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Bangladesh

by Michael last modified 2006-11-08 19:11

Bangladesh shares an uneasy history with Burma. Since the late 1970s, Bangladesh has had to deal with a large influx of refugees, which has considerably impacted the country’s economic development. Along with this, rebel activities along their shared border put considerable strain on Bangladeshi-Burmese relations.

At the same time, however, Bangladesh is concerned about improving diplomatic and trade relations between the two countries. This is based on the government’s own economic and strategic considerations as much as pressure from international donors such as the European Union and the United States, who share a growing interest in Bangladeshi-Burmese economic relations, mainly in the area of energy and infrastructure. [d]

According to the U.S.'s Energy Information Administration, Bangladesh's net proven natural gas reserves are at 15.3 trillion cubic feet (Tcf) as of mid-2004.  Moreover, it is estimated that Bangladesh has an additional 32.1 Tcf in "undiscovered reserves." Bangladesh may thus become a major gas producer and supplier in the region. [a]

Consequently, foreign interest and investment in the energy sector is considerable. Indeed, the U.S. government has put pressure on Bangladesh to allow U.S. oil companies to export natural gas from Bangladesh to India. [d] The U.S. corporation UNOCAL is the largest among foreign corporations involved in natural gas production in Bangladesh. UNOCAL has already heavily invested in Burma's Yadana and Yetagun natural gas pipelines. As a consequence, UNOCAL and the French corporation TotalFinaElf currently face charges of complicity in human rights abuses by the Burmese military in U.S. and European courts (click here for more information about the UNOCAL lawsuit).

UNOCAL and its subsidiaries have proposed that the government-owned oil and gas company Petrobangla build a pipeline with the purpose of exporting Bangladeshi gas to India. [a, c, e] Natural gas exports within Bangladesh, however, maintain that this is controversial because as many people think that Bangladeshi gas resources should first be used for domestic purposes (i.e., electric power generation, fertilizer production, and transportation. [a] Sixty six percent of Bangladesh's commercial energy consumption draws from the country's natural gas resources, 80% of which is consumed by power and fertilizer production, the remainder by industry and households. [a] Currently, Bangladesh's natural gas production is equivalent to its consumption, which is at 3.25 Tcf/0.99 Tcm. [b]

The U.S. government has also put pressure on Bangladesh to allow natural gas from Burma’s Shwe gas fields to be exported to India through Bangladesh. [d] The Bangladeshi government would in fact be interested in allowing a pipeline to be built from Burma’s Shwe gas fields off the Arakanese coast to India through Bangladeshi territory. The pipeline could provide both economic and political benefits to the Government of Bangladesh. Firstly, it could provide the government with access to additional gas supplies, which would be of particular interest if the Bangladeshi reserves prove to be less profitable than expected. Moreover, a pipeline through Bangladeshi territory could provide Bangladesh with additional bargaining power in any future disputes with India.

However, the proposed pipeline is highly controversial, as it would have numerous negative impacts on the environment and the people of Burma. By allowing the pipeline through Bangladesh, the government would run the risk of increasing regional instability by engaging with one of the world’s most brutal military regimes. By approving construction of a pipeline through Bangladesh, the government ultimately supports the Burmese regime, which is to reap a considerable profit from this deal. Bangladesh would thus contribute to prolonging the suffering and hardship of the Burmese people.
At the same time, however, Bangladesh is concerned about improving diplomatic and trade relations between the two countries. This is based on the government’s own economic and strategic considerations as much as pressure from international donors such as the European Union and the United States, who share a growing interest in Bangladeshi-Burmese economic relations, mainly in the area of energy and infrastructure. [d]

According to the U.S.'s Energy Information Administration, Bangladesh's net proven natural gas reserves are at 15.3 trillion cubic feet (Tcf) as of mid-2004.  Moreover, it is estimated that Bangladesh has an additional 32.1 Tcf in "undiscovered reserves." Bangladesh may thus become a major gas producer and supplier in the region. [a]

Consequently, foreign interest and investment in the energy sector is considerable. Indeed, the U.S. government has put pressure on Bangladesh to allow U.S. oil companies to export natural gas from Bangladesh to India. [d] The U.S. corporation UNOCAL is the largest among foreign corporations involved in natural gas production in Bangladesh. UNOCAL has already heavily invested in Burma's Yadana and Yetagun natural gas pipelines. As a consequence, UNOCAL and the French corporation TotalFinaElf currently face charges of complicity in human rights abuses by the Burmese military in U.S. and European courts (click here for more information about the UNOCAL lawsuit).

UNOCAL and its subsidiaries have proposed that the government-owned oil and gas company Petrobangla build a pipeline with the purpose of exporting Bangladeshi gas to India. [a, c, e] Natural gas exports within Bangladesh, however, maintain that this is controversial because as many people think that Bangladeshi gas resources should first be used for domestic purposes (i.e., electric power generation, fertilizer production, and transportation. [a] Sixty six percent of Bangladesh's commercial energy consumption draws from the country's natural gas resources, 80% of which is consumed by power and fertilizer production, the remainder by industry and households. [a] Currently, Bangladesh's natural gas production is equivalent to its consumption, which is at 3.25 Tcf/0.99 Tcm. [b]

The U.S. government has also put pressure on Bangladesh to allow natural gas from Burma’s Shwe gas fields to be exported to India through Bangladesh. [d] The Bangladeshi government would in fact be interested in allowing a pipeline to be built from Burma’s Shwe gas fields off the Arakanese coast to India through Bangladeshi territory. The pipeline could provide both economic and political benefits to the Government of Bangladesh. Firstly, it could provide the government with access to additional gas supplies, which would be of particular interest if the Bangladeshi reserves prove to be less profitable than expected. Moreover, a pipeline through Bangladeshi territory could provide Bangladesh with additional bargaining power in any future disputes with India.

However, the proposed pipeline is highly controversial, as it would have numerous negative impacts on the environment and the people of Burma. By allowing the pipeline through Bangladesh, the government would run the risk of increasing regional instability by engaging with one of the world’s most brutal military regimes. By approving construction of a pipeline through Bangladesh, the government ultimately supports the Burmese regime, which is to reap a considerable profit from this deal. Bangladesh would thus contribute to prolonging the suffering and hardship of the Burmese people.

Sources:

[a] http://www.eia.doe.gov/emeu/cabs/bangla.html
[b] http://www.allyoucanread.com/natural_gas_proved_reserves.asp?id=14
[c] http://www.unocal.com/globalops/b-ipipeline/
[d] K. Morshed (2001), ‘Bangladesh – Burma Relations’. In: IDEA (ed.) Challenges to Democratization in Burma. Perspectives on multilateral and bilateral responses. Online, available at: http://www.idea.int/documents/Burma/BURMA_beyond_2000.pdf
[e] http://www.unocal.com/globalops/bangla.htm

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