NEWS

India's Energy Security

February 05, 2006
Cynical Nerd

We had earlier posted on the uncertainty and the strategic-offset India might lose if it takes up the Indo-US N-deal. We had also argued that it is in India's interest to oppose Iran's nuclear ambitions without compromising on its energy security. In this post, we broadly look at India's energy security without accounting for neither the N-deal nor the Iranian issue since these issues are rapidly evolving and deserve continuous follow-up.What is "Energy Security"?

A very simple definition of energy security is "enjoying sufficient supplies at an acceptable cost". As a rapidly modernizing economy with a huge youth population looking for economic opportunities, access to cheap energy is vital for India's future as much as having a strategic nuclear deterrent to protect itself against enemies. Looking at this map and this chart, it is evident that energy consumption is directly proportional to the economic well-being of a country. India is already among the top consumers of petroleum products in the world. It is estimated that by 2010, it will be the fourth-largest energy user after the United States, China and Japan.

End of Oil?

Despite the prevalence of nuclear and renewable energy, fossil fuel (oil, natural gas and coal) remains the primary source of energy. We cannot be sure of the doomsayer's proclaiming the 'End of Oil' nor the oil industry cheerleaders who give a rosy picture. Nevertheless, there are huge deposits of unconventional oil sources such as the oil deposits mixed with sand in Canada, the shale oil in the United States or supposedly hidden beneath the Deccan Trap in Central India. Sure, these are much harder and more expensive to extract than the present Middle Eastern/CAR reserves. But it is better than paying $200/barrel to corrupt dictators or worse mad mullahs. In a welcome news, India has shown interest in extracting Canadian oil sand deposits. One thing is clear - access to cheap energy is fundamental to preserve the modern way of life and nation-states will go to any extent to achieve that.Fossil Fuel Drives Foreign Policy

We invite the reader to look at the worldwide proven vs unconventional sources of oil. It is clear that rapidly growing Asian countries are less blessed with the black gold. In India's neighborhood it is the Central Asian Republics (CAR) and Iran which hold vast amount of oil and natural gas reserves. The Quest for Oil will definitely put India on a collision course with its Asian neighbor China in the coming decades. Traditionally, the search for natural resources have been a significant driver of foreign policies of Great Powers. As a case in point, let's look at the United States (source Rajan Gupta, LANL):

1945: F. Roosevelt and King Abdel Aziz "oil for security"

1947: Truman Doctrine –Stop the spread of communism (Greece, Turkey, Iran)

1957: Eisenhower Doctrine –Protect friendly interests

1969: Nixon –Protect interests through surrogate friendly rulers

1980: Carter Doctrine –To protect Saudi Arabia and the free flow of oil from the Persian Gulf

1983: Establishment of Central Command –Protecting the free flow of oil from the Middle East and Central Asia

We would like to add:

2003: Bush Jr. - Operation Iraqi Liberation ( codenamed "O.I.L." )

2007: Operation Iranian Liberation ( "O.I.L. - II" ) ??

Big Oil And Global Economy

It is clear that the United States has paid a heavy politcal and military price to assure its energy security. Why go this far you might ask? Why not simply buy off crude oil from the open market. In the international oil market, there are two major players where oil is traded - the New York Mercantile Exchange (NYMEX) and the London-based International Petroleum Exchange (IPE). Both of them trade oil futures designated in U.S. Dollars. Note that the higher oil prices means that there will be more demand for the U.S. currency - this will ensure a strong dollar (good for the excessive U.S. consumption and the export-dependent E.U./Asian economies), allowing the U.S. to have a collosal external debt simply by printing U.S. Treasury Bonds. Simply put, whether you like it or not, this is how the "Global Economy" is presently run. With India's increasing integration with this system, it is more likely to follow these Unwritten Rules of the Big Powers.India's Recent Energy Ventures

In reality, only losers buy directly from this "Open Market". Many big oil firms actually own/lease oil fields in remote areas and extract them at a considerably low price (say $20/barrel as opposed to the market price of $70/barrel). Similar for natural gas. It is another story as to who gets the profit, see here and here.

