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Coal in Phulbari, Birampur – Economy and Politics – 1

Posted December 12th, 2009 by |

Coal in Phulbari, Birampur – Economy and Politics.

Coal is the most highly used source of energy for generating power in the world. Although, it has adverse environmental impacts, it is so widely used mainly because it is relatively cheap, abundantly available and readily fits with traditional power generation technologies. It is extracted from mines using both underground and surface mining techniques – either of them having advantages and disadvantages. Surface mining methods (i.e., open pit, strip or mountain top) are implemented in areas that are remote from human habitations and civic amenities (e.g., mountainous regions of British Columbia, Canada). In surface mining a larger proportion of deposits can be commercially extracted compared to underground mining. But, surface mining severely alters the landscape, which damages environmental value in the surrounding land.

Bangladesh has small coal reserves, and has consumed little coal in the past. Bangladesh began commercial coal production in April 2003 with the opening of the Barapukuria Coal Mine, which is expected to produce one million short tons of coal per year (Mmst/y), principally for electricity generation. This mine is being used to fuel the 250-MW Barapukuria Coal-Fired Power Plant in Parbotipur, which began commercial operation in January 2006. Another possible coal mining project at Khalashpir is under consideration as well.

Despite Bangladesh’s small reserves, the government has recently promoted the development of coal to ease its reliance on natural gas for power generation. Although estimates vary, Bangladesh’s Energy Ministry judges that the country has up to 3.3 billion short tons of high-quality coal reserves. Energy value of it is 35 -40 TCF gas.

Coal Mining in Bangladesh

During the last few years several high quality deposits of coal have been discovered in the northern part of Bangladesh which spends a big part of its foreign exchange earnings for importing oil. It has about 6.5 tcft proven and probable deposit( 2009) of natural gas which is being rapidly consumed for power generation, industrial and domestic use. Therefore, the government wants to utilize coal for power generation in order to reduce dependence on natural gas. A list of locations with their known coal reserves is given in Table 1, and their relative locations are shown on the map of northern Bangladesh in Figure 1. The coal mine in Barapukuria is already in operation and it supplies about 3000 tonnes of coal per day to a nearby 250 MW power station. This is an underground mine using shaft technology and therefore did not require relocating local inhabitants. However, debate is going on about the development of the other mines regarding the use of appropriate mining techniques. If open pit method is eventually selected (as suggested by Asia Energy) for the Phulbari coal mine, about 50000 inhabitants from the area would have to be relocated.

 

 

Coal Fields in Bangladesh: Reserve Data

Proven + Probable Reserve(mil.Tones

Proven Reserve (million tones)

Depth (meters)

Year of Discovery

Location/Field

390

303

118-509

1985-87

Barapukuria (2)

685

143

257-483

1989-90

Khalashpir (3)

572

572

150-240

1997

Phulbari (1)

1053

1053

640-1158

1962

Jamalganj (4)

600

150

328-407

1994-95

Dighipara (5)

Source:Bangladesh Govt. Website-https://www.petrobangla.org.bd/Final_coal_for_web1.pdf

 

Coal deposit locations in Phulbari and Jamalgang

 

Financing coal mining.

Bangladesh’s coal reserves have so far not been developed, mainly owing to a lack of domestic financing. To attract investment, the government has opened the coal sector to foreign bidding.

In July 2005, UK-based Asia Energy Corp. (AEC) submitted a proposal to develop a coal mine in Bangladesh’s Phulbari region. According to a Scheme of Development and Feasibility Study submitted to the government, AEC declares that the Phulbari site contains an estimated 572 million short tons of recoverable coal reserves. The initial investment in the project would be $1.4 billion, and the open-pit mine is expected to produce 15 Mmst/y of coal to fuel a planned 500-megawatt power station.

Extraction of coal and environmental debate.

 As proposed by the Swiss based Berne Declaration and the Bank Track network, the Phulbari Coal mine is “open cut” meaning that between 140 and 300m worth of earth will need to be removed to access coal seams deep under ground. Some 50 000 residents will need to be relocated, potentially reaching 200 000 should full scale expansion plans be realised. Extensive damage to the UNESCO declared world heritage site Sundarbans mangrove forest, the largest single block of mangrove forest in the world, is also expected from port facilities. Energy production from coal poses substantial impacts on climate change, and is also inappropriate at a time when Bangladesh is appealing to the rest of the world to curb greenhouse gas emissions.

 According to the Feasibility Study submitted by Asia Energy, up to 40,000 people would gradually be relocated away from the Phulbari area that currently live on or near the planned mining locations.

