Posted in Operations & IT Articles, Total Reads: 1112
, Published on 04 October 2014
India is facing tremendous pressure to secure energy for the future. BP Statistical Review forecasts that within the next 2 decades India’s energy demand will double. Along with that, India’s dependence on imports is expected to increase from 30 percent to over 51 percent (McKinsey & Company). Even when coal is concerned, imports are projected to increase from 140 million tonnes in 2011 to more than 300 million tonnes in 2040 (Brookings India).
With increasing demand the pressure to boost domestic production is increasing. But the deficit will have to be imported, increasing pressure on the currency. In such a scenario, the concept of energy security attains a higher meaning. One that not only covers availability, accessibility, affordability and sustainability but also utility and predictability. The need to be energy self-sufficient to have energy security is no longer a norm. Japan has the least energy self-sufficiency among G8 countries, of 4 percent, and yet with an LNG flexibility factor of 4 (Import capacity of 4 times the normal usage) and most efficient and sophisticated energy supplies, lead it to better energy security than most Asian countries. On the other hand even energy rich countries like Russia, Saudi Arabia, Venezuela, Brazil and Canada which are well endowed in hydrocarbons, import some of their energy in the form of refined petroleum products due to insufficient refining capacity.
Image Courtesy: freedigitalphotos.net, Naypong
A 2030 India in business-as-usual scenario would be the third most import dependent nation in the world. This trajectory is undesirable. The solution is to be energy self-sufficient. This is because:
1. Estimated coal reserves of 293 billion tonnes and minimal recent additional exploration.
2. India has 32GW of renewable energy capacity, which is just about 13 percent of potential.
3. Only 13 out of 26 sedimentary basins in India have been explored.
4. Though proven shale reserves are around 65 Tcf, many firms believe it to be 200 Tcf.
5. CBM reserves (that have seen only 4 rounds of bidding) are around 92 Tcf.
6. India has 25 percent of world’s Thorium reserves but viable Thorium technologies are in the implementation stage.
7. 7500 Km coastline provides a great opportunity for third generation biofuels (Biodiesel and Ethanol from Algae).
To capitalise on the potential, India needs better policies. Reports by Government committees and studies on policy reform suggest:
1. National Data Repository would go a long way in balancing the technical knowledge discrepancy that exists between the Government and the licensee.
2. The Open Acreage Licencing Policy will pave the way for efficient bidding and greater participation of Private players in upstream oil and gas.
3. A hybrid of concession contracts, Production Sharing Contracts and Risk sharing contracts need to be adopted such that the contract terms depend on the type of discovery and reserve potential over the period of contract.
4. Regulators and watch-dogs need to be empowered with implementing IT based work flow systems for e-governance and strengthen their Human Resource talent pool.
5. Promoting Joint Ventures for technology transfer so as to exploit unconventional sources and achieve Enhanced Oil Recovery.
A conducive policy environment coupled with an effective regulatory regime will be the key factors for accelerated growth of domestic energy resources. That will in turn decide if India can touch double digit growth figure in the next decade.
This article has been authored by Swapnil Rayjada School of Petroleum Management, PDPU
If you are interested in writing articles for us, Submit Here