On May 14th of this year, the Energy and Mineral Resources Division inked a memorandum of understanding (MoU) with the US Department of Energy for strategic energy collaboration. The US Department of Energy highlighted in a press release on its website that the agreement aligns with President Trump’s vision of enhancing American energy dominance and bolstering global partnerships by providing cost-effective, reliable, and secure energy solutions. This MoU is anticipated to streamline numerous energy projects and investment prospects spanning across the energy sector, including liquefied natural gas (LNG), liquefied petroleum gas (LPG), petroleum products, geothermal energy, and bioenergy.
The agreement aims to ensure affordable and dependable energy supplies while diversifying energy sources to secure US energy for promoting peace and prosperity at home and abroad. As reported by The Daily Star, the agreement also commits to collaborating on capacity-building, knowledge sharing, and research in oil, gas, geothermal, and bioenergy sectors. It emphasizes easier access to LNG, LPG, and other fuel imports from the US under favorable conditions.
However, this development raises two critical questions: why were these specific fuels selected as strategic priorities, and how do they align with Bangladesh’s sustainable energy future?
The timing of this agreement warrants careful consideration. Prior to the MoU, the Gas Exporting Countries Forum issued a commentary cautioning that the global LNG market had transitioned into a new structural phase. Future supply dynamics would not solely rely on resource scarcity but also on escalating marginal costs and capital limitations.
While the LNG trade is poised for expansion, the costs of new supply additions are on the rise. Projects that previously produced liquefied gas at under $3 per one million British thermal units (MMBtu) are now experiencing increased costs exceeding $4 per MMBtu—a surge of approximately 45-55 percent. This analysis attributes the escalating costs to higher capital investments, heightened technical complexities, environmental constraints, uncertainties in project execution, elevated construction expenses, remote and risky field developments, and dwindling low-cost sources.
In essence, the cost of new LNG projects is anticipated to be substantially higher than what policymakers may anticipate.
These findings urge caution for Bangladesh. Entering into long-term LNG agreements with the US could potentially bind the country to expensive imports and heightened vulnerability to global market fluctuations. Despite not being ratified, Bangladesh has already committed to a reciprocal trade agreement with the US mandating the purchase of $15 billion worth of LNG over the next 15 years. Portraying LNG infrastructure as a cost-effective path to “long-term energy security” becomes increasingly questionable when suppliers themselves warn of higher prices and risks associated with new capacity additions. While current and ongoing projects offer moderate cost benchmarks, proposed projects signify a significant escalation in capital requirements and technical complexities. Costs presently vary widely based on region and technology, with the Middle East representing the low-cost benchmark, Asia Pacific and Eurasia at the high-cost end, and Africa and North America forming a mixed spectrum.
Apart from LNG, the MoU designates bioenergy and geothermal energy as strategic fuel options. However, this selection raises concerns. Bioenergy, except for energy derived from waste, competes directly with forests and food production, leading to land pressure, potential spikes in food prices, and risks to rural livelihoods. The UN Food and Agriculture Organization has repeatedly cautioned that uncontrolled expansion of bioenergy could jeopardize food security and the environment. Given Bangladesh’s diminishing arable land due to urbanization, infrastructure requirements, river erosion, and salinity intrusion, pursuing large-scale bioenergy initiatives could exacerbate food security challenges at a time when agriculture is under strain. Additionally, Bangladesh’s geological and hydrological conditions make significant geothermal development unlikely. Prioritizing bioenergy and geothermal over abundant solar and wind energy potential appears both concerning and impractical.
These strategic decisions also give rise to domestic political considerations. Amid public apprehensions regarding trade agreements, the government has actively courted investors. A Bangladesh delegation recently led a group of approximately 25 business leaders to the SelectUSA Investment Summit in Washington, where they engaged with senior executives from Chevron and LNG infrastructure companies alongside US diplomats. This prompts the question of whether this concentrated effort on attracting export suppliers and investors was geared towards solidifying foreign commercial footholds rather than safeguarding national interests.
At the core of this issue lies the sovereignty of strategy. The current global gas market outlook suggests that an LNG-focused trajectory could be costly and risky. Simultaneously, bioenergy and geothermal energy initiatives may carry social and environmental implications for Bangladesh. Before committing to significant agreements, the government must evaluate these options against national capabilities, interests, and food security requirements. Where is the independent assessment in this regard? Why hasn’t parliament engaged in a public discourse on this matter?
It is encouraging that the new energy minister advocates for renewables. If the government genuinely aims to expand renewable energy utilization and safeguard national interests, it should refrain from hastening import deals and infrastructure projects that
