PAKISTAN'S ENERGY CRISIS

From Conundrum to Catastrophe?

Pakistan has been gripped by a crippling power crisis since the 1990s. It has intensified since 2007, imposing punishing costs on the country.
According to a report released in early days of February, 2021 by Macro Economic Insights, the power crisis has cost $82 billion in lost GDP
between 2007 and 2020. In per capita terms, the power crisis has cost each Rs 43,504 during this period, with rupee per capita GDP lower by
23% as a result. The lower GDP growth cost approximately 0.9 to 1.6 million jobs a year, on average, between 2007 and 2018.

Despite broad access to electricity (99% of the population had access to electricity in 2016), the country experiences massive blackouts (load shedding of 6-8

hours a day for households and 1-2 hours a day for the industry). According to a survey by the World Bank, 66.7 % of the businesses in Pakistan cite electricity
shortages as a more significant obstacle to business than corruption (11.7%) and crime/terrorism (5.5%). In light of these factors, there is an
urgent need to innovate in the energy sector of the country.

Fortunately, Pakistan has a high renewable energy potential, which has been elaborated in many studies on Pakistan. A recent report
published by USAID attests to Pakistan’s energy potential, stating that it can potentially produce 100,000 MW from solar energy alone.
Despite the potential, Pakistan remains “powerless” when it comes to adequately powering lights for its homes, machinery for its factories,
and stoves for its kitchens. Data from many sources, including the Ministry of Water & Power and Pakistan Economic Surveys, over the past
five years show that Pakistan has been facing an average shortfall of between 4,000-5,000 MW.

Origins of the crisis

While 2007 is considered the starting point of the ongoing energy crisis, the issue has its roots in policy decisions taken two decades ago. In
1994, when only 40% of the population had access to electricity, Pakistan was facing power shortages of about 2,000 MW during peak load
times. The government of the day assessed that the average annual increase in power demand would be about 8% in the short to medium
term, and generation capacity of the order of 960-1,300 MW would have to be added to the system annually from the mid-1990s onwards to
meet demands of a growing economy. The scale of investment required was deemed to be well beyond what the public sector could muster.

A power policy was thus issued in 1994 that offered an attractive package of incentives to foreign investors, including a tariff ceiling that
resulted in returns on investment of 15-18%, a minimum required equity investment of just 20%, and a host of fiscal and security incentives.
More importantly, the policy effectively transformed the fuel mix for energy generation in the country. In the 1980s a little over 60% of
Pakistan’s power was generated from hydropower. The 1994 power policy, on the other hand, was designed to encourage the quick
installation of thermal power plants, the bulk of which were fuel oil based. The government of the time considered this strategy to be the
optimal one, not only because of the relative ease with which thermal power plants could be added to the generation mix compared to
hydropower resources, which would take much longer, but also because key proposed hydropower projects, for which feasibility studies had
been prepared, were controversial for political reasons. By 2013, however, the proportion of power generation from hydro and nuclear
sources was about 36%, while the proportion of generation from furnace oil-fired sources was almost equal at 35%. Gas-fired plants
accounted for 29% of power generation, while coal-fired plants accounted for a minuscule 0.1% of generation. Thus, in less than two
decades the fuel mix for power generation underwent a significant transformation.

Globally the average usage for oil of energy generation stands at 5 % compared with Pakistan where the same number stands at a whopping
32% (2011). While the world uses on average 21% gas for energy generation, Pakistan continues to drain its gas reserves as the same number
is at 48%. As the world searched for cheaper and more reliable sources of energy the reliance increased towards coal (contrary to what

environmental experts would have suggested). Today, due to its low price global average usage of coal in energy generation stands at 40 % and the same
number for Pakistan is 7%. (Vaqar, Economics of Energy Mix).

The energy sector is in serious crisis —Performance is far from satisfactory, and major issues need to be resolved. Key challenges
include substantial and growing shortages of energy (4,000–5,000 megawatts—a third of peak demand for electricity, Pakistan Electric Power Company), as well as
financial constraints that prevent the sector from financing all its costs. As a result, the sector relies heavily on government support—
through subsidies amounting to about 2 % of GDP from the budget to cover operating costs and funding for almost the entire investment
program. This situation is unsustainable, as energy shortages are constraining the growth of
Subsidy— a benefit given by govt. to
productive activities (resulting in a loss of GDP of 2% or more a year, according to preliminary estimates), employment, public to remove some type of burden,
and exports, while budgetary subsidies are diverting resources from other high-priority activities. and it is often considered to be in the
overall interest of the public.
Economic Survey of Pakistan 2019-20 unfolds that Pakistan’s installed capacity to generate
electricity has surged up to 37, 402 MW which stood at 22, 812 MW in 2013, showing the growth of 64 %. Although generation capacity has
been added, because of inefficiencies and the network expansion this addition has not reduced the overall shortfall—on the contrary, it has
increased. The energy intensity of Pakistan is relatively high due to inefficiencies in not only supply (e.g., public sector generation plants depict heat rates

of 12,000–14,000 btu/kWh,whereas efficient gas fired generation plants should achieve heat rates of 8,000 btu/kWh or below) and transmission/distribution, but also in the
use of energy across different sectors.

Issues
A large and growing shortfall of energy supply
…The shortfall is essentially managed by load shedding—rotating shutdowns of supply feeders. These disruptions are hurting industrial,
commercial, and other productive activities, and their impact is estimated at around 2 % of GDP (Ministry of Finance 2012).

Strained finances
low collections — DISCOs should collect all the revenues they bill. Due to insufficient cost recovery, most DISCOs continue to suffer
financial losses and are compelled to defer investments for system enhancement, efficiency improvements, and the like.
This lack of cost recovery is a huge burden on the federal budget, aggravating macroeconomic imbalances — The shortfall in DISCO
revenues—which the government finances as TDS from the budget—has amounted to PRs 250–400 billion (roughly $3.0–4.5 billion) annually in
recent years.
Finally, is the issue of ‘’circular debt.’’ — With revenue and resource shortfalls, the DISCOs build up arrears in payments to the NTDC
(National Transmission and Dispatch Company). The arrears force NTDC to delay payments to its power producers, which then build up arrears to their
fuel suppliers, refineries, and so on. This is often referred to as circular debt, though the arrears buildup is one-directional—from consumers
to DISCOs and transmission companies, generators, and ultimately to fuel suppliers. The Ministry of Water and Power defines circular debt
as the bills unpaid by NTDC/PEPCO (Pakistan Electric Power Company) to other energy suppliers. Based on this definition, the ministry estimated
circular sector debt, as of January 2021, at PRs 2306 billion.

The large and growing subsidy requirement, along with circular debt, has two important impacts — First, it crowds out borrowing by
the power and other energy sector entities for investment in new capacity and blights the further development of existing projects. If the
amount of subsidies paid from the budget during 2007/08–2011/12 (PRs 1.2–1.4 trillion) had been invested in power generation, it could have
financed 4,000–6,000 MW of new hydro or thermal capacity. This should be compared with the 3,470 MW added over 2008/09–2010/11 and
the need for as much as 5000 MW today. Second, circular debt creates severe liquidity shortages in the sector as a whole, such that
suppliers refuse to provide fuel, generating plants stay idle, maintenance programs lag or are not implemented at all, and spare parts are
unavailable when equipment breaks down (NEPRA 2011). But it must be stressed that the circular debt is a symptom of the inefficient and
unsustainable energy system that can only be addressed once the underlying causes have been resolved—otherwise it would just reemerge.

Weak governance
Overall sector governance remains weak with diluted responsibilities across ministries—The government, as owner of the power and
gas utilities, exercises almost no control over the managements of public utilities. This is due partly to the limited capacities of the sector
ministries, but it also highlights the lack of a reform champion or leader, who is fully empowered to implement the reforms. Past efforts at
sector reform had limited impacts or were abandoned in between. Even when PEPCO was empowered to fully implement the reforms, the
desired result was not achieved because it got bogged down in running the companies, rather than restructuring them (develop management

capacities, systems, and human resources) and preparing them to operate as autonomous, commercial entities.

Policy Recommendations
High-level leadership and management of the reform program is required —While addressing the challenges and constraints
facing power and over-all energy development requires actions across several fronts, strengthening governance and leadership should be
an overarching objective. The government needs to establish a high-level and fully empowered structure (which could be a single ministry or a dedicated

task force reporting to the Council of Common Interests or the Cabinet) to manage the transition. The
Waivers and task forces work well only in
responsible ministry or task force would need to be empowered to act on behalf of sector
the short term, if extended, they create
institutions, take the required administrative actions, address conflicting objectives, priorities, complications. Permanent frameworks are
and points of view, and provide regular updates to the Council of Common Interests or the required for long-term sustainability.
Cabinet. The ministry or task force would also need resources to conduct critical analyses and Dr. Farid A. Malik
(Ex-Chairman, Pakistan Science Foundation)
reviews and be guided by the vision or goal that the government establishes.

Reduce Supply Shortfalls

More effective use of existing generation capacity must also be ensured — Most of the public sector plants were installed 20 or more
years ago and now need to be replaced or rehabilitated.
Regional energy trade offers opportunities for reducing the supply deficit — Pakistan can supplement domestic energy (power as well as

gas) supplies through imports. Gas Projects.

Curbing Electricity Theft — Electricity theft is the biggest impediment in the uninterrupted supply of electricity. Unless the government
introduces large scale measures to curb this problem, by introducing strict penalties for the culprits, and getting them implemented, it will
continue to be one of the major reasons contributing towards the energy crises. Such measures on government’s part are the need of the
day.
Building more Dams — It is high time that Pakistan invests in the construction of more dams, since the electricity demand is increasing
every year and the current capacity of the dams is not enough in fulfilling that demand.
Investing in Renewable Energy —Only renewable energy can provide sustained, clean, pollution free and environment friendly electricity,
which includes hydro power, wind energy, solar energy and tidal energy. Due to the advantages offered by renewable energy which includes
low cost, the world has made great strides in shifting from conventional to renewable energy. However, Pakistan harnessed 15 % so far.

