The fossil fuel quandary | Daily News


 

The fossil fuel quandary

Sri Lanka is a net importer of fossil fuels, to the tune of more than US$ 6 billion a year. In addition to the seven million vehicles on our roads, fuel is consumed by power plants, generators and certain types of machinery. This is a huge sum even for a developed country, leave alone a developing country. It is a moot point whether we can afford such an expense in the long term.

The fuel issue has been exacerbated by the fact that only 30 percent of the country’s total fuel requirement is refined domestically at the two existing refineries. This essentially means that we have to import the rest of the fuel requirement in finished or refined form – diesel, petrol, and kerosene and jet fuel. This is of course a more expensive option as crude oil is much cheaper in relative terms.

The best option in this scenario is to have one or more refineries to process crude oil locally. Accordingly, acting on President Gotabaya Rajapaksa’s instructions, the Government will commence construction of the largest petroleum refinery in Sri Lanka next year, Transport Management, Power and Energy Minister Mahinda Amaraweera has announced.

“A large amount of money flows out from our country annually for fuel imports. In addition to the Sapugaskanda and Hambantota refineries, there is a need for another large scale refinery. Therefore, by next year, the construction of the country’s largest refinery will begin,” the Ministry said. However, a location was not disclosed. This is a step in the right direction that can help save a considerable amount of foreign exchange.

Sri Lanka has been prospecting for oil and gas since 1974 without much success. While the chances of striking petroleum (crude) oil look slim, the Mannar Basin has been found to contain Natural Gas following extensive seismic and satellite surveys. Unlike fossil fuels which may run out in 150 years or so, Natural Gas deposits worldwide are likely to last for around 300 years at current levels. It is also a much cleaner fuel with a lesser environmental impact. Thus Sri Lanka is expected to begin drilling for Natural gas in due course, though full commercial exploitation may be around a decade away.

Though convenient and relatively cheap, fossil fuels have been blamed as the main cause of Global Warming. The continued and unrestrained use of fossil fuels around the world could mean a global temperature rise of 4.1°C – 4.8°C above pre-industrial levels by the end of the century (2100), according to the Intergovernmental Panel on Climate Change. This could have devastating consequences for all life on the planet.

Given that fossil fuels are finite and highly polluting, it is imperative that we opt for renewables sooner rather than later. This is one way of reducing our fuel import bill. In fact, President Gotabaya Rajapaksa in his Policy Statement to Parliament on January 3 stressed this very point, saying that future power projects must necessarily focus on renewable energy such as Wind and Solar. Both these sources of energy are found in abundance in Sri Lanka. It came as a surprise to many that the previous government actually seemed to discourage solar projects in the latter stages of its tenure, perhaps driven by the interests of the fossil fuel lobby.

There are also new, literally groundbreaking techniques such as geothermal and ocean wave energy which Sri Lanka might be able to take advantage of, given its geography and geographic location. But one thing is clear – we will be facing an acute power crisis soon if we do not opt for renewable energy on a big scale. Both wind and solar farm costs have drastically come down, while their efficiency has increased many fold. It is an investment that pays for itself in less than a decade.

The biggest component of fossil fuel imports go to the transport sector, both rail and road. Things are also complicated by the fact the government heavily subsidizes diesel and kerosene to aid the goods/passenger transport sector and the rural economy, which adds to its financial constraints. But there is another option that we should embrace in a much bigger way – the electric vehicle.

The Government has imposed a 2040 deadline for the resignation of brand new fossil fuel powered vehicles, which tallies with what other countries have done. But a start has to be made at some point, because right now only around 20-30 electric vehicles (excluding bikes) are registered per month, whereas around 4,000 Internal Combustion Engine (ICE) vehicles are registered during a similar period.

Unfortunately, despite the above policy the previous Government imposed heavy duties (as much as 125 percent on some categories) on the import of full electric vehicles. These duties should be drastically reduced and in order to reduce the burden on the National Grid (which is driven mostly by thermal power), duties must also be reduced or eliminated on fast superchargers and solar chargers. With most carmakers introducing a slew of electric models over the next five years, these steps will be inevitable. The fossil fuel era could well be over within our lifetimes.


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