Mineral Development
Figure 9. Economic Activity, 1988
Natural Gas
One of the country's few mineral resources is natural gas, which is the basis for nitrogenous fertilizer production sufficient to meet the country's needs. Estimated national reserves range from 182 billion to 623 billion cubic meters. Deposits lie in more than a dozen different locations, six of which were producing in 1986. The country's gas production is concentrated in the northeastern part of the country (see fig. 9). Reserves also have been discovered offshore, but extraction is not yet cost effective.
Total gas production in FY 1986 was 2.9 billion cubic meters, with production rising at least 10 percent per year. All production was consumed domestically. About 40 percent of production was used for generating power, nearly 40 percent for producing fertilizer, and the rest divided among industrial, commercial, and household uses. Even by conservative estimates of reserves and consumption trends, the supply was expected to be adequate for Bangladesh's requirements through the year 2030.
Coal
In western Bangladesh there are substantial proven reserves of coal, but they remained unexploited in the late 1980s, largely because of the absence of major prospective users in the area. The options of constructing a large coal-fired power station or exporting coal to India were being considered in the late 1980s.
Petroleum
Bangladesh holds unknown quantities of commercially exploitable reserves of petroleum, both on land and offshore. In December 1986, oil was discovered in the Haripur gas field, south of the city of Sylhet, in northeastern Bangladesh. Lucky Well Number Seven promptly went into production at the rate of several hundred barrels per day, the first commercial oil production in Bangladesh. The crude was shipped by rail to the Eastern Refinery in Chittagong, where it was combined with other lighter imported crude oil for refining. The Eastern Refinery had been operating at just 66 percent of capacity and processing 34,000 barrels of crude per day. The domestic addition did not in itself have much of an impact on energy use in Bangladesh, but it was a beginning that fed hopes for further development.
In the late 1980s, the Bangladesh Oil, Gas, and Minerals Corporation was carrying on further test drilling in western Bangladesh as well as in the vicinity of the successful Haripur strike. The government formed a high-level committee under the minister of energy and mineral resources to formulate recommendations for stimulating oil exploration and extraction in Bangladesh. In 1987 the Soviet Union reportedly agreed to provide assistance for oil exploration, a broadening of its traditional cooperation in the field of power generation, transmission, and distribution.
Electric Power
Electric power is generated by a hydroelectric complex in the Chittagong Hills and thermal plants in Chittagong and several locations in central and western Bangladesh. In 1987 the government announced its intention to proceed with construction of its first nuclear power facility, having concluded that the country's long-term needs could not be met by continued reliance on natural gas reserves. They did not announce how the project would be financed, but West Germany was considered the most likely source. The country's total generating capacity was 1,141 megawatts as of 1986, and the proposed nuclear plant would add between 300 and 400 megawatts.
Electric power outages and restrictions on peak-period consumption were a serious problem in the mid-1980s, resulting in substantial productivity losses for jute, textile, and other industrial concerns. Government and power board authorities worked out a strategy of planned brownouts and shutdowns, which were distributed geographically as equitably as possible to minimize economic disruption. Some industrial concerns adopted off-peak work schedules, operating their factories in the middle of the night instead of in the daytime.
There were also substantial losses in the transmission and distribution of electric power, including many unauthorized hookups to the system. The urban distribution system found it difficult to persuade subscribers, including state-owned industries, to pay their bills. In contrast, the system of rural electrification cooperatives, established in the late-1970s with assistance from the United States and other donors, and gradually expanding since then, has demonstrated that it is possible to deliver electric power effectively to nonurban consumers. Rural electrification immediately transforms economic life: within weeks a profusion of consumer goods appears, night markets open (complete with tiny cinemas for audiences of fifteen or twenty people), and demand for electric irrigation pumps soars.
Biofuels
At the household level, Bangladesh is the prime example of a country in which biofuel supplies (chiefly for cooking) come from the agricultural sector. According to data gathered for FY 1986, 61 percent of biomass energy for fuel use comes from crop residues (jute sticks, rice straw, rice hulls, sugarcane refuse, and other waste products), 24 percent from animal dung, and the remainder from firewood, twigs, and leaves. The firewood typically comes from village trees. The importance of cereal straws means that household energy supply is highly sensitive to changes in agricultural practices and economics and that agricultural policies need to take this into account. The future availability of these fuels was becoming a critical issue in the mid- and late 1980s. Inevitably, new energy resources would have to come from commercial sources. The government and aid donors were struggling with the dilemma of how to provide these needed resources in a manner consistent with the rest of Bangladesh's strategy for long-term economic development and growth.
