 80% of ultimate recoverable reserve is dedicated for LNG plant how does it harm Bangladesh. In this 80% significant portion will be Bangladesh share of gas which IOCs have to buy at international price.

IOCs will have to take Petrobangla approval for exporting LNG to any one and also about the price. Why Bangladesh can not be the export destination as Bangladesh is already thinking about LNG import in any case. IOCs will take about 9 years to reach that stage. By that time situation will change. Bangladesh may build LNG terminals and Regasification plants at Chittagong and Mongla to import LNG. Coal may become main source of power generation .Regional power grid may set up.

IOCs will invest their borrowed capital to risk ventures .Offshore drilling is always a gamble. There are chances to loose many and win few. If IOCs do not have required incentives then why they should come to a country like Bangladesh?

People have right to ask who are OGPPPC? Some identified agitators backed up by some parasite political parties. These satellite political parties can not win any election unless supported by major alliance. They cry for communism and socialism which is dead horse. Even our neighbours recently bade good bye to it.

This group agitated people of Phulabri and still trying to fan up trouble in mine belt. When major opposition BNP, Jamat and others are not telling anything why this group is opposing government efforts? It is due to the agitation of OGPPC energy crisis has reached at this stalemate stage.

What are their logic of of opposing commencement of exploration in our territorial water when India and Myanmar are doing it unchallenged. Are they not serving our neighbours cause creating impediments?

Our coal is sweet and almost sulphur free. Most of these are lying at mineable depth by surface mining. Resources under surface is owned by Government .If owners of surface are adequately compensated then who are OGPPC to oppose any move to mining in the most economic method.

Our neighbours dump polluting poor quality coal to Bangladesh which they even do not use in their country. If one travels along highway from Joydevppor towards Kaliakoir from November to April one can see how dirty coal is polluting our environment. Has anyone heard OGPPC talk about Environment pollution by using dirty imported coal? Intelligent people can understand what they are up to. These guys do not want Bangladesh explore most of its coal by the most economic method.

The OGGPPC program against government action must be dealt with properly.Peole must realise these are the people whom are serving b neighbours interest and not Bangladeshi interest. Bangladesh will not be benefitted by leaving 80% of its coal underground, Bangladesh will not gain anything if our offshore prospects remain unexplored and neighbours drain all.

Business communities, investors want Energy. Bangladesh can not come out of vicious circle of poverty if massive investment is not made. That is possible if Energy Situation improves, Energy situation will improve if we only explore and exploit our natural resources. We need IOCs and IPPs work here through transparent policies.

Many people shout on the street. But there are no reasons to listen to all as long as Government remains accountable to people through parliament.

Government must read the writings on the wall. People have started coming to the streets for power, gas . OGPPC type agitators’ will misguide them. These guys are Energy Criminals – modern version of War Criminals. They are no less responsible for the present energy crisis. Time has come for sufferers of energy crisis to resist trouble makers the agitators who are acting as agents of neighbours to oppose Government moves to explore and exploit our energy resources. These guys are empty vessel paper tigers.

Source:http://www.energybangla.com/index.php?mod=article&cat=SomethingtoSay&article=2036

Date: 30 August 2009, Bangladesh

Energy Sector Heading for Crash Landing?

EP Analysis

The elected government with massive mandate in the last general election spent almost 7 months in office. It is sheer irony that the government is still grappling with strategy for resource exploration to fuel power generation for sustained economic growth. The nation is suffering from severe energy crisis, power load-shedding. 

There are little or no reason to believe that the government is really serious about positively approaching in its efforts to revitalize almost non performing energy sector management when one reads the following news headlines of media.

• Petrobangla comes under JS body fire.
• Petrobangla gets hammered for not taking steps for exploration.
• Cabinet Committee sends back for fresh scrutiny oil, gas & metro rail projects.
• JS panel suggests speedy approval of coal policy.

These reports refer to lack of appropriate efforts of Petrobangla for exploration and development of potential energy resources, indecision of government policy makers to approve offshore exploration efforts of Petrobangla and protracted delay in finalizing coal (essential or non essential) to explore and exploit countries substantial coal resource.

Petrobangla is mandated to deal with exploration and exploitation of gas, oil, coal and other mineral resources. It works on behalf of Energy & Mineral Resources Division of the Ministry of Power, Energy & Mineral Resources. All its actions are seriously impacted by bureaucratic chain of the government.

The news headlines refer to two parliamentary committees — Public Accounts Committee headed by MK Alamgir MP and Standing Committee on Power, Energy & Mineral Resources Ministry headed by Major General (Rtd) Subid Ali Bhuiyan MP. The other news refer to indecision of Cabinet Committee for Purchase headed by Finance Minister M.A Muhith.

The country is suffering from serious power load shedding. Effective Power generation capacity now is about 3800-4000MW against daily demand of 5500MW. About 90% of power is generated from natural gas. Gas is also used for fertilizer production, industrial, commercial, domestic use and for CNG. Gas demand now is 2100MMCFD against which effective production is about 1800MMCFD. There is some apprehension that the proven gas reserve may deplete by 2015 if no new gas fields are discovered and brought into production.

It is also true that almost entire offshore and significant areas on onshore have not been explored yet. Even the known gas reserves have not been thoroughly appraised as yet.

Bangladesh possess about 3 billion tonnes of high heating value, low sulphur and low ash coal reserve in about 100Sq KM area in the greater Rangpur and Dinajpur area.

Bangladesh Awami League in its election manifesto declared that by 2011 it will add 1500MW new power and by 2013 another 3500MW. This means that by the end of their tenure the countries total power generation capacity would reach from 3800MW to 8800 MW. To achieve this it was expected that it had accomplished some homework. It is not out of context to consider that some policy makers read the draft coal policy and offshore exploration PSC.  But judging from present stalemate situation over coal policy finalization and hesitant attitude of the government to approve PB recommendation for engaging IOCs for offshore exploration it appears that there were very little or no homework done.

Government has spent almost 7 months in office.. The present situation does not give positive indication that government can achieve its election vision of adding new power to national grid. They cannot have required fuel; they can not complete installations of required power plants.

Parliamentary committee for public accounts has put Petrobangla on sword. But what Petrobangla can do without appropriate government support? Petrobangla has little role in signing lopsided deals with IOCs, Petrobangla has limited capacity to recover compensation from defaulters of blowouts. Why Parliamentary Committee dies not ask Energy Minister, Advisor to PM what happened to Enquiry Committee Report on Magurchhara blowout? How that issue was managed? Why Occidental was let off the hook when the PSC had provision for scraping their PSC for non-performing minimum obligation at the time of blowout?

