SUMMARY of the article “Gas crisis,” Editorial, published on November 22, 2023
As winter approaches, households and consumers connected to public gas utilities in Pakistan are bracing for the annual shortage of fuel. This recurring issue, persisting for over a decade and a half, intensifies during the winter months, leading to complete cutoffs for certain sectors and rationing for others, including households. The root causes of the gas shortages are well-established: a drastic decline in domestic production due to the prolonged misuse of this energy resource and a lack of major gas discoveries to replenish dwindling reserves. Pipeline projects to import gas from Iran and Central Asian states face persistent challenges. With no viable alternatives, Pakistan relies on the import of expensive LNG to bridge the supply gap. However, volatile global market conditions, disruptions in the international supply chain, and balance-of-payments challenges have made this option difficult. Despite renewed interest from international LNG traders, securing additional shipments remains a challenge, especially considering the prevailing high spot prices. With gas constituting a significant portion of the country’s energy supply, the domestic production falls short of meeting peak demand, leaving Pakistan with the dilemma of either paying premiums on high prices or enduring massive fuel cuts and rationing during cold weather.
Easy/Short SUMMARY:
As winter approaches, Pakistan faces the annual gas shortage, a recurring issue for over 15 years. Depleted domestic production and a lack of major discoveries leave the country reliant on importing expensive LNG, a challenging option due to global market conditions. Despite renewed interest from LNG traders, securing additional shipments at affordable prices remains uncertain. Gas shortages, constituting nearly 38% of the energy mix, force Pakistan to choose between paying premiums on high prices or enduring fuel cuts during cold weather.
SOLUTIONS of The Problem:
Diversify Energy Sources
Explore and invest in alternative and renewable energy sources to reduce dependence on gas and mitigate the impact of shortages.
Accelerate Pipeline Projects
Address challenges hindering pipeline projects for importing gas from Iran and Central Asian states to diversify gas sources and enhance supply reliability.
Improve Domestic Production
Invest in technology and infrastructure to revitalize domestic gas production, reducing reliance on imports and mitigating supply shortages.
Enhance Storage Capacities
Build and improve storage facilities to stockpile gas during periods of low demand, ensuring a more stable supply during peak seasons.
Promote Energy Efficiency
Encourage and implement energy-efficient practices and technologies to reduce overall energy demand and ease the strain on gas supplies.
IMPORTANT Facts and Figures Given in the article:
- Gas shortages in Pakistan during winter are a recurring issue for over 15 years.
- Domestic gas production has significantly declined due to prolonged misuse and a lack of major discoveries.
- Pipeline projects aimed at importing gas from Iran and Central Asian states face persistent challenges.
- Pakistan heavily relies on expensive LNG imports to bridge the gas supply gap.
- With gas contributing almost 38% to the country’s primary energy supply mix, the total domestic production falls short of peak demand.
MCQs from the Article:
- What is the primary cause of gas shortages in Pakistan during winter?
A. International market fluctuations
B. Decline in domestic production
C. Pipeline project delays
D. Lack of interest from LNG traders -
What percentage does gas contribute to Pakistan’s primary energy supply mix?
A. 20%
B. 30%
C. Nearly 38%
D. 50% -
Why is importing LNG considered a challenging option for Pakistan?
A. Limited global LNG supply
B. Unstable demand in winter
C. Volatile global market conditions
D. Excessive domestic production -
What is the main dilemma faced by Pakistan due to gas shortages?
A. Increasing domestic production
B. Rationing gas for all consumers
C. Paying premiums on high prices or enduring fuel cuts
D. Halting pipeline projects -
What alternative solution does the article suggest to reduce dependence on gas?
A. Diversify energy sources
B. Increase LNG imports
C. Expand domestic production
D. Enhance storage capacities
VOCABULARY:
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Woes (noun) (پریشانیاں): Troubles or difficulties.
-
Tandem (adverb) (ہم آہنگی سے): In association or conjunction.
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Depleted (adjective) (خالی): Drained or reduced.
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Dwindling (adjective) (تخفیف): Diminishing gradually.
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Snag (noun) (رکاوٹ): A problem or complication.
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Dilemma (noun) (دشواری): A difficult choice between two equally undesirable alternatives.
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Rationing (noun) (تنسیب): The controlled distribution of scarce resources.
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Mitigate (verb) (کم کرنا): Make (something bad) less severe, serious, or painful.
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Revitalize (verb) (تازہ کرنا): Imbue (something) with new life and vitality.
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Stockpile (verb) (ذخیرہ کرنا): Accumulate a large stock of (goods or materials).
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Strain (noun) (زحمت): A severe demand on the strength or resources.
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Promote (verb) (فروغ دینا): Encourage or support the growth or development of something.
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Gas crisis
Editorial
THIS is the time of the year when households and other consumers connected with pipeline networks of the two public gas utilities start to face a shortage of the fuel. The supply woes will keep increasing as the demand spikes in tandem with falling winter temperatures before peaking in January, forcing the utilities to completely cut off supplies to certain sectors and ration the fuel for others, including households. This situation is not new for people and has been going on for more than a decade and a half. The reasons for gas shortages in the country are well known: our domestic production has depleted drastically because of decades of misuse of this energy resource and as no major gas discovery has been made in years to compensate for the shrinking reserves. The pipeline projects to bring gas from Iran and the Central Asian states continue to hit one snag after another. The import of expensive LNG is the only option we are left with to plug the supply gap. But volatile global market conditions and uncertainty surrounding the international supply chain in recent years, as well as balance-of-payments woes have taught us that this option, too, is difficult.
Encouraged by the revival of international LNG traders’ interest after a gap of one year to supply two additional spot cargoes next month — although at a premium to spot prices — Pakistan is looking to buy an additional shipment for January to help ease gas shortages during the peak winter month. Hopefully, the government will be able to pick up the additional cargo, though securing it at an affordable price will be a challenge. The prevailing spot prices are in the $17 per mmbtu range, and the suppliers will demand a significant premium on top of that as they did for the December delivery. Will Pakistan have a choice? Not really. The fresh tender comes as Pakistan failed to confirm a shipment from the State Oil Company of Azerbaijan Republic under a deal. With gas contributing nearly 38pc to the country’s primary energy supply mix, the total domestic production hovers around 4bcfd against a peak demand of 6-8bcfd. This kind of gas shortage leaves Pakistan with no choice but to pay the premium to the prevalent prices or face massive fuel cuts and rationing during the cold weather.
Published in Dawn, November 22th, 2023