What are the expert’s views

  A geology professor of Dhaka University, Badrul Imam, told the following at a meeting –

  • that the amount of coal in the country was very limited and exclusively situated in two northern districts, Dinajpur and Rangpur.
  • ‘If you consider our entire coal reserve, which is around 2,500 million tonnes, with the Raniganj coal field in West Bengal that has a reserve over 22,000 million tonnes, you can surely see how limited our coal reserve is,’ he said at the meeting of the committee.
  • that the country would face difficulties in both underground and open-pit mining in Dinajpur and Rangpur because of presence of a layer of water over the layer of coal.
  • with regard to open-pit mining, that this method would be difficult and have adverse effects because of the tremendous land shortage and the extreme density of population.
  • ‘One can imagine what will happen by 10 to 15 years if two or three open-pit mines are operated in Dinajpur and Rangpur districts. The population of the districts will increase but not the land,’ said professor Imam. The Daily Star
Professor Anu Muhammad, member secretary, National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, Bangladesh interviewed on camera by Shahidul Alam appears in Meghbarta – online magazine on 17th October, 2009. (Questions not relevant to coal, left out)- Admin – dinajpurbd
 
Shahidul Alam: It is alleged that you and the others are preventing the extraction of coal and the search for gas. How then do you expect the nation’s fuel and electricity problem to be solved? Anu Muhammad: These statements are often put forward as part of the anti-movement propaganda. We are not opposed to the extraction of gas or coal. On the contrary. Our point is that these resources are limited, they are non-renewable, hence it is essential that their control should reside in the people of Bangladesh, that they should be extracted through environment friendly methods, that they should meet the electricity and fuel needs of the millions of Bangladeshi homes which need it the most.

In other words, the process of extracting Bangladesh’s natural resources—whether gas or oil or coal—should begin only after we know for certain that the last drop will be used for the benefit of Bangladeshis and not for the benefit of multinational companies (MNCs) and their national accomplices. Their motive is to plunder and make lots of money through exporting it, of course, they call it “development.” To phrase it differently, our movement aims at ensuring people’s control over national resources, these belong to the people, these should be used for industrialisation, for agricultural production, and for the fulfilment of people’s electricity and fuel consumption needs.

S A: Other countries in the world enter into contracts [similar to the PSC model in Bangladesh] for the extraction of oil and gas. According to government sources, we have neither qualified personnel nor the necessary technology, but the National Committee is creating confusion among the people—what is your response to this?

A.M: It’s not correct that all countries enter into similar contracts. Look at the US. Its own gas and oil reserves are lying beneath its soil, untapped, while it lords over the oil, gas and coal wealth of other regions, while it wages wars against people, while it occupies the lands of others, while it does as it pleases.

And then you have the African countries. As a continent, Africa is the richest in natural resources but it’s people are the poorest and it is the most violence-ridden. These two facts are inter-related and it is this that has made the continent a victim of multinational companies and imperial domination. MNCs have been present in various African countries for the last hundred years or so but these countries have not gained freedom from poverty, nor have they gained control over their natural resources. On the contrary, a country like Nigeria, rich in oil resources, has exported vast quantities of oil abroad. Its oil wealth has led to the creation of a corrupt group and the increase of authoritarianism and poverty. This is a picture from Africa.

You will see different pictures elsewhere, for instance, if you look at China, or Malaysia, these countries have built up their own institutions and have asserted national control over their resources through these institutions. A different kind of example exists in the case of Venezuela and Bolivia. These countries were earlier like African countries but are now working towards building a future on the basis of political consensus and popular will, they are trying to exercise control over their natural resources. And while attempting to do this, they are forcing the foreign companies to agree to their terms and conditions, to sign new contracts with them. If the companies do not agree to this, they are kicking them out.

If any country wants to maintain control over its natural resources it needs the political will, and it needs to develop the institutional and technological skills. What [the Bangladesh government] keeps saying is that we do not have the technology, we do not have the skills. Well, obviously this does not develop overnight or fall from the skies. That is not how it happened in the case of those who are lording over the world now. If any country keeps repeating ad nauseum for decades on end that they have neither the skills nor the technology, obviously, that country has no future. What these powers do to occupy a nation is, you see this if you look at world history, they cultivate feelings of inferiority among the people, and if you keep thinking `we can’t do it,’ then you are likely to end up believing it. And the other thing that the powerful do is to make the nation’s rulers corrupt. Both these things have happened in Bangladesh.

[Besides demanding that Bangladeshi people should have control over the nation’s natural resources] our movement also aims at freeing people from this inferiority complex, from this invasion. It aims to make people think positively, to think that it is possible for the people of Bangladesh to assert control over its resources, to develop the skills needed. It is control that is most important—it is that which needs to be ensured—once you can ensure that you can always employ people with requisite skills from abroad, or you can seek the assistance of friendly neighbouring nations, those who sincerely want to help us.

But the present trend of handing over control of natural resources to multinational companies, if this trend is not reversed, we will end up like Nigeria. If we cannot stop it, our resources will be used by the MNCs, they will profit from our resources, and we will not be able to get out of this intolerable situation, that exists in Bangladesh now.

S.A: The model PSC (Production Sharing Contract) 2008 had been on the website for a year. Why didn’t you comment on it then or advance any programme?