Improve sector finances

Announcing a firm timetable for eliminating the TDS— In the absence of an announced timetable to eliminate the TDS, the utilities face
no compulsions to reduce costs or increase collections, as the perception (and most often, the reality) is that the government will cover the deficit.
Announcing a firm timetable for eliminating the TDS is therefore a high priority; it will also mean savings of PRs 300–400 billion a year in the
federal budget, TWB.
By improving the DISCOs’ collection performance— compelling the DISCOs to improve performance—notably, collection of the amounts
that they bill to consumers—will reduce the subsidy requirement, and improve the DISCOs’ cash flow. For 2012/13, the DISCOs lost PRs 85
billion in revenues solely because they do not comply with NEPRA’s target for collections.Other actions that should be considered include
 As an interim step, publish the TDS amounts (both budgeted + actual) separately for each DISCO to identify the DISCOs and geographic areas
benefiting from this subsidy.
 Improve the utilities’ operational performance and manage consumer demand more efficiently. This requires reducing theft and
technical losses and improving metering. A 1% reduction in losses would generate PRs 9–10 billion in additional revenues or reduce
costs by a similar amount.TWB

Strengthen Sector Governance

To address governance and high-level leadership challenges, the Friends of Democratic Pakistan report recommends merging the sector
ministries and regulators and consolidating the authority and responsibility for completing the reforms in one office (a senior energy

advisor).Merging the Ministry of Water and Power and Ministry of Petroleum and Natural Resources into a single Ministry of Energy; Merging
NEPRA and OGRA into a single Energy Sector Regulator.

Conclusion
Pakistan’s energy sector is facing a serious crisis. Key challenges include large and growing shortages of energy, high energy costs, and
inefficiencies that prevent the sector from financing all its costs. It therefore relies heavily on government support, through subsidies and
funding for almost its entire investment program. Specific actions to overcome the dire situation can be classified along three main lines.
The first are actions to overcome the investment deficit, which requires least-cost investment plans based on low-cost supply sources
(notably hydropower), market competition, more efficient energy use, and incentives to manage consumer demand. Second, steps to
improve sector finances are needed. Key actions include modifications to the current universal national tariff, cost-recovering tariffs, and
improving utilities’ operational and commercial performance. Third, to improve sector governance, managerial autonomy and accountability
needs to be introduced in power utilities. Performance contracts or other tools for monitoring and
Tariff— tax imposed by one country
improving the performance of the public utilities—for example, outsourcing management, leasing,
on the goods and services imported
sale of shares along with management control, and privatization—should be considered, and the from another country.
approach deemed most appropriate should be introduced. The problems and potential solutions
to the recovery of the Pakistan energy sector are all well known. What is needed now is leadership and a road map of sustained action.

Katz (The Feasibility of Renewable Energy in Pakistan) indicates, somewhat sensationally, that if only a quarter of one percent of the land area of
Balochistan were covered with solar panels of 20 percent efficiency, the photo-voltaic energy generated would meet the country’s total
electricity needs.
 ENERGY RESOURCES OF PAKISTAN
Primary Energy Resources
Coal—Among the different primary energy resources, coal is the most abundant fossil fuel of Pakistan.Some studies suggest that by
utilising this huge coal potential, Pakistancould produce as much as 100,000 MW of electricity for a lifetime of 30 years (Javaid M.A. Electrical Energy
Crisis in Pakistan and Their Possible Solutions). Balochistan province is believed to be one of the most mineral-rich areas of the country, but inthe 1990s
huge reserves of lignite coal were discovered in the Tharparkar district of Sindh Province. These reserves are so huge that they represent
almost 95% of the total reserves of the country. Due to low heating value, Pakistan imported 7 million tons of coal in 2017 to meet its needs.

Gas—The first ever reserves of natural of the Pakistan were discovered in 1952 in the Sui district of Balochistan Province. The supply from
the Sui gas field commenced in 1955. Since then natural gas had formed a major portion of the primary energy supplies of Pakistan. Later
additional sources were found in Sindh. The demand in the transport sector, which commenced in 2002, has increased significantly over the
years because of the high efficiency of this fuel, wherein 1Kg of CNG provides better mileage when compared to 1L of diesel / petrol.
Association of Natural Gas Vehicles reports Pakistan has highest CNG running vehicles i.e. 3330 CNG refueling station.The historical natural
gas records show that Pakistan did not import natural gas until 2014.

Crude Oil & Petroleum Oil—Pakistan has a total sedimentary area of 827,268 km 2 which could be used for exploration and
development of oil and gas. In 2007, the exploration density was quite low, i.e., around one well/1446 km 2 of the available area. The main
factor that contributes to ensuring the enhanced amount of the proven reserves and probable recovery is the amount of exploration
activity. Since exploration is the first step; therefore, the more the exploration the higher the success and probability of making further
discoveries. The other element that affects the success rate is the nature of the geographic area, i.e., the larger the sedimentary area the
better are the chances and vice-versa. According to some reports, the success rate of exploratory activities in Pakistan is actually quite high,
i.e., seven times the world average based on the drilling density which is five times lower than the world average.

Hubbert Peak
M.K. Hubbert was the first to use a quantitative technique called Logistic Growth Curve or Hubbert’s Curves to simulate the production of
conventional crude oil in the lower 48 states of the USA. Based on historical production data and existing reserves, Hubbert predicted that
crude oil production in the USA would peak in the late1960s or early 1970s and decline thereafter. He faced some critics at that time, but
despite that, the predicted peak indeed occurred in the 1970s and despite remarkable advances in technology and additional reserves
discoveries in Alaska, currently, the USA produce 50% of the oil compared to 1970 level. The Hubbert peak production idea was initially
rejected by the majority of academicians and businessmen. It was not until 1998 when two geologists, Dr. Colin J. Campbell and Jean
Laherrere published a paper entitled “The end of cheap oil”, then Hubbert curves again gained attention. From there onwards, the Hubbert
theory of oil depletion has been used as a method to forecast the future the global oil production stating that oil production in large regions
follows a bell-shaped curve over time. Based onmajor assumptions: (i) the production rate must start from zero, rise to a maximum, then
decline to zero.

It is true that there exist many uncertainties in estimating peak production for oil or other fossil fuels. Therefore, to find out the exact time of
peak level production is difficult owing to multiple reasons. It is mainly because of inadequate knowledge of fossil fuels reserves in the
underground followed by the complex relationship between economic factors such as oil production, demand, regional GDP growth, and
global oil production. Similarly, the urge for exploration activities increases with increase in demand and when supply is limited
accompanied by high prices, leaving little space for geological reasoning. Despite these apprehensions, it is important to estimate the future
primary energy production especially for a country like Pakistan which is suffering from an energy crisis. These crises are the result of poor
planning and foresightedness in the energy sector. Therefore, the estimation of peak production of oil, natural gas and coal in the country
will open new horizons for policy planners to consider and help minimize the import of fossil fuel by anticipating indigenous potential
production and finding alternatives. As such, the Hubbert peak production for coal, natural gas and oil of Pakistan has been simulated using
historical data from the year 1971 to 2015. IEA and HDIP, the ministry of petroleum and natural resources of the Government of Pakistan.

Result of Hubbert Peak

The Peak Production of Coal—The results of coal peak production suggest that the peak production year in the Pakistan will be in the
year 2080 with total coal production of 134 million tons of coal.

For Pakistan, the definition of reserves being proven implies the measured reserves, having a high level of geological assurance, i.e., coal
that lies within a radius of 0.4 km from the point of measurement. On the other hand, coal with lesser geological assurance are classified as
indicated reserves, inferred reserves and hypothetical reserves being 1.4-1.2 km, 1.2-4.8 km and beyond 4.8 km away from the point of its
measurement. Thus, after including even the three less probable reserves alongside the proven reserves, the peak production year varies.
This proves that there is an obvious effect of the total size of the reserves on production cycle and that with the passage of time as the
technology advances and more and more exploratory activities are conducted the volume of the reserves will increase and hence the peak
years will move forward. On the other hand, if the rate of extraction increases due to government policies then the resource will deplete
quickly and peak year will be experienced sooner.

For Natural Gas—The results show that the peak production year for natural gas is expected to be in the year 2024 with a production of
32.70 million toe of natural gas. This amount of natural gas production is almost double the amount of production in the year 2000. The
results of his study further suggest that the cumulative production rises continuously until the peak is achieved after which the productions
start to decline thereby reaching its minimum limits.

There are various oil and gas exportation and development companies currently operating in Pakistan. These exploratory and development
activities are ongoing in all provinces of the country. Therefore, the production from different wells/sites is different from the estimations,
i.e., certain wells have already reached their peak production limits and are in the stage of decline, while the others are still young. In this
regard, an important study has also been undertaken by the Petroleum Institute of Pakistan (PIP)thereby forecasting the future production
of oil and gas in the country till 2025. However, according to the results of PIP production of natural gas will be highest in 2017, i.e., 4.2 BCFD
and from 2017 onwards the production will decline and shall be 2.4 BCFD in 2024. Thus, from the PIP study perspective, 2017 can be
regarded as the peak production year of natural gas.

Mari gas is expected to remain the largest producer till the end of the forecast period (2025). The production from the Uch field will peak
around 450 MMCFD in 2017/2018 before declining to nearly 300 MMCFD in 2024. A declining trend also persists in the Sui field’s gas output
throughout the forecast period, from an average of 420 MMCFD in 2015 to less than 250 MMCFD in 2024. A similar trend will be observed in
the Qadirpur field, however, with a higher depletion rate as production is estimated at below 230 MMCFD in 2024 compared 450 MMCFD in
2015.

Thus, the outlook for natural gas production in the country is no encouraging, either from the perspective of discoveries nor the situation of
already existing fields. This problem is further aggravated by the security situation in the country alongside increasing development costs
and limited economic opportunities for exploration companies to make discoveries. This is mainly why the country’s natural gas production
has not increased significantly from the year 2003 onwards. We can see that production in 2013, 2014 is even less than 2012 production of
26.5, 26.3 million toe and 27.1 million toe, respectively. According to PIP, this is because of the higher decline rates from maturing larger gas-
producing fields such as Sui, Qadirpur, and Zamzam which have outweighed additions from newer fields.

