Creating oil reserves

Energy City plan includes creating oil reserves Pakistan can tap in emergency

Oil reserves are a good idea, and just because Pakistan escaped oil shortages during the current crisis, does not mean that a buffer stock of fuel would have been unwelcome.  The problem with a national oil reserve is that it represents tied up money for whoever has paid for it, and a lot of money, for it will have to cover several days of national use if it is to be of any use. Then there is the problem of storage, for huge storage will either have to be built or found. (The US National Reserve of 274 million barrels is stored in underground caverns created by salt mining in Texas and Louisiana states, which have a capacity for 714 million barrels.) Pakistan is weaving the national reserve into the Energy City proposal, which in turn is part of a proposal which calls for three or four more new ports to be built across the Makran Coast of Balochistan, apart from Gwadar.

The Energy City is supposed to be a specialized port dealing with petrochemicals, and is supposed to be centred around a refinery that was to have been built by Saudi Arabia. That refinery has something of a chequered history, for it was originally targeted for Ratnagiri, Maharashtra, India, but had to be cancelled because of land acquisition problems. The project was moved to Pakistan but has not moved forward much. Placing it at the centre of an Energy City is meant to provide a sort of jump start to what was to have been a $44 billion project. The cost of storing the crude oil would be shifted to the refinery, for while the storage would be the refinery’s, Pakistan would have first call on those reserves in the event of some disaster, such as a war. Otherwise, presumably, they would operate as normal storages.

The problem with this is that the national petroleum reserve is downgraded from a top priority to something that is tagged along with the Energy City idea. The national reserve is too important to be treated so casually, as something merely desirable rather than a necessity. For the foreseeable future, Pakistan is going to be an oil economy. The switch to renewables for its power needs will take time, and the changeover to EVs for all transport needs will take longer. So long as oil continues to be used, an national reserve will be necessary.