Shortage of petrol hits alarming levels Ahmad Fraz Khan Published about 7 hours ago

LAHORE: Prime Minister Muhammad Nawaz Sharif Saturday took strict notice of the fuel shortage in various parts of the country and suspended four officials concerned. After arriving from Saudi Arabia, the Prime Minister called a meeting at the airport and took decisions to improve the situation on immediate basis. The four immediately suspended officers responsible for the crisis included Secretary Petroleum Abid Saeed, Additional Secretary Petroleum Naeem Malik, DG Oil C.M. Azam and Managing Director Pakistan State Oil (PSO) Amjid Janjua, said a press release. The provincial governments were directed to check sale of petrol in black and expedite its supply and delivery. ============================ Petrol crisis: Oil companies, govt trade accusations of culpability KARACHI / ISLAMABAD: Oil companies and government officials continued to trade accusations on Friday, with neither side willing to accept culpability for the sudden crunch in petrol supplies in the northern half of the country. Both sides agree on one fact: there was an unprecedented surge in demand for petrol after the government decided to reduce prices. At a press conference on Friday night, Petroleum Minister Shahid Khaqan Abbasi said that demand had surged by 25% after the 27% drop in oil prices from their peak in June 2014. Both sides also agree that the oil companies did not have the legally required 20 days’ worth of inventory to help deal with supply disruptions. But that is where the agreement ends. Government officials claimed that the lack of inventory was the sole reason for the petrol shortage. Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmad Khan announced at a press conference on Friday that Ogra would be serving notices to oil companies for failing to meet the legally required levels of inventory. But industry officials point out that if inventory was the only issue, then there would also be a shortage of diesel and the shortages would be uniform across the country. “The industry cannot be blamed for this situation. There is no shortage of diesel anywhere and petrol is available at all the pumps in Sindh and Balochistan,” said Aftab Husain, CEO of Pakistan Refinery and head of the Oil Companies Advisory Council (OCAC), an industry group. Husain explained that one ship carrying 50,000 tons of oil products was delayed by a few days. “This, along with heavy fog in Punjab, hampered transportation and disrupted the supply chain,” he said. Diesel is transported through a cross-country pipeline originating at Port Qasim, whereas petrol is transported mostly through trucks going north from Karachi. Husain admitted that the oil industry often does not carry the full 20 days of required inventories, especially when prices are declining, but blamed government pricing policy for the situation. “Petroleum prices are revised once a month and whenever the price drops, we book a loss due to the reduced value of our petroleum stock,” he said. “Complete deregulation of prices is the answer. But whenever we talk about it everyone starts writing against us.” Ogra acknowledges the commercial difficulties faced by oil companies when prices are declining, but appears in no mood to accept this as an excuse for not complying with regulatory requirements, said the regulatory body’s chairman. However, even though he blamed the oil companies for the current crisis, Khan agreed with their stance that oil and liquefied petroleum gas (LPG) prices should be deregulated. “In the beginning it will not be pleasant, but it will be good in the long run due to market competition,” said the Ogra chairman. Yet even though everyone agrees that the oil price drop resulted in an unprecedented surge in demand, the government is planning on decreasing prices even further. The petroleum minister announced at his press conference that prices could be reduced by more than Rs5 per litre in February. Abbasi also appeared to insist that the privately owned oil marketing companies were more responsible for the supply crunch than the state-owned PSO, even though PSO has a 65% share in the petrol market. Sales of petrol tend to rise particularly sharply on the first day of a government-mandated price cut. “Petrol sales hit 40,000 tons on January 1,” admitted the petroleum minister. The current crisis appears to have been worsened by the fact that alternatives to petrol – specifically compressed natural gas (CNG) – have largely been absent from the market due to a shutdown of gas supply to CNG stations in Punjab. Abbasi said that if the weather did not turn too cold, the government might consider reopening some of the supply of natural gas to CNG stations. Natural gas is the primary heating fuel in most of the affluent parts of urban Pakistan. Meanwhile, at a hearing at the Senate finance committee on Friday, Federal Finance Secretary Waqar Masood suggested that the current shortage is just the tip of the iceberg and that the country could be facing a rough six weeks before the crisis is fully resolved. Masood’s timeline is far longer than the 10 to 12 days promised by cabinet members during their speeches in the National Assembly on the same day. The finance secretary pointed out that there is a 45 day lag between when an oil company opens a letter of credit (LC) with a bank for oil imports and when the petrol is actually delivered to petrol pumps across the country. The finance ministry has released Rs17 billion to the state-owned PSO to handle its LC requirements, but admits the company needs Rs27 billion for this month alone. Masood admitted that the inter-corporate circular debt in the energy industry, caused in large part by government entities refusing to make the full payments they owe power companies, was at least partially the cause of the crisis. PSO has defaulted on at least Rs110 billion in LCs owed to its foreign suppliers. The finance secretary claimed that the government had been making timely payments of the subsidies it owes to power companies, which in turn owe PSO money for the fuel they use to generate electricity. However, he admitted that the finance ministry refused to pay amount related to the cost of theft, meaning that the power companies still do not have enough money to pay PSO. When the power companies fail to pay PSO on time, PSO defaults on its payments due to foreign suppliers, who then refuse to supply more fuel without payments made upfront in cash. The finance ministry has paid out Rs222 billion power subsidies so far this fiscal year, said Masood. The finance ministry has been urging the water and power ministry to crack down on electricity theft so that the circular debt problem can end once and for all. Sources told The Express Tribune that another reason for the supply crunch was Finance Minister Ishaq Dar’s refusal to allow state-owned PSO to buy US dollars to make oil payments to its international supplies in December, because doing so would have reduced the country’s foreign exchange reserves below the $15 billion mark the minister was targeting. Despite hearing that the drop in oil prices was at least partially responsible for the sudden supply shortage, the Senate finance committee passed a resolution demanding that the government reduce domestic oil prices even further, to fully match the global price drop. Published in The Express Tribune, January 17th, 2015. ============== By Zafar Bhutta / Saad Hasan / Shahbaz Rana / Photo: Shahbaz Malik Published: January 17, 2015 Customers throng a filling station in Lahore amid severe dearth of petrol. PHOTO: SHAHBAZ MALIK/EXPRESS KARACHI / ISLAMABAD: Oil companies and government officials continued to trade accusations on Friday, with neither side willing to accept culpability for the sudden crunch in petrol supplies in the northern half of the country. Both sides agree on one fact: there was an unprecedented surge in demand for petrol after the government decided to reduce prices. At a press conference on Friday night, Petroleum Minister Shahid Khaqan Abbasi said that demand had surged by 25% after the 27% drop in oil prices from their peak in June 2014. Both sides also agree that the oil companies did not have the legally required 20 days’ worth of inventory to help deal with supply disruptions. But that is where the agreement ends. Government officials claimed that the lack of inventory was the sole reason for the petrol shortage. Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmad Khan announced at a press conference on Friday that Ogra would be serving notices to oil companies for failing to meet the legally required levels of inventory. But industry officials point out that if inventory was the only issue, then there would also be a shortage of diesel and the shortages would be uniform across the country. “The industry cannot be blamed for this situation. There is no shortage of diesel anywhere and petrol is available at all the pumps in Sindh and Balochistan,” said Aftab Husain, CEO of Pakistan Refinery and head of the Oil Companies Advisory Council (OCAC), an industry group. Husain explained that one ship carrying 50,000 tons of oil products was delayed by a few days. “This, along with heavy fog in Punjab, hampered transportation and disrupted the supply chain,” he said. Diesel is transported through a cross-country pipeline originating at Port Qasim, whereas petrol is transported mostly through trucks going north from Karachi. Husain admitted that the oil industry often does not carry the full 20 days of required inventories, especially when prices are declining, but blamed government pricing policy for the situation. “Petroleum prices are revised once a month and whenever the price drops, we book a loss due to the reduced value of our petroleum stock,” he said. “Complete deregulation of prices is the answer. But whenever we talk about it everyone starts writing against us.” Ogra acknowledges the commercial difficulties faced by oil companies when prices are declining, but appears in no mood to accept this as an excuse for not complying with regulatory requirements, said the regulatory body’s chairman. However, even though he blamed the oil companies for the current crisis, Khan agreed with their stance that oil and liquefied petroleum gas (LPG) prices should be deregulated. “In the beginning it will not be pleasant, but it will be good in the long run due to market competition,” said the Ogra chairman. Yet even though everyone agrees that the oil price drop resulted in an unprecedented surge in demand, the government is planning on decreasing prices even further. The petroleum minister announced at his press conference that prices could be reduced by more than Rs5 per litre in February. Abbasi also appeared to insist that the privately owned oil marketing companies were more responsible for the supply crunch than the state-owned PSO, even though PSO has a 65% share in the petrol market. Sales of petrol tend to rise particularly sharply on the first day of a government-mandated price cut. “Petrol sales hit 40,000 tons on January 1,” admitted the petroleum minister. The current crisis appears to have been worsened by the fact that alternatives to petrol – specifically compressed natural gas (CNG) – have largely been absent from the market due to a shutdown of gas supply to CNG stations in Punjab. Abbasi said that if the weather did not turn too cold, the government might consider reopening some of the supply of natural gas to CNG stations. Natural gas is the primary heating fuel in most of the affluent parts of urban Pakistan. Meanwhile, at a hearing at the Senate finance committee on Friday, Federal Finance Secretary Waqar Masood suggested that the current shortage is just the tip of the iceberg and that the country could be facing a rough six weeks before the crisis is fully resolved. Masood’s timeline is far longer than the 10 to 12 days promised by cabinet members during their speeches in the National Assembly on the same day. The finance secretary pointed out that there is a 45 day lag between when an oil company opens a letter of credit (LC) with a bank for oil imports and when the petrol is actually delivered to petrol pumps across the country. The finance ministry has released Rs17 billion to the state-owned PSO to handle its LC requirements, but admits the company needs Rs27 billion for this month alone. Masood admitted that the inter-corporate circular debt in the energy industry, caused in large part by government entities refusing to make the full payments they owe power companies, was at least partially the cause of the crisis. PSO has defaulted on at least Rs110 billion in LCs owed to its foreign suppliers. The finance secretary claimed that the government had been making timely payments of the subsidies it owes to power companies, which in turn owe PSO money for the fuel they use to generate electricity. However, he admitted that the finance ministry refused to pay amount related to the cost of theft, meaning that the power companies still do not have enough money to pay PSO. When the power companies fail to pay PSO on time, PSO defaults on its payments due to foreign suppliers, who then refuse to supply more fuel without payments made upfront in cash. The finance ministry has paid out Rs222 billion power subsidies so far this fiscal year, said Masood. The finance ministry has been urging the water and power ministry to crack down on electricity theft so that the circular debt problem can end once and for all. Sources told The Express Tribune that another reason for the supply crunch was Finance Minister Ishaq Dar’s refusal to allow state-owned PSO to buy US dollars to make oil payments to its international supplies in December, because doing so would have reduced the country’s foreign exchange reserves below the $15 billion mark the minister was targeting. Despite hearing that the drop in oil prices was at least partially responsible for the sudden supply shortage, the Senate finance committee passed a resolution demanding that the government reduce domestic oil prices even further, to fully match the global price drop. Published in The Express Tribune, January 17th, 2015. ================== Schlumberger To Lay Off 9,000 Workers January 16, 2015 Oilfield services giant Schlumberger plans to cut 9,000 jobs as the global collapse in crude oil prices crimps production in 2015 and perhaps even longer. The cuts — nearly 8% of Schlumberger's 120,000 workers, were announced Thursday "to better align with anticipated activity levels for 2015,'' the company said. With production surging and waning growth, the world is awash with oil. That's led to a collapse in prices that's taken benchmark crude price down more than 50% since last June. Thursday, West Texas Intermediate fell 4.6% to $46.22 a barrel, while Brent crude slipped 2% to $47.67. Yet many forecasters say crude isn't close to bottoming. "In this uncertain environment, we continue to focus on what we can control,'' said CEO Paal Kibsgaard. "We have already taken a number of actions to restructure and resize our organization that have led us to record a number of charges in the fourth quarter. We are convinced that performance must now be driven by an accelerated change in the way we work through our transformation program." The layoffs come despite a relatively solid fourth-quarter earnings report in which the Houston-based Schlumberger increased revenue 6% to $12.6 billion and boosted earnings 11% to $1.94 billion. Schlumberger is also boosting its stock dividend 25%. Houston-based energy explorer Apache Corp. began laying off about 5% of its workers earlier this week. .. Read more: http://www.drillingahead.com/page/schlumberger-to-lay-off-9-000-workers?xgs=1&xg_source=msg_share_page#ixzz3P4ZZEWC6 =========================== Ahmad Fraz Khan Published about 7 hours ago A petrol pump seen deserted due to the shortage petrol.— Online/File A petrol pump seen deserted due to the shortage petrol.