Pity the nation that fails to exploit its vast national resources and continues to live in abject poverty. This is how Khalil Jibran, eminent Arab philosopher, if he was alive today, would have commented on the poor use of national resources by the successive governments in natural resource rich Pakistan.
Pakistan is the largest producer of butter oil (Ghee) in the world. The country stands second in chickpeas production, fourth in production of cotton, apricot and sugarcane, fifth in milk and onions, sixth in dates, seventh in mango, eighth in tangerines, mandarin orange and rice, ninth in wheat and tenth in oranges. Yet, the country, at one time or the other, faces shortages, as ‘master of none and jack of all trades’ type skippers of its fate have no vision for value addition, while the bureaucracy has no hold over hoarders, black marketers or smugglers.
Hold for a while, with a total coal reserves at 185 billion tons, Pakistan is the sixth largest coal rich country in the world. The aggregate energy potential of Pakistan’s coal reserves is more than the combined energy potential of the resources that Saudi Arabia and Iran possess. And yet, we spend US$ 12 billion – roughly 65% of our foreign exports, on oil imports. The current estimated value of Thar coal deposits, according to Engineering Development Board’s monthly magazine “Industrial Bulletin: June 2008 issue” is “$ eight trillion and if converted into energy its value comes to $ 25 trillion. It has the potential to generate 100,000 MW of electricity for 300 years.” 
Pakistan’s biggest coalfield lies in Thar (Sindh) where the coal reserves are estimated to be over 175,506 million tons. Seven other coal fields in Sindh have 8,617 million tons of coal reserves. These include Lakhra, Sonda-Thatta, Jherruck, Oagar, Indus East, Meting Jhimper and Badin with reserves of 1,328 million tons, 3,700 million tons, 1,323 million tones, 312 million tons, 1,777 million tons, 161 million tons and 16 Million tons respectively. Other major fields in the country contain reserves of over 533 million tons. These include Khost-Sharig-Harnai, Sor-Range-Degari, Mach-Abagum, Duki and Pir Ismail Ziarat in Balochistan with reserves of 76 million tons, 34 million tons, 23 million tons and 12 million tons respectively; Salt Range and Makerwal-Gullakhel in Punjab with reserves of 234 million tons and 22 million tons respectively; and Hangu in NWFP with a reserve of 81 million tons. In addition to these major fields, there exist minor coal deposits at Badiuzai, Bahol, Bala Chaka, Bhalgor, Johan, Kachh, and Margot in Balochistan; Cherat in NWFP; Choi in Punjab; Khilla (near Muzaffarabad) and Kotli in Azad Kashmir.
Presently, the fastest growing fuel in the world, coal is providing 26% primary energy and 40% of electricity supply worldwide. Coal has gained special importance due to the growing concerns for energy security prompted by apprehensions about fast depletion of the known resources of energy and abnormal surge in international oil prices to around US$144 per barrel.
Currently, China is the world’s largest producer as well as the biggest consumer of coal, accounting for 78% of its total energy requirement. Meeting 60% of its energy requirements from coal, the USA is the second largest user of coal on the globe.
Though already meeting most of its energy requirement from coal, China is now vigorously pursuing efforts to turn its vast coal reserves into barrels of oil. In Erdos, on the grasslands of Inner Mongolia, 10,000 workers are putting final touches to a coal-to-liquid (CTL) plant that will be run by the Chinese state-owned Shenhua Group. The plant will be the biggest outside of South Africa, which adopted CTL technology due to international embargoes on fuel during the apartheid years.
The Chinese CTL plant is expected to start operations later this year. This plant will have the capacity to convert 3.5 million tons of coal into one million tons of oil products, like diesel, per year, for use in automobiles. The production of the plant, in other words, would be equivalent to about 20,000 barrels per day of oil. China has plans to exploit half of Inner Mongolia’s coal output – around 135 million tons, for conversion into liquid fuel or chemicals by 2010. By 2020, China plans to raise its CTL capacity to 50 million tons or 286,000 barrels a day.
Reviled by environmentalists who say CTL process causes excessive greenhouse gases, yet the possibility of obtaining oil from coal and being fuel self-sufficient is enticing to coal-rich countries seeking to secure their energy supply. In view of the relatively low cost of CTL produced oil, the USA is also considering to using its coal reserves for producing oil. The USA has the world’s largest coal reserves, and the CTL process offers her prospects to reduce dependency on other countries for oil.
Developed about 100 years ago, the fuel produced through CTL technology has a shelf life of 15 years. However, it has been little used, except in Nazi Germany and the apartheid South Africa, which had difficulty in getting oil supplies. However, rapid rise in oil prices have revived interest of coal-rich countries in CTL technology. Realizing the importance of coal in development, many countries are now fast switching over to coal to meet their energy requirements. India, Indonesia, Germany, Australia and UK are among those countries that have recently embarked upon new coal based power plants.
Though found in abundance in most parts of the world, the use of coal as an alternate source of energy in the developing countries has been down played by powerful lobbies who do not wish to see coal as a substitute of oil that their principals sell. Resultantly, the share of coal in the energy mix of many developing countries remains very low. In Pakistan, the share of coal in the energy mix is about 5% and in power generation even less than one percent.
Furthermore, Pakistan’s refiners produce 1.6 to 2.0 million mt of naphtha, which forms the basic feedstock for most of the large scale activity. However, unable to add value to one of the most important hydrocarbon ingredients, the country exports the entire quantity of its naphtha produce. Derived from crude oil, coal and other forms of hydrocarbons, naphtha is further processed or cracked for use in a wide range of downstream industries, ranging from fibers to textiles, pharmaceuticals to paints and varnishes, metallurgy to explosives, construction materials to printing, etc.
To establish a good base of chemicals industry, a quantity of about 1.5 mt naphtha is said to be quite sufficient. Since Pakistan produces a sufficient quantity of naphtha, it needs to set-up at least one naphtha cracker plant to produce this basic feedstock to ignite Pakistan’s interests in the world of chemistry.  Since Pakistan does not have a strong base of chemical industry, most of the universities in the country do not have adequate arrangements for teaching chemistry at post doctorate level. Therefore, we also need to make arrangements for higher studies in chemistry.
In view of the uncertainty surrounding the price of oil and the tremendous amounts of foreign exchange involved in the import of oil, the authorities need to engage in serious efforts to make optimum use of the indigenous coal as an alternate source of fuel because it offers a great potential for turning the wheel of Pakistan’s economy.