PB had its limitations. It could not retain its trained professionals. Its capacity eroded over time due to massive brain drain. But did this government in 7 months perform any efficiency check? Did they engage appropriate professionals in key Petrobangla positions? What professional track records senior executives of PB have to manage PB in crisis period? Only experienced PB professional having extensive technical track record is sidelined in administration. Who is to answer this?

Petrobangla took appreciable initiative within its humble resources to update PSC for offshore exploration with professionals and assistance of international consultants. It was viewed and endorsed by notable lawyer Dr Kamal Hossain. The draft tender document and draft PSC got approval of the government. PB followed all recognized transparent route of tendering, tender evaluation and approval process. The caretaker government could have taken decision. Considering very aggressive exploration campaign of neighboring countries Bangladesh should have commenced its part much earlier. But the caretaker government lacked guts to take decision and left it for elected government. It took over 6 months for a advisor led government to take the offshore exploration PSC award case to cabinet committee to Council Committee after endorsement of PM as Energy Minister. But unfortunately it bounced off. Can one blame Petrobangla for it? Even if government takes positive decision soon on offshore exploration it will not be possible to get benefit in less than 7 years and that too depends on discovery of gas.

The only major option is to explore discovered coal resource. The coal exploration efforts are stuck in the quick sand of coal policy. When a country has Mines & Minerals act and Mines & Minerals rules why did we need coal policy? Do we have separate hard rock mining policy, gas policy or oil policy? Will we have iron policy, lime mining policy? How Barapukuria Coal mining could start with out coal policy?

If one checks the 9th draft of coal policy achieved after 4 years of struggle of non coal miners one can discover it is an extensive research paper having so much inherent conflicts and contradictions. Usually a policy is a brief concise document discussing energy security, investment and resource mobilization, implementation agency structure, impact management and resettlement and rehabilitation issues of mining. When we have mines and minerals acts and rules the initiative to formulate coal policy was to frustrate mining efforts which theoreticians could successfully do putting the nation in the present energy crisis. It is encouraging that parliamentary standing committee realizes the necessity for finalizing coal policy urgently and commences mining.

But one thing we must remember Bangladesh has almost zero capability of mining itself. It even does not have enabling core technical or managerial group to efficiently monitor activities of a world-class mining company. There is no opportunity to learn mining technology in the country. The only operating mine in Barapukuria is a technical and financial disaster.

Coal policy cannot dictate technical aspects of mining – like mining technique, mining methods, and rate of mining. Economics will dictate mining method. If the extent of the resource recovery justify investment of all require costs in a particular method including all cots of impacts management, relocation and rehabilitation of impacted community that method must be applied. Investor will have its own economics. It will have its own plan for recovering investment. No coal policy dictates what should be the rate of recovery. Once commercial coal mining starts it is impossible to change mining rate. Hence down stream local market must have capacity to absorb mined resources. Coal is self-burning.

We should also remember our coal has only 0.5% sulphur and very little ash. The coal, which is imported from across the border has much higher sulphur and ash content. It is polluting our environment while our sweet coal remains buried. Conspicuously the section of our civil society opposing mining does not object to import of dirty coal from neighboring country.

A media report also quoted Energy Advisor’s discussion with US Ambassador seeking technical help for coal mining. He reportedly said about challenges of strip mining given the fact the coal seams are at least 200m below the surface and extensive water pumping is required to reach there. He off course pointed out subsidence impacts of underground mining.  Modern mining technology can even reach much higher depth with appropriate water management. Water is considered as another mine resource, treated and is used for community supply, round the year irrigation and refilling the aquifer. Advisor possibly wants to train Bangladeshi professionals utilizing SARRIE resources. That will be extremely useful. But Bangladesh must immediately start mining education. Some smart boys and girls after HSC exam result must be offered scholarship to study mining engineering, mining technology on condition of serving Bangladesh after education and training.

Time is fast running out for the government. It will be impossible for them to reach anywhere near its energy sector vision if it fails to start coal mining and exploration for petroleum in a proper way by December 2009. For this they must evaluate the performance of present energy sector management without bias and engage truly committed professional to mean business. People with failed image and dark past record of hobnobbing with energy sector mafias will lead energy sector to further disaster.

Source:http://www.ep-bd.com/news.php?cat_id=10&archive=36&namee=ANALYSIS

Date: 01 August 2009, Bangladesh

OGPC’s Road March: What For?

Engr Khondkar A Saleque

The “National Committee to Protect Oil, Gas & Port” (OGPC) held a road march from Dhaka to Cox’s Bazar in protest against what it said the present democratic government’s bid for leasing out some offshore exploration blocks in the Bay of Bengal for petroleum exploration. The government has overwhelming peoples’ mandate to rule the country for five years. Obviously they are mandated to take decision for exploration and exploitation of natural resources for fuelling national economy. There are government organizations responsible for carrying out assigned tasks and there are well-documented approval procedures to handle such issues. The parliament is very much active to talk issues of national interest and elected representatives can any time raise questions concerning national interest.

The nation is now suffering from serious energy crisis, fuel supply crisis. At this moment all patriotic citizens must support government efforts to explore national resources and create power generation facilities without creating any unnecessary barriers. Bangladesh has unexplored gas and oil in the offshore. It has substantial volume of high quality coal at shallow depths in around 100 sqkm in onshore area. But, energy security of 150 million people is at stake.

When the nation needs to explore natural resources for future energy security the OGPC wants ban on open pit mining for coal. They want all moves to lease some offshore blocks to selected IOCs in the Bay of Bengal.  At a time when nation needs quick access to own resources the self-destructive actions of a certain identified group of vested interest must not be taken lightly. Conspicuously this group remain silent when legal and illegal means are taken to import dump ash coal in Bangladesh from a neighbouring country or when India and Myanmar encroach our maritime boundary. They even do not bother about subsidence impact of Barapukuria mining. They do not talk about wastage of 34000 crore taka in uneconomic venture of underground coal mining at Barapukuria.

Some so-called left leaning political leaders and some columnists have also joined the chorus. These politicians should try to win election and speak in the elected Parliament. In the backdrop of above let us discuss the situation in some depths.

