Bangladesh’s Gas Crisis is Really a Crisis of Energy Planning

Bangladesh’s gas crisis is often presented as a temporary supply problem. An LNG terminal has suffered an accident, imports have fallen, factories are struggling, CNG stations are facing long queues and power plants are being forced to operate below capacity.

The government has repeatedly assured the public that the situation will improve once the damaged terminal is repaired.

But this explanation, while relevant to the immediate crisis, misses the larger and more uncomfortable reality. Bangladesh is not facing merely a gas shortage.

It is facing the accumulated consequences of years of inadequate exploration, fragile import infrastructure and energy planning that has consistently fallen behind economic ambition.

The most revealing feature of the present crisis is the gap between what Bangladesh needs and what its energy system can reliably deliver. Recent Petrobangla figures show domestic gas production at a little over 1,600 million cubic feet per day, while LNG imports were around 467 million cubic feet per day on August 11-12.

Yet the country’s total demand is substantially higher.

The Energy Ministry itself has acknowledged a gap of roughly 1,200 million cubic feet per day between available supply and demand.

In other words, the problem is structural enough that even restoring the damaged LNG terminal will not make the underlying shortage disappear.

The consequences are spreading far beyond the energy sector.

Gas-dependent textile, spinning, dyeing, ceramics, steel, fertiliser and other industries cannot simply compensate for an unreliable supply by closing their doors for a few hours. Industrial production depends on continuity.

A factory that receives gas intermittently may lose an entire production cycle, damage machinery, miss export deadlines and accumulate financial liabilities even when its workers and other inputs are ready.

For entrepreneurs who have borrowed heavily from banks, the gas crisis can therefore become a credit crisis. A company cannot repay a loan from production that never takes place.

This is why the most disturbing aspect of the present situation is not the queues at CNG stations, although those are highly visible. It is the invisible damage taking place inside factories.

An industrialist does not necessarily become a defaulter because his business model is fundamentally weak.

He can become one because the state cannot guarantee the basic energy input on which his business model was built.

That creates a particularly dangerous form of economic uncertainty. Investment decisions become increasingly difficult when entrepreneurs cannot predict whether the country will have sufficient gas or electricity to operate their factories.

The crisis also exposes an uncomfortable contradiction in Bangladesh’s development story.

For years, the country has encouraged industrialisation, export growth and private investment while treating energy security as an issue that could be solved later.

But energy infrastructure cannot be developed according to the timetable of political convenience.

A textile factory can be constructed in a few years. A power plant can also be built relatively quickly. But discovering and developing a new gas field can take years.

Offshore exploration can take even longer. LNG infrastructure requires terminals, pipelines, ships, contracts and foreign currency.

Energy planning therefore demands decisions long before a crisis becomes visible to ordinary consumers.

Bangladesh began importing LNG in 2018 precisely because domestic gas production was declining.

Two floating storage and regasification units were subsequently installed offshore, with combined capacity of around 1.1 billion cubic feet per day.

But the present crisis demonstrates the vulnerability of relying so heavily on only two major floating terminals.

When one terminal becomes unavailable, hundreds of millions of cubic feet of potential supply can disappear almost overnight.

A country whose electricity generation, industries and transport system have become increasingly dependent on gas cannot afford such a narrow margin of safety.

There is also a deeper question about why domestic exploration has not kept pace with declining production. Bangladesh was once famously described as a country floating on gas.

That abundance encouraged a mentality in which exploration did not always receive the urgency it deserved.

Over time, production from mature fields declined, while demand increased with industrialisation, urbanisation and expansion of electricity generation.

The arithmetic was straightforward. Consumption was rising while the resource base was ageing.

The government is now pursuing a new FSRU through a government-to-government arrangement with China, reportedly targeting completion within two years.

It is also working on a land-based LNG terminal at Matarbari and has announced plans to drill 150 new wells.

Offshore exploration has been opened to international participation. These are necessary initiatives, but most of them belong to the medium or long term. Bangladesh’s immediate problem is happening now.

That distinction matters. A new gas field discovered tomorrow will not solve today’s industrial shutdowns.

Offshore exploration that begins today cannot provide meaningful commercial supply within months.

Even a new FSRU requires construction, conversion, financing, installation and connection to the national gas network.

Energy policy therefore needs two timelines operating simultaneously: emergency measures to stabilise supply and long-term investment to prevent the next crisis.

Domestic exploration deserves much greater urgency. Experts have suggested exploring deeper and upper layers of existing fields, accelerating development of Bhola’s gas resources and reopening serious onshore exploration.

International tenders for onshore exploration have reportedly not been used since 1997.

If domestic reserves can still be commercially developed, delaying exploration simply increases dependence on imported LNG.

At the same time, Bangladesh cannot treat gas as the only answer to its energy future.

Renewable energy, imported electricity and, where economically and environmentally justified, other sources must form part of a diversified energy strategy.

The objective should not be to replace one dependency with another. A country that shifts from dependence on domestic gas to dependence on imported LNG without developing alternatives has merely changed the source of its vulnerability.

The government is correct that it inherited many of these problems.

But acknowledging inheritance cannot become an excuse for postponing responsibility. Every government inherits something.

The test of government is whether it can transform an inherited crisis into a functioning system.

The present gas shortage should therefore be treated as a warning rather than merely an emergency. Repairing the damaged LNG terminal may reduce the immediate pain.

A new FSRU may provide additional breathing space. Drilling 150 wells may increase domestic production. Offshore exploration may eventually discover new reserves.

But none of these, individually, constitutes an energy policy.

Bangladesh needs something more difficult: an energy strategy based on redundancy, diversification and long-term forecasting.

The country must know not only how much gas it needs today, but how much it will need five, 10 and 20 years from now, where that gas will come from, what happens if an import terminal fails, and how industries will remain operational during a supply shock.

Without reliable energy, factories cannot produce, workers cannot retain jobs, exporters cannot meet deadlines, banks cannot recover loans and investors cannot make rational decisions.

The gas crisis, therefore, is not simply about gas. It is a bill for delayed decisions. The longer Bangladesh waits to pay it, the more expensive it will become.

The writer is an Academic, Journalist, and Political Analyst ased in Dhaka, Bangladesh. Currently he teaches at IUBAT. He can be reached at nazmulalam.rijohn@gmail.com)