— Online/File LAHORE: The country is left with oil stock of less than three days and its import has totally dried up as the Pakistan State Oil defaults on its payments and says it will need at least Rs100 billion and eight weeks’ time to retrieve the situation. According to PSO officials, no oil consignment has arrived at any port in the country for the past two weeks, whereas usually six to eight ships, each carrying 65,000 tons of oil, come to the country in a fortnight. “The company has exhausted all its overdraft (OD) facilities over the past few weeks. All its LCs (letters of credit) lines have been choked as its total receivables now run over Rs215bn,” a PSO official said, adding that the power sector owed Rs190bn and PIA Rs12.5bn. PSO defaults on its payments, needs Rs100 billion to retrieve situation The company’s default on its payments to a few local banks has made all others cautious; no bank is now ready to underwrite PSO’s LCs. Exporters are also not ready to trust the PSO with their commodity without hard cash or bank guarantees. “The piecemeal payments being made by the government cannot provide any relief to PSO given the size of default. On Thursday, the government released Rs17bn, but like all such previous payments, it went into retiring overdue drafts, making no impact on fresh imports. Also read: Petrol shortage continues for third consecutive day “The company needs at least Rs100bn immediately to set things right. Even if it gets the required money, it will need another two months to line up imports and re­store the supply line,” the official said. “Apart from the financial crisis, it is ad hocism at the top that has landed the PSO into this ditch,” said another official. “With the acting managing director sitting at the top of the company and being more interested in import of liquefied natural gas (LNG) — a new pastime of the PML-N — PSO has been sliding deep into crisis,” he said. “No one really knows how a bankrupt PSO will import LNG. Why has it not stopped supplies to the defaulting companies, be it IPPs (independent power producers) or the PIA? “Why did the PSO remain content on small payments of a few billion rupees over the past year or so, which made no difference to the import? “Why did other oil marketing companies (Shell, Total, Caltex), which are duty bound to keep stocks of at least two weeks, fail in their essential business obligation?” the official wondered. All these questions, he added, needed to be answered and should be made part of an investigation into how the company had stumbled into the current crisis. “The government is pressing local refineries to supply oil to the PSO on credit. If this happens, there may be some temporary relief in supplies in the days to come. But the situation will not improve in the long run unless the government arranges Rs100bn, and makes sure that the company gets regular payments from all its buyers,” the official said. Published in Dawn, January 17th, 2015 On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

COLUMN-Extreme project risk still holds back GTL: John Kemp

COLUMN-Extreme project risk still holds back GTL: John Kemp Mon, Nov 26 08:28 AM EST By John Kemp LONDON, Nov 26 (Reuters) - Plentiful and cheap supplies of natural gas, coupled with near-record prices for diesel and gasoline, provide a seemingly ideal environment for projects that convert natural gas into liquid transportation fuels. Yet most gas producers have hesitated to commit to new projects. Gas-to-liquids (GTL) beats other options like pipelines, liquefied natural gas (LNG) and compressed natural gas (CNG) for smaller gas deposits stranded thousands of kilometres from consuming markets. GTL plants are the most attractive way to realise the value in natural gas when oil prices are above $60 per barrel and gas prices are below $8 per million British thermal units, according to the 2012 "Global Energy Assessment", a landmark study compiled by the International Institute for Applied Systems Analysis. Four commercial GTL plants have become operational over the last 20 years: Mossel Bay in South Africa (1992), Bintulu in Malaysia (1993), Oryx at in Qatar (2007) and Pearl also in Qatar (2011-14). Combined capacity will be almost 225,000 barrels per day once Shell's Pearl project is fully operational (mostly diesel with smaller quantities of naphtha, lubricants and waxes). South Africa's Sasol (Mossel Bay and Oryx) and Royal Dutch Shell (Bintulu and Pearl) dominate the market, though other companies including BP, Chevron and Exxon have proposed projects or built demonstration facilities over the last decade. PROJECT GRAVEYARD Shell is currently expanding Pearl and Sasol is working with Chevron and the Nigerian National Petroleum Corporation to finish a GTL plant on the Escravos River in Nigeria. Escravos, which is a copy of Oryx, will convert about 8.5 million cubic metres per day of gas, currently flared, into 22,000 barrels per day of diesel and 11,000 barrels of naphtha. Both Shell and Sasol are reportedly considering projects on the coast of Louisiana in the United States. Sasol has plans to expand its production in South Africa and to build new plants in Uzbekistan and Canada. But even the two market leaders have hesitated to make firm commitments to new projects. Other major oil and gas producers have either avoided GTL altogether, or abandoned projects early. Exxon Mobil, Conoco and Trinidad have all cancelled projects in the last decade. BP produced 300 barrels per day of synthetic crude oil at a test facility between 2002 and 2009 but has not chosen to build a full-scale plant. TANTALISING ECONOMICS The case for a big expansion of GTL production appears compelling. Nearly 40 percent of the world's natural gas reserves are too far from consuming centres to be economically delivered via pipelines: GTL, LNG or CNG may be the only way to exploit them. GTL plants can unlock value by converting plentiful and cheap gas into scarce and valuable liquids. GTL yields lots of diesel (70 percent) rather than gasoline (25 percent), which could help bridge the worldwide shortage of middle distillates. GTL burns cleanly (it contains almost zero sulphur) and engine performance is better than for diesel from a conventional refinery (GTL diesel has a cetane number of 70 compared with 40 for refinery output). It also avoids the expense of fitting and operating energy-intensive hydro-desulphurisation units to conventional refineries. Together with LNG, GTL is the only way to reduce wasteful venting and flaring of stranded natural gas from oil wells in countries like Nigeria, Russia, Iran and Iraq. GTL plants are currently about 60-65 percent energy efficient. Their carbon efficiency is 75-80 percent. But projected improvements over the next decade could push energy efficiency over 70 percent, and carbon efficiency to 90 percent, comparable to conventional refining. AWESOME OVERRUNS Escalating costs have done much to undermine GTL. The technology is relatively mature. But many developers have opted for very large-scale plants in a bid to maximise economies of scale. GTL plants have had to compete for scarce engineering talent and raw materials such as high-strength corrosion resistant steels with the enormous number of LNG projects launched over the last ten years. The result has been enormous pressure on the relatively scarce engineering companies and suppliers capable of delivering advanced GTL plants on this sort of scale. In much-cited 2005 report, Professor Michael Economides of the University of Houston, put capital costs for a 65,000 barrel per day GTL plant at about $25,000 per barrel per day ("The Economics of Gas to Liquids Compared to Liquefied Natural Gas"). But following cost overruns, Shell's Pearl project ended up costing $18 billion, or about $110,000 per barrel per day for a 140,000 barrel per day plant. The Sasol-Chevron Escravos project has seen even worse cost inflation, and will likely end up costing at least $180,000 per barrel per day for 33,000 barrel per day of output. "Construction delays are chronic. Costs escalate as the giant projects create their own economic weather for engineering, labour, steel, shipping and other services," explains Arctic Gas, which coordinates gas transport projects in Alaska for the U.S. federal government ("Can gas to liquids technology get traction?" June 2012). LARGE AND LUMBERING Escalating costs are only one aspect of a wider issue. "The challenge for gas to liquid technology is not high cost, it is high risk," according to the U.S. Department of Energy's Advanced Research Projects Agency (ARPA-E). GTL projects have to cope with multiple risks simultaneously: price changes in both the feedstock and product markets, construction costs, cost of catalyst, and how big a plant to build. ARPA-E found the biggest risk was not the cost of gas, or even construction, but the realised price for the products when the project comes onstream (which explains why Pearl has been successful despite being wildly over-budget). It takes so long to develop a large-scale GTL plant there is no guarantee the configuration of gas and diesel prices which underpinned the original investment decision will still prevail when it eventually enters into service. "Progress has been stymied by the astronomical cost of building GTL plants, and the career risk facing chief executives who undertake such investments, as well as by oil prices that have swung between rock bottom and sky high," Arctic Gas observed. ARPA-E highlights the tremendous swing in oil prices from under $40 per barrel to more than $110 between 2000 and 