FORTNIGHTLY MAGAZINE, VOL 9, ISSUE 20, APRIL 1-15

Editor Mollah M Amzad Hossain Advisory Editor Anwarul Islam Tarek International Editor Dr. Nafis Ahmed Contributing Editors Saleque Sufi Dr. A Rahman Managing Editor Afroza Akther Pervin Consultant Editor Enayet Kabir Reporters Jannatul Ferdushy Nahid Anjum Siddiqui Design & Graphics Md. Monirul Islam Photography Bulbul Ahmed Farzana Karim Chowdhury Magazine Administrator AKM Shamsul Hoque Production Mufazzal Hossain Joy Computer Graphics Md. Uzzal Hossain Technical Support Laser Scan/Colour Touch Circulation Assistant Khokan Chandra Das Editorial, News and Commercial Room 509, Eastern Trade Center 56 Inner Circular Road (VIP Road) Naya Paltan. GPO Box : 677 Dhaka-1000, Bangladesh Tel & Fax : 88-02-8354532 Email: ep@dhaka.net energypower@gmail.com Website: www.ep-bd.com Price Bangladesh: Tk 25, SAARC: US$ 3, Asia: US$ 5, Europe: US$ 6, North America, Africa & Australia: US$ 7.5

he recent verdict of International Tribunal for the Law of Seas [ITLOS] has opened up a huge opportunity for both Bangladesh and Myanmar to explore maritime resources in the Bay of Bengal. The verdict is a milestone achievement in putting an end to our dispute with Myanmar over maritime boundary. It ensured Bangladeshs rights over an exclusive economic zone and continental shelves. Due to the disputes with Myanmar and India, the efforts to explore maritime resources had been frustrated for long. Now time has come to proceed smoothly with appropriate plan of action. The government deserves credit for successfully making arguments at the ITLOS, although it was not an absolute victory for Bangladesh. Both Bangladesh and Myanmar have got the opportunity to harness sea resources. We won some and lost some. Now we must strongly pursue our case of dispute with India. As we have already gone to arbitration we must keep our focus there. Indian suggestions of opening fresh dialogue must not lead us to withdraw from arbitration. Let the tribunal give its verdict. Through further surveys we can acquire further information that would strengthen our plea. We have very strong possibility of winning our rights.

39 Foreign Minister Dr. Dipu Moni made a statement in

the Parliament after the historic verdict. The editorial board of EP translated it from bangla for the EPs readers.

The International Tribunal for the Law of Seas [ITLOS] has issued judgment on the arbitration over the maritime boundary dispute between Bangladesh and Myanmar on 14th March 2012. The dispute emanated over the delimitation of the territorial seas, exclusive economic zones and continental shelves of Bangladesh and Myanmar in the Bay of Bengal. Bangladeshs efforts for exploring and exploiting significantly potential maritime resources were being frustrated for a long time due to the disputes with the neighbors. The verdict has opened up avenues for Bangladesh to proceed smoothly, though it lost in its claim over 4 shallow potential offshore blocks adjacent to Myanmar coast.

COVER

Green Page

The Energy & Power had introduced Green Page marking its stepping into the 7th year to campaign for efficient use of energy, energy conservation and using environment-friendly energy. Encouraged by the readers and patrons, the EP decided to continue with the pages as it is stepping into the 8th year. The EP would make its best effort to keep up the campaign
Page: 31, 33, 34

5 6-7 9 15

WORLD WATCH Latest Development in World SNAPSHOT Latest Development COVER End of Maritime Dispute No. 1 COVER PLUS Maritime Boundary & Hydrocarbon Exploration SPECIAL ARTICLE

17

The Cost of Indecision in Energy Sector--Disaster in Making REPORT

20 21 24 25 27 28 29 31 33 34 34 35 37 39 42

LPG Price Doubled Fresh Power Price Hike Chinese Co Set For Ctg Gas Exploration WWEA Releases Small Wind World Report 2012 US Solar to Get Obama Aid in Battle With China Russian Soft Loan Pledged For Rooppur Nuke Power New Mining Ownership Rule Irks Industry GREEN PAGE Climate Change the Greatest Threat German Wind Power Company to Invest in SL Obama Calls For Investment in Clean Energy Fuel Cells Rapidly Gaining Ground in Germany ARTICLE Can BAPEX Alone Meet the Exploration Challenges? TECHNOLOGY Getting Fresh Water From The Sea PARLIAMENT Statement After Verdict COLUMN Let's Prepare For The Worst

W O R L D WAT C H

No Power Cuts in SL Despite High Costs

The Sri Lankan government has no intention to go for power cuts to get over the problem of high overheads incurred in power generation, said Patali Champika Ranawaka, Minister of Power and Energy and appealed to the consumers to minimize electricity use during 6.30pm and 9.30pm. Power generating sector is facing a severe crisis today and the main reason is the high overheads. The country has the capacity to meet all power demands but the sector is facing numerous problems due to the high costs incurred in generating electricity. However, we have no intention to go for power cuts as a remedial measure, said the minister. Patali made these observations at a workshop held at the BMICH to launch an island wide program titled Today, for the Sake of Tomorrow (Heta Wenuven Ada) aimed at directing the daily use of energy to a more practical path to find a long lasting solution to the power crisis. The minister said the power sector provided electricity to around 93 percent and planned to make it 100 percent by year end. We have made Sri Lanka the only country in the Asian region that provides electricity round the clock. There are some who attempt to gain political advantage claiming that the country is facing a power crisis. The problem is not political, but the high cost incurred in power generation. The long standing solution is directing the consumer towards preservation of energy, through which, we can stop operating the costly diesel power generating plants, said the Minister. He called on the consumers to minimize the use of electricity during 6.30pm and 9.30pm. There are about five million electricity consumers and about 4.6 million are domestic consumers. If they can switch off one 60-watt bulb during the peak hours, the power saving is 180 mega watts. Switching off of the refrigerator for two hours during 6.30pm and 9.30pm will save 214 mega watts. Ironing of clothes during off peak hours will save an additional 68 mega watts. In the event the consumers respond positively to our appeal, the operation of high cost diesel generating plants could be stopped resulting in the saving of a lot of money, which will also reflect positively on the consumer.

Indian Minister Denies Coal 'Scam'

India's Coal Minister have d e n i e d charges that the government had lost $210 billion in revenues by giving away coal deposits instead of selling them through auction. "There has been no scam. It is all a figment of the media's imagination," Minister Sriprakash Jaiswal told reporters in New Delhi. Jaiswal's comments came a day after The Times of India newspaper quoted a draft report by the National Auditor as saying the government extended "undue benefits" to coal companies by awarding 155 coalfields without auction.

Sriprakash Jaiswal

Pakistani Minister for Petroleum and Natural Resources Dr Asim Hussain confirmed that the Industrial and Commercial Bank of China (ICBC) had stopped financing the Iran-Pakistan gas pipeline project, but the government could opt to collect the funds through imposing gas surcharge. The minister informed the National Assembly that the circular debt of the Petroleum Sector currently stood at Rs 396,684 million against Rs.70,586 million in March 2008. Responding to a query during the question hour, Asim said the main reason behind the circular debt was lack of repayment by the power sector against the oil and gas supply. He told the house that the government had constituted a highlevel committee, headed by the Finance Minister with the Ministers for Petroleum and Water and Power, Deputy Chairman Planning Commission as members to resolve the issue. Moreover, the Planning Division was moving a summary for rationalization of power tariff and removal of subsidies, Asim added. To another question regarding the ban on import of CNG kits, the minister said the government had imposed a ban on import of CNG kits while local manufacturing was also banned. To a supplementary question, he said the monitoring of the CNG kits was not the responsibility of the ministry; however, they were trying to tackle the issue. inflation-adjusted price of gas on the same chart as U.S. oil production since 1976, the numbers sometimes go in the same direction, sometimes in opposite directions. If drilling for more oil meant lower prices, the lines on the chart would consistently go in opposite directions. A basic statistical measure of correlation found no link between the two, and outside statistical experts confirmed those calculations. As one energy economist put it: "Drill, baby, drill has nothing to do with it."
5

Gas Surcharge to Raise Funds in Pakistan

Analyzing 36 years of gasoline prices and U.S. oil production, the Associated Press finds no statistical correlation between how much is pumped out of the ground and how much is paid at the pump. AP says four independent statisticians came to the same conclusion. As it was four years ago, the price of gasoline is an issue in the presidential campaign. This year, it's Republican candidates -- notably Newt Gingrich -- claiming that more domestic oil production would lower pump prices. AP writes, "If more domestic oil drilling worked as politicians say, you'd now be paying about $2 a gallon for gasoline. Instead, you're paying the highest prices ever for March." When you put the

More Drilling Hasn't Cut Gas Prices

SNAPSHOT
The High Court has asked the government to explain in two weeks why it should not be directed not to set up the proposed 1,300 megawatt coal-fired power plant in Rampal upazila of Bagerhat near the Sundarbans. The ruling came following a writ petition that says if the plant is set up at Sapmari-Katakhali Mouja of Rampal, the world's largest mangrove forest and its biodiversity will be damaged. Sheikh Siddique Ahammed, Organizing Secretary of environmentalist organization Save the Sundarbans, filed the petition as a public interest litigation. Secretaries to the Ministries of Planning, Environment and Forest, Energy and Mineral Resources, and Land, the Director General of Environment Department, the Chairman of Power Development Board, the Deputy Commissioner of Bagerhat and Project Director of the proposed plant have been made respondents to the rule.

HC Asks Govt to Explain

JS Body Recommends Coal Based Power Plant

The Parliamentary Standing Committee on the Ministry of Planning recommended to setting up coal-based power plants for reducing pressure on gas. The committee made the recommendation at a meeting with its Chairman HN Ashiqur Rahman in the chair. Members of the committee, Planning Minister AK Khandaker, Dr Mohiuddin Khan Alamgir and Mohammad Nazrul Islam attended the meeting. The meeting discussed different aspects of the sixth fiveyear plan and the upcoming budget. The committee laid emphasis on power generation and distribution, road construction and maintenance, providing jobs to the unemployed people by creating employment Barapukuria coal fired power plant opportunities.

The country saw the highest-ever volume of electricity generation on March 22 as the government pledged to ensure uninterrupted power supply during the Asia Cup final match through rationing gas supply to power projects. We produced 6065.5 megawatts of electricity at 7:30pm on the day, said an official. Earlier, the highest electricity production was 5569MW, said Power Development Board Member (Generation) Tamal Chakrabarti. But many people said they experienced load shedding during the final cricket match between Bangladesh and Pakistan.

Power Generation Hits Record 6065 MW

Gas Being Produced From Sundalpur Field

Gas production in Sundalpur gas field in Noakhali started with prospect of supplying 10 million cubic feet gas per day.

"Around 10 million cubic feet (mmcfd) gas is now being produced per day from one well of the new Sundalpur gas field," Bapex Managing Director Mortuza Ahmad Faruque said. The new onshore gas field is located in block 15 at Companiganj in Noakhali district. A 15-km pipeline was built to carry Sundalpur gas to the national grid. Port city Chittagong will be the direct beneficiary of Sundalpur gas, said Faruque. Total recoverable gas in Sundalpur field is estimated at around 40 billion cubic feet (Bcf). Country's overall gas production is now hovering around 2,090 mmcfd against the demand for over 2,500 mmcfd. State-owned Sundalur gas field is Bangladesh's 21st producing gas field. The number of country's total discovered gas fields reached to 24. Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) had started gas exploration in Sundalpur area in 2008, discovered the gas field in September 2011 and conducted drilling for gas.
6

SNAPSHOT

Production From 2nd Layer of Barapukuria Starts

Barapukuria Coal Mine Company Ltd (BCMCL) started production from the 'second slice' of the coal seam setting a milestone in coal mining history of the country. Md Mostafizur Rahman, State Minister for Land, inaugurated the coal production from the second slice. Earlier on February 15, BCMCL authorities suspended coal production to develop and shift the coal extraction equipment from the first slice or layer to the second. Since the mine launched its production in 2005, it has produced 4.5 million tonnes of coal, of which 80 percent was consumed by the 250 MW Barapukuria Power Plant and the remaining 20 percent sold to private buyers including brick kilns. Md Quamruzzaman, Managing Director of BCMCL, said they estimate that the mine would produce about 5.5 million tonnes of coal from the second slice. The mine has a 36-metre thick coal seam, of which the first slice constituting of three meters of coal has already been extracted. Stating that the mine was operating with a shortage of coal extraction equipment, Quamruzzaman said they have been using only one set of equipment since the mine's inception. We are trying to generate a budget to replace the old equipment with new ones, he added.

FBCCI to Exploit Bay Resources For Economic Development

T h e countrys p r i m e t r a d e b o d y FBCCI says that the vast resources in the Bay of Bengal could be used efficiently for overall socio-economic development of the country. The Board of Directors and President of the FBCCI AK Azad congratulated Prime Minister Sheikh Hasina for the historic victory on the sovereignty of the Bay of Bengal by the International Tribunal for the Law of the Sea on March 14. Because of the verdict, Bangladeshs long demand for a demarcation on the basis of equity has been established. A press release of the FBCCI (The Federation of Bangladesh Chambers of Commerce and Industries) said the 38 years long dispute on maritime boundaries between Mayanmar and Bangladesh came to end by the verdict of the tribunal. Bangladesh is now able to exploit natural resources including fish from the Bay and its proper use would help the country develop economically and socially, FBCCI observed.