For Crude Oil& Natural Gas Liquids —The results suggest that the peak production year for crude oil year had already passed in 2013
when the production was 4.52 million toe. Thus, from this point onwards the production is already on the decline and is continuously
decreasing. Therefore, it is anticipated that the if further reserves of crude oil are not found in the country then the situation regarding
availability of crude oil will worsen for the country and the imports of oil would rise in coming years. However, PIP reported 2016 as peak
year. According to it, after 2016 the production will decline at a compound annual growth rate of 13.7%. The major share of crude oil
production until 2016 is reported to come from OGDCL. Similarly, the Adhi field is expected to witness an increase in output to the tune of
8500 BPD in 2016 before entering its declining phase. Likewise, the production from the Nashpa field which currently produces around
20,500 BPD is anticipated to fall to approximately 14,000 BPD by 2020 (current 14,481) and less than 10,000 BPD by 2024. Thus, both theoretical
and ground situation support the thesis that crude oil reserves are on the verge of exhaustion in the country. Although around 50
exploratory and 50 development wells were drilled in 2014 alone, yet these attempts are not only insufficient, but have not delivered so far
for fulfilling the country’s ever-rising demand for oil and petroleum products.

Policy Recommendations
We noticed that coal is the only abundant fossil fuel in Pakistan and production is expected to peak in 2080 with a production of 134.06
million tons. Therefore, the power production sector which is one of the key consumers of natural gas and oil can replace these with coal
until renewable sources of energy are put into place. Since private sector investors own most of the thermal power plants, these companies
should be encouraged to replace the oil and gas with coal using state of the art technologies. It should be noticed that coal run technologies
carry significant environmental consequences regarding environmental emissions leading to air pollution and global warming. Thus, the
substitution of oil and gas with coal must be accompanied by carbon-capture and storage technologies to mitigate the aforementioned
negative impacts.

Our results suggest that oil is the scarcest energy resource in the country and the majority of what is available has already been produced.
Therefore, sectors like transport need a revival thereby introducing better mass transit systems. The country lacks state of the art railways
system followed by a lack of subways and fast trains. Thus, with the sixth biggest population in the world, public transport systems needs to
be improved, which will save a handsome amount of natural gas and oil. We conclude that indigenous primary energy resources with its
current production/availability are not sufficient to fulfill the anticipated energy demand. Thus, for optimal benefits both non-renewable and
renewable energy resource development should be streamlined and projects based on the resources planned side by side, even if the
country needs to import some inevitable quantity of fossil fuels in future. [The Future of Sustainable Energy in Pakistan, MDPI]
 FUTURE OF PAKISTAN’S ENERGY SECURITY
Internationally, the stress on energy resources is growing. Pakistan is no exception. The country does not have fossil fuel reserves and
spends heavily on their import, yet power outages have become frequent in recent years. Energy scarcity would increase with population
growth if resources other than the present thermal-based power sector are not tapped. Advances in technology have made new sources of
power generation available that are not only affordable and reliable but are also environment friendly. Among them is wind power whose
share in energy generation is rapidly growing. Today, wind energy alone provides 733 GW globally — a big achievement for a relatively new
technology, particularly in comparison with hydro power’s 4.3 PWh globally. Many countries are now using this source to meet their energy
needs. It is estimated that Pakistan can produce 50,000 MW electricity from wind in the Sind province alone. It means the country can exploit
this inexhaustible natural resource to ward off the current crisis as well as to meet its future energy needs. Wind energy is viable
economically as tech-savvy companies are eager to offer joint ventures in the field.Economic progress needs secure energy supplies. In
developing countries poverty reduction is critically dependent on economic progress.

The Issue
Background ― The age of fossil fuels that began with the discovery of oil in mid 19th century and brought about tremendous changes in
all aspects of life is approaching its end as fossil fuels that took millions of years to accumulate, are non-renewable. This presents us with a
dreadful scenario as virtually all activities of contemporary life had become dependent on the use of fossil fuels. The population increase has
put enormous stress on these reserves. The Production to Reserves ratio is declining.4 How the world will maintain the pace of progress and
development once the fossil-based fuels are gone is the big question that confronts leaders, scientists, and engineers. In fact, whether one is
aware of it or not, it is a universal challenge.

Energy and Electricity ― Electricity is a sub-sector of energy. It is the fastest growing and the most demanded and efficient form of
energy. However, energy is not all about electricity. In the areas that are not connected to national grids, energy in other forms is needed for
cooking, heating, lighting, irrigation, and other purposes. Electricity today is a critical component of energy yet 18.57 per cent of the world
population still has no access to it. With the increasing population and growing demand for electricity due to changing life style, the
dwindling fossil fuel resources are making it increasingly difficult and challenging to provide energy security to the coming generations. It is a
world-wide problem that transcends national boundaries.

Pakistan’s Electricity Scenario: Overview ― The growing demand and supply gap in terms of energy in general and electricity in
particular also afflicts Pakistan. According to the World Bank Data, 27 % or 51-54 million people in Pakistan do not have access to electricity,
whereas >50% of population still use biomass for cooking as per energypedia.info. Energy insecurity haunts the country’s economic future
as fossil-based fuel reserves are insufficient, electricity production from on oil imports, whose
UNPF Report (2016-17)
cost daily rises in the international market, has soared the oil import bill by 97 % to $4.59
 63% of population comprises of youth out of
billion in the first quarter of the current fiscal year (3MF22) from $2.32 billion over the 207 million people (Population Census,
corresponding months of last year. Despite huge spending and low per capita consumption of 2017)

electricity, the country remains unable to meet the demand. Long hours of power outages in UNDP Report 2020
the country are resulting in mass public protests. Load-shedding has become a regular topic  29% youth is illiterate.
 6% have >12 years education.
of newspaper editorials. The economic losses due to closure of small industries and
workshops are incalculable. If the situation persists it may trigger political unrest and destabilize the country.

The problem gets added importance in the backdrop of the changing demographic realities of the country. Pakistan is witnessing a youth
bulge. According to UNDP Report 2020, This generation is likely to consume much more power than did the generation of its parents. It is
anticipated that the demand for electricity would up to 1706.3 TWh in 2050, at an annual average growth rate of 8.35%, which is 19x higher
than the base year demand.If the state remains unable to end energy poverty, particularly deficiency of electricity, the youth’s potential
energies will be wasted.

Implications of Electricity Shortages in Pakistan

All industries in the country have suffered badly due to power outages. “Electricity shortages have worsened the country’s already slumping
export sector, while the skyrocketing rise in oil prices threatens Pakistan’s financial solvency.” Robert M. Hathaway, Powering Pakistan – Meeting Pakistan’s

Energy Needs in the 21stCentury.This loss of steam in financial and economic sectors translates into developmental and social losses. “High energy
costs have generated across-the-board inflation and slowed economic growth, which costs jobs and raises the spectre of political unrest.”In
the short and long term, the negative fallout of electricity shortages may erode the capacity of social and political order to sustain. As noted
by Hathaway, “An energy-deficient Pakistan will be poor, politically unstable, and environmentally unsustainable.”

Renewable Options for Energy Security and Global Trends

The better known and used among the renewable sources of energy are hydro and nuclear. But advancements in science and technology
have enabled the contemporary world to harness the energy from various other sources as well. Today, we have many viable options
available in the form of renewable energy. These include: nuclear, hydro, solar, wind, biomass, tidal, geo-thermal, and wave energy.The
hydro source had been an early entrant in the field of renewables because of its technological simplicity. The nuclear source, despite being
technologically sophisticated, got importance because of its immense potential, and advanced countries’ preference to harness it. However,
with the coming stress on hydro resources, and problems associated with nuclear generated energy, the world began moving to new
renewables to stave off the coming scarcity in fossil fuel resources. The focus now is fast shifting to other renewables; the wind and solar
technologies being in the lead.

Globally, renewable energy’s usage in power generation is increasing. The market share of solar + wind energy has increased at a growth
rate of 15% from 2015-20. If it continues, the growth rate is expected to reach 45 % by 2030 and 100% by 2033.According to the IEO 2011,
hydropower is the fastest growing renewable energy source followed by coal and natural gas, and would remain up to 2030, for producing
electricity. China has biggest hydroelectric generation in the world “The Three Gorges” generating 22.5 GW.

Growth of renewables worldwide provides an opportunity to graduallybring down the current reliance on fossil fuels that emit green-house
gases and pollute the environment. Whereas the world is shifting to renewable energy, particularly hydropower, Pakistan’s policy has been
very modest as to targets and slow in implementation. The Alternate Energy Development Board of Pakistan has failed to show the country
on the global map of non-traditional renewables.

Future Energy Needs of Pakistan and Options

The per capita energy usage in the country is expected to take a sharp turn upward in the future for the combination of the following
factors: the youth bulge, and increasing access for a large segment of population to modern amenities of life. Policy makers would be faced
with the huge task of finding options to meet the increasing gap that daunts the country.

Pakistan’s population is also increasing fast. From 183.3 million in 2011, it has reached to 226 million by November 15, as per UN’s data , and is
rd
expected to reach 380 million by the year 2050, surpassing the US, Indonesia, Brazil and Russia to become the world’s 3 largest country
(currently 5th)behind the India and China. The search for resources to feed the country’s energy needs is going to be frantic in the years to come.

The policymakers will have to devise suitable policies to make both ends meet. There are still several issues related to management that
deserve policy makers’ attention. For example, billing losses in distribution companies are above 15 %, which is very high. In 2019-20, these
losses were highest at 38.9% for PESCO and 36.43% for SEPCO. Dawn, The Analytical Angle: Addressing the woes of Pakistan’s electricity distribution sector. To
reduce these losses management and administration will have to be improved. In addition to administrative issues, “poor quality of
infrastructure causes an estimated 30% loss of transmission per year.”Robert M. Hathaway, Powering Pakistan – Meeting Pakistan’s Energy Needs in the 21 st
Century.

Fossil Fuels ― Oil and gas make a bad choice for meeting the future energy needs. As has been noted in Asian Development Bank’s
January 2010 report, the current crisis of load shedding in Pakistan “to a large extent is a fuel crisis caused by unexpected and unmitigated
increase in Residual Fuel Oil (RFO) prices and by delays in finding a substitute for the depleting domestic gas supplies.”