Bangladesh proven gas reserve is running out although there should not be any genuine concern that our entire gas resource is going to be exhausted. Bangladesh is still the least explored country. Vast onshore area and almost the entire offshore remain unexplored. So far there has been no serious attempt to explore for petroleum in the deepwater. Most of our major gas fields like Titas, Habiganj, Bakhrabad, Kaillastilla, Rashidpur, Feni, Chattak and Haripur were discovered by international oil companies. Our own OGDC (now Petrobangla) and Bapex discovered some small gas fields. Then again IOCs discovered Sangu, Bibiyana, Jalalabad, Moulavibazar and Bhangura gas fields. Our own capacity was never grown to any stage that we could invest and explore for oil & gas applying modern technology. But at the same time there is no denial that no genuine efforts were made to professionally make our own companies competent.

Government of Bangladesh is not in a position to make significant investment in exploration and exploitation of natural resources. So it mostly relied on lending of development partners to develop discovered resources and IOCs to explore petroleum resources. Continued negligence to BAPEX has reduced the company now to a weak and sick company not capable to accomplish assigned tasks with required urgency. It can not carry out offshore exploration. We have no option but to engage IOCs for it at this stage.

We should have started offshore exploration at least from 1990s. But even two democratic governments since 1991 till 2001 did not take necessary initiatives. India and Myanmar carried out extensive explorations and discovered some major resources. Bangladesh started its efforts in late 2005. The draft PSC was updated professionally. Offshore exploration is a pure gamble. So any PSC document must have required incentives to attract IOCs. Updated PSC draft is still available in the websites. PSC document is not a document on which a Tom, Dick or Harry can make comment professionally. An elected government does not require to seek people’s opinion every now and then on all issues. In addition the political government has its responsibilities to implement its election pledges.

But, certain quarters are misleading people. It has been ensured that an IOC will be able to export 80 percent of its portion’s gas (not from the share held by Petrobangla) in LNG form only if Petrobangla refuses (which is highly unlikely) to buy it.

But, the OGPC is telling people that the IOCs will own 80% of the gas of offshore discovery. It is a deliberate misinterpretation of PSC provision; it is a propaganda to drum up peoples support. IOCs will offer production sharing split from 50%-80% to PB. IOCS will also offer its share of gas to PB. It is only if PB refuses to buy gas then  IOCs may export 80% of their share of gas in the form of LNG. In the present situation such situation will not arise as PB desperately needs gas.

It is a crime to misguide people. The road march of OGPC was not to serve people or country’s interest but to serve interest of neighbouring countries, which want to create barriers for our offshore exploration.

OGPC also opposes exploration of our own high quality less polluting coal in the most technically appropriate manner to extract maximum resources. They challenged Engr Mahmudur Rahman in 2005-06, they challenged Dr M Tamim in 2007-08 and now they are challenging Sheikh Hasina government. Who are they? Some paper tigers, some failed politicians, some parasites. Other than making sarcastic statements every now and then did they make any substantial contribution ever in the development of energy sector?

Bangladesh has five discovered coal-fields in greater Dinajpur and Rangpur districts. The mines actually cover about 100 sqkm. About 3 billion tonnes explorable coal are there which if properly mined can generate about 20,000 MW power for 25 years. For the energy security of 150 million Bangladeshis it is a massive resource. Modern mining methods adopted in many countries can perfectly address all myths and propagandas, can manage professionally all impacts.

Bangladesh imports polluting inferior quality coal from neighbouring country. This coal is seldom used even in that country. They dump it to Bangladesh, which pollutes our environment. Coal merchants and the beneficiaries make huge profit. Our self styled patriots of OGPC do not speak against them. If BAPA is so much concerned about environment then why they do not protest against import of dirty coal?

Source:http://www.ep-bd.com/news.php?cat_id=31&archive=36&namee=COMMENT

Date: 01 August 2009, Bangladesh

Khalashpir Coal Mine Project-Hosaf’s sketchy study raises questions

Govt spends $95,000 for review of study by ex-consultant of Hosaf

Sharier Khan

The techno-economic feasibility study for Khalashpir coal mine project by Hosaf Consortium has finally been trashed by a foreign consultant questioning the study’s scientific basis, methodology and raising a host of other questions, sources said.

British consultant IMCL in the first of its kind review of a coal mine feasibility study notes that there are fundamental geological issues regarding the Khalashpir deposit which the company must address before framing realistic and financially viable mining business plans.

The consultant found that Hosaf had done inadequate geological work and had deployed no accredited geologist for the job. Its study offered no detailed outline for environment or resettlement issues, and all these work should be done again before submitting such a study report.

The IMCL, which used to be represented by Hosaf in Barapukuria coal mine project from the nineties and had worked for Hosaf in the same Khalashpir project a few years back, was appointed a few months ago for such a unique review through a tender floated during the last caretaker government’s tenure. Interestingly, the Hydrocarbon Cell of the energy ministry that deals with oil and gas-related policy issues gave the appointment.

The cell last week made a presentation on the IMCL review to the energy secretary and formally submitted the full review to the ministry Sunday. Khalashpir coal field was discovered by Geological Survey of Bangladesh (GSB) in 1989.

The then BNP-led alliance government on October 11, 2003, secretly gave Hosaf the licence to explore Khalashpir coal zone in 2,500 hectares of land. Hosaf applied for mining lease for the area in the same year for mine development.

Hosaf does not have mining experience. The company in association with Shandong Ludi Xinwen Mining Group of China in July 2006 submitted the feasibility report to the Bureau of Minerals Development (BMD) with a plan to develop an underground mine. The report was prepared by China Jinan Mining Development Corporation engaged by Hosaf. During the study, Hosaf took help of Geotech-India, NamNam of North Korea, Geo-Mineral Engineering of China and IMCL.

Many officials and experts had then pointed out that the Hosaf study was a copy of that for Barapukuria coal mine project in which it acted as the local agent, questionably, for all the contractors involved. “The Techno Economic Feasibility Study was prepared mainly on the basis of Geological Survey of Bangladesh’s (GoB) geological reports published earlier and subsequent exploration work (no internationally acceptable standard was followed and the exploration activities were carried out without any kind of monitoring by the GoB),” one expert said.

The experts also questioned quality of the study and claimed that Hosaf had drilled only three boreholes to come to its conclusions. But the company claimed to have drilled 14 boreholes. Even Hosaf’s own claims do not stand as a strong basis for such a study as the feasibility study of Asia Energy was done on the basis of 108 such holes. Hosaf’s study remained shelved, but the BMD did not cancel its licence for Khalashpir coal zone. The caretaker government last year initiated the process of reviewing Hosaf’s study through the Hydrocarbon Cell. The caretaker government had awarded several power contracts to enterprises owned by Hosaf chief Moazzem Hossain, who is an accused in the sensational corruption case concerning Barapukuria coal mine.