2011, the typical timeframe for developing and building a GTL project. Long delays and high costs give rise to enormous market-timing risks ("Gas to liquid technology" February 2012). SMALL IS BEAUTIFUL The solution may be to think smaller. Process engineers generally prefer bigger plants because costs go up in line with the surface area while revenues go up faster in line with volume. The Sasol-Chevron GTL reactor vessel is enormous (see picture here:). In Shell's two 1200-tonne reactor vessels at Pearl "the surface of the cobalt catalyst is so vast that if it were spread out horizontally it would encompass an area almost 18 times greater than Qatar itself," Arctic Gas says. Smaller scale plants would be quicker to build, more responsive to changing market conditions, and a lot less risky. Building lots of small plants rather than a few big ones would also maximise the opportunity to reduce costs through learning effects. WorldGTL and CompactGTL are already developing small-scale modular systems for offshore platforms and associated gas production. Petrobras is piloting a micro-reactor based GTL system developed by CompactGTL for some of its offshore oil installations. If GTL is ever to contribute a significant fraction of diesel demand, developers will have to be convinced the divergence of gas and oil prices will be sustained in the long-term, and find ways to manage project risk more effectively. In the meantime, the brightest outlook may be for smaller-scale plants that can be developed more quickly with less risk. ================ BG Group is a rapidly growing global energy business and a world leader in natural gas. With operations in more than 20 countries over five continents, we’re developing some of the most exciting projects in the energy industry today. QGC, a BG Group business, is leading the way in the Australian Coal Bed Methane (otherwise known as Coal Seam Gas) exploration and production industry and is currently establishing the Queensland Curtis LNG (QCLNG) Project. Date published: 18 Jul 2012 Key Benefits The QCLNG Project is helping to diversify the Queensland economy, generate new jobs and rejuvenate regional towns and communities. Jobs and opportunities QCLNG is creating an average of 5000 jobs during construction and will employ around 1000 permanent staff for operations. Nearing the peak of construction, our total work force now stands at more than 7300, with about 1600 staff and contractors working directly for QGC and more than 5700 people engaged by our major contractors. Investment and growth QCLNG, one of Australia's largest capital infrastructure projects, will generate significant economic and environmental benefits for Queensland and Australia. In the 10 years to 2021, it is estimated that QCLNG will boost the Queensland economy by up to $32 billion. The Darling Downs region's economy will rise by $14 billion and the Fitzroy region's economy will be lifted $13.4 billion. It's good for Queensland Other benefits include: •$1 billion a year in royalties and taxes for the Queensland and Australian Governments. •A new industry for Gladstone to complement its position as one of Australia's leading industrial centres for coal, alumina and cement production. •New gas extraction and transportation infrastructure, offering greater opportunities for gas producers and increased choice for consumers. ...and good for the world At a time of rising energy demand, yet concern about changes to the world's climate, coal seam gas offers a pathway to a cleaner energy future. Gas produces about 20% less carbon dioxide emissions than oil and up to 70% less greenhouse gas emissions than coal when burnt to create the same amount of electricity. Learn more. Investing in communities QCLNG was the first resources project in Queensland to have a social impact management plan. The plan, which involves commitments of about $150 million by 2014, is part of QGC's strategy to maximise project benefits in the communities in which we operate. It is aimed at addressing potential impacts across the project, including health and safety, local employment and training, economic development, social infrastructure and housing. Learn more. Supporting local industry We support regional towns and businesses by using local contractors and suppliers wherever possible. About 60% of the $8 billion invested in the first two years of the project went to Queensland companies. About 50% of capital expenditure on the QCLNG Project until 2014 will be spent in Australia. About 80% of operating expenditure will be spent in the country from 2014. Learn more. Upgrading roads infrastructure QGC has committed about $70 million to state and local road projects to manage the impacts of transport associated with QCLNG. A contribution of about $40 million was agreed with the Queensland Department of Transport and Main Roads in July 2012 to mitigate impacts on state roads over the life of the project. About $30 million has been committed to local and regional council. Learn more. Water treatment and use We are investing more than $1 billion to treat coal seam water produced by gas extraction. The water will be treated using state-of-the-art reverse osmosis technology for use by agricultural and industrial customers. It will also supplement water supplies for the town of Chinchilla. Learn more. Did you know? The gas industry in Queensland is expected to contribute $516 billion to Australia's total economy between 2015 and 2035 [1]. -------------------------------------------------------------------------------- [1] This means new jobs - about 20,000 full-time equivalent jobs each year by 2035. Queensland's income alone is expected to rise $342 billion, an average of $28,300 a person, thanks to coal seam gas. Source: Australian Petroleum Production & Exploration Association. ================ QGC is a leading Australian coal seam gas explorer and producer. QGC is establishing one of Australia’s largest capital infrastructure projects to turn our world-class reserves of coal seam gas into liquefied natural gas (LNG). Queensland Curtis LNG, a priority project for QGC, involves expanding our exploration and development in southern and central Queensland and transporting gas via a 380km buried pipeline to Curtis Island near Gladstone, where it will be liquefied. QGC operates the gas-fired Condamine Power Station, the world’s first combined-cycle power station to run entirely on coal seam gas. =================== Santos Indonesia Wortel gas field to start this month Fri, Jan 06 03:02 AM EST Uploaded by AlJazeeraEnglish on Jan 26, 2012 Religious tensions in Indonesia have heated up once again after calls by some Sunni Muslim religious leaders to ban Shia Islam led to attacks on a religious school and the homes of the Shia community on Madura island in East Java. Feeling their human-rights have been violated, the Shia population of Madura have asked for protection from Jakarta after Sunni leaders tried to persuade the Shias to abandon their faith or face further attacks. So far the government has remained silent, seeing the attack in East Java as a local conflict. Al Jazeera's Step Vaessen reports from East Java. ========= JAKARTA, Jan 6 (Reuters) - Australian energy firm Santos Pty Ltd's Wortel natural gas field off Indonesia's shia dominated Madura island is set to begin production by the end the month, Indonesia oil and gas regulator BPMigas said on Friday. The field in the offshore Sampang Block will produce 50 million standard cubic feet per day (MMSCFD) of gas for domestic consumption, said BPMigas project deputy Hardiono. Sixty percent of the field's production will be supplied to private electricity company Indonesia Power while the rest will be bought by regional government-controlled companies. Indonesia, the world's third-largest exporter of liquefied natural gas, has been struggling to keep up with rapidly increasing domestic gas demand. The additional supply from Wortel field will ramp up Santos' total production off Madura island to 210 MMSCFD. Santos also produces 110 MMSCFD from its Maleo field and 50 MMSCFD from its Oyong field, Hardiono said. BPMigas also said that the rig maintainance in Maleo field in December 2011 was successfully completed without shutting down the facility. Maleo field has been supplying gas to state gas distributor Perusahaan Gas Negara (PGN) and Oyong fuel to Grati power plant operated by state electricity company PT Perusahaan Listrik Negara (PLN). In November, PGN agreed to more than double the price it pays for gas