How Bangladesh can tackle the current energy crisis

As Bangladesh makes headlines for the energy crisis from the Iran war, Dr Ijaz Hossain, former Dean of BUET, speaks to Ramisa Rob of The Daily Star about the oil, gas crisis, and energy conservation and efficiency. 

What is a solution for Bangladesh’s oil crisis and Eastern Refinery facing a production crisis?

Diesel is 100 percent imported, so the root of the problem is our import-dependency. We only have the Eastern Refinery, which refines about 1.3 million tonnes of oil a year. From that, we get more than half a million tonnes of diesel, but the rest of it is imported from Singapore, which is also very affected, with companies having declared force majeure. India has promised to supply diesel and is trying to give us more; the government has looked into Kazakhstan and so on. We are looking into any countries that have diesel to spare.

Building another refinery is a measure the government can take. But that does not decrease our dependence, per se, as we would still have to import crude oil. It would only improve our supply situation in the long-run and save money from buying expensive refined oil — bought at a premium price during times of global crisis periods. We are currently facing both price and supply shocks. Even at high prices, there is scarcity and of course, whether the ship would safely reach the shores, is another matter to consider.

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Dr Ijaz Hossain

Are there any viable solutions for the issues we are facing from disruptions to LNG?

Importing LNG and creating the current dependency was a disastrous decision as we are seeing now. We should not put all our eggs in one basket. India’s industries do not run on gas, and there are other examples across the world.

We also don’t have enough facilities, such as regasification plants. Our demand was already higher than what we are able to import and domestically produce per day.

Bangladesh had an energy crisis even before this war. We also need the dollars to buy imported gas, adding another layer to the current disruptions from the closure of the Strait of Hormuz.

The “100 wells programme” was started by the Awami League government, due to a huge human cry from civilians. The same people who abandoned gas exploration began offshore bidding. The interim government gave a lot of lip service to continue this programme. Files were sitting there for funding in the planning division, they were not getting funds, but gas exploration didn’t stop. Our one success story is in the Bhola region, and within a month’s time, I believe we will be able to know how much gas was found. In the meantime, the government is also planning on floating the tenders for deep offshore, which is an unexplored area. A lot of us are hoping that we will find at least a bit of gas to alleviate some of the problems we are currently facing. Regarding challenges to acquiring requisite funds for gas exploration, big companies are also very much affected. But they might still be interested in Bangladesh, as they might be able to get out of the dependency in the Middle East. Companies have been successful in the Philippines, Angola and other places. India has found gas, Myanmar has also found gas.

Is Bangladesh going to be the first country to run out of oil supply, as a British paper has reported?

We will certainly be amongst the countries categorised in that bracket. Other import-dependent nations, such as the Philippines, for example, may run out before us. It appears that our customers who are panic-buying, especially those on motorbikes, will not easily be convinced with the government merely saying that we have enough oil supply. The crisis at the petrol pumps could have been dealt with earlier on. The government should look seriously into how they distribute petrol and octane. Again, petrol and octane are not the issues here — diesel is. The government should be a bit more honest about what the crisis is, as people don’t completely believe the government’s narrative. In order to do that, the government can take journalists to the depot, show them where the petrol is coming from, get experts to do roundtables and engage with companies facing issues.

What do you make of the austerity measures compared to other countries?

Rationing is always a good measure if done properly. In some countries, there have been digital methods such as QR Codes used, so Bangladesh needs to use the full extent of digitalisation for supply chain management. The government must study the whole crisis to design systems which we are seeing in our neighbouring countries to streamline the delivery of fuel.

Overall, I am not pleased with Bangladesh’s austerity measures, such as the justification to save energy by reducing office hours and shopping hours, which will not yield in saving liquid fuel. Sri Lanka’s measure to completely shut down work for one day, is more productive. Road transport, liquid fuel will be used everyday in Bangladesh, if we don’t have an enforced holiday or work from home. On the other hand, all the aforementioned measures affect electricity, so they mainly affect furnace oil. If you shut down offices, and commercial establishments, the electricity savings will not be too significant. It is better to enforce load-shedding, in my opinion. Forced conservation is a guaranteed method of saving energy.

What are some policies and behavioural patterns that can lead to energy conservation?

Energy conservation and efficiency must be the cornerstone of our consumption policy. It’s imperative to note the difference between the two. Conservation is what you do for yourself, and energy efficiency needs some investment, such as buying different fans, so energy efficiency always requires some sort of government sponsorship.

Industries can take their own austerity measures. Often we see lights on in offices and factories, and we’re not sure if that’s needed. AI-assisted automation would be able to handle that more efficiently. It is possible to implement such measures at cheaper prices, cut costs and also improve productivity.

Another simple example of daily energy conservation is the usage of fans, which is the device that uses the highest concentration of electricity. Brainless-direct-current (BLDC) fans consume much less energy than the fans that we are using currently. This is a doable option, but of course, people aren’t going to throw their fans away. The government has to give the right incentives for this shift. Conservation is akin to preaching a religion of sorts, to people, and they have to reach people’s mindsets. There are many lifestyle changes that can be encouraged by the government, and yield economic outcomes. In general, to reduce imported oil, we can take these measures: electrification, specifically EV and batteries; solar irrigation; car restrictions and traffic management to reduce congestion; less AC use in cars and regular maintenance.

Most importantly, we simply must have strategic reserves, which are only touched in deep crises like these. Right now, if we had strategic reserves, we would have been able to contain the chaos arising from the octane, diesel and petrol crisis. If people knew that Bangladesh has 30 days of octane, diesel and petrol, then we would not be in the current precarious state.

Renewable energy is cheaper, but advancements were not made during the Awami League government, the interim government, so the current government has to do something now. Pakistan reduced their LNG-imported demand with a significant consumer-driven solar energy boom in only two years. The city of Sialkot and similar industrial areas in Pakistan with high solar output can meet local demand without energy from the grid. It is a very good opportunity for the current government to implement these productive measures now.