While Pakistan’s frustration with the Organization of Islamic Cooperation (OIC) for not playing an active role in ending Indian brutalities in occupied Kashmir exposes our economic dependence on foreign countries, it also brings to limelight our vulnerabilities in the energy sector. This has prompted some experts to re-emphasize the criticality of seeking energy independence by shifting from imported fossil fuel supplies to indigenous energy resources. In today’s interconnected and interdependent world, however, “energy independence” may just be a mirage chasing which can lead us to isolationism and also may not be worth the cost. A better goal to pursue will be “energy security” which embraces within its folds, a practicable proportion of indigenous resources.
According to Pakistan Energy Yearbook 2018 (the latest available), of the total 88.25 (million tonnes of oil equivalent) primary energy supplies, we imported 41.5 million tonnes (or roughly 48 percent). We import 20 percent of our gas supplies, 71 percent of crude oil, 100 percent of petroleum products, 41 percent of LPG, and over 82 percent of our coal requirements every year. All these imports are coming with an annual price tag that exceeded USD 16.5 billion last year. As “a chain is as strong as its weakest link”, these imports are costing us not only a high proportion of our precious foreign exchange earnings, it also exposes our defense, economy, and society to high risks due to potential supply disruptions, price volatility, and as we noted above, our ability to pursue an independent foreign policy line.
These are not just perceived risks or paranoid thinking; these are very real as well as imminent. One is, therefore, tempted to consider total indigenizing of our energy supplies. However, and for a host of reasons—lack of resource endowment, technology constraints, locational issues, and economic and financial issues, to name but just a few—this may not be practicable. Also, the problem with energy infrastructure is that it is capital-intensive, long-lived, and once in place, locks a nation into consumption patterns and dependence on energy supplies that cannot be changed quickly and without serious costs.
For similar reasons, many countries had tried in the past to eliminate their dependence on foreign energy supplies, but at the end had to settle for indigenization well below 100 percent and instead have strived to improve the security of their energy supplies through a myriad of efforts other than indigenization. Just to illustrate this point, Japan lacks much of the commercial energy resources but still ranks among the top energy secured countries in the world, mainly because of its strong economic relationships with both the energy suppliers as well as other developed countries. Similarly, though China depends a great deal on other countries for its energy supplies, any serious “disruption” to Chinese energy supplies as a policy tool is considered implausible since the economies of many developed countries and energy suppliers depend a lot on supply of cheaper products from China.
Therefore, while energy independence is a pipe dream, energy security is more plausible, practicable, and achievable. Unlike the former, the goal of which is to become self-sufficient in the production of energy, the latter focuses on increasing the supply of energy by exploiting all of the sources available to us, not just those restricted to energy. A key point to remember is that while energy choices are influenced by a country’s foreign policy, economic priorities, and environmental constraints these also get influenced by the f energy choices it makes, thus adding another layer of complexity to an already convoluted issue.
[box type=”shadow” align=”” class=”” width=””]In a nutshell
“Energy Independence”, though sounds high, may not be practicable for multiple reasons. “Energy Security”, on the other hand, is more plausible and also embraces in its folds an objective and reasonable proportion of “indigenization” and, therefore, should be pursued instead. However, energy “security” involves multiple factors and is not static but dynamic as the world around us keeps changing continuously. It is, therefore, critical that both its definition and the metrics used to measure it are reviewed periodically, or whenever a material change in circumstances warrants such review.[/box]
Unfortunately, a singular focus on import reduction or indigenization will not address the multiple political, socioeconomic, and environmental impacts of energy supply, and many other factors. Many additional considerations should drive energy policy. However, we must admit at the outset that energy security is not a well-defined concept and also does not have an agreed upon set of metrics. According to one published report, at least 45 separate definitions of energy security are presented in the academic and policy literature over the past decade and the list is continuously increasing.
Energy security is generally considered to base on four pillars: availability, reliability, affordability, and sustainability. Availability is the ability of a country to secure its energy needs. It requires an extensive commercial market and sufficient physical resources, investments, technology, systems, and legal and regulatory frameworks to back them up. Reliability refers to the extent that energy services are protected from disruption through diversification of energy sources and supply chains, resilience to handle shocks and recover from failures. Affordability involves low or equitable prices relative to income and their stability. Sustainability refers to minimizing the socioeconomic and environmental damages that can result from long-lived energy infrastructure.
Policymakers in Pakistan are also not unaware of the importance of energy security and have been making efforts, at least as political slogans, to make the country self-reliant in resources including energy. Even though, an integrated national energy policy is, perhaps, still on the drawing board, the draft National Electricity Policy 2020 (“NEP2020”), under its section 3.2. ENERGY SECURITY, states that: “Energy security, including uninterrupted availability of energy sources, is an essential goal for the power sector. The goal of the government is to diversify the fuel mix of the generation capacity in the country, through optimal utilization of energy resources, such as hydro, renewable sources, indigenous coal, natural gas, and nuclear.”
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The NEP2020, however, does not specify any objective or concrete set of attributes that should guide the planners and decision-makers downstream on how they should build this security in their systems and the measures or indicators they should use to monitor and assess the progress on this issue.
Perhaps, for this reason, planners at National Transmission and Despatch Company (NTDC), in their Integrated Generation Capacity Expansion Plan 2047 (“IGCEP2047”)also considered energy security to be synonymous with indigenization. Under section 6.2: Strategic Considerations, this Plan states: “In the long-term, it is assumed that the GoP’s policy will continue to focus on harnessing of indigenous resources, particularly REs all across the country, Thar coal in South and hydropotential in North.”
A recently conducted research by Asian Development Bank (ADB) Institute that analyzed Pakistan’s energy security under a quantitative 4As framework (availability of resources, applicability of technologies, acceptability by society, and affordability of energy resources) over the 6-year period of 2011–2017, indicates that Pakistan’s energy security improved initially over the first 3 years but then deteriorated over the next 3 years. “Despite significant investments in the energy infrastructure over the last 5 years, Pakistan continues to be energy insecure,” the report noted. (ADB Institute: October 2019).
We must also appreciate that energy security is not a concept that is static in time; it is a dynamic issue and an evolving theme. It varies not only over time but also from country to country. Continuously shifting geopolitical conditions, technological developments, market trends, and new knowledge bases can easily render a previously energy secured country vulnerable to new risks and threats, thus undermining its energy security. It is, therefore, desirable that both its definition and the metrics to measure it are reviewed periodically, or whenever a material change in the background conditions warrants such review.
While new threats have emerged within and around our borders and also at global level, new opportunities have also evolved to reduce our dependence on fossil fuels and their foreign suppliers, and lessen our reliance on capital-intensive and high-risk projects. Thomas Jefferson had aptly noted, “The price of liberty is eternal vigilance.” We must also be ready to review our energy security afresh and frequently since it is a critical link to our liberty. And, this may just be the time to transform our energy infrastructure to more decentralized, distributed, and naturally renewable systems which can ensure supplies of socially, economically, and environmentally sustainable energy to our nation in the future.
[box type=”note” align=”” class=”” width=””]The writer is a freelance consultant, specializing in sustainable energy and power system planning and development. He can be reached via email at: msrahim@hotmail.com[/box]