from Santos to $5.00 per million British thermal units(mmBtu), up from $2.14 per mmBtu. (Reporting By Reza Thaher; Editing by Rebekah Kebede and Sugita Katyal) === The Wahhabi War On Indonesia’s Shiites – Analysis – by Rossie Indira and Andre Vltchek By: FPIF December 6, 2012 Indonesia’s Shi’a minority is under heavy attack. Men, women, and children have been assaulted, schools damaged, and villages burned to the ground. Many have been killed. It is becoming increasingly clear that Saudi Arabia’s intolerant brand of Wahhabi Sunni Islam—propagated farand wide by Saudi oil money—is behind most of assaults. Naila Zakiyah, a lecturer at a Shi’a school for girls in the city of Bangil, East Java, recently explained to us: “In light of recent events, we are naturally worried about the safety of our students… We feel discriminated against. Before this year’s Ramadan, the Sunni mosque across the street broadcasted their sermon twice a week. They had their loudspeakers directed towards our school. They were shouting that Shi’a teaching is misguided, and that spilling our blood ishalal. It is said that those who are attacking us are being funded by money from Saudi Arabia. In 2007, for example, 500 people demonstrated in front of our boarding school; the Saudis gave each person $2.” When we visited the neighboring mosque, our hosts showed us anti-Shi’a pamphlets and said that they couldn’t talk to their Shi’a neighbors “in a subtle way anymore.” They added, “If they don’t want to convert, then we have to use violence. In our opinion, they are kafir. We will not be at peace with them until we die, even if our lives are at stake. They have already insulted Islam! If the police do not take action against the Shi’a, we will resort to violence.” And violence they use. In late December 2011, a mob of over 500 Sunnis drove 300 Shiites from their houses in the village of Nangkernang, Madura Island. Countless dwellings, including a boarding school and a place of worship, were destroyed. As is common in Indonesia, local authorities sided with the attackers. Only one person was charged for the attack on the village and sentenced to a symbolic three months in prison. Around the same time, local Shi’a religious leader Tajul Muluk was charged with blasphemy and sentenced to two years in prison, despite repeated protests from Amnesty International and other international human rights organizations. After the attack, some villagers cautiously returned, only to face even more devastating terror few months later. On August 26, 2012 around 30 Shi’ites were traveling from Nangkernang village when they were accosted by a Sunni mob armed with swords and machetes. According to Indonesian press, two people were murdered as they attempted to defend women and children. When we investigated, the villagers told us that only one person had been killed but at least five had been wounded. Moreover, they said, members of the mob had taken some Shi’a children away from their parents. The mob also set fire to several homes, including one belonging to Tajul Muluk. We visited the village in October, defying an explicit prohibition by the police force stationed in the area. After slipping through the rice fields in the middle of the night, we finally managed to meet representatives of the local Shi’a community. “Now we are afraid to say or to show that we are Shi’ites,” said one. “Here, two communities are living side by side. Not all attackers came from the outside; some were from our own village.” After the onslaught, more than 170 people left central Madura for a refugee camp in the city of Sampang. Even this facility—a converted covered tennis stadium—is out of reach for most independent journalists, and it took great effort to negotiate our entry. Refugees were clearly in despair. They all wanted to return home, but the government insisted that they would be “relocated” instead. Once again the Indonesian government was more interested in appeasing a cabal of sectarian aggressors than in pushing for justice. Suryadharma Ali, Indonesia’s minister of religious affairs, has left little doubt about his sympathies. “Converting Shiite Muslims to the Sunni Islam followed by most Indonesians,” he declared, “would be the best way to prevent violent outbreaks.” The Essence Of Domination At the end of November, the desperate, disheartened, and hungry refugees in Sampang sent an envoy to the Indonesian House of Representatives. They demanded that they be allowed to return home. They had their back against the wall, as the local government had announced it would stop supplying them with food and water. Instead of sympathy and support, the envoy had insults thrown in his face. According to theJakarta Post, one lawmaker “indulged in ethnic stereotyping, attributing the violence that befell the Shia to their heritage as coarse Maduran fishermen,” adding that Indonesia’s Shi’ites “must learn to adapt to the norm.” Another legislator expressed his suspicion that “the Shiites had created their own problems themselves.” We contacted our colleagues from the NGO Kontras, which deals with displaced and disappeared Indonesians, and asked them for a comment. “It is very sad to see that only a few legislators attended the meeting. I am afraid that they are not serious in defending the minorities here,” said Kontras coordinator Haris Azhar. “In my opinion, the essence of domination is when the fate of minorities is determined by the majority. They forget that there are rights that can’t be contested.” The same day we called the camp in Sampang and spoke to one of our contacts there, Nur Kholis. He sounded depressed. “We feel betrayed,” he said. “The government still wants to relocate us – move us somewhere where we don’t belong. We just want to go home.” Collusion Across The Seas This is the latest chapter of gross discrimination against minorities in Indonesia. Since 1965, Indonesian authorities have committed at least three massacres that could be considered genocides. Between 1 and 3 million people—mainly leftists and members of the country’s Chinese minority—died during and after the 1965 military coup. Indonesian forces also killed or starved around 30 percent of inhabitants of East Timor. And at least 120,000 people have been killed in Papua in a conflict that continues to fester. Discrimination against Indonesia’s many ethnic and religious minorities did not end after Suharto stepped down in 1998. Since then, there have been brutal and often deadly attacks against “liberal” Muslims, Muslims from the Ahmadiyah sect, and of course against Shi’ites. There have been countless other attacks against Christians, members of indigenous traditions, and more recently Hindus as well. Are these latest attacks homegrown? That is highly doubtful. Indonesian decision makers since 1965—military, economical, political, and religious—have long been known to collaborate with foreign powers and interests. The attacks against Shi’ites and other religious minorities in Indonesia mirror those happening in Saudi Arabia, Bahrain, and other parts of the Muslim world closely allied to the West. “There are many madrassas in Indonesia that have been funded by money from Saudi Arabia,” says Ali Fauzi, a younger brother of one of the terrorists responsible for the bombing in on Bali in 2002. “In exchange they are expected to promote the Saudi brand of Islam – Wahhabism. They are expected to oppose Shi’a belief and even to attack Shi’ites, as the message coming from Saudi Arabia is that Shi’a teaching is heretical.” Andre Vltchek is a novelist, filmmaker, and investigative journalist. He covered wars and conflicts in dozens of countries. His book on Western imperialism in South Pacific is called Oceania. His provocative book about post-Suharto Indonesia and the market-fundamentalist model is called Indonesia – The Archipelago of Fear (Pluto). After living for many years in Latin America and Oceania, Vltchek presently resides and works in East Asia and Africa. He can be reached through his website. Rossie Indira is an independent writer, architect, and consultant. Her latest book Surat Dari Bude Ocie is about her travels to Latin American countries. With Andre Vltchek, she cowrote Exile, a book of conversations with Pramoedya Ananta Toer. She was the production manager and translator of the documentary film Terlena–Breaking of a Nation. Rossie lives in Indonesia and can be reached through her website. Source: http://www.eurasiareview.com/06122012-the-wahhabi-war-on-indonesias-shiites-analysis/ ============= Iraq