AK Azad

Boro cultivation in nine upazilas under Faridpur district is being hampered as the farmers cannot irrigate their land sufficiently due to frequent power outages in the district Many paddy fields are drying up due to inadequate supply of water on the paddy field. Some farmers are yet to transplant seedlings on their croplands as they cannot prepare their land for the want of water for irrigation. A Power Development Board (PDB) official said that the frequency of power outages might go up further during the peak time of irrigation in the district. We have fixed a target of producing over 139 thousand tonnes of rice from around 367 thousand hectares of land in nine upazilas under the district this season, said Md Rafikul Islam, an agriculturist of the local DAE office. But due to erratic power supply, the farmers may not be able to harvest their expected yield, the officer said. Most of the water pumps lie unutilized as power supply is not ensured round the clock. Many farmers are taking water from diesel-run shallow machines to protect their transplanted seedlings. But the poor farmers cannot do it as they are unable to afford the cost of the water supplied by the shallow machines.
7

Power Outages Hit Boro Farming

Md. Mostafizur Rahman, State Minister for Land, inaugurated the second slice of the coal seam Photo: BCMCL

National Committee For Scrapping Deal With ConocoPhillips

The National Committee to Protect Oil-GasM i n e r a l Resources and Power-Ports urged the government to scrap the deal with Conoco Phillips to ensure peoples rights on its exclusive economic zone. Thanking the officials and the experts of Bangladesh involved in the maritime boundary dispute issue, Professor Anu Muhammad, the Member Secretary of the committee said that Bangladesh has won a landmark verdict at the International Tribunal for the Law of the Sea. Now it is the job of the politicians and officials to ensure peoples rights on it to protect the resources from the multinationals, he added.

COVER

Engr Khondkar Abdus Saleque

he International Tribunal for the Law of Seas [ITLOS] has issued judgment on the arbitration over the maritime boundary dispute between Bangladesh and Myanmar on 14th March 2012. The dispute emanated over the delimitation of the territorial seas, exclusive economic zones and continental shelves of Bangladesh and Myanmar in the Bay of Bengal. Bangladeshs efforts for exploring and exploiting significantly potential maritime resources were being frustrated for a long time due to the disputes with the neighbors. The verdict has opened up avenues for Bangladesh to proceed smoothly, though it lost in its claim over 4 shallow potential offshore blocks adjacent to Myanmar coast.
9

Bangladesh Foreign Minister Dipu Moni from Germany claimed a massive and historic victory immediately after the judgment. She incidentally was present there and was the kingpin of Bangladesh submissions to the Tribunal. Bangladesh media and policymakers started making big noises immediately. But as the details and the entire test of it started emerging, it now appears that the judgment did not give absolute victory to any party. Rather both the party lost something as well as gained. We can at best say that the match was drawn. But one thing for sure that the resolution of the dispute is a milestone achievement and gives both Myanmar and Bangladesh opportunities for harnessing maritime resources and establish rights on territorial seas, exclusive economic zones and continental shelves. For the sake of clarity, let us try to analyze the verdict. Both parties earlier gave undertaking of accepting the verdict and not to raise objections further.

Background Bangladesh was the first country to enter the Bay of Bengal for hydrocarbon exploration in 1974. The then Bangabandhu government ignoring some mild objections from neighbors successfully concluded PSCs with 6 IOCs for exploring oil and gas in 8 blocks of the bay. Union Oil Company of California discovered a gas field at Kutubdia. But after the unfortunate killing of Bangabandhu, the IOCs gradually left and in about 33 years since then Bangladesh gave no genuine efforts to explore and exploit its massive potentials of hydrocarbon resources. Our neighbors Myanmar and India, however, preceded aggressively with exploration campaigns and reportedly discovered some major resources in off- Courtroom of the International Tribunal for the Law of Seas

shore blocks pretty adjacent to our territorial water. Many consider that some of the discoveries may encroached on our territory even. Successive Bangladesh governments even failed to register protests with India and Myanmar about the aggressive exploration campaign in disputed areas till Engr. Mahmudur Rahman in 2005 first raised the matter while he was Advisor to PM Khaleda Zia. Mahmud initiated actions for fresh bidding rounds of offshore exploration which ultimately reached bidding stage through model PSC of 2008. The caretaker government could create great enthusiasm among potential bidders for participating in the bids. About 100 representatives of 70 bidders attended the pre-bid conference in Dhaka. But India and Myanmar both objected strongly to Bangladesh initiatives of offshore bidding and infact persuaded major IOCs from participating in the bidding. Major IOCs Chevron, Shell, BP, Exxon Mobil. PETRONAS, CNPC, stayed away from the bidding. Some potential bidders requested for extension of bidding time. Some requested amendments to the bidding document as the incentives included in the bid document appeared insufficient in the economic analysis for preparing and submitting win win bid by major bidders in very risky exploration efforts. Bangladesh could not provide adequate geological and geophysical information of blocks with bid and perhaps did not undertake

financial model of its own bidding document. Nevertheless, Bangladesh ignored suggestions of potential bidders and got very poor responses from them. A strong group of agitators, however, for the best reasons known to them only disputed Bangladeshi initiative for offshore exploration. The caretaker government could complete evaluation of whatever bids received and identified two IOCs -- Conoco Philips of USA and Tullow of Ireland -- for some blocks. Conoco appeared the evaluated bidder for 8 blocks and Tullow for one. The caretaker government, for lack of mandate about taking such major policy decision, smartly refrained from taking decision leaving it for democratically elected government. However, they took some initiatives for discussions with Myanmar and India in efforts for resolving maritime boundary disputes. But these efforts could not bring any meeting of minds. There were some initiatives for acquiring more data and information on offshore blocks. At one stage, Myanmar mobilized its drilling rig in the disputed water under coverage of its naval ships. Bangladesh responded strongly sending its own ships. There was war like situation which could be avoided at the last minute following withdrawal of Myanmar from the disputed boundary. The present government after assuming office proceeded meticulously to acquire extensive data and information on offshore hydrocarbon resources through commissioning a company for survey. Bangladesh proceeded to prepare packages of information in support of its legitimate claims over maritime b o u n d a r y . Following further initiatives for setPhoto: ITLOS t l i n g d i s p u t e s
11

amicably through mutual engagements with India and Myanmar, Bangladesh served arbitration notice on both to take the matters to ITLOS. In the meantime, Bangladesh duly submitted its claim over maritime boundary to the UN body within stipulated time. Government also reviewed the outcome of offshore bidding during the caretaker government and after protracted brain storming could conclude PSC for two blocks with Conoco Philips. Many, however, believe that Conoco submitted aggressive offer in 2008 without detail analysis and may at one stage find it not an attractive proposition. Objectives of Arbitration Main Argument The driver for the push to delimit the maritime boundary between Bangladesh and Myanmar stemmed from two factors. First, there were strong prospects for newly accessible gas in the overlapping claims. Speculation about gas prospects results from advances in offshore drilling technology that allows exploration in new swathes of the geologically promising but disputed ocean. Second, there remained heightened demand for natural gas by the two countries. The growing demand for natural gas in Bangladesh, which has experienced power shortages, constitutes a major domestic political issue. Demand for gas has also grown rapidly in potential export markets, creating strong incentives for Myanmar to export gas in order to bring in foreign reserves and gain favor with countries such as China and India. Bangladesh and Myanmar were actively pursuing a settlement through bilateral negotiations and the ITLOS. Both maritime base-

over gas from the Shwe fields. Gas discoveries in the overlapping claims area offer the opportunity for Myanmar to create stronger economic, strategic, and political links with India. Development of energy infrastructure in northwestern Myanmar will disproportionately challenge the livelihood of the Rohingya. Some scope exists for regional multilateral organizations, especially BIMSTEC, to help engender cooperation in the Bay of Bengal region. If settled through the ITLOS, the dispute could provide legal precedent that affects future maritime boundary cases elsewhere. Now the verdict of ITLOS has resolved most of the above issues.
President Jesus

lines and the legal principles for defining exclusive economic zones were the key issues in the proceedings. Policy Implications A maritime boundary agreement would allow Bangladesh and Myanmar to begin exploiting potential resources, which could help alleviate Bangladeshs gas crisis and bring more foreign reserves to Myanmar. Gas discoveries in Myanmars newly delineated maritime territory will likely rouse competition for gas exports between China and India similar to that

The agents of Bangladesh

Analysis of Judgment The ITLOS judgment is important for a number of reasons. It is the first such judgment over dispute concerning maritime boundary delimitation. It, therefore, gives an indication of the approach of the Tribunal to maritime boundary delimitation compared to other international courts and tribunals. Secondly, it is the first judgment of an international court or tribunal which directly addressed the delimitation of the continental shelf beyond 200 nautical miles. The tribunal therefore had to deal with some novel legal issues in its judgment. It will also be an important point of reference in the resolution for dispute between Bangladesh and India concerning their maritime boundaries on the other side of the bay. The tribunal dealt with the delimitation of the maritime boundary in three different parts: the territorial sea; the exclusive economic zone and continental shelf within 200 nautical Photo: ITLOS m i l e s ; a n d t h e
12

continental shelf beyond 200 nautical miles. Regarding the territorial sea, the Tribunal drew an equidistance line from baselines identified by the parties in accordance with Article 15 of the 1982 United Nations Convention on the Law of the Sea. It found there were no special circumstances which The agents of Myanmar called for moving (See Para. 462 of the judgment). this equidistance line. In relation to the exclusive economic zone and continental shelf within 200 nautical miles, the tribunal had been asked to draw a single maritime boundary by the parties. The Tribunal identified that it was required to draw the maritime boundary in order to achieve an equitable result in accordance with Articles 74 and 83 of the 1982 United Nations Convention on the Law of the Sea. The Tribunal decided to draw a provisional equidistance line but it then adjusted this line to take into account the concavity of the Bangladeshi coast. The Tribunal also decided that the delimitation method to be employed in the present case for the continental shelf beyond 200 [nautical miles] should not differ from within [200 nautical miles]. (Para. 455 of the judgment) As the concavity of the coast continued to have an impact beyond 200 nautical miles, the Tribunal held that the adjusted equidistance line should continue in the same direction beyond the 200 nautical mile limit of Bangladesh until it reaches as area where the rights of third States may be affected. Who Won, Who Lost? So who won the case? There has already been Declaration of Historic Victory in the case. However, in the context of maritime boundary delimitation disputes, this is probably not an appropriate question to ask. Throughout the judgment, the Tribunal stressed that the goal of maritime boundary delimitation (beyond the territorial sea) was an equitable solu-

tion. Thus, the outcome of any decision is unlikely to be a winner takes all scenario. Actually the verdict is a win win situation for both parties. The claim of Bangladesh Foreign Minister that it won more than what the country asked for cannot be established without having strong arguments. This is perhaps clearest in relation to the single maritime boundary drawn for the exclusive economic zone and continental shelf within 200 nautical miles. Bangladesh had argued that the Tribunal should use the angle-bisector method in drawing the boundary, as the equidistance line would, in its opinion, lead to inequitable result. Bangladesh argument was rejected by the Tribunal which accepted that the equidistance/relevant circumstances method was appropriate in this case, as had been argued by Myanmar. Yet, the Tribunal did not fully accept all of the arguments by Myanmar. The Tribunal stressed that it was not bound by the base points suggested by Myanmar in its proposed equidistance line and the Tribunal added its own base point to lead to a more equitable provisional equidistance line. Moreover, the Tribunal also rejected the argument of Myanmar that there were no relevant circumstances. Bangladesh had identified several possible relevant circumstances. The Tribunal accepted that it was necessary to adjust the equidistance line to take into account the concavity of the coast. But it denied the relevance of the other circumstances, put forward
Photo: ITLOS 13

by Bangladesh, including the position of St. Martins Island (subject to the sovereignty of Bangladesh) which was given no effect in the delimitation. (Para. 319 of the judgment) The adjustment of the line is largely done at the discretion of the Tribunal, with the Tribunal itself noting that there are no magic formulas. (Para. 327 of the judgment) Arguably, the final delimitation line for this part of the boundary gives something to both parties. Here also it is a win-win solution for both. The equitable nature of the solution is also apparent in relation to the settlement of the boundary beyond 200 nautical miles. On this point, Myanmar had argued that the Tribunal should not exercise its jurisdiction, but the Tribunal was clear that it had the right to decide on the delimitation, regardless of whether the extension of the outer continental shelf had been approved by the Commission on the outer limits of the Continental Shelf. The tribunal also rejected Myanmars argument that Bangladesh has no continental shelf beyond 200 nautical miles. At the same time, the tribunal rejected the argument of Bangladesh that there was no natural prolongation from the coast of Myanmar because of the geological discontinuity where the Indian tectonic plate meets the Burma tectonic plate about 50 nautical miles from the coast of Myanmar. In an important clarification of the law, the Tribunal held that natural prolongation refers to the extension of the continental margin and there was therefore no need for geological continuity. (See Para. 437 of judgment; see also Para. 460) Nor did the Tribunal accept that the geographic origin of the sedimentary rocks had any relevance for the delimitation of the outer continental shelf. (Para. 447 of the judgment) In the end, the Tribunal simply extends the adjusted equidis-

equidistant method was appropriate as argued by Myanmar. The Tribunal, however, added its own base point to lead to a more equitable provisional equidistance line. The Tribunal accepted that it was necessary to adjust the equidistance line to take into account the concavity of the coast. So while we congratulate the present government for taking historic initiatives of taking the maritime boundary disputes to international court and achieving resolution, we also suggest that we must not consider this as an overwhelming victory. We won some and also lost some. We must strongly pursue our case of dispute with other neighbor India. As we have already gone to arbitration we must keep our focus there. Indian suggestions of opening fresh dialogue must not lead us to withdraw from arbitration. India resolves nothing through arbitration. Let Tribunal give its verdict. Through further surveys we can acquire further information that would strengthen our plea. We have very strong possibility of winning our rights over south Talpatty. Bangladesh should announce fresh bidding round on the offshore blocks on the basis of the amended draft model PSC 2012. One must also carefully see whether the model PSC addressed all genuine concerns of potential bidders those might have stayed away from last bidding round. If the bidding is done now, Bangladesh can engage IOCs by end 2012 to avail the dry season of 2012 and 2013. By 2016, Bangladesh may get some good news from offshore prospects. Bangladesh desperately needs exploitation of offshore hydrocarbon resources for its mid and long term energy security.
EP

tance line that it had already drawn for the exclusive economic zone and continental shelf within 200 nautical miles. Again, this solution can be seen as giving something to both parties, but it certainly does not give either of them everything they had asked for. Conclusion Reaching a solution to long standing maritime boundary acceptable to both parties is an achievement in itself. The present government can definitely be credited for that. But there is no reason to believe that the verdict is an exclusive victory for Bangladesh. Bangladesh lost rights over 4 relatively shallower water blocks adjacent to Myanmar coast which are believed to have greater potential for Hydrocarbon resources while Bangladesh got some deeper water blocks where there are no proven existence of such resources. Some of the major Bangladesh claims and submission were rejected by the tribunal as appears from above expert analysis. Bangladesh has won rights of continental shelf beyond 200 nautical miles. This is an achievement. The Tribunal did not accept Bangladesh plea of using angle bisector method in drawing boundary and viewed that

