Gas Extraction and Its Implication for Economic Sustainability of Bangladesh

Natural gas in Bangladesh currently is a very hot issue that deserves considerable discussion. Its reserve is very debatable agenda. It is officially reported that the gas reserve in Bangladesh is around 12 trillion cubic feet (Tcf) that plays a very vital role in economic development of the country...

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Bibliographic Details
Published in:Bangladesh development studies 2001-09, Vol.27 (3), p.1-34
Main Authors: Billah, Ahm Mustain, Khan, Abdul Aziz
Format: Article
Language:English
Subjects:
Economic rent
Economic resources
Energy resources
Natural gas
Natural resources
Resource depletion
Resource economics
Sustainable consumption
Sustainable economies
User costs
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Summary:Natural gas in Bangladesh currently is a very hot issue that deserves considerable discussion. Its reserve is very debatable agenda. It is officially reported that the gas reserve in Bangladesh is around 12 trillion cubic feet (Tcf) that plays a very vital role in economic development of the country. In order to sustain the economic growth in respect of rapidly depletable gas resource, two issues need urgent attention-to invest some of the resource rent in alternative sectors and to ascertain the amount to be invested. The study attempted to examine the effects of gas resource extraction on sustainable consumption for maintaining better standard of living. A model for estimating gas resource depletion of Bangladesh is developed then used to make necessary adjustment with sectoral GDP that reflected the effects of resource extraction. The study revealed that the trend of resource depletion has some implications that can affect the trade off between current and future resource rents. Future rents will decline, if the current stock of resources is extracted quite excessively. The trend of the Adjusted Gross Domestic Product (AGDP) appreciated when the resource was valued at an official price (low price). This signifies that the real value of resource was undermined inducing more resource to be extracted. A reversed scenario was observed when the resource was valued at a border price. But after 1996 onward under both the prices the trend of AGDP was declining indicating the un sustainability of the economy. The urgent attention is needed for investing some of the resource rent in alternative sectors to protect the gas based downstream industries for economic sustainability.
ISSN:0304-095X