seeks around 1 mln tons more gasoil for 2013 Tuesday, 11 December 2012 Iraq’s State Oil Marketing Company seeking nearly 1 million tons of gasoil to supply power stations in 2013. (AFP) By Reuters Dubai-UAE Iraq’s State Oil Marketing Company (SOMO) is seeking nearly 1 million tons of gasoil on behalf of the country’s electricity ministry to supply power stations in 2013, a tender document showed on Tuesday. SOMO is tendering for 1,260 metric tons a day of gasoil to be delivered Feb. 1-March 31, or a total of 74,340 tons over the two months, with another 3,360 tons a day required from April through to the end of 2013, amounting to 924,000 tons. The seller will have to deliver the fuel to the Iraqi port of Basra and then transport it by road to Iraqi power stations. Submission of bids begins on Dec. 13 and the tender closes on Dec. 26, SOMO said. In November, SOMO finalized a term deal to buy up to 1.097 million tons of gasoil for delivery next year from Swiss trader Vitol and oil major BP, according to traders. ============== An offer you cannot refuse: Iran offers crude supply on deferred payment By Zafar Bhutta Published: December 18, 2012 Iranian oil has a bigger component of furnace oil and no Pakistani refinery can process 100% Iranian crude oil. Thus, a new Iran-sponsored refinery may be placed in Gwadar to support the deal. PHOTO : FILE ISLAMABAD: Iran has given Pakistan an offer that looks like it is too good to refuse. Tehran offered 100,000 barrels per day of crude supply to fuel-starved Pakistan on a long term deferred payment. This offer comes amid US efforts to block Iran’s oil exports to the world to build up economic pressure in an attempt to curb Tehran’s ‘going nuclear’ ambitions. Sources told The Express Tribune that the Iranian government made the offer during the visit of the petroleum adviser Dr Asim Hussain to Tehran earlier this month. According to sources, Iran had also offered to enhance supply if the two sides moved ahead on the proposed oil exports plan. The crude oil imported will be processed by Pakistani refineries. “Iran is losing half of its oil revenues because of international sanctions imposed over its disputed nuclear programme,” AFP quoted Iran Economy Minister Shamseddin Hosseini as saying on Monday. Hosseini put down the loss to difficulties in repatriating oil money. According to the International Energy Agency, Iranian exports in November were estimated at 1.3 million barrels per day, down from nearly 2.3 million last year. The US is making efforts to block Iran’s oil exports as it estimates that crude sales provide about half of Iranian government revenues and that oil products make up nearly 80% of the country’s total exports. US is already working to convince the Government of Pakistan to shelve the Iran-Pakistan (IP) gas pipeline project, designed to import 750 million cubic feet per day (mmcfd) of gas from Iran to meet its domestic requirements. The recent Iranian offer may further anger the US and pressure may build upon Pakistan to refuse. “At present, Pakistan is facing problems in repayment of the International Monetary Fund (IMF) Stand-By Arrangement $7 billion loan and long term oil credit facility may ease pressure on foreign exchange reserves,” a senior government official said, adding that however, Pakistan many not be able to materialise the offer due to payments issues. Pakistan was importing 73 megawatts (MW) to meet the requirements of Gwadar in Balochistan but payment issues were hampering these imports. Previously, Tehran supplied 45,000 barrels of crude oil to Pakistan on a three-month deferred payment plan until January 2011. However, the United Nations imposed sanctions halted imports due to difficulties in opening letters of credit from global banks. Since then, Iranian oil is largely smuggled into Pakistan. “So, the payment issue may again halt the oil supplies if offer materialises,” official said. An official said that Pakistan Refinery Limited (PRL) was designed in 1962 to process Iranian oil. “But consumption of Iranian oil in Pakistan is very low and therefore PRL has made modifications,” he said, adding that no refinery in Pakistan can process 100% Iranian crude oil. “The oil pipeline between two countries may be feasible If Iran sets up a refinery in Pakistan,” he added. Sources said that petroleum adviser Hussain had also discussed a plan of establishing a Iran-sponsored refinery in Gwadar and laying an oil pipeline between two countries. “Under the plan, an oil pipeline is to be laid right up to the Gwadar Port, where a crude oil refinery will be set up. Pakistan and Iran may enter into a joint venture partnership to set up the refinery,” sources said. Iranian oil had more component of furnace oil and Pakistan furnace oil requirement had increased from three to four million tons in 2004-05 to nine million tons in the ongoing financial year. The production of furnace oil capacity of local refinery is up to 3.5 million tons annually. At present, the Pakistan State Oil (PSO) is a major importer of furnace oil to meet requirements of the power sector. “Pakistan may also meet furnace requirements by importing crude oil from Iran,” an industry source said, adding that Pakistan may save 20 cents per barrel as it will no longer have to bear the costs of transporting Iranian oil. Published in The Express Tribune, December 18th, 2012. ============== US GTL start-up could help Iraq cut gas-flaring if politics weren’t a factor By Tamsin Carlisle | February 11, 2014 12:01 AM Comments (1) Call me an Iraq skeptic, but when I learned last week of US plans to deploy mobile power generation technology to help Iraq eliminate large-scale natural gas flaring, my applause was distinctly one-handed. My initial thought: “Just how is that going to work in a country with a barely functional electricity transmission grid?”But never fear. If Plan A falls through, Washington may find the US private sector has already come up with Plan B in the form of economic,small-scale gas-to-liquids technology. Primus Green Energy is a Hillsborough, New Jersey, petroleum technology start-up that has developed proprietary technology to produce liquid fuels such as high-quality gasoline, diesel and jet fuel, as well as aromatic chemicals, from natural gas or biomass. Gas is the stuff Iraq now burns as waste from its major oil fields in volumes exceeding 1 Bcf/d due to lack of gas processing and delivery infrastructure. Primus predicts that products of its process will be cost-competitive with conventionally refined petroleum products, and won’t need subsidies. The company also says use of its fuels for transportation requires no engine modifications or changes to fuel delivery infrastructure. Given that international oil companies of the stature of ExxonMobil and Royal Dutch Shell have each spent billions of dollars developing and proving their own versions of commercial gas-to-liquids technology, are these anything more than empty claims? I was more than a little skeptical in January when I met Primus Vice President of New Business George Boyajian at the International Petroleum Technology Conference in Doha. Blog entry continues below… -------------------------------------------------------------------------------- Request a free trial of: Oilgram News Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more. -------------------------------------------------------------------------------- Boyajian told me that for $120-$130 million, Primus could build a commercial plant capable of producing about 2,000 b/d of a chosen fuel–say, 93-octane gasoline–at high purity and with high yields. Multiply that by 80, and one could theoretically achieve the output of Shell’s landmark Pearl GTL plant in Qatar–the world’s biggest–at less than half Pearl’s $19 billion price tag. It seemed too good to be true. Yet technology advancement has a habit of accelerating once someone has done the groundwork to prove the commerciality of an initial product or industrial process. In the back of my mind was another voice saying Primus should not be dismissed out of hand. Certainly, the technology startup has made a sufficiently compelling case for its technology to convince the US Patent and Trademark Office to allow its patent application covering “STG+” liquid fuel synthesis technology. Primus already has patents on various components of the technology, such as the recipes for coaxing its system to produce specific products by adjusting operating conditions and combinations of commercially available catalysts.