Engr. Khondkar Abdus Saleque Non Resident Energy Expert Now Working in Afghanistan
14

COVER PLUS

Maritime Boundary & Hydrocarbon Exploration

Dr. Ijaz Hossain

may be located with Bangladeshs territorial waters, they may be taking away gas that rightly belongs to us. Today with directional drilling one can penetrate several kilometers in a horizontal direction. Exploring our natural gas resources will progressively become expensive as the drilling success ratio drops. Two shallow offshore drilling by Santos have been dry; Chevron has not had much success in their own drillings; most importantly, BAPEX has not been able to add very much to our reserves in the last 10 years. These conclusively proves that finding gas is becoming harder and harder. The success ratio in Bangladesh is certainly approaching 1:5. Additionally, the chances of finding an onshore giant field like Titas or Bibiyana is remote. The deep offshore energy resources are extremely relevant for us. The USGS study which told us that there is a 50% probability of finding 32.5 Tcf of gas banked on deep offshore. The NORADHCU study, which puts the resource figure at 42 Tcf also banked upon deep offshore. The shallow offshore success ratio is somewhere in the region of 1:8, whereas the onshore success ratio still remains below 1:3. But what about deep offshore prospects. There has been no seismic in the vast acreage we have secured for ourselves, and most importantly in the offshore blocks of the coastal region of Myanmar there has been significant discoveries in four fields. The last frontier is therefore deep offshore. The maritime boundary delineation has finally cleared the way for deep offshore exploration. To bring dynamism to the gas sector we need to change our present mindset, and allow IOCs to vastly scale up the exploration effort in the entire country, along with that we need to ensure an attractive price for the IOCs share of gas. The delineation of our maritime boundary is excellent news, but we must act quickly by redrawing the blocks and inviting the IOCs to start a vigorous exploration program. EP

ur efforts to start exploration in the deep offshore Bay of Bengal have always been hampered by the uncertainty in the maritime boundary. Very recently ITLOS through a 151-page verdict has determined the maritime boundary between Myanmar and Bangladesh. At long last we know what portion of the Bay of Bengal is ours and what portion is not. Therefore, we have no excuse to further delay offshore hydrocarbon explorations. We must immediately initiate a vigorous exploration program by drawing up new exploration blocks in line with the ITLOS verdict. Let us not be misguided by those who say that IOCs should not be involved. If we do that it would be a suicidal because BAPEX will not be able to acquire deepwater exploration capability in the next 10 years. To initiate hydrocarbon in the deep offshore we had drawn up 28 blocks. These blocks were bounded on two sides by two straight lines that come vertically down from the east and west boundaries of mainland Bangladesh and go into the deep sea. Lots of people have criticized Petrobangla for drawing up these blocks before dispute resolution. In some sense they are right, but I think staking a claim beforehand allowed us to invite reputed IOCs to participate in the PSC tenders. In short, we have been aggressive about the Bay of Bengal, and why not. We have always known the Bay of Bengal to be closely associated with mainland Bangladesh. In terms of hydrocarbon exploration, what have we achieved through the ITLOS verdict? A close scrutiny will reveal that there is nothing to get so excited about. Firstly, the deepwater blocks in the Bay of Bengal facing the Myanmar coast are all gone because the delimitation line runs diagonally

from a point 12 nautical miles south of St. Martins Island to another point located somewhere in the middle of the Bay of Bengal where India also has a claim, and that wont be resolved before 2014. Secondly, neither Myanmar nor India has found any hydrocarbon beyond shallow offshore. However, this is not to imply in any way that there are no prospects. On the contrary the deep offshore of the Bay of Bengal is totally uncharted territory. Practically no seismic has been done, and the fact that we do not know much about the deep offshore is indeed our biggest hope. Our real gain has been the sea area below the St. Martins Island, i.e., just beyond Myanmars Rakhine coastal region. Here we have got possession of substantial portions of Myanmars AD blocks. Now, why are these blocks so important? The importance comes about from the fact that in shallow offshore Myanmar has found a big gasfield, the SHWE field in their A block. The location as the crow flies is only about 50 kilometers from the southernmost tip of Bangladesh mainland. The potential of this reserve is so good that Myanmar immediately initiated exploration of the deepwater adjoining the SHWE field, and IOCs as the owners of the PSC blocks undertook exploration. Since this was well within our expected territorial waters we immediately protested, and further work was suspended pending verdict. The good news is that the ITLOS delimitation line puts substantial portions of Myanmars AD blocks into our control. The big question now is can we take advantage of this? We must remember that these highly prospective blocks fall partly on Myanmars side and partly on ours. With Myanmar well advanced in exploration in this area can easily hit gas and start exploitation. Since it is very likely to be the same structure that

Dr. Ijaz Hossain Professor, BUET

15

SPECIAL ARTICLE

The Cost of Indecision in Energy Sector -- Disaster in Making

M. Tamim

he great Spanish philosopher Maimonides said The risk of a wrong decision is preferable to the terror of indecision. From a country perspective, any indecision in financial or technical policy stymies economy and makes investors nervous. A survey by Sirota survey intelligence found that Indecision not only causes delays but it stimulates frustration, destroys motivation, causes costs to rise and more mistakes to be made. In short the cost of correcting the wrong decision is less than the cost of indecision. Bangladesh is currently paying very high for the cost of indecision in its energy sector. If it is of any consolation, Bangladesh is not alone in energy indecision fiasco. The small island of Mauritius is currently using only 430 MW power and the demand is expected to grow by another 60MW in next four years. Almost 60% of the current power comes from IPP generated coal/bagasse fired plants and the rest from government owned HFO based power. They also have very small hydro power. A six year old approved 2x50 MW coal fired power plant is mired in legal and environmental battle with no end in sight. In the mean time government took the expensive oil fired small plants at a high cost to meet the demand. The average crude price is predicted at $120/bbl in the current year compared to $100/bbl last year. Present HFO price is $100/ton more than last year. HFO based marginal electricity production cost is at least 2.5 times more than coal fired power plant per KWh. Indecision on coal is bleeding Mauritius. It is a simple matter of economic choice that was rejected/delayed due to political game play. India produces 15000 MW from imported coal. These are mainly oper-

ated by private sector Tata Power, Reliance Power, Adani Power, JSW Energy and Lanco Infratech who competed on tariff based bidding process depending on long term coal import contract from Indonesia ($40-$50/ton). They got the jolt of international energy price volatility and uncertainty when at the end of 2010 Indonesia declared benchmarking their coal price with international movement (price moving to over $100/ton). Very soon Australia and South Africa also followed suit. India is increasingly falling short of achieving its domestic coal production and stuck at about 460 million ton per year causing a total shortage of 100 million ton now. About 20000 MW coal fired power plant is stranded and another 16000 MW is running on a daily supply basis. The indecision on how to meet the supply shortage is making both the private and state operators anxious. Pakistan reached its colossal energy shortage through a path of indecisions, corruption, mismanagement political unrest and wrong policy decision. Presently it has a power shortage of about 6000 MW and gas supply deficit of over 2.5 bcfd against the demand of 14000 MW and 8bcfd respectively. Poor rain fall and high oil cost have shut down several power stations this year. Pakistans petroleum basin for possible new oil and gas finding is enormous but no major exploration work took place for many years mainly due to political unrest. Despite more than 1 billion ton of recoverable safe coal deposit it produces only 150 MW from coal. Increasing oil dependency of thermal power was the result of indecisions by subsequent governments that has resulted in 34% power generation by oil whereas the world average is about 5% only. The annual oil import bill is over $12 billion. All these inde-

cisions were fed by politics, interest groups, petroleum lobby whereas clear technical and economic solutions of the problems were in front of the rulers all the time. Forty percent of world electricity is produced from coal whereas 68% of Indian, 78% of Chinese and 48% of US electricity is generated from coal. Bangladesh was an energy surplus country even in 2005 when Tata was invited to invest in Bangladesh using the surplus Bibiyana gas without understanding the ground realty. Since 1999, no major base load power plant has been constructed. In those days the real problem was generation capacity not the lack of primary energy. The mono fuel dependency on gas for every aspect of primary energy use and not realizing the true economic value of the gas have led to rapid growth in use and eventual shortfall. The Decisions After the emergence of Bangladesh, The Bangladesh Petroleum Act 1974 was promulgated and subsequently Petrobangla was formed in 1974 to promote and regulate exploration, production and distribution of petroleum. The years 1974-78 were focused on offshore drilling by six international oil companies under Production Sharing Contracts (PSC). Petroleum policy was formulated in 1993 from the guideline of Petroleum Act 1974 to augment the petroleum resources base of the country and to meet the ever increasing demand of natural gas especially in the field of power, fertilizer and industrial sectors. To achieve these objectives both domestic and foreign participations were to be attracted to this vital sector. As a result of these two critical and progressive acts, 33 wells were drilled between 1974 and 1999 resulting in
17

discovery of almost 10 tcf of gas by both Petrobangla and International Oil Companies (IOCs). Out of these, Petrobanglas recoverable share is 2 tcf and IOCs recoverable reserve is 6.5 tcf. Adoption of both these policy documents required vision and guts remembering the need of the country instead of any political interest group. At the same time the Private Sector Power Generation Policy in 1996 allowed the cash strapped country to bring in Independent Power Producers (IPPs) that added about 1000 MW combined cycle highly efficient gas fired base load power plants by 1999. These are the cheapest electricity production by any producer in the country today. Policy Guidelines for Small Power Plants in Private Sector in 2000 later played a vital role for developing smaller, efficient and commercially viable generation in the country.

the expected commotion and while vigorously debating the proposal, Bangladesh went out of its way to increase the usage. During the same time a gas utilization committee (2002) suggested that IOCs should be allowed to export their share of gas from new discovery only. This was concluded from a demand analysis that showed that while short term surplus prevailed at that time, there would be supply shortage from as early as 2010 if new gas discovery was not made. The complete idleness of the IOCs was alarming. The export suggestion was more a market signal to invigorate exploration than actual reality as Bangladesh could always exercise its first right of refusal to buy the gas. Apart from uncontrolled and unplanned expansion of gas use, no other decision was taken since 1999 to find new gas field despite written warning (except the 2008 offshore bidding). The result is the leanest decade of gas discovery in the history of Bangladesh. Only 0.5 tcf Bangura field was discovered from a known structure and after all these talks, UNOCAL had to sit on their investment for eight years before Bibiyana came into production in March 2007. The indecision also affected BAPEX, the national exploration company. No attempt was made to activate them either. The recent activity by BAPEX is the result of the approval of their 7 year vision plan in

2008. Unfortunately, the last two explorations by them did not find any mentionable reserve. The prediction of the 2002 Gas Utilization Committee has come into effect couple of years early due to unexpected and uncontrolled growth of captive power and CNG sector. Due to a court case by an environmental law group and supported by a section of political activists, no new land PSCs were signed since 2001. The notion that PSC is too expensive or detrimental (even though the full price purchase of the entire gas at $3/Mcf is far lower and very much affordable than $15/Mcf LNG import) to the interest of the country propagated by this group created enough pressure for the governments that kept all exploration work frozen. At the same time no government seriously tried to extract coal either. The 1996 National Energy Policy which was accepted by both the major political parties clearly identified the danger of mono fuel dependency. As a solution to the problem the policy suggested developing coal that would bring a twofold benefit1 reduce the great energy divide between the East and the West of the country and 2) eliminate the absolute dependency on gas by producing at least 40% power from coal. Since 2000, countrys energy policy became reactive and indecisive instead of visionary and proactive. The 2001 UNOCAL proposal of exporting gas was never objectively examined. There was no serious effort to resolve the stranded investment issue which could be easily solved by giving a purchase guarantee of all newly discovered gas. Instead, a
18

