Pakistan’s acute energy crisis has affected each segment of society. In the summer season, frequent power outages crippled the lives of people when the gap between demand and supply was constantly increasing and the shortfall reached between 6,000 and 8,000 megawatts. In the winter season, the situation has become even worse due to a shortage of gas.
Natural gas meets 49 percent of total energy requirements in Pakistan. Due to the relatively lower price of natural gas and indiscriminate promotion of use of compressed natural gas (CNG) for the transport sector, the consumption of gas has substantially increased. Pakistan consumes all the indigenously produced gas — the Sui gas field in Balochistan is the biggest natural gas field in Pakistan — while the pace of developing new gas fields is slow. The increasing demand for gas by the domestic sector, transport sector and for power generation has created a demand-supply gap that has eventually led to massive cuts in gas supply to industry, the power sector and CNG stations but domestic users are the worst sufferers.
The energy crisis has been a major contributing factor for our slowed economic growth rate by negatively impacting Pakistan’s already meagre economy. Pakistan though, having the potential to meet its energy needs in general and to enhance power generation capacity in particular, has remained unable to utilise its indigenous resources to overcome the energy crisis. Apart from internal political differences among federating units for the development of indigenous resources, particularly hydro power projects, there are many other hurdles, naming a few as lack of foreign investment and financial sponsors, a precarious security situation and weak economy, which have hampered progress in the energy sector.
The energy crisis has not emerged overnight; increased urbanisation in a couple of decades indicated a huge gap in demand and supply. Apart from technical and political reasons, our decision making structure is equally responsible for the energy crisis. One of the major hindrances in achieving energy prosperity has been the lack of a coherent energy policy. Energy issues have been dealt with on a temporary basis while adopting a project oriented approach rather than goal-oriented approach. The best examples are the Independent Power Producers (IPPs) of the1990s and Rental Power Plants (RPPs) of the previous government. The IPPs enhanced power generation capacity by more than 5,000 MW but costly furnace oil burdened the people and created a price hike; as far as the RPPs are concerned, due to lack of transparency, these only resulted in wastage of public money and gave rise to controversies. Though unable to utilise indigenous resources, it is imperative to explore viable regional resources to meet the haunting energy challenge.
Pakistan has been cooperating with Turkey and China in the energy field. Pakistan and China have a decades-old collaboration in the field of renewable energy, especially in developing hydropower projects in Pakistan. They hold regular meetings of the Pakistan-China Joint Energy Working Group to decide the future course. These initiatives are useful but, given Pakistan’s dependence on natural gas and the shortage of indigenously produced gas, Pakistan has been negotiating with states to import natural gas to meet the increasing demand. In this regard, the Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan (IP) are two proposed pipeline projects.
TAPI is a gas pipeline project that the government has considered seriously but, given the complexity of issues involved in the actualisation of the project, the future of TAPI does not seem promising. The precarious security situation in Afghanistan and the uncertain post-2014 withdrawal scenario pose questions about the ability of the Afghan security forces to guarantee the security of the pipeline. Apart from security considerations, India-Pakistan rivalry may have a negative impact on the pipeline project as it has been the case in the Iran-Pakistan-India (IPI) pipeline project. These factors make TAPI a less attractive option in the near future.
The much debated IP gas pipeline project, since its inception, has been mired in controversies. Starting with the Indian refusal to join the project, the uncertainty regarding applicability of US sanctions on the pipeline project, Pakistan’s concerns over the price of gas and political transitions in both states have stalled the project so far. The IP project, if it materialises, presents immense opportunities — in addition to meeting Pakistan’s energy needs it has the potential to transform the geopolitical landscape of South, West and Central Asia by developing networks of regional connectivity.
Pakistan needs to develop indigenous resources on a medium and long-term basis but these gas pipeline projects can be adopted as short-term solutions to the energy problem as these would considerably contribute to Pakistan’s energy mix and help sustain the economic growth hampered by energy shortages.
The writer is a researcher at the Islamabad Policy Research Institute (IPRI)