Revisiting disastrous 2006 ban on extracting Bangladeshs coal

Recent Facebook posts by the Bangladesh chief adviser’s press secretary, Shafiqul Alam, attempt to argue that Bangladesh’s 2006 decision to scrap the Phulbari coal-mining project stands as one of the most economically self-sabotaging choices in the country’s history.

What was celebrated as a victory for the people and the environment has, almost two decades later, become an example of the extent to which emotionally charged activism can derail a country’s long-term energy security.

Alam’s argument has ignited a storm across Bangladesh’s social media, prompting swift backlash from left-leaning activists who regard the Phulbari movement as the crown jewel of their political legacy and have been quick to challenge his claim.

The protests of August 2006 were tragic and unforgivable. Several people were killed when police opened fire on demonstrators, many more were injured and a justifiably outraged public demanded accountability.

Press Secretary Alam says the state’s violence deserved condemnation then and deserves condemnation now – but that the outrage over police brutality mutated into a wholesale rejection of the Phulbari mining project itself.

He argued that what should have been a push to renegotiate terms, improve rehabilitation plans or replace a flawed company with a stronger partner became, instead, an absolutist campaign to kill the project entirely – and Bangladesh has lived with the consequences ever since.

At the time, nearly every major newspaper, column and activist group insisted that open-pit mining in Phulbari would unleash an environmental apocalypse – poisoning water tables, destroying farmland, displacing tens of thousands and turning a fertile region into a wasteland.

Many of those fears were sincere. Many were also exaggerated or rooted in simplistic readings of mining impacts from other countries.

One basic truth was missing in nearly all that commentary: Bangladesh in 2006 was a desperately poor country with declining gas reserves, limited energy options and almost no capacity to absorb global energy shocks.

Coal was the only resource Bangladesh had in any meaningful quantity. And we essentially chose to leave it in the ground.

Within a decade, the energy crisis that experts warned about arrived. Gas fields depleted faster than expected. The country turned to LNG imports – first cautiously, then desperately – and ended up paying five to ten times the normal price on account of the Ukraine war. Power plants and fertilizer factories lay idle for months because the country could not afford spot-market LNG.

Export industries faced crippling instability. All the while, tens of millions of metric tons of high-quality coal lay untouched under Phulbari and Jamalganj. Left-leaning activists still treat the Phulbari protests as a moral triumph, a “red moment” when people blocked corporate greed and environmental destruction.

But the harsh truth is that the activism was economically not measured. Bangladesh did not stop using coal; it simply stopped using its own. Instead of extracting domestic coal with proper safeguards, we now import huge volumes from India and Indonesia.

Our brick kilns burn almost exclusively Indian coal, becoming the single largest source of air pollution. The same activists who warned that domestic mining would destroy the environment now accept – without protest – thousands of kilns belching imported coal smoke over entire districts.

Nor did Bangladesh abstain from coal-fired power plants. We built enormous new plants – Payra, Rampal, Matarbari – all designed to run on imported coal. The country that rejected Phulbari on environmental grounds now depends on coal mined in someone else’s backyard, transported across oceans, burned on our shores, producing the same carbon and pollution we once claimed to reject.

And in one of the most painful ironies, we are now contractually bound to buy power from the Adani plant in Jharkhand – a plant that itself runs on Indian coal. If the Phulbari activists’ goal was to keep Bangladesh away from coal, they failed entirely. All they accomplished was ensuring that Bangladesh pays other countries to burn coal for us.

The activists’ argument that open-pit mining would cause displacement was valid, but not fatal. The choice was never between mining and no displacement; it was between displacement with compensation and rehabilitation or displacement from economic collapse.

Every major coal-producing country – China, Australia, South Africa, even India – has relocated communities for mines, often badly, sometimes responsibly. Rehabilitation is not an impossibility; it is a matter of political will, funding and oversight.

Instead of demanding a better deal, better compensation, better relocation and better environmental management, our activists demanded total abandonment. In doing so, they handed Bangladesh a long-term structural weakness that no amount of moral satisfaction can offset.

It is also worth remembering that the original agreement with Asia Energy was flawed, and critics were right to highlight that. But a flawed agreement is corrected, not discarded. Foreign mining companies can be replaced; contracts can be renegotiated; safeguards can be imposed; extraction methods can be modified. What cannot be replaced is the coal itself. That is the one asset Bangladesh had – and the one asset it threw away.

The economic cost of that decision is quite a lot. By conservative estimates, domestic coal extraction could have saved Bangladesh at least two billion dollars a year in fuel imports. Over two decades, that is tens of billions of dollars that could have been invested in infrastructure, health, education and industry.

Instead, those billions now flow to foreign suppliers, foreign ports, foreign shipping lines and foreign power companies. And Bangladesh today remains trapped in a cycle of energy insecurity. Every global crisis – a war in Europe, a price spike in Qatar, a disrupted shipping lane in the Red Sea – becomes a domestic disaster.

The activists who opposed Phulbari did not foresee this because many of them were driven by a worldview in which fossil fuels are inherently immoral and development can be achieved without difficult trade-offs. But a country with a per capita income barely above survival level cannot afford that worldview.

Rich countries can indulge in green idealism. Poor countries cannot. China, with the world’s largest renewables sector and trillions in reserves, still depends heavily on coal. Why? Because energy security is the foundation of sovereignty. Bangladesh chose moral symbolism over sovereignty – and is now paying the price.

The tragedy of Phulbari is not just that a project died. It is that we convinced ourselves that killing it was virtuous. We mistook reaction for strategy, outrage for policy, idealism for planning. And in doing so, we locked ourselves into permanent dependence – on imported coal, imported LNG, imported electricity, imported solutions to crises we created for ourselves.

The protesters of 2006 were right to demand accountability for the killings. They were right to question corporate motives. But they were wrong – disastrously wrong – to insist that Bangladesh walk away from its own coal.

That decision may have been emotionally satisfying, but it was economically reckless. A nation that refuses to use the resources beneath its own soil will forever be at the mercy of those who do.

Shaquib Ahmed is a writer and analyst