Energy security first for sustainable economy: Experts

Bangladesh has made significant progress in expanding its electricity generation capacity, overcoming one of the major barriers to economic development. But behind this achievement lies a growing structural weakness: the country’s increasing dependence on imported energy.

As imports of liquefied natural gas (LNG), coal and petroleum products rise, pressure on foreign exchange reserves is mounting and energy costs are becoming increasingly volatile. Experts believe Bangladesh’s next phase of economic transformation should focus on domestic natural gas, the resources of the Bay of Bengal and renewable energy. This could mark the beginning of what they describe as the country’s “second economic revolution.”

The transformation, however, should go beyond exploring new gas fields or generating more electricity. The objective should be to build a resource-to-industry economy by connecting domestic natural and renewable resources with industrialisation, investment, exports and higher-value production.

According to Petrobangla data, natural gas remains Bangladesh’s primary source of energy. However, production from older gas fields is declining, while the absence of major new discoveries has forced the country to increasingly rely on LNG imports to meet growing demand.

Energy experts warn that recent global crises have demonstrated the risks of excessive dependence on imported fuel. The Russia-Ukraine war, instability in the Middle East and volatility in international energy markets have shown how quickly rising LNG and fuel prices can increase electricity generation costs. Higher energy costs eventually affect industries, exports, inflation and the country’s foreign exchange position.

Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmood Tuku said declining domestic gas production had forced Bangladesh to depend more heavily on LNG and other imported fuels, creating significant pressure on foreign exchange. He said the government was increasing investment in domestic gas exploration and renewable energy, including plans to significantly expand solar power generation over the next five years.

Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed said efficiency, cost control, transparent tariff-setting and long-term planning would be essential for sustainable development in the energy sector. He stressed the need to balance the actual cost of energy, efficient consumption and investment-friendly policies.

Experts also argue that gas exploration alone will not solve Bangladesh’s energy challenges. Exploration, extraction, transportation, storage and industrial use must be developed as an integrated chain, while investors need transparent and predictable long-term policy support.

Sakif Shamim, chairman of the Centre for Strategic and Economic Research (CSER) and managing director of LabAid Hospital Group, said reliable and competitively priced energy was essential for industrialisation. Ensuring energy security, he said, could attract both domestic and foreign investment, particularly in economic zones, manufacturing and high-value-added industries.

He also called for faster development of renewable energy and a resource-to-industry strategy. A commercially viable gas discovery, he argued, would not merely reduce imports; it could support gas-based fertiliser, petrochemical, chemical and other downstream industries, creating much greater economic value from the same resource.

International experience offers several lessons. Norway has used oil and gas revenues to build a sovereign wealth fund for future generations. Qatar has developed LNG, petrochemicals and global investment networks around its gas resources. Indonesia has sought to move beyond exporting raw nickel by developing processing, battery and electric-vehicle supply chains.

For Bangladesh, the goal should not be to copy these models directly, but to develop a strategy suited to its own circumstances. The principle should be simple: resources should not merely be extracted and sold; they should be transformed into higher-value products and industries.

The Bay of Bengal offers perhaps the country’s greatest untapped opportunity. Bangladesh’s offshore area could support oil and gas exploration as well as a broader blue economy involving deep-sea fisheries, seafood processing, algae-based industries, marine biotechnology, shipbuilding, modern ports, maritime logistics and offshore renewable energy.

Petrobangla Chairman (Additional Charge) Md Abdul Mannan said greater attention was now being given to offshore blocks in the Bay of Bengal. New production-sharing contracts, modern seismic surveys and efforts to attract international companies are being pursued to accelerate exploration.

Renewable energy could also diversify Bangladesh’s energy system. Rooftop solar, utility-scale solar, floating solar, agrivoltaics, offshore wind, biogas, waste-to-energy and battery storage could gradually reduce dependence on imported fuels. Smart grids and demand-side management would also be necessary to make the transition effective.

CSER’s analysis identifies several priorities: intensifying gas exploration both onshore and offshore; establishing transparent and investment-friendly production-sharing contracts; strengthening BAPEX’s technical and financial capacity; investing heavily in renewable energy and smart grids; developing gas-based downstream industries; and establishing a national energy database and a long-term National Energy and Resource Transformation Roadmap.

Such a roadmap should link energy policy with industrialisation, investment, foreign exchange management and national resource development. If Bangladesh can discover and efficiently use its domestic resources while expanding renewable energy, cheaper and more reliable energy could strengthen industrial competitiveness, attract investment, create employment and increase export capacity.

The challenge, therefore, is not simply to produce more electricity or import more fuel. Bangladesh must decide whether it will remain dependent on international energy markets or build a diversified energy economy based on its own land, sea and renewable resources.

The country’s first major economic transformation expanded access to electricity and helped drive industrialisation and urbanisation. The next transformation should make that foundation more secure, affordable and resource-based.

Energy, in this vision, would no longer be merely an input for production. It could become one of the principal drivers of Bangladesh’s long-term economic independence, industrial competitiveness and national prosperity.