However, since Pakistan has already invested heavily in the gas sector, it should keep this option open and pursue gas pipeline projects such
as IPI, and TAPI. The country has an integrated network of transmission 9,257 km long, and distribution and service lines networks covering
74,186 km. This network that has been developed over the last five decades is an asset. However, when planning for the long term, the
declining reserve to production (R/P) ratio of gas should inform the decision makers’ choices.

Though Pakistan has huge reserves of coal in Thar Desert, it is thought to be of a poor quality.Moreover, burning coal causes environmental
hazards that would be hard for Pakistan to control as the control technology is very expensive and in the development phase.Pakistan may
keep this option open for the time till coal can yield clean energy . Future of Pakistan’s Energy Security, IPRI

Traditional Renewables – Nuclear and Hydro ― As a renewable resource, nuclear energy has been very efficient. However,
Pakistan faces a number of hurdles in developing nuclear power plants. First, building these plants requires huge investments and it takes
several years to build them. Second, the unfair policies of western governments would stand inthe way if Pakistan expands its nuclear
programme. Third, the Fukushima episode in Japan has alerted the world to the hazards of nuclear plants and quite a few major users are
inclined to review their present and future projects. “Japan has cast aside plans to build more nuclear power plants, and Italy will no longer
restart a long moribund nuclear industry. Even nuclear stalwarts such as France―which gets 70.6 %of its electricity from nuclear
reactors―have begun to analyze what eliminating nuclear might mean as part of a broader energy strategy for 2050. Given the nature of
impediments, while Pakistan should not close the nuclear option for producing electricity, this “must always be a last resort…” Robert M.
Hathaway, Powering Pakistan – Meeting Pakistan’s Energy Needs in the 21st Century.

Pakistan is blessed with a huge potential for hydroelectric power, which has the capacity to generate approximately 60,000 megawatts of
energy against the current peak time requirement of only 21,000 megawatts (Umar K. Mirza “Hydropower Use in Pakistan: Past, Present, and

Future”).According to Hydel Power Potential of Pakistan NEPRA, only 15 % of Pakistan’s hydropower potential has been harnessed so far, and
the remaining 85% is untapped remains untapped.

Although Pakistan has abundant water resources to generate hydroelectricity, but politics has come in the way of building large dams.
Without political will and consensus this resource is not likely to be used any time in the near future. Large hydroelectricity generation
projects also involve huge cost and several years for completion. Further, a large dam failure can be catastrophic.Although Pakistan’s
untapped hydro potential is large, there is no need to solely focus on this source as the savior. But, of course, if better alternatives are not
there, water would always be there to harness its energy.

If institutional, political, and financial hurdles are overshadowed and even 25 % of the current untapped potential is harnessed within the
next two decades, the gap between supply and demand can be reduced to a manageable limit. However, this does not negate the necessity
of building other energy sources—of increasing Pakistan’s capacity to generate energy as well as diversifying its energy mix.

Non-traditional Renewables – Wind and Solar ― Pakistan needs to think beyond the traditional resources. With the worldwide
increasing pressure on fossil fuels, challenges for economically less developed countries are big and complex, though not entirely
insurmountable. New developments in renewable energy resources (excluding nuclear and large hydro) have made them attractive and capable to
meet Pakistan’s growing energy deficit. Now technologically viable, and economically affordable, solar and wind power are among the
leading renewables that can generate electricity on a large scale and take up pressure on traditional resources.

The addition of solar energy to Pakistan’s power supply can provide some relief
to its present generation capacity. Active solar heating policy can free 30 % of the
natural gas consumed in homesShaukat Hameed, “Technology Status and Costs of Emerging

Alternative Sources,”Pakistan should therefore focus on solar energy in a hedging role

against growing needs and the rising cost of energy from traditional resources.

The cost of solar generated electricity is also expected to slide down. “For
example, a study published in Scientific American for January 2008 suggests that
a massive array of photovoltaic panels in the American Southwest, when connected to new electrical infrastructure, could supply as much as
69% of the nation’s electricity by 2050 at rates equivalent to today’s costs for conventional power sources.”

The Wind Option ― Technological advancements have made wind an attractive option for renewable energy. Pakistan has tremendous
potential in this form of energy. The wind corridor near Gharo in Sindh province is estimated to have the potential of 50,000 MW “The Role of the
Private Sector in Pakistan’s Energy Sector,” in Powering Pakistan – Meeting Pakistan’s Energy Needs in the 21st Century. In Powering Pakistan: Meeting Pakistan’s Energy
Needs in the 21st Century, Shaukat Hameed Khan, member of Pakistan’s Planning Commission, notes: “Wind is cheaper than natural gas
even without subsidies, and on good sites, wind is even closing in on coal. The technology is mature and has reached full industrial levels,
spread over several years’ extensive development in many countries.” In addition to their green nature, and a hedging role against
increasing oil prices, wind turbines can be rapidly installed; in just one year versus four years for coal and seven years for nuclear plants.

As noted in Obama’s Blueprint for a Secure Energy Future, “Less than thirty years ago, the United States
By early 2020, the leading
boasted >80% of the world’s wind capacity and 90% of its solar capacity. We invented the photovoltaic country for solar power was
solar panel, built the first megawatt-sized solar power station, and installed the first megawatt-sized China with 208 GW accounting
for 1/3rd of global installedsolar
wind turbine. Yet today, China has moved past us in wind capacity, while Germany leads the world in
capacity.
solar.” It is expected that this competition will help foster wind and solar research to reach new levels of
efficiency soon.

Pakistan should therefore pursue non-traditional renewable sources of energy, particularly wind. This transformation of energy resource
would not only relieve the country from the huge economic burden that comes with imported fossil fuels, but also the political stress that is
attached to building large water reservoirs to generate electricity. Moreover, the clean energy obtained from wind and solar sources would
also help in keeping the country safe from environmental and security hazards attached to coal and nuclear power generation.

Conclusion
In the years to come, the gap between demand and supply of electricity in Pakistan will increase exponentially. Pakistan can secure its
energy supplies by aggressive pursuit of wind and solar energy. These non-traditional renewable sources can also harness business
potential in the country if Pakistan collaborates with business corporations that produce wind turbines and solar cells. Such joint ventures
would be attractive for foreign companies as Pakistan ranks second to India and first to Bangladesh in South Asia in the World Bank’s ‘Ease
of Doing Business Index’ 2020. Pakistan offers a readily available market, and potential access to future markets in the other South Asian
and Central Asian countries. Pakistan’s policy makers should thus invite Chinese, Japanese, Norwegian and Korean companies for joint
ventures in wind electricity production. Pakistan has a success story in the form of M-2 motorway built by a Korean company. Now is the
time to build an energy highway for Pakistan’s journey to progress and prosperity.

IEA statistics indicate that worldwide, renewable energy is growing at a fast pace. In 2011, about 21 % of the world’s electricity generation was
from renewable energy (including hydropower), with a projection for it to grow to nearly 25–30 % in 2040. However, efforts in Pakistan to substitute
fossil fuels with renewable energy sources (excluding large hydro) in order to diversify the current energy mix, or even to reduce the huge
gap between supply and demand, have not succeeded for many reasons

Another alternative is to shift to renewable forms of energy, such as wind and solar power. There are around 1.2m irrigation pumps installed in Pakistan, with about 90% of these pumps using diesel directly or indirectly. The
use of solar irrigation pumps for agricultural purposes instead of diesel-powered or tractor driven pumps could mean a 27% saving in consumption of diesel fuel for irrigation pumping.

 17% of total electricity used in Pakistan can be saved through conversation and efficiency measures. (IFC Nov 2014, Dr. Ambrosini, Sustainable Energy Finance)

 Energy efficient fans can reduce the total quantum of load shedding by 39% at existing consumption while energy efficient lighting can reduce load shedding by 47%.

…Energy experts estimate that Pakistan has a total renewable energy potential of about 167.7 GW, more than enough to meet the nation’s total demand for electricity.
 Chronic power shortage, in the form of load-shedding and power outages, costed the Pakistan economy Rs14 billion (7% of GDP) last in 2015

 Between 2007 and 2015, over 450 protest incidents took place in Pakistan in response to the electricity supply crisis, which, at its peak, saw outages last for up to 14 hours per day.

It is a universal phenomenon that the socio-economic progress of a state is significantly dependent upon the performance of the energy
sector, as the energy sector drives the engine of growth and development in agricultural, industrial, and defense sectors, in addition to
impacting domestic users. In Pakistan, the increasing gap between the demand for, and the supply of, energy has brought economic
progress to a standstill. A number of industries have been closed due to this increasing gap, which is expected to grow even further.

Despite huge indigenous potential and its geographical significance as a potential energy corridor between the Middle East and Central Asia,
Pakistan’s energy sector fails to secure its energy needs.

In Pakistan, the energy crisis is the single largest drain on the economy, which cuts gross domestic product progress by more than 2 % each
year(Elizabeth Mills, “Pakistan’s Energy Crisis,”).This crisis stems from the policy of fuel mix transformation introduced almost 20–25 years ago, when
imported furnace oil became the primary source of power generation, rather than a greater diversification of energy. With over a 9 % annual
increase in energy demand, total demand has increased four times in the last two decades. This amount is likely to double in the next
decade and a half, that is, by 2030 (Shoukat Hameed Khan, “Pakistan’s Energy Vision 2030,” IPRI).

CONCLUSION – FOSSIL FUELS: growth in energy demand will be driven by emerging economies as more people move out of poverty,
demanding more energy and gaining access to it.” Therefore, securing energy needs from existing fossil fuels, while discovering new and
sustainable forms of energy to meet growing energy needs, is the new “great game” of the day.