Figure 9. Economic Activity, 1988
Natural Gas
One of the country's few mineral resources is natural gas, which is the basis for nitrogenous fertilizer production sufficient to meet the country's needs. Estimated national reserves range from 182 billion to 623 billion cubic meters. Deposits lie in more than a dozen different locations, six of which were producing in 1986. The country's gas production is concentrated in the northeastern part of the country (see fig. 9). Reserves also have been discovered offshore, but extraction is not yet cost effective.
Total gas production in FY 1986 was 2.9 billion cubic meters, with production rising at least 10 percent per year. All production was consumed domestically. About 40 percent of production was used for generating power, nearly 40 percent for producing fertilizer, and the rest divided among industrial, commercial, and household uses. Even by conservative estimates of reserves and consumption trends, the supply was expected to be adequate for Bangladesh's requirements through the year 2030.
Coal
In western Bangladesh there are substantial proven reserves of coal, but they remained unexploited in the late 1980s, largely because of the absence of major prospective users in the area. The options of constructing a large coal-fired power station or exporting coal to India were being considered in the late 1980s.
Petroleum
Bangladesh holds unknown quantities of commercially exploitable reserves of petroleum, both on land and offshore. In December 1986, oil was discovered in the Haripur gas field, south of the city of Sylhet, in northeastern Bangladesh. Lucky Well Number Seven promptly went into production at the rate of several hundred barrels per day, the first commercial oil production in Bangladesh. The crude was shipped by rail to the Eastern Refinery in Chittagong, where it was combined with other lighter imported crude oil for refining. The Eastern Refinery had been operating at just 66 percent of capacity and processing 34,000 barrels of crude per day. The domestic addition did not in itself have much of an impact on energy use in Bangladesh, but it was a beginning that fed hopes for further development.
In the late 1980s, the Bangladesh Oil, Gas, and Minerals Corporation was carrying on further test drilling in western Bangladesh as well as in the vicinity of the successful Haripur strike. The government formed a high-level committee under the minister of energy and mineral resources to formulate recommendations for stimulating oil exploration and extraction in Bangladesh. In 1987 the Soviet Union reportedly agreed to provide assistance for oil exploration, a broadening of its traditional cooperation in the field of power generation, transmission, and distribution.
Electric Power
Electric power is generated by a hydroelectric complex in the Chittagong Hills and thermal plants in Chittagong and several locations in central and western Bangladesh. In 1987 the government announced its intention to proceed with construction of its first nuclear power facility, having concluded that the country's long-term needs could not be met by continued reliance on natural gas reserves. They did not announce how the project would be financed, but West Germany was considered the most likely source. The country's total generating capacity was 1,141 megawatts as of 1986, and the proposed nuclear plant would add between 300 and 400 megawatts.
Electric power outages and restrictions on peak-period consumption were a serious problem in the mid-1980s, resulting in substantial productivity losses for jute, textile, and other industrial concerns. Government and power board authorities worked out a strategy of planned brownouts and shutdowns, which were distributed geographically as equitably as possible to minimize economic disruption. Some industrial concerns adopted off-peak work schedules, operating their factories in the middle of the night instead of in the daytime.
There were also substantial losses in the transmission and distribution of electric power, including many unauthorized hookups to the system. The urban distribution system found it difficult to persuade subscribers, including state-owned industries, to pay their bills. In contrast, the system of rural electrification cooperatives, established in the late-1970s with assistance from the United States and other donors, and gradually expanding since then, has demonstrated that it is possible to deliver electric power effectively to nonurban consumers. Rural electrification immediately transforms economic life: within weeks a profusion of consumer goods appears, night markets open (complete with tiny cinemas for audiences of fifteen or twenty people), and demand for electric irrigation pumps soars.
Biofuels
At the household level, Bangladesh is the prime example of a country in which biofuel supplies (chiefly for cooking) come from the agricultural sector. According to data gathered for FY 1986, 61 percent of biomass energy for fuel use comes from crop residues (jute sticks, rice straw, rice hulls, sugarcane refuse, and other waste products), 24 percent from animal dung, and the remainder from firewood, twigs, and leaves. The firewood typically comes from village trees. The importance of cereal straws means that household energy supply is highly sensitive to changes in agricultural practices and economics and that agricultural policies need to take this into account. The future availability of these fuels was becoming a critical issue in the mid- and late 1980s. Inevitably, new energy resources would have to come from commercial sources. The government and aid donors were struggling with the dilemma of how to provide these needed resources in a manner consistent with the rest of Bangladesh's strategy for long-term economic development and growth.