Some officials expressed surprise that the government spent about $95,000 to pay IMCL for reviewing a private company’s feasibility study. “When Asia Energy submitted its study report, the government formed a committee headed by Buet Professor Nurul Islam to review that study. There was no cost involvement. But the Asia Energy study was much bigger and detailed that needed professional scrutiny. The Hosaf study is visibly a sketchy report,” noted an official.

Explaining why Hydrocarbon Cell was given such a job when it should have been done by the BMD, one source said, “ BMD did not have enough funds to carry out a review. Hydrocarbon Cell had some Norwegian donation.”

IMCL observations
Sources said IMCL in its review suggested that additional drilling should be carried out by a reputable and proven drilling contractor with modern and well-maintained equipment, who is qualified to operate in accordance with Joint Ore Reserve Committee (JORC), an internationally acceptable coal resource assessment code.

The review says previous boreholes that yielded unacceptable levels of core recovery should be re-drilled; an additional exploration must be carried out in accordance with internationally acceptable standards such as JORC utilising downhole geophysical logging in every hole as Hosaf drilled holes without logging; samples should be taken, logged and prepared as per JORC and supervised by a JORC- accredited senior geologist; analysis of collected samples should be undertaken by at least two accredit international laboratories observing the standard rules of analysis.

IMCL further says some coal samples indicate that coal at Khalashpir might have metallurgical coking properties and should be re-tested with fresh samples; underground mining would be preferred method of coal extraction particularly with respect to the surface environmental and social considerations; the Hosaf study’s production design parameters are out of date with respect to current longwall technology, or inappropriate to meet the overall production targets; spontaneous combustion and air temperatures are likely to be the dominant underground environmental issues which interact, and it is to be reflected in the design process.

The company should have made environmental and social impact studies for construction, operation and mine closure stages, and the relevant department has to consult the local people to consider problems threatening the environment in and around the mine, the review says. Further professional studies are needed to address hydro-geological issues including hydraulic conductivities and aquifer behaviours. There is no information about Acid Mine Drainage in the study, IMCL notes.

Mining subsidence impacts should be addressed during Environmental Impact Assessment (EIA) and engage the local population and all stakeholders in open discussions to ensure that land owners and workers are fully informed at all stages of project development and implementation; the surface layout of the study is based on Barapukuria mine surface facilities. Many of these facilities are unnecessary, IMCL observed.

Hosaf’s study
In its study, Hosaf claimed that Khalashpir coal reserve occurs at depths between 257-480 metres with an estimated total reserve of 451 million tonnes — proven 277 m tonnes and indicated 174 m tonnes. Of the reserve, seam I, II and IV are considered to have a potential for mining 277 m tons.

The IMCL review puts this estimate at 337 million tonnes for seam I, II and IV, showing that Hosaf’s assessment is grossly different. Hosaf suggested underground mining with initial production target of two million tonnes a year, which would be raised to four million tonnes in the 10th year of production.

Regarding underground mining risks and environmental impact assessment, the study said the spontaneous combustion and subsidence risks are high, including high methane emission and high underground mine temperature hazards. But it gave no details of management plans for the mining hazards and environment issues, stating ‘proposed damage and hazards, reclamation plan etc have been duly undertaken.’

Source: http://www.thedailystar.net/story.php?nid=100425

Date: 08 August 2009, Bangladesh

Phulbari Coal Project : Anu Vs NRB Expert – Part1

Phulbari Coal Project : Anu Vs NRB Expert – Part2

Coal, Not Gas, Is The Panacea For Bangladesh’s Energy Security

Hafeezuddin Ahmad

There is growing concern about power availability and energy security facing the nation. This is acknowledged by Awami League government in its Five Priority Issues. The following is an analysis of the current Power Generation scenario (2009) with respect to the two primary fuels — Gas and Coal.

What Is The Ground Reality?

• Generation of power is nearly 90% dependant on gas resource.
• Current gas supply is much short of demand. Several installed power plants are shut down; no new units will get gas; unless diverted from other users (fertilizer, industry, commercial, domestic).
• Gas resource is fast depleting. Unless new discoveries are made, gas will run out within 10 years. New discoveries and production from these, if any, are at least 5-6 years away. It would appear that the mindset is still to bank on this primary fuel. Why ?
• Extracting a bit of incremental gas from existing gas fields may increase current supply, but that would reduce the field’s life proportionately.
• Coal reserves in north-western districts are significant,  to last for several decades. Except for Barapukuria, it is perceived that government is not pursuing with a sense of urgency. Why?
• All new power plants should be coal fired. Our gas resource should be conserved for existing gas fired power plants. If significant discoveries are made in future, it could be used for more value added products i.e. fertilizer, petrochemicals and LNG.

What Should Be Done?

Coal mining must start immediately (in addition to Barapukuria), and construction of coal based power plants must start simultaneously, so that first coal would converge with first coal based power. The nation will have to cope with frequent load shedding, until in the interim, new power plants using oil or dual fuel (oil/gas) and strategically located, are set up urgently.   

Alternative Energy:

Clearly we, as a nation, must look at alternative energy sources. In the long term, renewable must be the answer, such as wind and solar. Whilst there are limitations (technical, safety and cost) in these areas, it is hoped that with future development and innovation in developed countries, which is going on with a sense of urgency, it would be possible to harness these for our future power need. There is also nuclear; government is in discussion for 1000 MW. We have already started on this path, and must persevere.

Power Generation 

Installed Power Plants

The current installed capacity is approximately 5551 MW, but the derated capacity is lower; estimated to be 5061 MW on 29-3-09 (due to plant ageing, wear and tear). Nearly 90% use gas as primary fuel. However, gas shortage,  plant maintenance and rehabilitation, have further reduced actual generation capacity. During March 09 average generation was around 3600 MW.  Demand is widely believed to range between 4400-4700 MW. So we are looking at 800-1100 MW shortfall.

To give an example, gas demand for power generation on 30-31 March 09 was 912 mmcfd, but only 745 mmcfd could be supplied, shortfall of 167 mmcfd (18%).  The maximum power demand (probable) on that day was 4600 MW. The maximum generation on 30-3-09 was 3803 MW,  so a shortfall of about 800 MW (17%). Consequently, load shedding was high. Interestingly, the highest ever generation was 4130MW on 17-9-07.  (source: BPDB-Petrobangla)

Pipeline Power Plants       

Over 1000 MW new capacity is supposed to be “under construction” during 2009/10, out of which 700 MW to be completed by June 09. However, all or most are gas based. How  will these be supplied with gas, when there is a net shortage already?  A net gas shortage does not mean there is shortage throughout the gas grid. If some of these units are located where there is already surplus gas or if additional gas can be produced from nearby existing fields, then well and good. However, if some units are in deficit locations, they would have to be converted, if feasible, into dual fuel (oil/gas) to be able to generate. This converted capacity would be added to the de-rated installed capacity as the “effective” capacity. If some units cannot be converted into oil, then they will have to remain idle until more gas is available. PDB can throw light on this.