“STG+ is a new, proprietary thermochemical GTL process that fundamentally transforms the efficiency and economics of liquid fuel synthesis technologies,” Primus CEO Robert Johnsen said in a statement last week. “The allowance of this patent application validates the novelty of the technology we have developed and proven at scale in our research facilities and commercial demonstration plant,” he added. “It greatly strengthens our intellectual property portfolio, an important step as we look toward construction of our first commercial GTL plant.”

In October 2013, Primus commissioned a 100,000 gallon-per-year (6.5 b/d) demonstration plant at Hillsborough, a far stretch from its proposed 27.8 million gallons/year (roughly 1,800 b/d) commercial unit. Nonetheless, an independent engineers’ report found that catalyst performance and system economics in the demonstration plant exceeded expectations. Primus said it expected final issuance of its STG+ technology patent in March and to break ground on the commercial plant in 2014. Start-up is slated for early 2016. Boyajian said that because the STG+ process had fewer steps than the GTL processes currently in commercial use, and its economics had already been proven at small scale, he expected the larger plant also to be economically viable. He also said that while Primus had initially seen an opportunity in the US domestic market, as a result of the recent shale-gas boom, small-scale GTL could be an ideal interim technology for jurisdictions with stranded gas resources, gas in the ground but no infrastructure to get it to market. Part of Boyajian’s remit is to develop international markets for Primus’ technology. Among Asian states with significant undeveloped gas resources, Kazakhstan and semi-autonomous Iraqi Kurdistan had thus far expressed interest, he told Platts. The proof is in the pudding, and Primus says it is in financing discussions to bake puddings with potential strategic partners such as airlines and gasoline retailers. Its pudding recipes, meanwhile, are being funded by IC Green Energy, the renewable energy investment arm of Israel Corp., which is Israel’s largest holding company. Oh dear, perhaps Baghdad won’t welcome Plan B after all. Ed. Note–this posting has been revised to accurately reflect the estimated cost Primus puts on the cost of a new plant at $120-$130 million. Share this: All blog comments are moderated before being published. Comments Rohit at March 5, 2014 7:32 am Does the cost estimate include a) gas conditioning and b) storage/pipelines for the individual products, which could easily cost another $ 30 m or more. Reply ====================

The poor man’s fuel: Regulate the use of CNG, not just the price

By Khurram Baig Published: November 19, 2012 A Toyota Prado lines up with a Suzuki Mehran for a CNG refill. Consumers like these destroy the benefits of providing the cheap fuel as a means to lessen the poor man’s burden. PHOTO: FILE KARACHI: The merits of the idea can always be argued. There are supporters as well as opponents to the idea of switching to CNG. The efficacy of the idea however needs no argument. The switch to CNG to mitigate or to some extent lessen the economic burden of the masses has failed to bring about the desired results. I feel the bigger issue is about who actually ends up using CNG. There is the general perception that CNG is a poor man’s fuel and the shift from petrol was initiated to enable the lower income groups to benefit. However, while that may have happened in some cases, for the most part, the real beneficiaries of CNG, regardless of what price it is being sold at, are those who were never really less privileged or ‘poor’ to begin with. And this becomes quite obvious when one sees long lines of Corollas, Citys, Civics and other expensive cars, including fancy SUVs lined up to get CNG. I tried, I really did, but I could not come up with any economic rationale to classify these people as less privileged. In fact, the less privileged do not usually own cars. The less privileged do not use taxis and rickshaws. The less privileged either use motorcycles or public transport to get to work or go about their daily commute. And I think we can safely argue in today’s economic environment that anyone who can afford nothing more than a 800cc car also falls within the domain of middle or lower middle class. Motorcycles do not use CNG. And while transporters have made the shift from diesel to CNG in large numbers, fares have not been reduced to reflect this change. So we have established that the idea is probably flawed, based on the fact that it has not worked. That can be as a result of two things. One is that the idea was based on unsound economic principles to begin with, or the execution was flawed. I believe that in this case the idea was workable, and still is workable. It could have made a change, but the execution was pathetic. I cannot be clearer than that. But before I go into that, let’s take a second to figure out exactly how much one saves off CNG and if it really is worth the hassle, the conversion cost, and the increased engine maintenance cost. Let’s use some rounded off numbers and peg the price of Petrol at Rs100 and the price of CNG at 90, closer to where it was before the Supreme Court intervened to reduce prices. The reason I am using that as a peg is because current prices are interim, and they will in all likelihood be revised upwards based on the new formula being proposed by Ogra. On average – barring extreme exceptions – the daily mileage racked by most car owners is usually not more than 50 kilometres. So that means about 5-6 litres of petrol consumed, Rs500 to Rs600 spent. A car running on CNG, would travel the same distance using about 4-5 kilogrammes of CNG. This translates into Rs360 to Rs 450 spent on a daily basis. I have based this on the average consumption of a 1300cc car. This translates into daily savings of Rs150, monthly Rs4,500. Is this really meaningful for someone who can afford a Rs1.5 million car, or Rs2 million? And factor in the fact that the car owner invested in the CNG conversion kit and also pays more on the maintenance of the engine as a result. It really doesn’t make economic sense to me. Most of us can easily save more than this or even more by resorting to other means like saving on electricity consumption, driving less, carpooling, or buying a smaller car. But I guess this means a measure of self-discipline but that’s no fun is it? The government has to put its foot down to insist that the savings made by public transport owners – since the shift to CNG and LPG – be passed on to consumers. The mass-shift to CNG in private cars without any regulation which has resulted in the current shortage is also the government’s fault. They can still fix it. I believe any car with an engine capacity over 800cc should not be allowed to run on CNG. It should be restricted to mass public transport and not even prime movers. It certainly should not be allowed in Civics, Corollas, Citys and SUVs. If one can buy an expensive car, one probably is and should be willing to pay the cost of running it. If you can’t, then buy a smaller car! Published in The Express Tribune, November 19th, 2012. =============== Coal-powered energy – the best substitute By Faiza Hai / Creative: Faizan Dawood Published: November 19, 2012 According to last estimates made in 2011, coal deposits in the country are up to 185 billion