A. M: It’s not true that we didn’t say anything then. The PSC 2008 model was designed during the caretaker government regime. It was uploaded on the net to facilitate international bidding, not to elicit comments or responses from members of the public. It is not as if bidding proceeded after comments were incorporated. Not at all. It was made available on the net to facilitate the bidding  of multinational companies. We began talking about Bangladesh’s maritime boundaries from 2007 onwards. It is of utmost importance that these boundaries are fixed. If this is not done we will end up losing control not only over our offshore  natural resources, but over maritime territory as well. Secondly, Bangladesh is still suffering as a result of PSCs signed earlier. Bangladesh’s maritime territory has been divided into 28 blocks, if gas exploration is carried out, and if gas is found and extracted from these blocks, we will be worse off. We need only 200-300 crore taka annually to make Bapex—a national institution—strong. It is absurd that the Bangladesh government does  not have this amount of money, that it does not have the 75 crore taka to buy oil rigs, but that it can spend 3,000 crore taka in subsidies each year to buy gas from foreign companies, that the government is then not short of money. Strange, huh?

It is because of the PSC that instead of economic development taking place, we are going through this big crisis, and the price of gas and electricity has increased which has had a terrible impact on the economy as a whole. People are deeply worried about the rise in prices, and one of the main reasons for this rise is the oil-gas contracts. And that is why we [the National Committee] have insisted that history should not be allowed to repeat itself, that only such PSCs should be entered into which has the consent of the people. Third, we have calculated and found out that to ensure energy security for Bangladesh for the next 50 years—even at an estimated annual growth rate of  6%—we need 110 TCF gas. At present Bangladesh has 7-8 TCF gas.If we calculate the energy value of our coal it stands at 35-40 TCF gas. This means that in order to gain access to the needed 60-70 TCF gas we will have to rely fully on the Bay of Bengal reserves. And this is why—because we want to ensure energy security for Bangladesh for the next 50 years—we cannot afford to enter into export-oriented contracts. Foreign companies will always exert pressure for the inclusion of export clauses because selling energy on the international market reaps them bigger profits.

S. A: One comes across the claim in different newspapers that if the National Committee had not waged the  movement against the extraction of coal in Phulbari, our electricity problem would have been solved by now. How do you respond to that?

A. M: This too is incorrect and is part of the propaganda against our movement. If coal extraction had begun, say, if there had been no resistance in 2006 and they had begun extraction in 2007, they would not have reached production stage until 2014-15. And very little of the coal extracted would have been used for electricity production within Bangladesh. Hardly any. Seventy five to eighty percent would have been exported abroad.

In the case of Phulbari coal project, 94% ownership would have been vested in the hands of Asia Energy, Bangladesh would have only 6% royalty, and she would have to build quite a lot of infrastructure with that royalty money. These would include rail lines for exporting coal abroad, building rail lines from Phulbari to Mongla. Our point is that Bangladesh would not have exercised control over the coal that was to be extracted, neither would its export have benefited us financially. On top of everything, the method of coal extraction would have greatly harmed cultivable land in that area.

This area in Dinajpur is very fertile, it is also free of natural disasters. It is one of the areas which steadily supplies food crops to Bangladesh. Also, it is less poverty-stricken than other areas in the north. The steady supply of food would definitely have closed down if the cultivable land had been destroyed, which of course is what happens in the case of open pit mining. Secondly, one of the renewable resources that Bangladesh is blessed with—and in vast quantities—is water. Open pit mining will adversely affect both surface-level and underground water resources. Underground water levels will surely fall dramatically. The loss of productivity of cultivable land and the destruction of people’s livelihood will directly affect a few crore people in Bangladesh. Desertification is sure to occur, and along with it, pollution of surface level water as well. It is not correct to view Bangladesh’s water resources as inanimate. Water is living matter, it sustains life and modes of living. The pollution of water will create problems in our drinking water, it will also affect our fish resources, and the diversity of life that exists in our ecology.

We lost lives in Phulbari. The tremendous resistance which took place in Phulbari is not only a great inspiration for the people of Bangladesh, it is so for people the world over. It has protected the nation from incurring great losses and destruction. These projects of “destruction” are termed “development” projects by the government, by the MNCs and the World Bank, the Asian Development Bank, and by their consultants. The peoples movement has revealed very clearly that these programs for development are nothing else but programmes of death and destruction.

There are many people who cry crocodile tears, who repeatedly say that if MNCs cannot make any profit then why should they bother to come to Bangladesh! Our argument is simple: it is the people’s needs that must come first, all plans should be built around this basic fact. The World Bank, the IMF, the ADB, the US embassy, the Indian High Commission or India-Myanmar-China-United States, the idea that we should turn over our country to them, to protect their interests, that our people should be sacrificed for their interests is absolutely absurd. Unless a big change is effected through this political struggle no real change or development in Bangladesh is possible. What we are saying is: real change is essential. Real change is possible. It is our movement that makes the difference.