Economists regard it as an issue of only circular debts (Energy Crisis in Pakistan, Dudlex Knox Library). Elizabeth Mills, an expert on energy and
environmental issues, has described Pakistan’s energy problems as follows: “For the political observers, it is an issue of absent political will.
For the aid organization specialist, it is a governance problem. For the engineer, it is a matter of resolving technical problems, improving
energy conservation, and addressing issues like theft and nonpayment of electricity bills” (Mills, Pakistan’s Energy Crisis).The aforementioned
problems are logical, yet regional energy and geopolitics are important additional factors that seriously impact Pakistan’s current energy
scenario. This situation is a testimony to the country’s inability to capitalize on regional energy resources.

Current Energy Situation

There are also a number of factors which make the system inept to deliver the goods and, as a result, energy produced is not sufficient to
meet the demand. Previously, electricity demand by growing by 3-4% annually until 2003-4. The growth rate increased up to 10 % in 2007-8.
Economic Survey 2019-20 reveals that there is 64 % increase in energy demand between 2013-20, with unsustainable supply catching up to
the demand. As a result, in electricity alone, Pakistan is experiencing a gap of almost 5,000–6,000MW, which is almost 33–35 % of the total
requirement (Ahmed Faraz Khan, Power Shortfall increase to Over 5,000 MW, Dawn).

Unfortunately, domestic energy supplies are gradually diminishing. In particular, the available oil and gas resources are forecast to be
exhausted between 2025 and 2030 respectively (Mills, Pakistan’s Energy Crisis). Subsidizing fuel costs, partially to ease the financial burden on the
population but mainly to survive against public frustration, has further stressed the state’s already crippled economy. According to the
statement by Pakistan’s federal finance minister, the state has to release approximately one trillion rupees annually to make up for the
subsidies and losses of state-owned power companies (Sohail Iqbal Bhatti, “Finance Ministry cut Subsidy to power consumers by Rs60 bn,” Dawn 2014) .

Political and Policy Issues

Review of available literature reveals that there is a significant acknowledgment of the severity of the energy crisis. Numerous high-level
committees of think tanks have been constituted to formulate an all-inclusive and cohesive energy policy for the country, but there has
always been an absolute failure to galvanize the effort and translate policy into action. The energy sector has long been affected by ad-hoc
decision-making by the government. The absence of single-energy regulatory authority further compounds the issue: Important issues such
as the close linkage between various forms of energy, the affordability and sustainability of energy supplies, the linkage between choice of
technologies and resultant cost of energy etcetera never received the attention of our policy makers and planners in the absence of a
comprehensive policy. Piece-meal policies, … formulated to meet urgent short-term needs, were neither adequate nor effective for ensuring
energy security for the country(Hamid Hasan Mirza, “An Overview of Pakistan’s Energy Sector”).

Many studies suggest a time frame Pakistan could take to tackle the energy issue. Chapter 9 of Planning Commission of Pakistan, Vision
3030 also speaks volumes about energy security. In 2007 an energy framework was formulated, in consultation with hundreds of experts, by
the Planning Commission of Pakistan under then-Prime Minister Shoukat Aziz. Today, plans and progress are far apart: The situation on the
ground is much worse. Similarly, during 2013 elections, electricity was the major agenda of the PML, the sitting ruling party. PML made
numerous contradicting promises with different timelines to address this issue, but unfortunately, it remained more of a political stunt than
a resolve. For example, “ADB report, published in 2010, argued that with swift action Pakistan could be on the right energy trajectory within
three years”(Asian Development Bank, Pakistan: Energy Sector Restructuring Program, February 2014). On the other hand, while inaugurating a 404 MW Uch-II
power plant at Dera Murad Jamali (Baluchistan Province) on April 25, 2014, Prime Minister Nawaz Sharif claimed that the energy crisis would be
overcome in three years (Geo News, 2014).A year later, on March 22, 2015, the prime minister said in a public address that “most of his
government’s time is consumed in tackling terrorism and the acute energy crisis which leaves little time for development works.” The
government’s claims have always lacked any viable implementation strategy.

From the above facts, it can be concluded that Pakistan urgently requires an all-encompassing, futuristic, and implementable energy policy.
Policies framed over a period of time mostly focus on short-term solutions and fall prey to bureaucratic, rather than national, interests.
Unfortunately, a desirable, comprehensive energy plan is still not on the horizon. Ioannis N. Kessides writes, “Pakistan’s energy bankruptcy is
ultimately due to massive institutional and governance failure” (Ioannis N. Kessides, “Chaos in Power: Pakistan’s Electricity Crisis”).

Regional and Global Aspects

Existing literature reveals that a stable and prosperous Pakistan is crucial to
preserving harmony and facilitating regional progress in South Asia.
Benefitting from its geostrategic significance as a junction to and between
regional countries, it can serve as an energy pivot as well as an energy
corridor; Figure. Unfortunately, such transnational energy projects come
with a flip side of the story. Elizabeth Mills explains its significance: “How
Pakistan pursues its regional energy options … will either increase potentially
destabilizing geopolitical competition among regional actors or contribute to
new collaboration, strengthening regional ties” (Mills, Pakistan’s Energy Crisis). If

handled sensibly, economic opportunities in transnational projects may

resolve the regional security dilemma, stabilize the region, and ultimately
contribute towards global peace.

However, in regard to energy solutions, it is easier said than done. Literature on

Pakistan’s energy sector policies reveals a number of agreements with
potential partners and at-length talks, but no significant output. There have been a lot of deliberations, sometimes trailed by memoranda of
understanding (MoU). However, the outcome of deals has always remained short of what dialogue or MoU promises. Pakistan desperately
needs to develop an energy vision which has absolutely sellable prospects for all of the regional and international stakeholders.

Pakistan’s foreign policy initiatives need to be redeveloped to foster better relations with its regional and international community and its
own long-term national interests. The United States will remain a significant player in this regard. Ebinger writes: “This is going to be difficult,
given domestic anti-American sentiment coupled with Pakistan’s interests in furthering relations with Iran. Still, Pakistan should not forget
that the United States can, should it choose, give it a lot of support, both as a partner and a lobbying force within the international
community” (Charles K. Ebinger, Energy and Security in South Asia: Co-operation or Conflict). Therefore, Pakistan needs to create conducive environment
domestically as well as internationally in order to reap the benefits of energy security.

Energy Sector Challenges: Institutional, Governmental, And Political Obstacles

In February 2014, the ADB report stated that “the [energy] problem has been exacerbated by existing generating capacity not being fully
employed. In May 2013, out of eleven public sector thermal power plants, seven were completely shut down and the rest were not running
at full capacity due to fuel shortages.”

The U.S. government conducted a three-

The energy sector in Pakistan lacks cohesiveness and unified authority at the part study of Pakistan’s policy-making
infrastructure in mid-2008which revealed
planning and decision level, which is necessary for long-term, futuristic, and sustainable
the U.S. view that the country’s power
policies. The OGRA is responsible for the regulation of oil and gas; whereas, according to problems were the result of “the haphazard
section 7(3)(a) of the act, the “NEPRA is exclusively responsible for determining tariff, rates, mix of horizontally and vertically placed
institutions, which comprise the energy
charges and other terms and conditions for supply of electric power services by the
policy making sector of Pakistan.” Further
generation, transmission and distribution companies and recommend to the Federal to this, “the complex maze of GOP
Government for notification.” Similarly, hydel power projects are managed by the WAPDA. The (government of Pakistan) policy makers
cannot co-ordinate Pakistan’s energypolicy
due to overlapping and contradictory
institutional fragmentation of various components of energy sources like fuel, electricity, and water is prominent. ADB’s Pakistan director,
Rune Stroem, who is also co-chair of the Energy Sector Task Force, notes that: Responsibilities and accountabilities in Pakistan’s energy
sector are dispersed to the point that they are ineffective. … This fragmentation blocks integrated planning and budgeting in the energy
sector, distorts efficiency, creates disequilibrium among the subsectors, and generates disharmonious regulatory structures. Energy security
simply cannot be achieved unless it is treated as an integrated item (Energy Task Force, Integrated Energy Sector Recovery Report & Plan).

This lack of executive-level singular planning and one decision-making body has always resulted in ad-hoc measures and piecemeal policies.
These policies were neither effective nor adequate to achieve energy security. Mirza Hamid Hassan, a former secretary of the Ministry of
Water and Power, says: “Important issues such as the close linkage between various forms of energy, the affordability and sustainability of
energy supplies, the linkage between choice of technologies and resultant cost of energy etc., never received the attention of our policy
makers and planners in the absence of a comprehensive policy” (Mirza, “An Overview of Pakistan’s Energy Sector”). Therefore, it can be safely concluded
that the current energy crisis is largely the product of policy makers and planners failing to forecast and construct viable long-term energy
policies, and instead introducing piecemeal and short-term measures.

The management and governance of Pakistan’s energy sector are other big issues , and in power economy this is not a
framework that can sustain itself. According to different sources, the average
The lowest T&D rates are in Japan (4 %). Denmark,
losses in T&D amount to 15–25%. Out of this, the biggest loss is attributed to
Germany, Singapore, France, Australia, Canada,
China, South Africa, Switzerland, and Sweden are at distribution. This issue is not Pakistan-specific; India surpasses Pakistan with
6%. The United States, United Kingdom, and Italy are average T&D losses of 31–32%. However, contrary to Pakistan, Indian authorities
at 7%.
are seriously concerned about the energy issue and are taking concrete measures
The Ideal level of T&D losses ranges between 6-8%. to minimize T&D losses. For example, in New Delhi, they have achieved remarkable
success by stripping down T&D losses to around 21–22 %.62 Even the most developed countries of the world face T&D losses, but their
percentage is much less than third world countries. In addition to T&D losses, revenue recovery is another pitfall. Recovery of revenue from
consumers in both private and public sectors is almost half of the billing totals for power producers. Old and obsolete meters and billing
systems also contribute to inefficiencies by making it very easy for anybody to tamper with the meters. In fact, meter readers themselves
interfere with the billing system.

Clearly, the current system lacks accountability and transparency. The resulting outcome is the accumulation of circular debt.63 This circular
debt affects not only the power sector itself; rather, a liquidity crunch sparks a chain reaction, resulting in the interruption of the oil and gas
sectors’ supply chain and the weakening of financial organizations.