The Indecisions It all started in 1999 when UNOCAL discovered Bibiyana gas field. At that time, Bangladesh could not use the gas because there was not enough market. It was a short term surplus. As a result, all IOCs essentially stopped looking for any more gas except the minimum work obligation of the contract. They gave up most of the risky areas. The PSC says that if a commercial discovery is made, Petrobangla will have the first right of refusal and if they cannot buy the gas, the IOCs can sell it to any local third party as the second alternative. The third option is to export in the form of LNG that was never viable for the 4 tcf gas situated far away from the shore. As a result, the company proposed a pipeline export to India that was not included in the PSC contract, for a quick return on investment. This created The employees of Rupali Bank Ramna branch suffering by load shedding

Photo: Bangla News24

reactive move by some resource nationalist capitalized the opportunity starting a war of rhetoric using the export issue as the main weapon to oppose any PSC. They were very successful in confusing the country and starting the era of indecision. Their false projection of BAPEX being a super successful, competent and capable party was devoid of facts and completely politically motivated. For all practical purpose, the gas exploration stopped and the country ended up with an accelerated gas use with the false idea of vast gas reserve. The now infamous idea of Bangladesh floating on gas theory could never been tested although the possibility of substantial reserve still remains. Another reactionary policy stalemate was triggered when Asia Energy was given the license for developing Phulbari coal mine in 2005. There was no hue and cry about coal before this move which shows the passive nature of our political activists. Even today, not a single group of people of any

affiliation has come up with a clear doable energy road map before the nation. The violent reaction to the Phulbari proposal killed the hope of any new coal project that is still being stalled in the absence of a decisive coal policy. The sensitive export issue can easily be resolved if government looks into the issue objectively and sincerely. The stoppage of coal development and gas exploration due to political indecision despite the presence of clear economic advantages has forced the governments to take the short term and expensive oil based rental power plants. The countrys current economy simply cannot afford or sustain the burden of importing expensive energy either. The international energy price volatility is also a source of great uncertainty. Only a comprehensive energy road map based on broad national consensus with a clear vision can avoid knee jerk policy reaction instigated by some foreign proposal. The policy conclu-

sions and decisions have to be home grown. There are some signs of changes. The new onshore and near offshore PSC bidding contains a gas purchase guarantee instead of a conditional export clause. This would adequately address the return on investment concern of any future investor and take away the principal weapon of PSC opponents. The recent maritime boundary settlement encouraged Petrobangla scurrying for a new offshore bidding. If a quick decision for local coal development is not taken, all development work will come to a standstill. The present 500mmcfd gas and 1500mw power deficit will shoot to unmanageable level. Even if a firm decision on all out gas exploration and coal development is taken, the country will not get the benefit until another five years. Decision taken late is better than never.
EP

M. Tamim Professor, BUET

19

REPORT

LPG Price Doubled

EP Report

thinking about increasing market harmony. According to the BPC Chairman, the private firms were importing 80,000 tonnes of LPG and the government 20,000 tonnes a year against the demand of 300,000 tonnes. The country is producing 20,000 tonnes LPG every year through Eastern Refinery Limited and Rupantarita Pakritik Gas Company Limited (RPGCL), he said. Siddique said there were two government plants to bottle LPG. Of them, the capacity of Chittagong's LPGL is 14,000 tonnes a year and Sylhet's Kailashtial LPGL 7,000 tonnes. There are six privately-owned plants to bottle LPG. Of them, Premier LPG, owned by the multinational firm Total, and another owned by Clean Heat have the capacity to bottle 15,000 tonnes a year. Another plant owned by local firm Bashudhara at Mongla can bottle 20,000 tonnes a year. Private firm Jamuna Spacetech JV has a plant at Bogra and Summit has another at Mongla. BPC Chairman Siddique said the government had planned in 2010 to set up two plants to bottle 100,000 tonnes LPG a year. One of the plants will be set up at Mongla and another under Public Private Partnership (PPP) at Kumira of Chittagong, he said. The Development Project Proposal of the plant at Mongla has already been sent to the energy ministry and the work to make the DPP for the plant in Chittagong is underway, he said. Another project for setting up a plant to produce 240,000 cylinders a year awaits clearance, the BPC chairman said. There are four plants in the country to produce cylinders. A TK Group factory in Chittagong produces 500 cylinders a year, a Bashundhara Group plant 500 at Manikganj and another produces 700 at Mongla, and a Jamuna Spacetech JV in Bogra produces 600 cylinders a year.
EP
20

onsumers are reportedly paying around double the amount fixed by the government for a cylinder of liquefied petroleum gas (LPG) due to irregularities in the three state-owned oil firms. The government, however, prefers LPG to natural gas for household use and is not giving any new gas connection to homes. Though the government said it will encourage using LPG, no step in this regard is visible. According to Abu Bakr Siddique, Chairman of Bangladesh Petroleum Corporation (BPC), the government fixed the rate at Tk 700 a 12.5-littre cylinder. State-owned oil companies Jamuna, Padma and Meghna have around 2,200 dealers of LPG across the country, he said. About the allegation against them of selling LPG at Tk 1,500-1,700 a cylinder, the BPC Chairman said, "The oil companies have been asked to take steps against those dealers. Even their dealership will be cancelled if they are found guilty." Banker Shahidul Islam of Barisal said private firms were selling LPG at Tk 1,700 a cylinder while the state-owned companies at Tk 1,500-1,600. Rajshahi resident Abu Bakr Ali said the state-owned oil companies were selling LPG at Tk 1,580-1,700 there. Asked why they charges more than the government-fixed rate, Jamuna dealer in Satkhira Sirajul Islam said, "We have to buy LPG at Tk 750 a cylinder though they are supposed to sell at Tk 700." "We are selling at Tk 850-900 a cylinder," he added. Qamrul Islam, a consumer of the district, however, said it needs at least Tk 1,500 to buy a cylinder of LPG even from the government firms. He cited lack of supply of LPG for this anomaly. A dealer in Satkhira does not

get more than five to seven cylinders a month, he said. Jamuna's dealer in Barisal Mohammad Mamun said he gets seven to 10 cylinders a month. "We buy a cylinder at around Tk 700. We have been asked to profit not more than Tk 100-150," he said. Jamuna Oil Company Barisal depot incharge Sayeed Hasan, however, admitted that there are complains that dealers are selling LPG at rates higher than that fixed by the government. There are 35 dealers in Barisal who buy LPG at Tk 678 a 12.5-litre cylinder, he told bdnews24.com. "The government should take steps against these dealers," he added. In the budget speech for the last fiscal year, Finance Minister A M A Muhith had said the government prefers a boost in use of LPG to giving new connection of natural gas for residential usage considering the reserve. Energy Secretary Mohammad Mesbahuddin had told a press briefing of Petrobangla that the government will not give any new gas connection for residential use and will encourage using LPG. But no step in this regard was taken in the past nine months. Rather, discrimination between residential and commercial consumers increased. While a residential user has to pay a highest amount of Tk 450 a month for 24 hours gas through pipe line, LPG costs around Tk 1,700 a cylinder of 12.4 liter. State Minister for Energy Mohammad Enamul Huq had told Parliament on Feb 16 that import, bottling and marketing of LPG was open for all in Bangladesh. "Private firms import, bottle and market LPG through their own systems. So there is no government move to fix the price of LPG imported by these companies," he said. Later, he said that the government was

REPORT

Fresh Power Price Hike

EP Report

he prices of electricity for both the retail and bulk consumers have been increased for the third time in last four months due to adjust enhanced fuel cost and reduce subsidy.

The power tariff increased The Power Development by Tk 0.18 to Tk 3.05 per Board on March 13 sent a unit for consumption of up to 100 unit, by Tk 0.25 BERC Chairman Syed Yousuf Hossain & its Members Selim Mahmud & Imdadul Haque proposal to the energy to increase Photo: EP regulator to Tk 4.29 per unit for were present at the hearing power price by Tk 0.41 consumption of 101-400 Board (PDB) has bulk consumers Dhaka per unit or 11 per cent for bulk users, folunit and by Tk 0.46 to Tk 7.89 per unit Power Distribution Company, Dhaka lowing which a public hearing was held for 400-plus category. Electric Supply Company, Rural at the BERC office on Mar 19. The rate for irrigation has been increased Electrification Board and West Zone The evaluation committee of BERC the by Tk 0.13 to Tk 2.26 per unit and for Power Distribution Company. commercial purpose by Tk 0.46 to Tk The average production cost of a unit of same day recommended bulk tariff hike 7.79 per unit. The rate for small-scale electricity is Tk 6.68, according to PDB. by 5.79 per cent or Tk 0.22 per unit within a week. On Mar 11, finance minindustries has been revised up by Tk "Though prices are generally hiked per ister Abul Mal Abdul Muhith in parlia0.35 to Tk 6.02 per unit. unit in phases following usages, retail ment also hinted at power tariff hike. Bangladesh Energy Regulatory price has been increased by Tk 30 paisa Commission (BERC) Chairman Syed per unit on an average. The bulk tariff BERC in November last year had also Yusuf Hossain announced the new has also been hiked by 30 paisa per unit hiked the power price at retail levels by prices at his Karwan Bazar office in the in the same way," BERC chairman Yusuf a total of 21.28 percent in two phases. Earlier, it had raised bulk power price by city recently. This hike is due to adjust- Hossain said. 31.16 percent in two phases for the third ment of fuel cost. The subsidies for oil"We are trying to provide an equitable time last year. based power plants went up folPDB explained in lowing the latest the proposal that rise in oil prices in the production the international cost of electricity market, he said. increased as the prices of all types The retail tariff of fuels had gone went up by Tk 0.55 up by Tk 5 per liter. per unit on So, per unit bulk December 1 and power tariff be Tk 0.31 on increased by 7.49 February 1 while per cent to Tk 4.02 for bulk consumers from Tk 3.74. it rose by Tk 0.47 According to offiper unit on cial estimates, the December 1 and government in the by Tk 0.40 per unit current fiscal year on February 1. is set to spend Tk Besides, 13 million 20,000 crore in retail consumers, subsidies for the P o w e r power sector. Source: BPDB EP Development
21

solution for all," he added. "We hope that it will acceptable to all," he said. "The PDB proposed to increase the price by Tk 0.41 but we agreed on Tk 0.28 for the bulk and Tk 0.30 for the retail level."

REPORT

Chinese Co Set For Ctg Gas Exploration

EP Report

he state-run exploration agency Bapex has finalized a draft agreement to explore gas at block 22 in joint venture with a Chinese corporation. The draft, which now awaits approval by the Bapex Directors, Petrobangla and Energy Ministry, says Sinopec Corporation will get 70 percent of the gas if extraction was possible in the block. It also says the company will have to pay if any accident takes place. Bangladesh Petroleum Exploration and Production Company Limited, or Bapex, will get 30 percent of the extracted gas and will buy the rest from Sinopec. Sinopec will be able to sell its share to third parties within the country if Bapex is unable to buy it, according to the provisional deal. Bapex officials said that the agreement was for exploring and extracting gas in Chittagong's Patia, Jaldi, Sitapahar and Kasalang areas. "If the board approves it, it will be sent to a Petrobangla review committee and then to Energy Ministry for final approval," said an official. The government invited expressions of interest from multinational companies for exploration in block 22 in December 2010. Sinopec was picked in a primary selection on January last year. The Energy Ministry in October last year ordered Petrobangla to strike an agreement with the company. According to the draft, Bapex will get 30 percent of the gas extracted from the region, as opposed to the 20 percent it was supposed to get from a previous agreement made with Candadian Niko Resources. The draft says Petrobangla will fix the gas price in accordance with the price it takes from international oil sellers. Bangladesh government will not spend

anything on the exploration. Any accident during the exploration will be compensated by the company. The contract with Niko had no such terms on compensation. Two massive blow-outs took place while the company was extracting gas from the Chhatak gas

field in Sylhet. A probe committee that looked into the accidents demanded Tk 7.47 billion in compensation from Niko but the company refused. In June 2008 a case was filed against the company at a local court. The case is still on trial. EP

5 Lakh Apply For New Power Connection M

ore than 5 lakh applications for new connections have remained pending with five state-owned power distribution agencies, as well as private agencies, since June 7, 2011. About 1,140Mw (megawatt) of power is required to give all these new connections, according to the Power Ministry. On the other hand, the government's instruction to install environmentfriendly solar panels to substitute a small fraction has yet not been implemented. None of those five agencies has been able to enforce the requirement for various reasons. During the same period, these agencies have given connections to about 9.56 lakh consumers, entailing a total consumption of 1,355 MW of power. At present, the five agencies have a cumulative capacity of about 3,800 MW of power. The actual requirement varies from 6,000 MW to 9,000 MW. As a result, power cuts, both in the urban and rural areas, has become a common phenomenon for the household and the industrial sectors. The number of new applications pending for new connections during the same period stood at 5,595 with DPDC, while it is 4.68 lakh with Rural Electrification Board (REB), 22,900 with PDB, 10,963 with Dhaka Electric Supply (DESCO) and 7,621 with the western Zone power generation (OZOPEDCO).