Future Power Plants

New power plants (2000 MW plus “under process” and 1000 MW plus “new planned”) are envisaged to meet the projected demand under PSMP. It would be prudent to revisit such plans in the context of primary fuel availability.

What needs to be done ?

1. Unfortunately, the situation will not improve immediately so long there is a gap between demand and supply. Prudent load management can ameliorate the deficit situation.

2. Meanwhile there is urgent need to install new oil/gas dual fuel power plants to fill the gap between demand and supply (from existing plants and plants under construction plants which are converted into oil or dual fuel). (This exercise may already have been undertaken by BPDB-Power Division).

3. Maintenance and repair of all power plants must be given highest priority. This requires fast track emergency procurement of spares.

4. Conservation of available energy by mass scale use of energy saving bulbs; extreme prudence in the use of air-conditioners and national awareness against waste (switching off lights and fans whenever no one is around); maximizing day light timings in offices, shops and other public spaces.

5. Encouraging the use of captive generation in industrial and commercial entities by reducing price of generators and liquid fuels.

Gas Availability 

Gas Reserves, Demand and Supply

Bangladesh gas reserves are depleting. Production is unable to meet demand. Remaining reserves is estimated between 12-14 TCF (Proven 8.3 and Probable 5.5). This is likely to exhaust between 2015-2020. For example during 30-31 March 09, total gas produced was 1877 mmcfd, against normal demand of 2150-2200 mmcfd; so shortage was approximately 300 mmcfd (average 14-15%). Of this 745 mmcfd (39%) was to power plants, 206 mmcfd (11%) to fertilizer units, and 938 mmcfd (50%) to industrial, commercial and domestic consumers. (source Petrobangla). 

Gas based power generation

Currently, around 700mmcfd gas is supplied for power generation against demand of around 900 mmcfd, varying daily depending upon gas production, generation capacity of power plants, and diversion from other consumers. The fact is there is gas shortage daily. This inevitably results in reduced or no gas to some power plants, which were unable to generate to their operating capacity. The shortage would have been more; but for some power plants not operating due to maintenance and rehabilitation.

Increased effort for more gas discoveries

According to estimates from past surveys and studies (USGS and Norwegian Petroleum Directorate), there is 50% probability of Bangladesh having 32-42TCF undiscovered gas, and possibly more. Petrobangla is trying to increase production from its producing fields, and Cairns and Tullow are engaged in offshore exploration work (Blocks 16, 17, 18). All out exploration work is likely to yield positive result, given Bangladesh’s track record of successful drilling . (69 exploratory wells, 25 discoveries. 56 onshore exploratory wells, 22 discoveries, and 13 offshore exploratory wells, 2 discoveries). Despite the probability of some limited additional production from existing fields already, it would not be realistic to expect significant increase of gas production, what with Sangu depleting fast, and other unforeseen situations. The significant breakthrough would come only if new discoveries are made, unlikely before 2011, at the very earliest. Thereafter development and production would take another 3-4 years. So new gas, if any, is at least 5-6 years away.

What Needs To Be Done?    

• Petrobangla should ramp up its efforts to produce additional gas from existing fields. An accurate re-evaluation should be made of how much more may be reasonably expected in the next 3-4 years. Very close co-ordination is needed between Petrobangla and Power Division (BPDB), so that gas allocation and utilization is maximized. There should be no surprises. Power Division and Petrobangla’s accurate, regular and updated rolling status of pipeline projects is critical for calculating the capacity of the emergency new dual fuel oil/gas fired plants.
• Bidding for new blocks, and awards to successful bidders, should be expedited on an urgent basis.
• Cairns and Tullow should be encouraged to expedite their exploration program.   
• Bapex should become much more active, thus reducing dependency on IOCs for exploration and at the same time is more cost effective.

Coal Mining

Coal deposits

The north-western region of Bangladesh (Barapukuria, Khalashpir, Phulbari, Dighipara and Jamalganj) have an estimated coal resource of 3.3 billion tons, a third of which (in Jamalganj) is very difficult to mine due to being at depths exceeding 640 meters. The others are at shallower depths of 118-509 meters. Out of 3.3 bln tonnes of resource, about 962 mln tonnes are well studied coal deposits at shallower extractive depths. These are at Phulbari (572 mln tonnes at 150-240 meters), and Barapukuria (390 mln tonnes at 118-509 meters). The Khalaspir (143 mln tonnes at 257-483 meters), Dighipara (150 mln tonnes at 328-407 meters) and Jamalganj (1056 mln tonnes at 640-1150 meters) coal fields require further extensive studies for their commercial use. It may be noted that Barapukuria and Phulbari deposits have coal seam sections that are at very shallow depths, and therefore are the most feasible and viable for commercial mining. More coal field discoveries are expected with more exploration.

What Does This Coal Mean In Terms Of Gas?

In contrast to about 12-14 TCF proven gas reserve remaining, our coal deposit is equivalent to several times more TCF of gas, considering 1 TCF gas = 38 million tons coal (heating value).

To express this contextually,

• 3.3 billion tonnes north-western coal reserves (proven and probable) is equivalent to 87 TCF gas.
• 962 million tonnes coal (Phulbari and Barapukuria) is equivalent to 25 TCF gas.
• Barapukuria coal deposit is equivalent to 10 TCF gas.
• Phulbari coal deposit is equivalent to 15 TCF gas.

Bangladesh’s proven and probable coal reserve have huge potential. There are indications of more coal deposit discoveries in future.  There is also the extraction of co-products, such as rock, aggregate, clay, kaolin, and sand, all of which are economically useful.

Naturally, it is not possible to extract 100% of the coal deposit. This depends primarily upon the method of mining and techno-economic realities. In Bangladesh conditions of the discovered coal fields, open pit mining would allow 90% extraction, underground only 20%. Open pit mining, well tested and reliable technology, is prevalent in many countries.