The lack of desired and possible energy mix is also largely attributed to the energy sector’s institutional
inefficiencies. Dr. Vaqar Ahmed notes, Globally, the average usage for oil of energy generation stands at five %
compared with Pakistan where the same number stands at a whopping 32 % (2011). While the world uses on
average 21% gas for energy generation, Pakistan continues to drain its gas reserves as the same number is at
48%. As the world searched for cheaper and more reliable sources of energy the reliance increased towards coal
(contrary to what environmental experts would have suggested). Today, due to its low price global average usage of coal in energy
generation stands at 40 percent and the same number for Pakistan is 7 % (Vaqar, “Economics of Energy Mix”). Energy Year Book, current
Fuel Mix

The worsening energy crisis is further compounded by a lack of consensus between the provinces and the central
government due to the politicization of power projects on ethno-linguistic bases and resource and revenue-sharing issues. There has
always been resistance to policy making and implementation, either by the provincial or central government. Unfortunately, energy policy
issues are highly politicized in Pakistan. Prior to the 2013 general elections, Punjab’s provincial government (opposition-run) had a series of sit-
ins demanding a solution to the energy crisis and criticizing the central government for its energy policies. However, since the same political
party, PMLN, came into power after the general elections of 2013, there has been no significant improvement in the energy situation and tall
claims of overcoming the energy crisis remain unproved.

The other three provinces have their own reasons to disown the central government’s plans and policies. Pakistan is blessed with a lot of
hydropower potential, but due to the provincial opposition (Sindh and KPK), this huge potential remains untapped. A case in point is the issue of
construction of the Kalabagh Dam on the Indus River, with a power generation capacity of approximately 3,500–4000 megawatts. According
to the Journal of Hydrology, “Pakistan has used only about 10 % of its estimated 40,000 mw of economically viable hydropower potential, a
proportion around 30% lower than India and China and around 75 % lower than other developed states” (“The Impact of Climate Change on the Water
Resources of Hindukush-Karakoram-Himalaya Region under Different Glacier Coverage Scenarios,” Journal of Hydrology). Both provinces oppose construction of this
hydroelectric project on the basis of possible negative effects, such as population displacement, silting up and backwater issues, the flooding
of populated areas, etc. The problem is aggravated when ethno-linguistic and political spheres merge together. The International Panel of
Experts (IPOE) and other feasibility studies consider these provincial apprehensions for constructing the Kalabagh Dam as baseless (M. Israr

Khan “Feasibility Study of Kalabagh Dam Pakistan,” Life Science Journal). The devastating flood of 2010 revealed the significance of and need for building this
dam; however, resentment and lack of trust and political will limits the state’s ability to do so. In the case of Baluchistan Province, the case is
not much different. Issues of energy resource and revenue distribution between the central and provincial governments are most acute.

Private sector participation plays an important role in national development projects. By the end of 2005, approximately
6,000 MW of electricity was being generated in Pakistan by IPPs (currently 15663, IAEA 2020). In 2006, this was followed by the induction of
Rental Power Projects (RPPs), which ran into controversy and were declared illegal by the apex court. The main reasons cited were lack of
transparency in awarding contracts, heavy upfront payments, and advance mobilizations. Thereafter, no worthwhile progress has been
made in private sector participation.

A current spate of domestic unrest, together with provincial, localized grievances and regional security
environments, have created a security dilemma, which is also a key obstruction to achieving energy security. Pakistan is blessed in
abundance with natural energy resources, but unfortunately their availability is mostly bounded by areas with a troubled past and present,
or in areas with no infrastructure to support the extrication of energy resources. Major sources of energy like oil, gas, and coal deposits are
found in provinces that have peculiar problems. For example, the discovery of Thar coal deposits, the safest and one of the cheapest forms
of energy, is yet to be explored due to lack of infrastructure and sustainable, long-term, investor-friendly policies. Pakistan will have to open
up to the world instead of merely relying on China for its energy sector development (Sumita Kumar, “The China-Pakistan Strategic Relationship).

Similarly, Baluchistan Province is blessed with huge gas reserves, but deep-rooted
Article 158
tribal issues, including tribal-separatist movements and the grievances of masses “The Province in which a well-head of natural gas is
against the central government, disrupt the security equation. For example, situated shall have precedence over other parts of
Pakistan in meeting the requirements from the well-head,
Baluchistan Province is the major contributor of Pakistan’s gas supply, but its share
subject to the commitments and obligations as on the
of consumption in total national production is only almost 6 percent. The same is commencing day.” It simply means that the discovery of
the case with royalty share, which goes to this province. This treatment of the any natural resources must first benefit the province
where the discovery has been made. Sadly, the inverse is
province is a clear violation of “Article 158 of the constitution of Pakistan: priority of true in the case of Baluchistan and its Sui gas field).
requirements of natural gas.”This is not the end of the story. The situation is further
complicated by the frequent disruption of gas supplies due to anti-state elements blowing up gas pipelines. Similarly, the kidnapping of
foreigner engineers working in the energy sector, particularly in Gwadar, and gun running and bomb blasts hinder progress in developing
the energy sector. This unrest is also a major deterrent for foreign investors (Sumita, “The China-Pakistan Strategic Relationship”).

On the regional front, in an effort to benefit from the transnational oil and gas projects, the current regional security environment is a key
impediment. Pak-Afghan, Pakistan-India, and U.S.-Iran relations, and the interests of other regional players like Russia, China, and Saudi
Arabia are also key factors in harnessing these energy potentials; and for Pakistan, to assume the role of regional energy hub together with
the development of Gwadar deep sea port in collaboration with China, still seems to be a daunting task (Andrew Small, The China-Pakistan Axis: Asia’s

New Geopolitics).Recent investment of $46 billion by the Chinese government is an important development in this regard.

Transnational Pipelines/Regional Prospects: Challenges And Opportunities

Pakistan desperately needs to achieve energy security, and time and resources are fundamental requirements to overcoming the ever-
increasing gap between supply and demand. Unfortunately, Pakistan does not have the time or resources. According to 2007 EIA estimates,
Pakistan’s indigenous gas reserves are 28,000 bcf, which could suffice for the next twenty years.However, due to an overreliance on gas and
a lack of desired energy mix, energy experts fear that existing gas reserves may not last even that long and may diminish as early as 2020.
An enormously increasing demand for energy calls for an
intelligible national energy policy that encompasses managerial
issues, fact-based planning, tapping hydro-potential,
mainstreaming domestic energy resources, and most important,
incorporating transnational gas pipeline projects. Elizabeth Mills
writes “Pakistan is situated at the confluence of Central Asia,
West Asia, and South Asia; a sure gateway for mutual regional
cooperation in energy sector.” Therefore, Pakistan’s neighboring
energy-rich regional countries can not only assist Pakistan in
mitigating its energy shortfalls, but can also profit from its
geostrategic location. Available regional energy options include
IPI, TAPI, the Pakistan-Qatar gas pipeline, and an ongoing project
of LNG imports from Qatar.

Similarly, the recent Chinese investment of $45.6 billion in the CPEC for
infrastructure especially the trade routes, commonly referred as ‘Silk Roads,’ and
energy projects is another significant development. Through this project, China
will have an alternative route to bridge the Gulf energy, and Pakistan will yield
significant economic benefits. Dr. DhrubajyotiBhattaacharjee, a research fellow at
the Indian Council of World Affairs, writes: “The proposed economic corridor will
connect the north-western Chinese province of Xinjiang with the Pakistani port of
Gwadar through a network of roads measuring around 3,000 kilometers (1,800 miles),
providing Pakistan its much-needed economic infrastructure, especially power-
generation plants” (DhurbajyotiBhattarcharjee, “China Pakistan Economic Corridor,” Indian Council of

World Affairs).The CPEC project will not only pacify Pakistan’s energy crisis, but will
generate a lot of other economic activities and create job opportunities in the
much-neglected, poverty-ridden, and troubled Baluchistan Province. These economic activities are likely to emerge as a major stabilizing
factor and will harness the internal dissent in the province.

The Pipeline Projects

Since the last two decades or so, Asia’s share in the world economy is constantly stepping up, and consequently, its appetite for energy
resources is also increasing significantly. For India, China, and even most of the globe, the access to energy fields extending from the Pacific
Ocean to Iran is through pipeline projects that pass through Pakistan. Pepe Escobar notes: “Pakistan is an energy-poor, desperate customer
of the grid. Becoming an energy transit country is Pakistan’s once-in-a-lifetime chance to transition from a near-failed state into an ‘energy
corridor’ to Asia and, why not, global markets” (“IP and TAPI in the ‘New Great Game’: Can Pakistan Keep Its Hopes High?” Spotlight on Regional Affairs). In Central Asia,
Turkmenistan is ranked the number four gas producer after Russia, Iran, and Qatar. Central Asia is the world’s obvious focus because it sits
on the earth’s biggest untapped reserves of oil and gas.

Iran-Pakistan-India Gas Pipeline ― The history of the IPI pipeline project can be traced back to 1988, when natural gas reserves were
discovered at Pars Fields in Southern Iran.”76 However, in 2008, a tri-country consensus was built to strike the final deal. In March 2010, a
final agreement between Pakistan and Iran was inked at Ankara. India withdrew from the project, possibly due to strained U.S.-Iran relations
and India’s apprehension about Pakistan being historic rivals. According to the outlined agreement, “IPI was to initially have a capacity to
deliver roughly 22 billion cubic meters per year which was to evolve to a maximum of 55
billion cubic meters. Iran would initially transfer 30 mcm (750mcf) of gas per day to Pakistan The South Pars/North Dome field isthe world’s
largest gas field, shared between Iran and
but would increase to 60mcm per day.”However, due to the enormous twenty-two-year Qatar. This gas field covers an area of 9700
delay from conception to finalization of the project, the project’s cost had almost doubled square km, of which 3700 km2 is in Iranian
territorial waters and 6000 km2 is in Qatari
—from $4 billion to $7.6 billion in 2010 (Noor-ul-Haq, “Iran-Pakistan Peace Pipeline,” IPRI Factfile). As of
today, its cost stands much higher. The operation of the pipeline will add 4,000 megawatts
of cheaper electricity to the national grid and also reinstate approximately 2,200 MWs of currently idle thermal power. Farooq Tirmizi writes,
“Pakistan would pay US$3 billion a year to Iran, but it would reduce its oil imports by US$5.3 billion, resulting in a net reduction in oil imports
by around US$2.3 billion” (Farooq Tirmizi, “Analysis: Iran-Pakistan Pipeline a Mutually Convenient Political Stunt,” Express Tribune). Moreover, if the project assumes
multilateral status, then foreign exchange earnings, through royalties, will further reduce the country’s oil import bill.