During the same period, highest number of connections was awarded by the REB, while the total number of connections, awarded by the organizations, stood at a little more than 6 lakh. In the rural areas, farmers are facing acute shortage of power for irrigation requirements, while in the urban areas, builders, owner of homes, industrial and commercial ventures are suffering, as the new connections are not available for new constructions and industries. Also, commercial operators are not getting required power supply to supplement their production. The government, last year, introduced a law to make mandatory the use of solar panels for the households, commercial and industrial ventures that are to get new power connections. Accordingly, the households were asked to generate three per cent of their total requirement from solar panels. Similarly, the commercial ventures, consuming less than 50 KW per hour (KWH), were instructed to use five per cent and those consuming more than 50 KWH were asked to generate seven per cent of the total requirement from solar sources. On the other hand, the industrial ventures were asked to generate 10 per cent of total requirement from solar sources. But, in practice, no organization appeared to have those conditions fulfilled. EP

24

REPORT

WWEA Releases Small Wind World Report 2012

EP Desk

n the occasion of the 3rd World Summit for Small Wind during the New Energy fair in Husum (Germany), WWEA released the first Small Wind World Report. For the first time, data about the status of small wind turbines all over the world has been gathered and published. The total number of small wind turbines installed all over the world reached 656'000 units as of the end of 2010, after 521'000 in 2009 and 460'000 in 2008. These small wind turbines represent a total capacity of around 440 MW (end of 2010), compared with a total capacity of 240 GW of large wind turbines. The largest share of the small wind turbines can be found in two countries, China (450'000 units/166 MW) and the USA (144'000 units/179 MW), followed by the medium sized markets with 222'000 installed units and 5-50 MW total capacity: UK, Canada, Germany, Spain, Poland, Japan and Italy. In 2020, WWEA expects that the total installed small wind capacity will reach 3'800 MW, representing an almost tenfold increase compared with 2010. The market for new small wind turbines will have a volume of around 750 MW in the year 2020. Today, more than 330 manufacturers of small wind turbines have been identified in 40 countries on all continents, and another estimated 300 companies are manufacturing equipment for the small wind industry. Most of the manufacturers are still small and medium sized companies. More than half of these manufacturers can be found in only five countries, namely in China and the USA, as well as in Germany, Canada and the UK. In spite of a vibrant small wind sector in many countries, only few governments are offering specific support policies for small wind. Less than ten countries are offering sufficient feed-in tariffs for small

wind, and there is almost a complete lack of support schemes in the development countries, where the demand for small wind turbines would be huge, especially in non-electrified areas. Only in China, small wind turbine contributes today on a large scale to rural electrification, which is also thanks to the relatively modest price level of small wind turbines in the country. WWEA President He Dexin: "So far, small wind turbines are still only representing a minor share of the wind power market. However, the market potential is enormous. Wherever the wind blows, small wind turbines can provide electricity at affordable prices to local citizens, be it for rural electrification like in China

or in other developing countries or connected to the grid, like often in the industrialized countries. Considering this and the recent huge growth rates, the small wind sector has the chance to increase its market shares substantially in the foreseeable future and become a mature industry that contributes to human wealth, energy security and a healthy environment." WWEA Secretary General Stefan Gsnger: "Governments should recognize the huge potentials of small wind and its great economic, social and environmental benefits and set up favorable legal conditions. Short and comprehensive permission procedures, appropriate feed-in tariffs or similar support schemes and comprehensive standard and certification schemes should be implemented in the near future. The huge number of small wind manufacturers, many of them still very small, shows us the potential of the small wind industry, to create jobs and become a booming industry sector."
EP

Solar Products Show Begins in Dhaka

EP Report

four-day trade fair begins in Dhaka from April 5 to showcase latest solar products and technologies. The second international show titled SOLAR POWER Bangladesh 2012 will be held at Bangabandhu International Conference Centre to display products of nearly 50 companies from Bangladesh and abroad will be put on display. Organized by Zakaria Trade & Fair International and ASK Trade & Exhibitions Pvt Ltd, and presented by Hydron Bangladesh (Pvt) Ltd, the show with focus on display of products, technology and applications based on solar power will be the largest one in terms of the number of products and companies participating with products related to a single field, organizers said. We are very happy at the product-mix which will be on display at SOLAR POWER Bangladesh 2012, said

Saleem B, Director ASK Trade & Exhibitions Pvt Ltd. it will give tremendous sourcing options for a discerning buyer as well as an opportunity to witness latest innovations and its commercial implications of adapting this alternative energy source. The government has a plan to generate 280 MW of solar power by 2013. Manufacturers, local and global players in photovoltaic, solar thermal, solar architecture, photovoltaic and solar equipment, products materials and systems cell modules inverter and other components, solar community lighting systems, portable solar lanterns, solar street lights, solar fixed home lighting systems, solar water pumps, solar water heaters and systems, solar cookers, solar test centers, solar end use manufacturers and large users, total PV solution providers, service providers etc. would participate at the event. EP

25

REPORT

US Solar to Get Obama Aid in Battle With China

EP Desk

resident Barack Obama's administration is expected to throw its weight behind US solar panel producers in their battle against lowerpriced imports from China that they say threaten the future of the industry in the United States. A coalition of seven US manufacturers has asked for duties topping 100 percent on Chinese-made solar cells and panels, which they say are subsidized by the Chinese government and "dumped" in the United States at unfairly low prices. The case, which was filed last year, has created more friction in the US-China trade relationship, already strained by clashes over Beijing's currency policies and US duties on a number of other Chinese goods. China's biggest solar manufacturers, which include Suntech Power Holdings Co, Trina Solar, and JA Solar Holdings, generate more than 20 percent of their annual sales in the United States, making it the second-largest market for them after Europe. They are already moving to shift some of their production out of China to dodge additional US tariffs. "We're already dependent on the Middle East for our oil. We cannot become dependent on the Far East for our renewable energy," said Gordon Brinser, president of SolarWorld Industries America, which heads the coalition and the US arm of one of Germany's largest solar manufacturers, SolarWorld AG. The group appears to have found a sympathetic ear in Obama. "I don't want to see wind turbines and solar panels and high-tech batteries made in other countries by other workers. I want to make them here," Obama said last week.

The US Commerce Department will announce preliminary countervailing or anti-subsidy duties and preliminary antidumping duties in mid-May. A final decision on both is expected in the third or fourth quarter of the year. Analysts expect 20 to 30 percent antisubsidy duties on the imports, which soared to an estimated $2.8 billion in 2011 from about $1.2 billion in 2010. The punitive tariff, if it comes, is expected to take effect immediately. Chinese companies will be reimbursed if the decision is reversed later this year. US producers say the Chinese companies receive a long list of subsidies, including below-market loans from China's state-owned banks and subsidized raw materials, such as polysilicon, that greatly reduce their operating costs and helped Chinese firms grow their share of the US market to nearly 40 percent from 11 percent in 2009. But efforts to whittle down China's presence in the US market could hurt the fast-growing American solar market, where the industry is racing to cut costs and reduce its dependence on government incentives for renewable energy. "The resulting uptick in pricing might be

temporary good news for module vendors who have struggled to compete with Chinese firms, but we think the most substantive result is more likely to be lower US demand," Bank of America Merrill Lynch analyst Joe Osha said in recent note to investors. And China's solar makers appear to be already moving to shift their production outside the mainland, ordering key supplies from Taiwanese companies to avoid likely US tariffs. Suntech moved some of its operations to Arizona as early as 2010, and other Chinese companies are likely to follow. "Chinese module makers will not give up the US market," said chief financial officer Terry Wang at Trina Solar, which is also planning to add plants outside China. Chinese solar companies may also be able to take advantage of spare production capacity in countries such as Taiwan. "The likely response would be doing 'cell tolling' in Taiwan in order to avoid the US import tariff," said Xavier Chollet, co-manager of Pictet's Clean Energy Fund. Under such deals, Chinese companies provide products to Taiwan companies, which then process them to be packaged at solar panel plants elsewhere. That trend has not gone unnoticed by SolarWorld and its partners, who also are asking the Commerce Department to structure punitive tariffs in a way that will reduce the opportunity for Chinese companies to skirt the duties. "The scope of the case that we've proposed would cover Chinese cells that are made into modules (panels) somewhere else, or Chinese modules that are made from cells, whether from China or somewhere else," said Timothy Brightbill, an attorney with Wiley & Rein. "We will be quick to act if there are any signs of improper activity." EP
27

Barack Obama

REPORT

Russian Soft Loan Pledged For Rooppur Nuke Power

EP Report

ussia has agreed to provide 85 percent of the fund for the firstever nuclear power plant in Bangladesh. They [Russia] will give us the money as state credit. It will be a soft loan, State Minister for Science and Technology Yeafesh Osman said on his return from a visit to the Russian capital. Bangladesh will further negotiate with Moscow to get the entire amount -- Tk 12,000 crore to 15,000 crore -- estimated for building the plant at Rooppur in Pabna. A crucial deal on nuclear radiation safety control was inked during the trip. Under the deal, Yeafesh said, Russia would extend full support in forming a regulatory body to handle the safety issue of the 1,000-megawatt project. In another major outcome of his weeklong visit late last month, Bangladeshi students will get scholarships to study nuclear science and technology at a specialized university in Russia. Besides, teachers from the Russian university will visit Bangladesh to teach students at Dhaka University and Buet. DU and Buet will sign separate Memorandums of Understanding with Russian National Research Nuclear University. This programs are essential to create local expertise, Yeafesh said. He added that the government was also planning to establish an info-centre like the one in Russia to inform people everything about a nuclear power

plant. The centre may be set up at the Russian Culture Centre in Dhaka. According to official sources, Bangladesh has made a considerable progress in the last three years in meeting the requirements specified by the International Atomic Energy Agency (IAEA) for building a nuclear plant to resolve the country's energy crisis. A number of deals, framework agreements and MoUs have already been signed with Russia for peaceful use of nuclear power, technology transfer, development of human resources, and supply of required fuel and taking spent fuel back. The government will pass a law and form an independent regulatory body to carry out IAEA suggestion to form a legal structure for implementing a nuke project, the sources add. Yeafesh said the draft Bangladesh Atomic Energy Regulatory Act would be placed in a coming parliament session. Managing the huge cost to set up the plant was a major hurdle to overcome. Russian financial assurance has ended that uncertainty.

A final deal on the plant is expected to be signed within this year, aiming to commission it by 2017. The state minister said, We are trying to complete all preparatory work in a quickest possible time so that the deal can be struck during the prime minister's Russia visit later this year. Back in 1961, the then government had decided to build a nuke plant and accordingly acquired 292 acres of land -- 260 acres for a nuclear plant and 32 acres for offices and residences -- in Ishwardi upazila of Pabna. Meanwhile, the cabinet has ratified a cooperation deal signed between Bangladesh and Russian Federation to set up a long-dreamt nuclear power plant at Rooppur in Pabna, which is meant for catering ever-growing electricity needs. With financial and technological assistance from Russia, the nuclear power plant will be constructed to generate 2,000 megawatts of electricity. Through ratification of the deal, the country took yet another step forward towards implementation of the nuclear power plant, said Cabinet Secretary Mosharraf Hossain Bhuiyan while briefing reporters in the conference room of the Cabinet Division at Bangladesh Secretariat. The cabinet meeting was held in the cabinet room with Prime Minister Sheikh Hasina in the chair. Ministers, advisers to the Prime Minister and state ministers and officials concerned were present.

Proposed nuclear plant area Rooppur

Photo: Google Earth

EP

28

REPORT

New Mining Ownership Rule Irks Industry

EP Desk

he Indonesian governments new regulation which will cut foreign ownership in local mining projects from 80% to 49% will cost the sector billions by deterring international investors, industry commentators say. The law is applicable to new contracts and means the foreign stake can be no more than 49% by the 10th year of production. It effectively means foreigners are going to lose control after 10 years. Its going to make Indonesia a lot less attractive to foreign investors, as if it wasnt already, says Deloittes technical advisor on mining in Indonesia, Julian Hill. This regulation is the latest in a string of changes to practice that have lessened Indonesias attractiveness to investors. The new laws terms include a 20% sale of ownership after the projects fifth year of production and then a continual reduction in ownership for the next five years. Sometimes a mining company doesnt break even in five years, especially companies that make huge investments, like gold miners, says Indonesian mining association deputy chairman Tony Wenas. A record US$20 billion was injected into Indonesias economy in 2011 by foreign investors with US$3.6 billion going into the mining sector. The sector was buoyed by the passage of a new mining law in 2009 which the government cited would improve the

investment climate for foreigners, but since then parliament discussions have become increasingly protectionist. Despite the passage of the 2009 law, discussions in parliament have in recent years taken a more nationalist tone, including the proposal to ban the export of raw materials by 2014 in a bid to stem foreign companies gleaning the countrys natural resources. The government says the raft of new regulations aims to give Indonesian bodies a greater opportunity to engage in the mineral and coal-mining sector. An economist at the University of Indonesia, named Kurtubi, welcomed the regulation, saying foreign companies have made huge profits from Indonesian resources without giving enough back to the country for too many years. Its not true that the regulation will deter foreign investors, because even if they hold a smaller share, they will still harvest plenty of profits. The government has denied claims by some large foreign mining companies that the new law unfairly targets them. The regulation will be imposed on

every mining company operating in Indonesia, in general. That includes Freeport and Newmont, says deputy energy and mining minister Widjajono Partowidagdo. Freeport, which contributes 1.6% of Indonesias gross domestic product, is negotiating to renew its royalty contract to run the 90%-owned Grasberg mining complex, which has the worlds largest gold reserves and is the secondlargest copper mine. The government owns the remaining 10%. Grasberg has become a publicized example of the growing labor unrest in Indonesia, as workers push for a bigger slice of the spoils in a booming economy. A three month strike in 2011 forced Freeport to partially meet demands for a pay rise for workers in December. Newmont Mining is also engaged in a renegotiation with the government. Australian-based Intrepid Mines, which owns an 80% stake in the Tujuh Bukit mining concessions, is considering its best course of action given the new law. It was in the process of negotiating the conversion of the whollyIndonesian-owned company PT IMN, which holds the permits, into a foreign investment vehicle. Deputy trade minister Bayu Krisnamurthi says, We still believe, even with only 49%, the mining sector is still very alluring, still very lucrative for everybody. In some countries, this industry is prohibited from international investors.