The depth of the coal seam is important; the deeper it is, the more intense is the technology, cost, and safety. Coal at un-extractable depths may be used for producing coal-bed methane and coal gasification, although the technology of the latter is being pursued and improved in many countries…this is relevant for our deepest coal reserves. Overlying rock characteristics including location of the aquifers (underground water bearing rocks) are also important. Environmental concerns, hazards, land subsidence, and dewatering cost are important factors.

Mining is associated with social and physical issues, i.e. relocation of human population, loss of livelihood, relocation of infrastructure and other obstacles, land and traditional homestead loss. There are environmental issues i.e. effect on water bodies, forest, atmospheric emissions, ground subsidence, ground water, etc.

These concerns are not specific to Bangladesh…they are part of mining activity, encountered all over the world. With serious commitment, and partnership amongst the stakeholders i.e. government, affected population, and miners, they have been removed or mitigated. The economic benefit accruing to the nation is the over-riding factor.  

How Much Coal Is Needed For Power Generation And What It Means To The Nation?

This naturally depends upon plant design and capacity utilization. It is estimated that a 1000MW power plant will need between 3.0-3.5 million tons thermal coal annually. Clearly, several thousand megawatts can be generated from our coal resource. One way of looking at it is that only Phulbari deposit can feed five 1000MW power plants for 38 years, assuming mining capacity of 15 million tons yearly. So Bangladesh can comfortably shift to 100% coal based base load power generation, sustainable over several years. 

Globally, coal is the most abundant and least expensive energy source. It accounts for over 50% of US electrical energy, 20% of Canadian energy, over 65% of Indian energy and over 70% of Chinese energy.  Better technology, improved combustion, increased levels of scrubbing, filtering of flue gas etc have resulted in greatly mitigated environmental concerns.

First coal from new mining will take 4 years. It takes 5-6 years for the development of coal based power plants. So if the process of coal mining and coal based power plant construction is taken up immediately and concurrently,  it would not only be feasible to meet Awami League’s manifesto pledge by 2013 but also put Bangladesh to energy self sufficiency and security in the foreseeable future.    

Top Priority Focus to Shift Power Dependency from Gas to Coal

• Immediately throwing open the coal mining program (at present restricted to Barapukuria deposit only of 1 million tonnes yearly target), such that first coal from the new projects can start flowing within 4/5 years  (2012/13), by when the new coal based power plants would be ready. Parallel and simultaneous program to be undertaken to set up coal fired power stations.
• Private and private-public investments should be mutually synergesic and parallel in the development of such a program. Already concrete projects/proposals are with government from foreign investors (Asia Energy’s “Exploration & Mining” Contract with GoB , Tata, South Korean group).
• The advent of coal sector in the North West region should provide the engine for accelerated socio-economic development of Western Bangladesh (Rajshahi and Khulna divisions). This would include  development of infrastructure (roads, railway, port, and electricity), greater industrial activity, and access to improved education and health services. For this, an integrated and comprehensive Western Bangladesh Development Program is necessary; to be funded from pre-allocated part of the coal revenue inflow.
• Proper Collection and Use of Coal revenue: A transparent accounting system is necessary (source and application). There may be progressive and sound examples of such systems in developing countries, which are involved in mining.
• Coal Policy: Should it not be a component of the Energy Policy? Is there need for a standalone policy for coal? There is no standalone policy for natural gas. The Mines and Mineral Rules, 1968 (amended up to 2004) is a workable basis for regulating the sector, under the Bureau of Mineral Development. It may be further strengthened through amendments and/or new enactment.
• Private sector (national and FDI) policies and contracts need to be honored in the process. Overall nation’s interest, economic and socio-environmental aspects and adherence to global norms and practice should all be underlying principles and mutually complementary.  

Hafeezuddin Ahmad: formerly Resident Representative and Country Manager of IFC Bangladesh – the private sector arm of the World Group)

Source: http://www.ep-bd.com/news.php?cat_id=33&archive=29&namee=ANNIVERSARY

Date: 16 June 2009, Bangladesh

Posted in Phulbari-news, Power & Energy, coal | Tagged: coal, energy & power, Phulbari-news | Leave a Comment »

Coal mining issues spark fresh debate

Posted by phulbarinews on June 23, 2009

NRB expert’s comment irk colleagues; NRB panel advocates mining method on cost-benefit basis

Staff Correspondent

The local and non-resident Bangladeshi (NRB) participants of the four-day brain storming session on coal policy were irked by public comments of two experts against certain aspects of mining in Bangladesh. They said that their comments at a press conference organised by Bangladesh Paribesh Andolon (Bapa) and Bangladesh Environment Network Friday were aimed at discrediting the four-day session in which the two themselves had participated and contributed to the recommendations on the coal policy.

Only within a day after participating in the session, NRB coal expert and a member of the Environment Network Dr Khalequzzaman Friday at a press conference on the four-day session said that open pit mining was not ecologically friendly for Bangladesh. Another NRB environmentalist Dr Sarwat Chowdhury said coal could be exported if there is no way for it to be stored or preserved. This statement however reflects the outcome of the four-day session.

Other NRB and local experts who attended the four-day session said that Khalequzzaman misrepresented the discussions that took place at the Jamuna Resource on coal policy, land subsidence, resettlement and environment issues arising out of coal mining. “He gave an impression to the public that this four-day session was designed to legitimise open pit mining and coal export and they sat with the same group of people which is terming that session a grand conspiracy,” said a Petrobangla official who attended the Jamuna sessions.

“While the session was highly academic and focused, we had a lot of discussions with Dr Khalequzzaman and we had converged that the policy will not be bent on any particular style of mining. Instead, we recommended that the method of mining will be determined by cost-benefit ratio. In certain areas, underground mining method would be more beneficial for the nation, while in some other areas, open pit would be more beneficial,” he added.

NRB Saleque Sufi who is working on mines and minerals with Queens Monarch University said, “It was unofficially agreed among the NRBs that we would not make any isolated statement to the press.” “But contrary to the spirit of the group, Khalequzzaman Mohammad and Sarwat Chowdhury appeared at a press conference of a group which is agitating against mining in Bangladesh within less than 24 hours of the formal conclusion of the programme.” He noted that a leader of the National Committee to Protect Oil, Gas and Mineral Resources–that has been campaigning against any coal sector development–was present at the conference.

“As invited guests of Petrobangla and part of the group, normal courtesy demands that they should have consulted with Petrobangla chairman or at least the group co-ordinator before joining the conference,” he added. “NRBs in the brain storming session did not recommend any particular mining method but discussed in-depth all forms mining methods and associated impacts. It was agreed that mining methods would only be adopted after extensive feasibility study and on detailed cost benefit analysis. Yet within less than 24 hours of agreed position these two professionals from USA disowned the agreed position,” he pointed out.