At present, India is excluded from the pipeline project, yet the project remains open to any third-party participation at the later stage. It was
proposed that, with India’s involvement in the project, the pipeline could be further extended up to China through Bangladesh. Any
multilateral pipeline agreement will be a key to regional integration and a win-win situation politically, economically, demographically, and
most importantly, from a regional security point of view. With recent improvements in U.S.-Iran relations, due to a possible U.S.-Iran nuclear
deal, India’s return to the IPI project is a most likely proposition because of its growing energy needs. It is evident from the fact that “India is
the world’s fifth-largest energy consumer; India is projected to rise to third-largest by 2030, surpassing Japan and Russia” (Carin Zissis, “India’s

Energy Crunch,” Council on Foreign Relations). According to an EIA case scenario, India’s principal energy demand is projected to swing to 1,299 MTOE in
2030, with an average annual growth rate of 3.6 % per year. India’s current and projected needs provide reasonable grounds to become part
of this project as soon as sanctions from Iran are lifted as a result of its possible nuclear deal with United States.

Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline― Commonly known as TAPI, this gas pipeline project was conceived in the mid-
1990s by the Union Oil Company of California (UNCOL). At the same time, Bridas Corporation, an Argentinean oil and gas giant, was working
in parallel, on the same project.83 From 1995 to 1997, Bridas officials were in consultation were Turkmenistan, Pakistan, and Afghanistan
governments to convince these countries to join this trans-Asia gas pipeline project. However, the project ran into difficulties due to the
emerging security scenario in the region. Lutz Kleveman writes: “The commercial competition between the UNOCAL and BRIDAS resulted
into an open conflict between the two and ultimately ending the project as a result of the rise of Taliban and subsequently the 9/11 episode
and war on terror” (Lutz Klevemean, The Great Game: Blood and Oil in Central Asia). After the tragic incident of 9/11, both companies were less interested
due to the region’s turmoil and unpredictable future.

Despite all odds, in 2002, Pakistan, Afghanistan, and Turkmenistan reached an agreement, signed at Ashgabad. Later, in 2006, equally
energy-starved India also decided to formally join the project, primarily because the United States consented to its implementation. It is
noteworthy that after signing TAPI, the Indian plea of abandoning the IPI gas pipeline project because of Pakistan’s domestic security
situation and traditional rivalry with India does not hold water. The impact of the United States not joining IPI stands confirmed. After having
built the consensus of all stakeholders, the ADB provided $100 million to conduct a feasibility study of this Trans-Asia gas pipeline project.
Despite the willingness of all stakeholders to go ahead with the TAPI gas pipeline project and the United States’ consensus in the project’s
favor, the construction of this megaproject could not commence due to a stalemate over Turkmenistan’s proposed financial terms and
conditions.

In October 2014, a significant development occurred when “Russian natural gas giant Gazprom announced that it would cease purchasing
natural gas from Turkmenistan.” In January 2015, as a follow up to its declaration, Gazprom significantly dropped the import of gas from
Turkmenistan—by about two thirds. Taking advantage of Russia’s significant reduction of gas imports, China promptly exploited the
opportunity and inked an agreement with Turkmenistan for constructing two additional pipelines (lines C and D), increasing the gas imports
from Turkmenistan from the current 35-65 billion cubic meter (bcm).

With a significant decrease in export of natural gas to Russia coupled with the threat of total cessation of Russian supplies, Turkmenistan
has been forced to depend on China for its energy exports and revenue earnings. Realizing the danger of its sole economic dependence on
China, Turkmenistan decided to diversify its export markets. Besides other options, TAPI seemed to be most feasible pipeline project.
Therefore, Turkmenistan now seems willing to grant vital concessions, contrary to original financing terms, to kick-start the TAPI gas pipeline
project. Despite reaching a consensus, the consortium leader’s selection is still pending. Big giants in the oil and gas sectors are reluctant to
take the lead role in the TAPI project because Turkmenistan’s law prohibits private land ownership.

For Pakistan, implementation of the TAPI gas pipeline project will be a big breakthrough toward its economic sustenance. This project will
generate approximately 6,000 megawatts of gridded electricity (Maini and Vaid, “Roadblocks Remain to TAPI Pipeline Construction,”). Besides easing out the
energy crunch, this project will also create employment opportunities and Pakistan will earn millions of dollars on account of transit fees.
The only opposition to this project comes from Russia, which despite significantly reducing its gas imports from Turkmenistan, still desires to
route the pipelines to European markets through its own territory.90 Russian interests are two-fold: economically benefitting from the
transit revenues and keeping tabs on Central Asia’s rich energy basket, thereby maintain its influence in the region.

Pakistan-Qatar Gas Pipeline ―Like most other pipeline projects, the Pak-Qatar gas pipeline project was also conceptualized in the 1990s
and still lies short of implementation. The Sharjah-based Crescent Petroleum Company proposed this project, also known as the Gulf-South
Asia (GUSA) gas pipeline project. The same international company was also willing to finance the project. A survey of the proposed route was
also carried out by Crescent Petroleum, incurring a cost of US$4 million, after the signing of MOU between Pakistan and Qatar in July 2000
(Noor-ul-Haq, “Gas Pipeline Projects in South Asia,” IPRIFactfile).

The proposed project, still under consideration, is not cost-efficient because of high tariffs, the double cost of underwater route construction
as compared to any land route, and costly maintenance. In 2012, Pakistan and Qatar inked a MOU for importing liquefied natural gas (LNG)
to Pakistan. It is aimed at producing 2,500 megawatts of electricity, with a daily average import of 500 mcf. The current government is
desperately perusing the LNG import project. On March 26, 2015, the first consignment ship carrying LNG anchored at the Karachi shore.
After a lapse of six months, confusion still persists over the price issue—terms and conditions of contract have yet not been made public by
the government. However, energy experts believe that despite the Qatari government’s willingness to trade at a reduced price of US$13–14
million MBTU instead of their initial demand of US$18 MBTU, the net cost of electricity generation will be more than what Pakistan is
producing from diesel (Arshad H. Abbasi, “The LNG Deal and the Masters of Spin,” News International). The terms and conditions of the deal are not considered
worthwhile, like keeping the current price frozen at the same rate for the next twenty years, whereas, a sharp decline in prices is being
perceived in the next few years. Therefor the project runs contrary to the national interests, and seems to be only serving the bureaucratic
interests. The Pakistan government’s effort to calm the severe energy crunch by importing Qatari LNG seems seriously flawed. It will raise
electricity tariffs, compound the already crippling life of the common man, and cause industrial disorder and price hikes instead of providing
much-desired relief. This deal is testimony of the government’s institutional, political, and policy inefficiency.

Materialization of IPI and TAPI gas pipeline projects will add approximately 10,000 MW of electricity to the national grid. These pipeline
projects will substantially ease Pakistan’s energy shortfall burden and simultaneously strengthen its economy, by virtue of its energy
corridor status. The pipelines’ importance is an undeniable factor, yet these projects alone will not help achieve the desired energy security.
Therefore, eyeing the much-desired diversified energy mix will remain a definite need.

China-Pakistan Economic Corridor (CPEC)

Envisioning the proposed CPEC, it may be appropriate to consider this economic corridor as an energy corridor. Out of a $46 billion
commitment for this economic corridor, which equals almost 20 % of Pakistan’s GDP, $34 billion will be utilized to generate approximately
17,000 MWs of electricity. The remaining amount will be spent on upgrading infrastructure and supporting development.The amount of
electricity generated through CPEC is almost double the amount of electricity that will be produced from both the IPI and TAPI gas pipeline
projects, if they materialize. 100 MG Quid-e-Azam solar park, Bahawalpur, further extend to a 1000 MW power plant. For Pakistan, the
project has an enormous potential to support its dooming economy, especially a fast-track solution to its rampant energy crisis.

With the possibility of easing out of sanctions against Iran, Beijing is also looking to benefit from the IPI pipeline project. As a part of CPEC,
Beijing has already inked an agreement with Pakistan to link the Gwadar port with the existing domestic network of gas pipelines. Initially,
this section of gas pipeline was to be built by Pakistan as part of the IPI project. This $2 billion pipeline construction project, including an LNG
terminal construction at Gwadar, will be undertaken by the CNPC (China National Petroleum Corporation). It has significantly eased Pakistan’s pipeline
financing issue, and now Pakistan will only have to construct the remaining 100 kms of pipeline from Gwadar to the Iranian border. Iran has
already completed construction of its portion of pipeline. Not only Pakistan and China will benefit from an Iran-Pakistan gas pipeline, but it
will significantly impact the regional geopolitical calculus. Pakistan’s stance of not sending troops to Saudi Arabia and remaining neutral in
the case of Saudi-Iranian conflict over Yemen is testimony to this impact. India’s re-entry into the project, after the sanctions over Iran are
lifted, will be another significant milestone.

Expert Opinions And Conclusions

Energy Sector Governance ― For Pakistan, financial problems, incompetent leadership, managerial shortfalls, frail political institutions,
and unimpressive foreign policy are the major obstacles in tackling the issue. Reforms required by Pakistan are not much different from
what Charles and Banks propose for all developing countries: A variety of institutional reforms (legal, regulatory, & governance) is critical for
developing countries if they are to expand energy access. The case of India provides a telling example. Although the blackout in northern
India in August 2012, which left 600 million people without power, was blamed initially on technical and operational issues, longstanding
institutional obstacles (bureaucratic red tape, arcane land acquisition processes, an overly complex regulatory system, coal transportation bottlenecks, corruption in coal leasing,
inadequate upstream coal pricing, and heavily regulated retail electricity rates) played a much larger role. Expanding grid access in emerging market countries
requires a policy framework that is conducive to private sector participation and that includes the implementation of an effective,
independent regulatory regime; cost recovery in the tariff system; transparent subsidy regimes; and mechanisms for funding
noncommercial grid expansion into lower income rural areas. The development of smaller-scale mini grids or micro grids in rural areas
using distributed generation represents a major opportunity for areas where expansion of the national grid is prohibitively expensive and
commercially unviable (John P. Banks, Energy and Security: Strategies for a World in Transition).