Indonesian open-cast coal mine

Photo: Internet

EP

29

Climate Change the Greatest Threat

EP Report

arliamentarians from over twenty nations unanimously identified global climate change as the greatest threat to the lives, livelihoods and welfare of their constituents, and the ecosystems that sustain them, through a unanimous declaration in Dhaka on March 16. The Dhaka Parliamentary Declaration came at the end of three days of deliberations which included parliamentarians from the developed world, and the least developed countries and small island states that are among the most vulnerable to global climate change.

comes of this meeting has been the formation of a platform of parliamentarians not just from across the world but across the entire spectrum of the climate change discourse, said Saber Hossain Chowdhury, MP, Chairman, Standing Committee on Ministry of Environment and Forests, Bangladesh Parliament. Speaking at the inauguration as the chief guest Prime Minister Sheikh Hasina underscored the principle of climate justice, and observed the need for a global platform that draws attention to the plight of the countries that are suffering the worst excesses of global climate change.

The fact that a network was established is significant and the test for us will be whether we can represent our own governments but also countries not represented here in meaningful efforts to influence laws and policy to tackle climate change at the national and international levels, said Sarah Boyack, Member of the Scottish Parliament for Lothian, who was elected to the networks steering committee. Speaking at the closing ceremony, Robert Juhkam, UNDP Resident Representative observed that Bangladesh has played a leadership role in formulating policies to tackle climate change nationally, and in influencing international agendas, and urged Bangladesh and its leaders to continue to be a champion and a beacon in this area. I encourage MPs to position themselves to better influence their national and international agendas in climate change adaptation and disaster risk reduction. In this light, I hope that this network of parliamentarians will serve as an advocacy channel at the Rio+20 conference on sustainable development to be held in Brazil in June this year, Juhkam said. The three-day meeting held at Dhakas Radisson Hotel, was organized by the Bangladesh Parliament, with support from the United Nations Development Program and the Royal Kingdom of the Netherlands. Opening Ceremony Earlier the international conference of parliamentarians from over 20 countries opened in Dhaka with participants calling for elected representatives to play a greater role in combating the impacts of climate change at national and international levels.

The Declaration established Parliamentarians for Climate Justice, a global network of lawmakers in support of people most vulnerable to climate change, which will advocate for decisive action on tackling climate change through adaptation and mitigation efforts. The network will look to the peoples representatives to promote awareness and action on climate change through legislation and public gatherings, and be a platform for lawmakers across the world in sharing knowledge, information and best practices. The Declaration closed the International Meeting of Parliamentarians on Climate Change Beyond COP 17, which opened in the Bangladeshi capital on March 14. One of the most significant out-

Speaker Abdul Hamid Advocate preside the inaugural ceremony

The International Meeting of Parliamentarians on Climate

31

Change: Beyond COP 17, identified climate change as one of the most significant challenges to overall human development, which could potentially offset the gains in poverty reduction, food security and equitable economic growth that the world has made in the past few decades. Speaking at the inauguration, Prime Minister Sheikh Hasina said: For us parliamentarians, the vulnerable people, women and children are our most important constituencies. Their concerns and needs must be taken care of in all our policies and planning. So must be our commitment to our mother earth, she said. The PM said that she was confident as peoples representatives we will not be found wanting when it comes to protecting the people whom we represent, and securing the future of humanity and our planet. Looking towards the upcoming Rio+20 conference on sustainable growth to be held in Brazil in June this year, Sheikh Hasina urged parliamentarians to start talking about the path to green and sustainable growth with a special focus on equity, justice and human development. Dr. Hasan Mahmud, MP, the Environment and Forests Minister, spoke about the leadership role that Bangladesh has played in formulating policies to tackle climate change at the national level, and in drawing attention to the plight of the most vulnerable countries from across the globe. Parliamentarians and international experts from Canada, Pakistan, South Africa, Costa Rica, Maldives, Philippines, Tanzania, East Africa, Mali, Samoa, Ethiopia, Nepal, Scotland, Uganda, Netherlands, Senegal, United Kingdom, India, New Zealand, Sri Lanka, and Bangladesh participated in the conference to share their experiences and to shed light on issues that best exemplify the challenges of climate change in these countries and role that parliamentarians could play in taking a global consensus forward. Saber Hossain Chowdhury, MP, Chairman, Standing Committee on Ministry of Environment and Forests, Bangladesh Parliament and Stefan Priesner, Country Director, UNDP

Bangladesh spoke the opening ceremony as special guests. The inaugural ceremony was presided over by Speaker Abdul Hamid Advocate. In a video message to the conference Al Gore, Former Vice President, USA and Nobel Laureate lauded Bangladeshs efforts in drawing attention to the urgency with which the world must act in mitigating the impacts of climate change, but also for the leadership role the country has played in speaking for the least developed world. The conference was organized by the Bangladesh Parliament through the Standing Committee on the Ministry for Environment and Forests with support from the United Nations Development Program (UNDP) under the project Improving Democracy through Parliamentary (IPD). Speaker Abdul Hamid Advocate, in his speech, said members of parliament are well positioned to move this agenda forward; and so, Bangladesh Parliament wishes to promote a greater role of parliamentarians as well as substantive cooperation and alliances, as this may provide significant opportunities to influence change for the most vulnerable countries. Saber Hossain Chowdhury noted that parliamentarians had an important role in holding the executive arm of the government accountable on acting to mitigate and adapt to climate change. Climate change is the defining challenge of our time and the most potent national security threat, he said, adding that parliamentarians must play a role in seeing a united global response to this threat. Stefan Priesner, Country Director of UNDP Bangladesh, said that the members of parliaments from across the world must now step forward to bring efforts to tackle climate change into the social and political mainstream. Climate change is a classical non-partisan issue where we must seek out common interests, since our actions will determine a common future. Indeed, the parliamentarians can play the decisive role of the bridge between the world of the common man and that of academia, he said. EP

German Wind Power Company to Invest in SL

or the first time a German multi national wind power generating company is contemplating in opening one of their plants in Sri Lanka. The Sri Lankan Ambassador in Germany, Sarath Kongahage in an interview with Daily News Business at the ITB event in Berlin said that he has already forwarded this proposal to Sri Lanka and the German company is being kept informed of the developments in Sri Lanka. He said several other leading companies are keen to invest in solar power; tourism sector and infrastructure projects. Already small time businessmen have set up joint venture hotel projects in Beruwela and Hikkaduwa areas. They are also keen at making investments related to Ayurvedha products and service, he said. A German toy manufacturer, Fehm GMBH has started a manufacturing plant in the Puttalam district in 2010 employing over 300 workers. Germany is Sri Lanka's second largest investor from the European Union. Many of the German companies operating in Sri Lanka are global leaders in their field of specialization. The investment areas include apparel,hosiery knitwear, surf sails, textiles, electronic products, light and heavy engineering, rubber based products such as tyres and automobile spare parts, coir products, wooden/soft toys, chemicals and dyes, gems and jewellery and recreational projects. Commenting on tourism he said that Germany is the second largest European market in Sri Lanka with over 55,000 arrivals last year. One of the biggest advantages of a German tourist is that they are loyal to a destination and keep returning many times. In addition they are long stayers (14 days) and the economic crunch in Europe did not have a negative impacts on the German economy. He predicted that German arrivals to Sri Lanka would pass the 100, 000 marks this year. EP
33

Obama Calls For Investment in Clean Energy

S President Barack Obama called on Congress to invest more money in clean energy technologies and end multi-billion-dollar subsidies given each year to oil companies. "I want this Congress to stop the giveaways to an oil industry that's never been more profitable, and invest in a clean energy industry that's never been more promising," Obama said in his weekly radio and Internet address. "We should be investing in the technology that's building the cars and trucks and jets that will prevent us from dealing with these high gas prices year after year after year," he added. The comments came as the president faced mounting criticism from Republicans, who have blamed his energy policy for spiking gas prices. The American Automobile Association (AAA) predicts gasoline prices across the United States could average $4.25 a gallon by May, up from over $3.60 today. Between 1998 and 2004, prices ranged from $1 to $2. Prices vary wildly between regions, however, and last week, gasbuddy.com, a website that tracks prices in all 50 states, reported $5.09 a gallon at one Mobil and two Chevron stations in greater Los Angeles.

Given that 76 per cent of Americans drive themselves to work, and a trip to the store can often mean a long drive to the mall, higher gas prices are a critical issue -- especially in a presidential election year. The president said that under his administration, domestic oil production has been on the rise and the number of operating oil rigs has quadrupled. But he argued the United States won't be able to solve its energy problem just by drilling more oil wells. "But you and I both know that with only two per cent of the world's oil reserves, we can't just drill our way to lower gas prices - not when we consume 20 per cent of the world's oil," Obama said. "We need an all-of-theabove strategy that relies less on foreign oil and more on American-made energy - solar, wind, natural gas, biofuels, and more." He noted that his administration had already put in place new standards that will make sure that American cars average nearly 55 miles per gallon (88.5 kilometers per 3.8 liters) by the middle of the next decade - nearly double what they get today. The president also called for ending the $4 billion a year in tax breaks that US oil companies receive each year. "We've been handing out these kinds of taxpayer giveaways for nearly a century," he said. "And outside of Congress, does anyone really think that's still a good idea?
EP

Fuel Cells Rapidly Gaining Ground in Germany

anadian fuel cell maker Ballard has opened its European headquarters in Germany. Fuji is delivering its first fuel cell exports there. And in recent weeks, USbased fuel cell power plant manufacturer FuelCell Energy announced a partnership with renowned German research institute Fraunhofer IKTS. At this year's Globe 2012, the biennial conference and trade fair on business and the environment, Germany Trade & Invest experts will highlight business opportunities in Germany's quickly growing market for fuel cells. "We have seen these developments coming for a long time, but finally the market conditions for fuel cells are just right. Germany's share of renewable energies is rising so quickly that energy storage is urgently needed. In Germany, fuel cell companies have a chance to be in the right place at the right time," said Raphael Goldstein, energy storage expert at Germany Trade & Invest in Berlin. Innovative companies from all over the world are looking to Europe's largest market as a testing ground for their technologies and market strategies. Germany's renewable energy share in the electricity mix is already greater than 20 percent. The increase of fluctuating energy sources, such as wind and solar, increases the demand for storage. "The innovation strength of Germany makes our presence there crucial. The expertise we found at Germany Trade & Invest has led us to the best matched partners and opportunities for R&D and investment," stated Dr. Christopher Guzy, VP and Chief Technology Officer of Ballard. And while companies are investing in new headquarters and research partnerships, demonstration projects are entering a new phase as well. Europe's largest hydrogen refueling station opened in recent weeks in Hamburg. EP
34

US President Barack Obama

ARTICLE

Can BAPEX Alone Meet the Exploration Challenges?

Saleque Sufi

n recent times BAPEX, the national exploration & production company of Bangladesh, has acquired additional capacities. Government of Bangladesh bought for them new drilling rig and seismic equipment. Government allotted them additional fund to explore for new petroleum in allotted blocks. BGFCL and SGFL engaged them for working over some wells. BAPEX also drilled some new wells in Fenchuganj and Salda fields. BAPEX also developed Semutang Gas field. During this dry season BAPEX is set to carry out exploration works at Kapasia, Sreekail and Sunetra prospects. They were doing 2D seismic survey for a while. But one of their new milestones is acquiring 3D seismic capability. It has already completed survey and exploration at Rashidpur, Haripur Kailashtilla and Titas fields. BAPEX is conducting 3D survey at Bakhrabad. As a well wisher of BAPEX and a proud Bangladeshi gas professional, success of BAPEX delights me. But at the same time over exuberance of some less informed outsiders comparing BAPEX with International Oil Companies also worries us. BAPEX is a state-owned enterprise still relying almost exclusively on government exchequer. It has still not acquired required capacity to risk exploration in tight structures. On the other hand, International Oil Companies manage exploration and development of Petroleum resources. They operate under Production Sharing Contract with host country. They do not act as drilling contractor. After seismic survey they engage drilling contractor in accordance with approved work plan. They take investment and resource risk. In fact they gamble with discovery of resources. Very often their

efforts do not meet with success. It is only when they make commercial discovery they enter into Gas Purchase and Sales agreement with host country. Hence it is not wise to compare BAPEX with IOCs. If we check records most of the gas fields were discovered by International Oil Companies. Titas, Habiganj, Rashidpur, Bakhrabad and Kailastilla and Feni gas fields were discovered by Shell BV. Sylhet and Chhatak gas fields were discovered by Pakistan Petroleum Ltd [PPL]. Jalalabad gas field was discovered by Scimitar. Bibiyana and Moulavibazar gas fields were discovered by Occidental. Bangura gas field was discovered by Tullow. Sangu gas field was discovered by Cairn. Kutubdia gas field was discovered by Union Oil Company of California. Semutang gas field was discovered by OGDC. Beanibazar, Fenchuganj, Salda Nadi, Begumganj Feni, Kamta, Meghna, Narsingdi, Shahbazpur and Sundalpur gas fields were discovered by either by exploration department of Petrobangla or BAPEX. Getting step-motherly treatment from Petrobangla for several years in matters of training, promotion and other facilities the above achievements of BAPEX are really commendable. But BAPEX has to do a lot to be compared with reputed drilling companies. All its assets are procured by state resources and funding. The engineers, geologists and drilling crew are still required to acquire state of the art modern technology, need to adopt International Standard of Health, Safety and

