Thursday, October 25, 2007

The coal debate

By M Inamul Haque*, NewAge, October 25, 2007. Dhaka, Bangladesh

BANGLADESH has tremendous renewable energy sources in the form of wood (65 per cent of the total energy consumed), generated annually on its surface through the growth of vegetation. This is because of our fertile soil, regular rainfall and the energy of sunshine consumed by the plants together. The sunshine also consumed by the animals, directly and indirectly in many ways is difficult to quantify. The energy of wind and water currents in the rivers and seas consumed by the ecosystem supports our economy in many ways but is never quantified.

The non-renewable energy we have in the form of gas, oil and coal lies underground. These, if not extracted, remain stored for the next generation. However, the rate that we are consuming gas now, it will finish by the year 2014 unless new reserves are discovered. Discovery of oil has not been significant. The coal reserve is 2.7 billion tonnes, of which just about 1.4 billion tonnes is recoverable. However, the policy as regards how to extract and use it remains debatable.

Bangladesh has peat coal in the northeast haor and southwest beel areas, a few metres under the surface. There the poor people spend their days digging soil in the hope of extracting a chunk of coal and selling it for their living. This coal is not commercially feasible for extraction by companies who seek to make a pound spending a penny. These companies want shares, investments, contracts, markets and monopoly. They were in a similar action in Phulbari to dig a few hundred metres to extract our black gold.

Bangladesh is mostly a plain land of alluvial soil, deposited by the rivers since at least six million years past (the Late Miocene Age). From the groundwater model of Bangladesh shown in Figure 1, the layers over the Gondwana Hardrock basement are the Lower Dupi Tila, Upper Dupi Tila, Dhamrai Clay and the Barind Madhupur clay formations. These alluvial formations from the Permian to Holocene age of present time are about 300 metres deep in northwest Bangladesh, whereas in the coastal areas it is about 20 kilometres deep.

From the geological and hydrological sequence given in Chart 1, the Pre-Cambrian formation is the oldest igneous and metamorphic rock basement (570 million years past), upon which all the sediment formations of later ages lie. The Pre-Cambrian basement comprises of granite, granodiorite, gneiss and schist. This formation is accessible at Madhyyapara of Dinajpur at about 150 metres below the surface. The Permian Age (245 million years past) is next, when the Gondwana mudstone, coal and sandstone deposited. This formation is accessible near Barapukuria and Phulbari of Dinajpur at about 300 metres below the surface.

The secondary Permian Age Gondwana coal was discovered first in 1959 in Bogra at a depth of 2,381 metres. In 1961, the Jamalganj-Paharpur deposit of 1,050 million tonnes was found, but it is too deep to mine. In 1962, the Tertiary Age ligno-bituminous coal was found in Takerghat-Baglibazar area at a depth of 45m to 97m. The beds are 0.90m to 1.70m thick and reserves were estimated at 3 million tonnes. The Gondwana coal was found at Barapukuria in Dinajpur in 1985, Khalaspir in Rangpur in 1989 and Dighipara in Dinajpur in 1995. According to a feasibility study, the Barapukuria mine had a reserve of 390 million tonnes, 70 million tonnes of which is recoverable at depths ranging from 118m to 506m. Coals in Khalaspir and Dighipara (406m below surface) are at similar depths. In 1997, the Phulbari coal was found at about 150m below the surface (Banglapedia).

The mining at Barapukuria started with two 6m shafts of 280m depth to extract one million tonnes of coal a year, of which 80 per cent was to be consumed for a 300-megawatt power plant. By the time the Petrobangla/Power Development Board started the power plant, the Barapukuria mine was redesigned to a production capacity of 500,000 tonnes (50 per cent less than before) and the cost of coal production doubled (from $35 per tonne). It was found that the project had actual IRR 13 per cent. However, to make it viable, it was shown 39 per cent in the feasibility study by fictitious projections and investment that never took place. The project cost rose from Tk 887 crore to Tk 1,600 crore. According to the Daily Star report of September 15, 2006, the Barapukuria coalmine was made the nation’s liability.

The Barapukuria coalmine has become a quagmire where hundreds of crores of taka from the government exchequer is draining down (Tk 600 crore by August 2007), with little possibility of good return. According to its first project proposal, 60 per cent of the coal was extractable, but now it has come down to 20 per cent only (The Daily Star, September 7, 2007). It is the depth of the coal reserve (too deep underground) that makes it hard to be a profitable mine. However, the promoters of the coalmine project at Phulbari wanted ‘open pit’ excavation there, blaming the ‘shaft method’. The Phulbari coal lies at a lesser depth but not less than 300m on average.

Figure 2 shows the variable depths of Phulbari coal lying under the Dhupi Tila formations. Open pit mining shall have to remove tertiary age alluvial deposits of 150-300 metres depth, and then secondary age sandstone deposits of 100 meters depth to reach the coal seams. It shall be an unprecedented operation, removing soil of about 30 square-kilometre area to the depth of 300 metres on average. Open pit mining is only feasible where the coal lies near the surface. The coal there then extracted removing the topsoil in strips. The extracted pit filled back by the removed soil of previous pit. Being too deep at Phulbari, ‘open pit’ excavation and removal of the coal by strips (as in Germany) is not feasible here, technically. Moreover, the Phulbari ‘open pit’ operation shall need to dry up the entire 200-metre deep Dhupi Tila aquifer, which shall have depletion effect to subsoil water of about 500sqkm surrounding area. People in the locality were reasonably just in their opposition and agitation, as any sort of rehabilitation programme would be a mess, people would have to migrate. The remaining people after the mining would have to survive in inhuman condition around a poisonous lake with their cultivable lands devoured and distorted forever.

In my understanding, investment has now become a corporate gamble than an investor’s liability. As most of the investors in the corporate capital do not have direct knowledge of the daily proceedings, a mastermind in the game can extract profit even from a loosing company at any time. The corporate company behind Phulbari coal has already raised capital from the market, whose share value has halved after increasing tenfold. The company showed improper documents to the government to keep authority on the project. However, after strong resistance from the locals the project prospect is now bleak.

Figure 3 shows the location of the Barapukuria coalmine, Madhyapara hardrock mine and the proposed Phulbari coalmine area. The Phulbari mine would cover a large part of the Parbatipur, Nawabganj, Birampur and Phulbari upazilas. Having the worse experience of shaft mining at Barapukuria, people could not accept the open mining option at Phulbari fearing loss of no bound. Shaft mining does not displace people but it causes pollution to the streams by acid mine drainage. In absence of proper treatment facility for the acid mine waste, the rivers and wetlands around Barapukuria are severely polluted and toxic.

The proposed coal policy of the government is now open to the public for debate. For Phulbari coal, the government had reduced its royalty share from 20 per cent to 6 per cent only, with the rest allowed to export. This raised strong objection from energy activists in the country. Now the pertinent questions of why should the ownership for the people should not be 100 per cent and why export should not be an option until and unless there is enough to meet the domestic demand for the next 50 years remain unresolved. The search continues for technically, socially, economically and environmentally suitable methods to make the coal mining beneficial to the people of Bangladesh.

*M Inamul Haque is director general of the Water Resources Planning Organisation