Another participant noted, “This was not a discussion to give Asia Energy’s Phulbari project a go-ahead. But unfortunately some people are giving that impression.” “Some asked why did we meet at Jamuna resort. I ask how do you get people fully devoted to discussion and debates for four days if you don’t take them out from Dhaka?” he added.

Source: http://www.thedailystar.net/story.php?nid=93499

Date: 21 June 2009, Bangladesh

Water Management in Coal Mining Project: Case Study Phulbari

Zubayer Zaman

Water management is one of the major aspects of coal mining, specially for open pit mines. As Phulbari has been planned for open pit operation, its water management plan is a much discussed about matter. EP’s this issue cover report covers Asia Energy’s prepared detailed management plans for water management with adequate fund allocation and its clear commitment.

There is no arguing about the fact that Bangladesh has good quality coal at open pit mineable depth and has the potential to provide long term energy solution for the country. But the point is how Bangladesh would ensure safe and economic extraction of its coal resource against the experience of Barapukuria underground mine which represents a poor match of mining method for the type of thick coal deposits Bangladesh has. Bangladesh has an estimated reserve of about 2,500-3,000 million tonnes of coal but at mineable depth the amount is not more than 1,500 million tonnes as Jamaganj (>1000 million tonnes) is not considered technically and economically feasible as of today for mining for its greater depth.

This quantity of coal is pretty limited and maximization of resource recovery is a must (wherever possible) to attain long-term energy security for the country. Any wrong decision or selection of wrong mining method without taking into consideration of geological and hydro-geological reality of the coal basins will jeopardize the potentials of this sector. Barapukuria has become a very good example in this regard. Bangladesh can’t afford to leave 90% of its valuable coal resource beneath the ground as wastage only for choosing wrong mining method while the country has been in serious crisis of primary energy fuel.

Asia Energy Corporation (Bangladesh) Pty Ltd, the subsidiary of UK-based GCM Resources plc has proposed to establish and operate an open pit coal mine in Phulbari. Phulbari is one of the most well explored and credibly assessed coal fields in Bangladesh. Geological data revealed that it is the shallowest coal basin and ideal candidate for open pit mining. The proposed mine has the potential to recover more than 90% of the deposit, can deliver much needed coal at affordable prices along with other valuable co-products that will come out only as a process of open pit coal extraction. All the potential impacts associated with open pit mine development have been thoroughly assessed and management plans have been prepared with particular importance on water issues. Many of the Project documents are open for public, uploaded on Project website. It would be worth useful to look into the water management issues of Phulbari Coal Project as water management has been raised as a contentious issue for open pit mine development in Bangladesh.

Dewatering & Open Pit Mining

The overlying or underlying sediment and rocks of coal seams in a coal bearing basin may contain water bearing strata (aquifer). Open pit mine development in such situation requires dewatering and depressurization of the aquifers through continuously pumping out of water to keep the mine pit dry and maintain safe working conditions. This potentially lowers the water table within and outside the mining area and makes water inaccessible for many operational shallow and/or deep tube-wells within the influence area, mostly used for irrigation and domestic purposes. Therefore, efficient water management is a critical issue for the successful operation of an open pit mine as well as to maintain the existing water supply system to the environment and community. Open pit mining operation has been successful in different parts of the world including India, Germany, Australia, Indonesia, Greece, Thailand, USA, South Africa managing the overlying and underlying aquifer systems in complex geological and hydro-geological situations.

Underground water withdrawal is not uncommon in Bangladesh and widely practiced in Phulbari region to meet irrigation and domestic water needs. In Dhaka, some 6,480 million litres of water per day is being extracted from the underground aquifers. There are some 200 functional deep tubewells within 10 kilometres of the Phulbari mine site, and some 15,000 shallow tube-wells (STW). During the dry season, the deep tube-wells alone pump more than 1,000 million litres per day for irrigation purposes. The cumulative volume of groundwater extracted by the shallow tube-wells would be significantly greater (about 1,800 million litres per day) than the deep tube-wells. Barapukuria Power Plant and Barapukuria Mine also withdraw significant amount of water, some 78 million litres and 24 million litres per day respectively.

Hydrogeology of Phulbari

The sediment and rock in Phulbari basin contain both aquifers and aquitards that require dewatering and depressurization for open pit mine development. The main aquifer is the really extensive, Upper Dupi Tila Formation, some 100m thick.  It underlies the Madhupur Clay and is the main source of domestic and irrigation water in the Project area. 

Water Management Plan

All potential water issues associated with open pit mine development have been thoroughly studied and groundwater model has been developed for the Phulbari Coal Project. A Water Management Plan has been prepared to minimize the impacts of mining operations on the natural water balance of the region and offer benefit to environment and community. It is learned that experts from the vastly experienced and successful coal mining and power company, RWE of Cologne Germany, have checked various water issues especially the proposed water injection program and have been engaged to work with Asia Energy during the early years of the Phulbari Coal Project implementation to make the system full proof. Asia Energy has clearly affirmed its position that they have technical and management skills and commitment to manage all the water issues efficiently and adequate funds have been allocated to ensure it. The water management plan of the Project comprises many components, major issues include:

• Mine water balance 
• Dewatering system
• Mitigation works
• On-site mine water management
• Comprehensive water monitoring program

Water Balance

The mine water balance has been based on various climatic and major mine and community water demand operational scenarios over the life of the mine. For community requirements, it considers irrigation, aquifer injection and town and mine potable water demands. A mine water balance is complex.

The flow chart indicates that the Project will have excess water throughout the year.  During the wet season excess water will need to be discharged off-site into nearby watercourses. The amount to be discharged is not significant comparing to the bank full capacity of the local river courses.  During the dry season, there is sufficient water for:

• Irrigation for agriculture. 
• Aquifer injection purposes
• Water supply to Phulbari Township; and
• Water for riparian and downstream irrigation uses.

Dewatering

The groundwater level must be pulled down to create dry conditions in the mining area so that the generally low strength aquifer sequence materials (sands, gravel and clays) can be safely excavated.  Mine dewatering is usually undertaken for a variety of geo-technical (material strength considerations), mining and safety reasons. This is a well-proven way to maintain dry working conditions, prevent flooding and ensuring the stability of the mine walls and mine haulage road pavements.

Mine dewatering can be achieved in Phulbari by pumping continuously from a ring of dewatering tube-wells around the mine and on benches, and installing pumps in special sumps on the mine floor to remove any surface water. Computer modeling indicates that some 80 to 100 dewatering tube-wells are required at any one time to cumulatively pump some 6,000 liters/second (L/s) to achieve the target.