Environment [HSE] , Risk Identification, Assessment and Mitigation Strategy of Drilling in Tight Structures to qualify as drilling company of international standard. While we appreciate BAPEX gradual maturing process, we suggest that BAPEX be developed as a drilling management company. It can carry out work over and development drilling in discovered onshore gas fields. It can carry out all kinds of seismic survey activities. It can further develop skills in reservoir studies and reservoir management. It can always engage drilling contractors through transparent process for conducting drilling under its supervision. There is no point in risking hard earned resources in exploration. However, in all future PSCs bidders must be asked to carry BAPEX as their strategic partner. But there must not be partnership with companies of doubtful competence like NIKO Resources. It is the works of inexperienced fools or ill-motivated corrupt syndicate to compare BAPEX drilling cost with foreign companies. The costs of a state-owned company getting allocations of funds from government budget and using rigs and equipment bought for them by the government cannot be compared with that of foreign private companies using their own drilling rigs or hiring from others and investing money out of borrowings from banks at high interest rates. Also insignificant overhead costs [salary and allowances] of BAPEX are not comparable with international standard of overhead costs of foreign oil companies. Hence citizens and policymakers must not be confused by cheap slogans of a vested quarter that BAPEX can drill much cheaper than foreign companies.
35

BAPEX is in Shahbazpur for over a decade and a half. What the nation got out of it? Of course Petrobangla and government policy are also responsible for it. What happened to exploration efforts of BAPEX at Sreekail? Print and electronic media were invited to a immature declaration of gas discovery. What happened during work over at Titas #3? Why that better performing well could not be worked over? Why it had to be killed to avoid potential blowout? It is not that foreign companies did not have major lapses. The first blowout happened at Haripur in 1960s. Then companies getting into Bangladesh through backdoor Occidental and Niko caused blowouts at Magurchhara and Tengratilla. It requires to be assessed why Petrobangla and Bangladesh could not take contractual actions against foreign companies for their major failures which wasted our national resources. PSC with Occidental could be scrapped following Magurchhara blowout for not

accomplishment of minimum work obligations till that time. BAPEX has already commenced exploration at Kapasia near Dhaka and will soon start works at Sreekail and Sunetra. Earlier in 2D seismic surveys some resources were mapped at Kapasia and Sunetra. BAPEX will be going to Sreekail for second time. We know that no seismic survey can guarantee existence of commercially explorable gas resource. People must not get over enthusiastic about commercial discovery till exploration well is complete and tested. In the recent past Chevron and Santos drilling efforts at Moulavibazar and Sangu did not produce positive results despite getting positive images in 3D seismic surveys. Here are the acid tests of BAPEX to further prove its maturing present. Bangladesh requires additional gas resources to produce about 1000MCFD additional gas in the next 3-4 years .There is no way it is possible without massive exploration at onshore and shallow water of offshore blocks by

combination of BAPEX and IOCs efforts. In this context engagement of world reputed GAZPROM is not a bad decision although they were engaged not through bidding process. The offered rates for drilling by GAZPROM is also much less than IOCs working in Bangladesh. About credential of GAZPROM any smart person can check them out on Internet. It is a giant company owning several gas fields, thousands of kilometers of high pressure cross border gas transmission pipelines and hundreds of compressor stations. Some ill motivated sector insiders are spreading propaganda against a giant gas company of a friendly country which responded to request of head of the government of Bangladesh. Drilling at leaking Titas gas field is well beyond capability of BAPEX. We want continued success of BAPEX. But at the same time we also do not want people with ill motivation cause BAPEX potential gets nipped in the bud. EP

36

TECHNOLOGY

Getting Fresh Water From The Sea

Matthew Wong

a small reduction in speed can make a big difference in energy use. Using VSDs will not only help to save energy and enhance reliability through reduced mechanical stress, but will also improve process performance: a VSD is able to match the pump output flow or pressure directly to the process requirements, and small variations can also be corrected more rapidly by a VSD compared to other control means. Stopping Harmonics While the VSD helps to save energy and improve reliability and control, precautions must be taken against the harmonics it can generate. Harmonics will cause distortion of the electrical waveform and, if left unmanaged, can cause problems such as overheating of cables, motors and transformers; electronic display and light flicker; and nuisance tripping of electrical protection devices. One way to solve the harmonics issue is to connect an active harmonics filter (AHF) to where the major harmonics occur. ABBs AHF solution uses the power quality filter (PQF) which monitors the line current in real time and processes the measured harmonics as digital signals in a high speed multi-DSP (digital signal processor). The multi-DSP, in turn, drives IGBT power modules with pulse width modulated (PWM) signals, causing them to inject currents of exactly opposite phase to the harmonics into the components involved, thus eliminating that order of harmonics. Lower Cost The motor driving the pump can be either low voltage (LV) or medium voltage (MV) depending on the pump power rating. The latest member of the MV VSD family, the ACS2000, lowers the cost of ownership as it is not necessary to use an expensive and specialized transformer at the input of the MV VSD to lower the harmonics generated by the VSD. The active front end (AFE) design of the ACS2000 eliminates the need for such a special phase-shift transformer. When it comes to operation and maintenance, the ACS2000 has excellent availability and reliability due to its low parts count and, thus, extended mean time between failures (MTBF). With its modular design, it also has an impressive
37

lthough water covers over 70 percent of the earths surface, 97.5 percent of it is sea water. Whilst much of the remaining 2.5 percent of fresh water, is unobtainable, demand for it is increasing daily, driven by a complex combination of geophysical, geopolitical and demographic factors. The logical place to look, then, for new water supplies is to our oceans and seas. Desalination technology can unlock the almost unlimited abundance of water available there by removing salts and other minerals to make the water suitable for human use.

In the absence of a convenient power plant, the lower-energy RO is usually the preferred choice. In normal osmosis, the solvent naturally moves from an area of low solute concentration through a membrane to an area of high solute concentration. This natural tendency to equalize solute concentrations on each side of the membrane generates osmotic pressure. Applying an external pressure to reverse the natural flow of pure solvent is reverse osmosis. For drinking water, the pressure forces only the water molecules through the membrane, resulting in clean water on the other side. Different pressures are applied depending on which dissolved contaminants are present. Membrane Pressurization & VSDs During the RO process startup, a precisely-controlled pressurization of the membrane system is essential as the membrane must be pushed gently but firmly against its support. This ensures no elements are damaged and that the ideal conditions prevail for water production at the correct flow and pressure. Since variable pressure needs to be applied for both startup and production, a direct-on-line starter can be used to start the pumps and run the motor at full speed. Then, by throttling a valve, the required water pressure can be achieved. This method serves the purpose but it creates mechanical stress, such as vibration and hammering on the pipeline and valves, and wastes energy. It is far better to use a variable speed drive (VSD). With a VSD, instead of using a valve to control flow or pressure the motor speed itself can simply be adjusted to achieve the desired output flow or pump pressure. And, because the pump power required varies with the cube of the speed, even

Currently, the most popular desalination methods are thermal and membrane desalination. The former principally uses multi-stage flash (MSF) and multiple-effect distillation (MED) methods, the latter reverse osmosis (RO). The cost of transforming sea water into fresh water is one of the main factors in deciding which method to use, but these three common desalination methods are still all considered to be energy intensive. Other technologies, too, have been commercialized for desalination. For example, forward osmosis, which is also an osmotic process using a membrane to separate the dissolved solutes from the water; and the Passarell process which uses a vacuum to enable the sea water to vaporize at a lower temperature. Other desalination methodologies such as geothermal desalination, nanotube membrane desalination, biomimetic membranes, low temperature thermal desalination (LTTD) are in the development phase. Reverse Osmosis When a power station is near the desalination plant, either MSF or MED is usually used, as these methods can utilize the thermal energy produced by the power station. Occasionally, hybrid designs which combine two or more desalination methods will be adopted.

mean time to repair (MTTR) as its drawer design concept enables quick component replacement and thus minimizes downtime. For the low-voltage VSD, the Low Harmonics Drive family offers a unique harmonics solution that is incorporated into the drive and that fulfils harmonics requirements without external filtering devices or multi-pulse transformer arrangements. Power Factor During operation, the pump motor will generate reactive power that can cause an undesirable drop in the electrical power factor. A capacitor bank is usually used to correct for such a drop. However a VSD already has an internal capacitor bank and this may be exploited to eliminate power factor drops or to reduce the size of the external capacitor bank that is required to do so. Membrane Maintenance Pushing the solution through the membrane is the most energy-hungry activity in a reverse osmosis desalination plant. One of the factors which affect the pressure and therefore the energy, required to accomplish this is the cleanliness of the membrane. When the membrane begins to foul, more pressure is required to achieve the same production rate, and the pressure is only adjustable within an allowed range. Thus, membrane maintenance is crucial. Cleaning is generally done by flushing, chemical cleaning or replacement, the appropriate intervals being determined by the degree of membrane fouling. This rate is affected by water temperature, concentration, flow rate, recovery rate, etc. Usually, maintenance is carried out at the fixed intervals recommended by the membrane manufacturers or when the pressure drop between feed and reject streams goes out of range. Such regimes can lead to premature cleaning, resulting in overconsumption of chemicals and excess production loss, or belated cleaning, resulting in permanent fouling which may damage the membrane. ABBs Optimax Membrane Performance module, which won the Water/Energy Nexus award at the H2O Water Awards 2010, can help to overcome the draw-

backs of current approaches. One module of the Optimax, Membrane Performance Monitoring, displays the membrane performance, factoring in the hydrodynamics of membrane fouling, and provides advice for maintenance measures and recommended due dates so that the intervention can be planned and production disruption minimized. It also provides information as to how successful the cleaning was. The other module of the Optimax is Membrane Optimization, which uses the results from the Performance Monitoring module as a basis to calculate the optimal operational conditions given the operational and physical constraints. As the fouling rate dynamics depend on the operational set-points such as feed flow and feed pressure, these are also factored in to the calculation so as to increase productivity levels as well as to optimize the fouling rate. The optimization can be run regularly and can be implemented for open-loop or closed loop operation. By applying the optimization function, it is possible to reduce the gap between the actual and optimal set-points; productivity increases of two percent are achievable. Increased productivity is not the only benefit: the when-needed cleaning approach reduces chemical usage and thus operation costs; lowering the risk of membrane damage minimizes unbudgeted membrane replacement; and maintenance outages can be better planned, thus increasing plant availability. The Intelligent MCC A large proportion of the equipment in desalination plants is controlled by motor control centers (MCC). To better manage operation and maintenance, operators need more information such as how long units have been operating, what is their operating condition, etc. Traditionally, this extra data required more meters, transmitters and devices and, of course, a mass of cables leading to the control room. However, now ABBs MNS IS, the first integrated Low Voltage MCC system, will help solve this. MNS IS is a single integrated MCC system configurable for all possible customer specifications from conventional right up to very sophisticated intelli-

gent motor control system requirements. MNS IS makes modifications of control and protection functions possible at any time and at any stage of the complete project lifecycle. It provides muchneeded flexibility for engineers, system integrators and end users. A very few standard motor starter variants are needed for a complete plant. The MCC also provides condition monitoring such as: motor over current; cable and terminal temperatures; MCC drawer reinsertion count - which may require performing some drawer maintenance; and so on. All this information facilitates predictive rather than reactive maintenance and helps reduce unplanned downtime. Outlook Overall, electricity is still the key cost component of desalinated water and, depending on the chosen desalination technology, can represent more than 30 percent of the operational costs. As a result, energy efficiency and lifecycle cost optimization are among the most important challenges for both developers and plant owners. ABB offers advanced technology for the desalination industry with a comprehensive range of proven products as well as the technology ownership behind these which allow ABB to play a role in enhancing the plant performance, efficiency and reliability. As a provider of instrumentation, control and electrical (ICE) solutions, ABB is able to provide complete engineered packages with the benefits of a single interface that saves time, reduces cost and manages risk. As demand for fresh water increases, conservation and efficient usage are areas where we can maximize the utility of the water we already have. Cheaper and less energy-intense desalination is the key to unlocking the vast reserves of water in our seas and oceans and thus massively expanding the freshwater supply. EP

