The global energy landscape has been impacted by increased market uncertainty due to the Russia-Ukraine war. Even before the war began, there was rebound in energy demand triggered by supply constraints and price spikes for multiple commodities.
While gas price hit a 30 year low at the start of the pandemic in 2020, it reached a nearly two-decade high in 2021. Power prices show similar volatility, according to the editorial of the current News Bulletin (July-September 2022) of International Chamber of Commerce-Bangladesh (ICCB) released on Wednesday.
The transition to a low-carbon economy is continuing to gain momentum in the long-term shift to low-carbon energy systems and has been accelerating in several respects. In the context of COP26, developed countries as well as many large corporate houses have committed to achieving the net zero emissions within the next few decades to fight the climate change catastrophe.
Russia-Ukraine war is certainly a reason for global energy crisis which also affected Bangladesh. But experts said with all certainty that even if the war had not taken place, Bangladesh would have still faced an energy crisis.
The production and supply from local gas fields has been declining since 2015 and will continue to decline in the near future. On the other hand geoscientific studies testify that there is more untapped natural gas in Bangladesh than what has so far been extracted.
A two-year joint study (2001) by the US Geological Survey (USGS) and Petrobangla shows that Bangladesh has mean probability (50%) of undiscovered natural gas resource to the tune of about 32 trillion cubic feet (Tcf).
The Norwegian Petroleum Directorate (NDP) and Hydrocarbon Unit (HCU) in another joint study (2001) suggested that mean probability of Bangladesh’s undiscovered gas resources is 42 Tcf. In 2011 Ramboll, a European oil and gas consultant, updated the undiscovered gas resource assessments for Bangladesh and suggested that it is 34 Tcf in 90% probability.
According to experts, Bangladesh consumes about one trillion cubic feet of gas per year. It means that by exploring the untapped gas resource of 32-34 Tcf, the country can be ensured of gas supply for the next 30 years. Although Bangladesh has further potential in the gas sector, the number of exploration gas wells is less than many other gas basins in the world.
In 2026, Bangladesh will become a middle income country and as such is going to lose a number of benefits of LDCs. Besides, with the declining foreign exchange reserve, the country is expected to be hard-pressed in the next 2/3 years time when the debt re-payment becomes due. In addition, US$26 billion debt re-payment of the private sector borrowing may also make it difficult to manage foreign debt re-payment.