Depending on the geological and hydro-geological conditions around the mine site, mine dewatering will induce water level draw-down away from the pit. This may restrict availability of water to the surrounding community for irrigation and household purposes. A number of well-tested mitigation measures have been planned to manage the impacts, to make water available to the impacted community. Asia Energy is confident that the proposed mitigation works (internationally reviewed) will minimize the impacts and will offer benefit to environment and community.

Mitigation Works

Aquifer Injection

One of the mitigation works planned to control the impact of mine dewatering activities in the Phulbari area is aquifer injection. This involves injecting water from the dewatering operation into the Upper Dupi Tila Aquifer at around 5 kilometers from the pit. This hydrologically isolates the impacts of dewatering within and outside the injection. Experience shows up to 30% of water from the mine dewatering operation can be injected into the aquifer with this system.

Certain geological and hydro-geological criteria are required for the successful operation of an injection system.  This includes:

• An really extensive, thick, sedimentary sequence;
• The target aquifer preferably overlain by a confining layer; and
• A simple geological structure.

All factors and criteria are available at Phulbari. 

Aquifer injection is a proven technology and has been used successfully in many mining project in the world under strict environmental rules and regulations. For example, over 50 million metres3 of water per year is injected into 70 infiltration trenches and 150 recharge wells to protect wetlands near the Rhenish open cut lignite mines in Germany.  

Water Supply for Irrigation

Groundwater is the major source of irrigation water during the dry season and a substantial number of shallow tube-wells used for irrigation purposes will not be functional within the influence area of dewatering operation. Depending on the degree of water level draw-down and distance from the mine, reticulated water will be delivered to affected farmers by large diameter pipelines and trenches/canals from the mine dewatering system; or by construction of new deep tube-wells.  Sufficient water is available for the piped delivery system in the dry season (216ML/day) for two irrigated crops, thus allowing three crops per year.  Another advantage of this system is that the historical dry season water level decline will be ameliorated close to the injection bore field and shallow tube-wells (STW) will be able to operate for the whole irrigation season.

Water Supply for Domestic & Ecological Uses   

Groundwater is also the primary source of drinking water to the rural villages and township and Project must ensure safe drinking water to the affected households.  A reticulated water supply system will be developed to supply a portion of water from the mine dewatering operation to the affected households.  Deep tube-wells will be installed in isolated villages far off from the mine operation area to source water for reticulated water supply system. This will improve the water supply quality to the affected rural households.

Water may also need to discharge to surrounding water bodies from the dewatering operation to maintain current seasonal water levels and quality. Any surface water pumped from the floor of the mine will be treated to ensure it meets national water quality standards before releasing to the neighboring environment.

On- Site Water Management

The overall water management system philosophy is the preferential release of clean water for direct external use and to re-use treated dirty water on-site for mining purposes.  Water released from the mine site will conform to water quality discharge standards. On site water management for the Phulbari mine site comprises the following primary components:

• progressive enlargement and linkage of noise bunds, visual mounds, flood levees and the ex-pit overburden dump around the periphery of the expanding mine;
• in-pit water collection sumps and pump system to remove groundwater seepage and rainfall runoff to treatment/storage ponds
• rainfall runoff collection system from disturbed surface works areas (such as haul roads, ex-pit overburden dump, mine service areas) to detention and sediment basins;
• rainfall runoff collection system from undisturbed and rehabilitated surface works areas for release to watercourses outside mine bund areas;
• collection of drainage seepage from ex-pit overburden dump to treatment facilities;
• collection of sewage and treatment by facultative lagoons, then discharge to local wetland;
• collection of industrial liquid waste in a dedicated oily waste treatment facility;
• preferential re-use of ‘dirty’/treated water for mine purposes (dust suppression, plant wash down, landscape and rehabilitation, coal washery and fire fighting);
• controlled water volume and quality discharge from the site; and
• a comprehensive water monitoring program

Monitoring

Monitoring is the key to assess the impacts of mining operations and appropriate mitigation measures to be implemented to rectify the impacts. Asia Energy has developed a comprehensive monitoring system to monitor dewatering effectiveness, batter stability, aquifer injection performance, water chemistry, off-site discharges etc and to assess the requirement for local and regional mitigation works. A telemetric system for automatic ‘real-time’ measurement of key parameters (water levels around the mine, local and regional impacts; dewatering discharge and water injection volumes; water chemistry; etc) will be installed and operated 24 hours/day. In addition, a regular manual monitoring program will also be operational. 

Myths of Desertification Due to Dewatering

Desertification is the degradation of land in arid, semi arid and dry sub-humid areas resulting from various factors including climatic variations and human activities. Phulbari is not located in an arid to semi-arid environment and the concern for desertification doesn’t have any scientific basis. The proposed land clearing and deforestation at Phulbari will temporarily occur but will be progressively replaced by nutrient enriched topsoil and 1,946 hectares of forests. Low salinity irrigation water will be supplied to agricultural land and the Madhupur Clay will support vegetation during the dry season. Desertification does not occur in Dhaka City, where, with similar geology, some 75,000 L/s of groundwater is extracted and water levels have declined in excess of 50m. Signs of desertification do not appear at the Barapukuria Mine nor Power Station nor open lignite mines after 50 years dewatering in Germany. There is no single evidence in the world where desertification happened due to mine dewatering.

Conclusion

Water management is one of the major aspects of Phulbari open pit mining operation. Asia Energy has prepared detailed management plans with adequate fund allocation and has made its commitment clear that the company will deal with care the various water aspects of the Project and its incumbent technical and environmental risks.  All management plans prepared for any mining project is a living document as the case with Phulbari and are expected to be continuously reviewed and updated and measures taken accordingly. Despite having a comprehensive water management plan for the Project, people still have concern about the management of various water issues especially mine dewatering issue and its impacts on surrounding environment and community. Besides the Project Proponent, the Government has a role to play to eliminate people’s concern and to assure that all water issues are well addressed and well managed and mining operations are environmentally and socially responsive. An independent monitoring system can be developed with data reviewed by some of Bangladesh’s renowned hydro geologists or by a panel of national and international experts to ensure the impacts of water level lowering are being managed and the benefits of the abundant water supply are being delivered. 

Zubayer Zaman: Geologist

Source: http://www.ep-bd.com/news.php?cat_id=2&archive=30&namee=COVER

Date: 01 July 2009, Bangladesh