Matthew Wong Power System Division Singapore

EP Desk; Source ABB
38

PA R L I A M E N T

Statement After Verdict

EP Desk

oreign Minister Dr. Dipu Moni made a statement in the Parliament after the historic verdict. Following is the full text of her statement: Your Excellency Speaker I am a rookie in this parliament although I am in active politics for over three decades. I contested for the first time in national election and won it. I am really grateful to all for that. We are witnessing something different here than what nation wants from it. I am beholding some heritage of glorious political background. If I have to speak of past, I have to mention about Deshbandhu Chitta Ranjan Das, I have to talk about Shubash Chandra Bose, Hussian Shahid Suhwarawardy and I have to mention about the Father of the Nation Bangbandhu Sheikh Mujibur Rahman. We have got Sheikh Hasina in the chronology of that tradition. This parliament is the seat for establishing peoples right. This is the centre of politics. That politics is to serve the country, serve the people. This parliament is the centre for pro-people, prodevelopment politics. But what we heard today, what we witnessed today that can not only hurt or shock all but can also people turn around from politics your Excellency Speaker. The language may not be fitting even in redlight areas. But through this speech I have no intention to degrade the sex workers of forbidden areas your Excellency. But the words that even do not seem appropriate in the context of the environment they live or they circumstances they are victim of those words have been used eloquently today in this Parliament. Your Excellency Speaker, My frustrations have been plunged me into greater depth, and I have become deeply ashamed when I witnessed that the Leader of the Opposition encouraged use of unconstitutional, vulgar and filthy words through drumming the

table. The environment of the Parliament has been polluted like this. Your Excellency speaker, I am standing here to share with the nation through this Parliament very happy news of a historic achievement. Bangladesh made several milestone achievements since liberation. But today I will talk about an achievement which I am sure our 16 crore citizen are eagerly waiting to listen to. At this historic moment of sharing the joy of such an historic event with the nation as a political activist I am in great pains. I like to share with you my pains. Your Excellency, Parliament is the seat of peoples representation. Those who have made the environment of the Parliament dirty and stinky, those who have brought shame for the nation through use of unparliamentarily, indecorous filthy languages in the Parliament cannot be the positive catalyst for the continued onward march of the nation to healthy evolution of democracy. Their pursued path is the path of destruction. I do not know why

they have indulged in such politics of anarchy and destruction. Nation will not accept this. Nation will definitely abandon these trends of self destructive trend of politics. Your Excellency Speaker, The Water and the extensive resources below the water of the Bay of Bengal can make epoch making contributions in the economic development of Bangladesh. Bangbandhu Sheikh Mujibur Rahman from his deep faith and believe attached highest priority for establishing the sovereign rights of Bangladeshi nation over its maritime resources immediately after the liberation. Through bilateral and multi lateral initiatives and resorting to international laws he took several active and definitive initiatives to resolve all outstanding issues. Within three years of the independence Bangladesh as the first country of the region could pass a full fledged legislation, The Territorial Waters Maritimes Zones Act in the Parliament. Through that act Bangladesh declared a State Baseline. Your Excellency Speaker, Here we have to resort to use of Information Technology for proper understanding. The matter is a bit technical. I will try to place it as simple as possible. We declared in 1974 a State Base Line We declared 200 Nautical miles as Economic Zone. I like to mention here that the concept of economic zone was not recognized in international law at that time. The most important matter is that the bilateral talks with India and Myanmar for demarcating maritime boundary also started in 1974. We could establish our maritime boundary along 12 nautical mile territorial strip with erstwhile Burma in the second bilateral meeting. The talks of formulating International Law of Sea started in United Nation in 1973 and the Law of Sea Convention was adopted
39

Dr. Dipu Moni

in 1983. It is unfortunate but true that subsequent Bangladesh Governments failed to include the State Baseline of Bangladesh declared in 1974 in UN Convention of the Law of Sea. Not only that the successive Bangladesh Governments also neglected to initial the Convention adopted in 1982. Daughter of Bangabandhu took the initiative after 21 years when she was in state power. In the last Cabinet meeting of Sheikh Hasina Government of 19962001, Bangladesh took decision to initial UNCLOS. Bangladesh became member of UNCLOS. On the other hand our neighbors India and Myanmar became UNCLOS member in 1994. Bangladesh was due to submit its claim over territorial Water and Maritime Boundary by 26th July of 2011 to UNO ie in 10 years after initialing UNCLOS in 2001. But unfortunately Governments of the past did not take required initiatives to obtain seismic and bathymetric data and information essential to establish our claim. After taking over state power Sheikh Hasina Government in March, 2010 for the first time started seismic survey in deep waters of the Bay of Bengal using money from own source. For very tight monsoon corridor it is only possible to carry out seismic survey in the Bay of Bengal from December to March. We would have failed to raise our claim with strong logic in time if we could not complete seismic survey in 2010. Moreover Bathymetric data were also essential for credible information in support of our claim. A New Modern Survey Ship, BNS Anushandhan was added to the fleet of Bangladesh Navy after the accession to Power of Sheikh Hasina Government. Bangladesh Navy using its own technology created Bathymetric profile of the Bay of Bengal. All these works completed about 5 months before schedule facilitated Bangladesh in submitting the status paper of Bangladesh Claim of its rights over 380-460 nautical miles from Bangladesh Coast on 25th February 2011. Your Excellency Speaker, The previous Government declared 28 offshore blocks for exploration of oil and gas in the Bay of Bengal. You all

know that how suicidal this decision was for us to take such unreasonable initiative prior to settling maritime boundary disputes and establishing our legitimate rights over territorial water and exclusive economic zone. Bangladesh unilaterally declared exploration blocks over 200 Nautical Miles from its coast. Anyone looking at the map easily realizes that the Eastern Blocks as let out by Bangladesh squeezed Myanmars Maritime Boundary to 30122 nautical miles. Your Excellency Speaker, Our constitution provides for our declaration for peaceful co-existence with neighbors in matters of international relations. Which provisions of the constitutions were adhered to when we announced the 28 maritime blocks? We will want our legitimate claims to be established yet we will try to ignore the rights of others? That cannot be the spirit of true neighborly relationship. We will try to establish our legitimate claims and at the same time honor the rights of others. That is what we understand the spirits of good neighborly relationship. The previous government created vulnerable situation and put our claims to dangerous consequences like the way they create environ of confrontation in politics. Consequently after India disputed over 10 blocks and Myanmar over 17 blocks we were left with just one undisputed block. This created serious setback to our endeavor for our offshore gas and oil exploration. Our government has taken some contingent actions to redress the situation. The governments that succeeded after 1975 not only failed to take required initiatives for maritime boundary demarcations but it also failed to turn into binding agreements the agreed 12 Nautical Miles maritime boundary demarcation with Myanmar. Our government continued bilateral discussions, had three meeting with Myanmar and India two with India. But finding no possibilities of amicable settlement of disputes dedicated to seek legal remedy within 5 months of taking over state governance. Later within 10 months of assuming state power on 8th

October 2009 our government issued legal notice upon India and Myanmar. I like to extend sincerest thanks to respected Prime Minister for her courageous and far sighted decision. It is due to the bold, farsighted and patriotic initiative of PM Sheikh Hasina that people of Bangladesh have won an area almost the size of Bangladesh. On the basis of legal notice the hearing of the case for settlement of maritime boundary demarcation related disputed between Bangladesh and Myanmar commenced at International Tribunal for the Law of the Sea at Hamburg Germany in December 2009. We completed all verbal and written pleadings within two years. Later on 14th March 2012 Tribunal in open court in presence of representatives of both parties declared its final verdict. The verdict of the court was approved through 21-1 voting by the tribunal comprising of 21 permanent and two temporary members. This verdict is final, irreversible and obligatory. There is no scope for any appeal against it. Your Excellency Speaker, Let us now see what is there in the verdict? Bangladesh submission was to settle maritime boundary on the basis of 12 Nautical miles maritime boundary as agreed per minutes of 1974 proposal or alternately to settle it giving St. Martin Island Full effect and settling it on basis of equidistant principle. Myanmar on the other hand proposed to give St. Martin Island half effect and not provide Bangladesh more than 6 nautical miles beyond that. Tribunal rejected Myanmar submission and settled the Maritime Boundary giving St. Martin Island full effect and settling maritime boundary on the basis of equidistant principle and allowing Bangladesh 12 nautical miles area. One will find that it was actually the establishment of Bangladesh claim of maritime boundary as agreed in 1974. There exists an inward curve in the coastal area of Bangladesh up to 200 nautical miles of Exclusive Economic Zone and Continental self area. To avoid Cut of effect due to Concavity we proposed for settling of maritime boundary at 215 degree following angle
40

bisector principle instead of equidistant principle. On the other hand Myanmar placed their arguments for settling the maritime boundary at 243.23 degree following equidistant principle. Myanmar in it pleadings argued that Concavity of Bangladesh coast like is a natural phenomenon. Myanmar must not compensate for it. But it is matter of great delight that to ensure legality tribunal has given total recognition of concavity of Bangladesh Coastal Line and has settled the maritime boundary along 215 degree angle restricting St. Martin Island within 12 nautical miles following Equidistant Special Circumstances Principle. Bangladesh argued that in accordance with Geological structure of bed of the Bay of Bengal Myanmar cannot have any claim over extended section of continental self beyond 200 nautical miles. Myanmar on the other hand claimed that tribunal has no scope to settle the maritime boundary prior to finalizing the limit of the continental self of two countries by UNO. Myanmar also claimed that as the maritime boundary of Bangladesh ends at 130 nautical miles instead of 200 nautical miles it cannot have any claim over extended continental self beyond 200 nautical miles. Tribunal rejected Myanmars claim about the scope of the tribunal and recognized claims of both countries. Tribunal has given direction by the Arrow you see (in presentation). Tribunal in its historic verdict has also recognized the right of the continental shelf of Bangladesh on the bottom of the sea and Myanmars Exclusive Economic Zone on Surface water. Though Myanmar right has been recognized over Myanmars Exclusive Economic Zone of 200 Nautical miles its right over sea bottom Continental self has been defeated to Bangladesh claim.

Your Excellency Speaker, It is a historic achievement of Bangladesh. In the history of international law no cases regarding boundary disputes has been resolved in such a short time. Following this verdict we will be able to explore for hydrocarbon resources and acquire other sea resources including fishes independently without any obstructions of Myanmar. I would like to thank our Prime Minister once again for our achievement. I would also like to thank all including legal counsels. And off course like to congratulate the people of Bangladesh on this achievement. Your Excellency Speaker, I would like to mention here the names of all who were in my team throughout the process so that the minutes include their names. They are: 1. Mr Paul S. Reichler, United States of America. 2. Mr Lawrence H. Martin, United States of America. 3. Professor James Crawford, United Kingdom. 4. Professor Phillippe Sands, United Kingdom. 5. Professor Alan Boyle, United

Kingdom. 6. Professor Payam Akhavan, Canada. 7. Dr Lindsay Parson, United Kingdom. 8. Dr Robin Cleverly, United Kingdom. 9. Rear Admiral (retd) Khorshed Alam, present here. A glorious son of the nation. 10. Dr Sirajur Rahman Khan, Geological Survey of Bangladesh. 11. Mr. A. Z. M Zahedul Islam, Bangladesh Space Research and Remote Sensing Organization. 12. Commander Jashim Uddin, Bangladesh Navy. 13. Mr Rafiqul Alam, BAPEX 14. Ms Farhana Shaon, Petrobangla. 15. Lt Cdr. M R I Abedin, Bangladesh Navy 16. Sahahanara Monica, Ministry of Foreign Affairs. 17. Mr Jamal Uddin Ahmed, Ministry of Foreign Affairs. 18. Mr Monirul Islam, BAPEX 19. Mr A K M Ashraful Alam, BIWTA. Your Excellency Speaker, With your permission I would like to read out here a paragraph of initial submission that I placed to tribunal as our primary submission to the tribunal: The institution of these proceedings is not in any way hostile act. It is intended to resolve a long standing dispute in an equitable manner. That serves the interest of peace and stability in the region. The resolution of this dispute will serve the interest of both states. We have every confidence that with your tribunal judgment in hand and this matter behind us, Bangladesh Myanmar relations will be able to move forward on an even more positive and productive bases.
EP

(Translated from Bangla)

41

COLUMN

Let's Prepare For The Worst

t did not come as a bolt from the blue. The latest round of electricity price hike had been in speculations for some time. According to Bangladesh Energy Regulatory Commission Chairman Syed Yusuf Hossain this time the bulk price on an average increased by 7.49 percent and the retail rate by 6.25 percent. The tariff, effective March 1, increased by 28 paisa at the bulk level and by 30 paisa at the retail level. The latest hike came in just a month after another raise in power price this year. Overall the current government has increased power hike five times in three years. The BERC chief has justified the price hike as an adjustment with the rising prices of liquid fuel. The government wants to further cut the subsidies in pays in the power sector. In the words of Syed Yusuf: "We have done it as Power Development Board generates a large amount of electricity from its liquid power plants and everyone knows that the fuel cost has gone several times in international market in the last few months." "So we had a strong rationale to adjust costs," said Yusuf, "It is not a typical hike. It's a fuel cost adjustment." I think few would disagree with the BERC boss. It's true that the fuel price in international market has gone up. Also true is that power generation, especially by the rental plants, has increased manifold because of the rise in the prices of imported fuel. But the latest power hike came at a time when people are suffering from frequent power cuts. Right or wrong power hike has never been a popular move for any

government any time. Users are never happy whenever the prices of electricity increase. This time the consumers are doubly unhappy. They have found that the increase in power generation (around 3,600 MW in the past three years) has done little to ease load shedding even at the start of summer, when the consumption goes up. Rather power cuts have become an hourly affair. So, the consumers are feeling the pinch of the power tariff hike even more than before. There is no let-up in load shedding. Each time the power goes off consumers are reminded of government's failure in properly tackling the power crisis. There is no way not to acknowledge that Prime Minister Sheikh Hasina's government has done much better than

its predecessors in dealing with the energy crisis. The national grid has received an additional supply of around 3,600 MW of electricity during the first three years of this government. This looks a big achievement considering the fact that not a unit of new electricity was generated when BNP-led government ruled for five years. There was no new generation of power during the two years of emergency rule even though the interim government was able to reduce load shedding through effective management of the system loss and better distribution of electricity. Prime Minister Sheikh Hasina's government has argued that the load shedding will remain during the summer as power is being diverted to irrigation of crop fields. That's fair enough. This has been a long-held practice in Bangladesh. The current government is doing better than others in this respect. Power should go to the farmers first so they can operate the irrigation pumps as long as they need. At the time we feel sad and disappointed when we hear reports from some parts of the rural areas that erratic power supply is disrupting irrigation. The government has a daunting task to prove these reports wrong. Crops production should not suffer under any circumstances. For the urban people, it is now time to endure power cuts. This is bad enough. Even worse is the news that their sufferings are not going to end soon. Let's prepare for the worst.

BERC Chairman Syed Yusuf Hossain

EP

42