Experts say coal gasification, liquefaction projects harmful for Pak economy, environment

LAHORE : Experts speaking at a webinar warned against the harmful economic and environmental impacts of the government’s move to produce energy by changing coal to gas (CTG) and coal to liquid (CTL). They said it would also increase Pakistan’s reliance on fossil-fuels. The webinar was organised by the Alliance for Climate Justice and Clean Energy (ACJCE).

The experts advised the government to look at the experience of other countries which have used CTG and CTL technologies and include the lessons learnt from them in its policies.

The speakers at the webinar shared the findings of their studies on economic and environmental viability of Pakistan’s planning to use domestic coal for the production of gas, diesel and fertilizers. The planning was announced by Prime Minister Imran Khan while addressing the Climate Ambition Summit in Dec 2020.

Simon Nicholas, an energy finance analyst with Institute for Energy Economics and Financial Analysis (IEEFA), said it was the unaffordable nature of surplus coal-fired power that led the government of Pakistan to seek debt relief from China. The CTG and CTL proposals came as the coal-fired power was already contributing to ballooning capacity payments, accelerating the build-up of circular debt, he said.

Referring to various similar experiences in the United States, South Africa and Indonesia, he argued that the projects to convert coal into gas and liquid have been heavily reliant on government subsidies everywhere in the world.

“Now is not the time for Pakistan to be increasing fossil fuel dependence along with the subsidies needed to support their consumption,” he said. Given the much higher than anticipated water usage by Kemper Project, he said, the water intensive technologies to be used for CTG and CTL processes would be inappropriate in a water-stressed region like Thar.

Haneea Isaad, an energy research associate at the Rural Development Policy Institute (RDPI), said Pakistan’s need to diversify its energy mix and reduce its dependence on imported fuel was understandable. She, however, said the move to coal gasification and coal liquefaction could have serious economic and financial implications for Pakistan without a significant reduction in the cost of extracting coal from Thar.

She argued that providing the gas produced from coal to fertilizer industry would only increase the prices of fertilizers enormously since this industry is currently using subsidised natural gas produced domestically.

On the other hand, she said, if CTL and CTG fuels are used for power generation, the cost of electricity could go up almost by Rs 10/kilowatt hour (KWh) for diesel-based generation and by Rs 2/KWh for gas-fired power production.

Isaad also said that Pakistan’s increased dependence on coal-based power generation would significantly increase its emissions of greenhouse gases. “This will reverse whatever little progress it has made on its global commitments for lowering carbon emissions,” she concluded.