tons. DESIGN: FAIZAN DAWOOD KARACHI: Since Pakistan came into being, people have been facing loadshedding due to shortage of power supply, with frequent outages affecting economy in many ways. Uncountable working hours have been lost, leading to an increase in poverty and economic loss of billions of rupees to the country. Surprisingly, it is happening despite the fact that only about 60% of the population has access to electricity. According to the World Energy Statistics 2011, published by the International Energy Agency (IEA), Pakistan’s per capita electricity consumption is one-sixth of the world average. World average per capita electricity consumption is 2,730 kilowatt hours (kwh) compared to Pakistan’s per capita electricity consumption of 451 kwh. According to the Pakistan Energy Year Book 2011, the country’s installed power generation capacity is 22,477 megawatts and demand is approximately the same. The country needs to redesign the electricity portfolio and substitute oil and gas with an abundantly available indigenous fuel source. It must develop indigenous energy resources to meet future electricity needs and can overcome energy crisis by utilising untapped coal reserves. Fortunately, Pakistan has a very inexpensive source to get energy through coal. Coal is economically viable and a long-term solution to balance the demand and supply chain of electricity in the country, which has the fifth largest coal deposits in the world. According to last estimates made in 2011, coal deposits in the country are up to 185 billion tons. The largest deposits are in Thar desert, which is about 850 trillion cubic feet spanning over 10,000 square kilometers, surprisingly more than the oil reserves in Saudi Arabia having a collective quantity of approximately 375 billion barrels. At present, 40.6% of world’s electricity is being generated from coal and it is the single largest contributor to world electricity generation. By looking at the electricity generation mix of the countries that are blessed with coal, it is evident that coal is the largest contributor. Countries like Poland, South Africa, China, India, Australia, Czech Republic, Kazakhstan, Germany, USA, UK, Turkey, Ukraine and Japan are generating 96%, 88%, 78%, 78%, 77%, 72%, 69.9%, 52.5%, 52%, 37%, 31.3%, 27.5% and 22.9% of electricity from coal respectively. In comparison, Pakistan generates only 2.27% of electricity through coal. However, coal reserves of only Thar can generate 20,000MW of electricity for the next 40 years without loadshedding and at a rate Rs4 less than the current cost of electricity production. The government has given the task to experts to enhance energy efficiency by focusing on coal and ensure large scale power generation through this resource. How coal produces electricity Technically, producing electricity through coal is a simple process. In most coal-fired plants, chunks of coal are crushed into fine powder and are fed into a combustion unit where they are burnt at a very high temperature. Following this, the burning coal is used to generate steam that is used to spin one or more turbines to generate electricity. However, during the process, sulfur dioxide and nitrous oxides are produced as well, which cause an increase in smog, ozone depletion and acid rain. Nitrous oxide is also a very powerful greenhouse gas. Even before power is produced, the transportation of coal also poses health risks due to coal dust and emissions from vehicles. Lastly, heavy metals from coalmine waste can seep into groundwater and rivers. Despite the negative aspect, the significance of coal is not easy to ignore. Recently, work on a 50MW Underground Coal Gasification (UGC) project has started, which is expected to cost Rs8.898 billion with foreign exchange component of Rs5.847 billion. It has been approved by the Executive Committee of National Economic Council (Ecnec). If successful, the project will encourage investment from leading international companies. At the International Coal Conference 2011, Pakistan had invited investors from around the world, encouraging them to pour money into coal power projects as the country initially requires $1.2 billion to build power generation infrastructure in Thar. Japan is keen to finance transmission lines from the Thar coalfield to the national grid and Chinese companies have expressed interest in developing coal-based power plants in Thar and Badin. The writer comments on economic and energy-related issues Published in The Express Tribune, November 19th, 2012. ===================== Sidra Humayun Umar One of our teachers is doing PhD in Bio-Chemistry. As part of his field work, he has been contracted by Dr Samar Mubarakmand for development of coal gas in Thar, for production of electricity. The care serves were found to be deep in water and extraction very difficult and costly. So as a step one they have successfully managed production no water gas which can be used by industrial units for their domestic production of electricity at almost no cost!!Later the coal gas can be used for the normal PPs. He is one of five scientists tasked with this project. And they have successfully achieved the task in less than half the time allotted.They were then asked by Dr Saman to make a presentation to the PM -Nawaz Sharif. This is what my teacher tells me;-They made the presentation to the PM and he praised them and said he had heard of their good work, and that we will be giving the Awam good news very soon. Thereafter he said you should stop this project and we will pay you manifold from what these people are giving you. Just saythat the project cannot proceed - - -!!My teacher says that they were briefed before the meeting that they should not ask any questions or raise objections. So they kept in stunned silence at the utterances of the PM. However one of their teama Miss Shiza spoke up and said that we are not doing this for you but for Pakistan, and you should not be talking like this - - -. The bold girl berated Nawaz openly, while he shrunk into his seat and did not say anything, and was looking glum!The next morning when Miss Shiza left her home in her car, she was fired upon!!! The message was clear.Then one of the advisers of PM sent them a message that they should abandon the project where it is. A similar project had been launched earlier which had failed. Now they will say that the second attempt b ythe country's scientists has failed and now we will invite some foreign firm. In the meantime electricity will be imported from abroad(India?). If you stop this project, you will be " weighed in notes".Earlier on one of PM's advisers had visited their work site in Thar and told them to ensure the project fails and "you will be compensated heavily" During their meeting with the PM, the latter had asked them to think seriously about what the "Musheer" had talked to them!My teacher is very upset. he says that as per their calculations the electricity could pe produced at a maximum of Rs 0.75 per unit. How much could they eat out of that??!However the up side is that Gen Wyne, Chairman, Joint Chiefs of Staff, has sent them a message through Dr Samar to carry their work and not to worry as "they will protect you".I thought I should let you know what is actually going on. This is no hearsay. Its my own teacher involved and I have questioned him extensively before writing this.Do let every one know. Do whatever we can. ==================