As U.S. secretary of state, Hillary Clinton highlighted good governance as a cornerstone of addressing energy poverty. With the United States
in the lead role, other developed countries should increase their support to implement reforms in the energy sector. Good governance will
help build the trust of investors and encourage donors to respond to the call for investing in the energy sector. Charles K. Ebinger further
elaborates: “The leadership in emerging market countries must be committed to ending corruption and to making serious institutional and
regulatory changes. The commitment must include phasing out subsidies to encourage energy efficiency and, above all, strengthening the
rule of law, which is so vital to attracting private sector investments” (Ebinger and Banks, “Electricity Access in Emerging Markets,”). This commitment is, of
course, a daunting task and, without objectively taking the pathway of good governance, any worthwhile objectives cannot be achieved.

For Pakistan, institutional reforms can lay the foundation toward achieving energy self-sufficiency. Once put into effect, these reforms will
guarantee efficient management of existing energy resources as well as judicious incorporation of renewable energy technologies.

A viable institutional framework can only be put together when policymakers play their role in developing a consensus in greater national
interest above and beyond their party and own self-interests. Similarly, the reorganization of the decision-making hierarchy in the energy
sector is also a fundamentally needed reform. This issue of non-centralized decision-making is not only specific to Pakistan and other
developing countries, but it can also be traced equally in the developed economies of the world. Jan H. Kalicki and David L. Goldwyn write
the following about the United States: Energy-related decision-making is, unfortunately, largely dysfunctional at the national and global
levels. As with other issues, U.S. energy decision-making has been built incrementally over time, with different responsibilities assigned to at
least 10 different departments and agencies in the executive branch and with more than 30 congressional committees and subcommittees
that more often reinforce shared turf with executive agencies than promote a unified strategic view (Kalicki and Goldwyn, Energy and Security).

However, the United States is not confronted with issues that are at the core of developing countries. Besides other institutional reforms
needed for a workable national energy policy, there should be a unified decision-making apex body representing all energy-related
institutions.

Domestic Energy Resources And Financial Issues ― Countries like Pakistan, blessed with huge natural resources, are unable to
plug the energy demand-supply gap due to lack of financial support from the international community. USGS-supported geological surveys
in the Thar Desert of Pakistan show that it has coal reserves worth US$5,540 billion. The amount of energy that can be produced from this
coal can meet the country’s need for years to come. However, the lack of finances for infrastructure development and water scarcity in the
resource-rich desert prevent execution of such megaprojects. Unless institutional reforms are not in place, multinational companies or
international organizations will be hesitant to support such projects. John P. Banks writes: “Most analyses indicate that the level of financial
support required to provide electricity to everyone in the developing world must increase dramatically. … It is particularly incumbent on the
world’s wealthiest economies to do more. … United States should lead in providing financial assistance in this endeavor.

Developed economies the world over are based upon cheap energy sources, and coal is the most prominent source of energy. As of 2015,
40 percent of energy worldwide is still being produced from coal, despite environmental concerns. Dr. Shoukat Hameed Khan writes that
despite the technological advances, coal will continue to remain a major source of energy (Ahmed, “Solutions for Energy Crisis in Pakistan,”). However, the
climatic effects due to carbon emission are not as devastating as perceived. For example, “the IEA states that achieving its ‘Energy for All’
scenarios would increase CO2 emission by 0.6% in 2030.” In this scenario, the major sources of energy still remain fossil fuels. If developed
economies provide the financial support, assist in building the requisite infrastructure, and help in the transfer of technology for efficient
combustion of coal, such as ultra-supercritical systems, Pakistan can substantially overcome its energy shortages without running counter to
environmental concerns.

Case for Renewable Energy― In an effort to catch up with the developed world and diversify its energy mix, Pakistan needs to
incorporate renewable energy projects. M. Farooq writes, “Pakistan has great potential for different kinds of renewable energies like solar
thermal, biomass, wind, and hydel technologies” (M. Farooq and A. Shakoor, “Severe Energy Crisis and Solar Thermal Energy as a Viable Option for Pakistan,” Journal of
Renewable and Sustainable Energy).However, despite launching the Renewable Energy Policy in 2006, no worthwhile contribution has been made in
the energy sector. The reasons are twofold. The high cost of developing physical infrastructure and transmission and distribution systems,
and the unavailability of capital investment with common people, coupled with high interest loans, render this form of energy unfeasible.
Secondly, the governance issue—such as an absolute lack of coordination at all levels between policy makers, R&D organizations, banks,
importers, and users—further complicates matters. Recently, the inauguration of the Quaid-e-Azam solar park and the installation of
windmills in Sind Province as part of the CPEC project are positive steps in this direction. If the mistakes of the past are repeated and a pool
of experts on renewable technologies is not created, despite financing through the CPEC project, the outcome is likely to remain dismal.

Research And Development (R&D) ― In Pakistan, lack of objective R&D is another missing link. In any long-lasting technological
development, R&D plays a pivotal role. Institutional inadequacies and dependence on multinational institutions have always put indigenous
R&D on the back burner. This practice in the energy sector has not only aggravated the deepening energy crisis, but it has drained the
national exchequer, which is detrimental to Pakistan’s national economy. There is a dire need to create a conducive environment for public-
private partnerships in R&D projects. A huge amount of money is spent on energy-related R&D projects in the leading economies of the
world.

Foreign Policy, Regional Energy Prospects, And National Security ― Most developed economies, even with an abundance of
domestic energy resources, have to rely on the energy resources of other nations. Their successful, mutual interdependence can be best
explained by the quality of foreign policy initiatives, which ultimately ensures national as well as regional security. Foreign policy plays a
significant role in reaping the benefits of regional and trans-regional energy resources. In the case of Pakistan, all transnational gas pipeline
projects, already discussed at length, have not only the prospect of meeting Pakistan’s energy needs, but of meeting the much-needed
national and regional security and energy objectives. Foreign policy must be judiciously utilized and common grounds of mutual interest
explored. Otherwise, the turf of energy may run counter to national interests.

Energy Security vis-à-vis National Security ― Energy security has a direct bearing on national security. Daniel Yergin defines energy
security as follows: “Objective of energy security is to assure adequate reliable supplies of energy at reasonable prices and in ways that do
not jeopardize major national values and objectives.” This definition explains four different, but equally important, dimensions of the energy
security: first, the adequacy of energy resources for present andpredicted future use; second, the assurance of not being subject to
disruption in terms of duration or magnitude; third, the economic viability; and fourth, the non-compromise of national objectives. Defects
in any of the above dimensions result in energy insecurity, which also runs counter to national security. Any of these four dimensions can be
affected by domestic as well as external threats. External threats are more relevant to the level of foreign policy initiatives. Therefore, the
national energy policy must have contingencies in place to deal with defects in any of these dimensions and must possess options, such as
maintaining the SPR (Strategic Petroleum Reserves).

Diplomacy of Pipelines ― For Pakistan, its inability to benefit from proposed transnational gas pipelines can mostly be attributed to
ineffective foreign policy. Almost all of the transnational pipeline projects were conceived in the 1990s, but even after a lapse of almost a
quarter of a century; these projects have not materialized. Pakistan must benefit from its geostrategic pivotal location and create a
conducive environment, which Frank Verrastro calls the coalitions of the concerned. The objectives of Pakistan’s foreign policy should be
twofold. First, it should be able to project Pakistan as a country serious about addressing its energy shortfalls. Of course, it requires
contemplating and implementing reforms and good governance in the energy sector. Second, Pakistan’s foreign policy should utilize
diplomatic channels to pursue regional energy alignment between the consumers and producers. These transnational pipeline projects,
once implemented, will be a win-win situation for all stakeholders, and this economic interdependence will result in settling age-old disputes
and help stabilize the region. Once this is achieved, it will surely change the life of millions of people currently living below the poverty line.

Universities and Think Tanks

Universities and think tanks can play an important role in energy conservation by developing model projects on campus and through public
awareness campaigns. This may subsequently lead to outreach initiatives. Boston University in Massachusetts has achieved substantial
results in energy conservation through the use of “LED lighting retrofits; occupying sensors; daylight-responsive lighting controls; de-
lamping; and boiler efficiency upgrade.”

Conclusion
Pakistan stands far away from developing an energy policy, which necessitates a total government approach as a precursor to achieving
energy security. Without effective, implementable energy policy, Pakistan’s huge domestic potential for energy production cannot be utilized
optimally. Big oil and gas giants will remain reluctant to invest in Pakistan unless a conducive security and investment environment is
created. Similarly, effective integration of national and foreign policy with an economic and energy policy is a must for perfect utilization of
domestic energy resources, benefiting from regional energy potentials, creating economic stability, and achieving broader national security.

Some Pakistani energy experts opine that since Pakistan has enough coal reserves to meet its energy needs, it does not need to aspire to
regional projects. This argument runs counter to the objectives of achieving energy and national security, energy equity, global climatic
concerns, and diversification of Pakistan’s energy mix. Bennett Johnston writes: “In the longer term, progress toward regional infrastructure
and eventually regional energy reserves can go far in helping highly diverse countries to navigate between the adversarial and the
cooperative in Asia.” Therefore, the proposed regional gas pipeline and liquefied natural gas trade plans will cater to the ever-growing
appetite of energy by the regional countries at market prices and will eventually accelerate region’s economic growth. Johnston believes that
the “stronger the economic and energy foundation, the greater the growth and, ultimately, the peace of this extraordinarily dynamic region
will become.”The prime milestone of the progress of these bold initiatives will hinge upon the developed economies of the world, and the
United States will have to assume leadership as mediator, stakeholder, bridge builder, and facilitator of multifaceted organization.