In the recent months, India has signed several deals abroad in Nigeria, Siberia (Russia), Cuba and Brazil. Domestically, a spectacular gas find by Reliance which analysts say may account for 10% of India's proven gas reserves. Among set backs, the Nigerian deal was since rejected by the Indian government due to the 'opaque' nature of the deal though Oil Minister Aiyar expressed no regrets about losing Nigeria. Despite our proactive ex Oil Minister's enthusiasm for co-operation with the Chinese, his love was not reciprocated in Kazakhstan, Myanmar and elsewhere. Even after this, the ex-Communist minister's persistent pro-China policy probably cost his job. Though there has been some gains of cooperating with China in winning deals in Syria.

In addition, India has decided to build an LNG terminal project to transport gas via huge shipping vessels, formulated a bio-diesel policy announced to encourage the cultivation of eco-friendly Jhathropa, planning to invest in geothermal energy and is also constructing a strategic petroleum reserve. European Hypocrisy

India's per-capita green-house gas emission remains miniscule compared with the U.S. and the E.U. nations. In fact despite their laggard economic growth most European nations have completely bypassed the green-house emission targets set by the Kyoto Protocol. Of course, the biggest polluter U.S. didn't even bother signing the treaty. Despite this, Western NGOs like Worldwatch Institute, have warned that India and China's growth cannot be compatible with 'sustainable development' without taking about reducing Western resource consumption itself. So let's not fool ourselves into delusions of grandeur and move on to finding means to provide energy to the Indian masses. So, while India should go ahead and develop the necessary technology it needs, it shouldn't to 'demand' the tech already developed by nations like Japan and Germany. Let's see how can we approach them. Looking at the Future: The Han Approach - Pollute Your Way to Glory

India has massive coal reserves which it should use to construct high-capacity 1000-2000 MW thermal power plants. Given the high oil prices, this is the trend in the United States too. In fact, India should purposefully construct non-toxic but highly CO2 polluting coal-fired plants. This will get the environmentally-conscious Europeans flocking to our doorsteps willing to share their nuclear/renewable energy tech. This is not something new. The Chinese exactly followed this policy and are reaping its benefits where Western firms such as Areva S.A. of France and GE Wind of the U.S.A. are actively courting to build nuclear reactors and wind mills.Go Global, err Gobar!

Gobar Gas which mainly generates methane gas from cow manure is also a good solution to alarm Western nations. You see, Methane has a much larger Global Warming Potential compared with carbon-dioxide. Massive investments in Gobar Gas means there will be significant augmentation in green house gases! Now where is my German subsidized solar panel?More Seriously ... Clean Coal

With its big coal reserves, India should work towards developing Clean Coal technology which is based-on gasification of high ash-content coal significantly reducing green house gases. The technology is expected to mature only around 2025 but we need to start looking at it right now.Cultivate Booze Ethanol

By adopting Flexible Fuel Vehicles (FFV) using a mixture ethanol-petrol mix Brazil has shown the way to become energy independent. While Brazilians produce ethanol from sugar beet, India can get it from sugar cane. This is better than exporting sugar to failed states.Take Advantage of Tropics

Looking at this map, India's tropics and vast coast lines can greatly help in harnessing solar and wind energy. More research and investment is needed in this area. India's Own Peaceful Manhattan Project

Mobilize massive resources on the lines of the Manhattan Project to advance our Thorium-based breeder reactors. Remove all the hurdles concerning domestic Uranium mining. Compensate the villagers handsomely and help them relocate. Expose the foreign-funded NGOs who scare monger innocent villagers of the 'perils' of Uranium mining.

In the long run, some believe the solution to energy problems is unlocking the fusion energy. India which already has a promising fusion program and with it's inclusion in the International Thermonuclear Experimental Reactor (ITER) will be at the forefront if some good comes out of this project.




Originally posted in our blog .


The author writes at National Interest
eXTReMe Tracker
Keep reading for comments on this article and add some feedback of your own!

Comments! Feedback! Speak and be heard!

Comment on this article or leave feedback for the author

#1
Storms Of Mind
URL
February 5, 2006
12:48 PM

Cynical nerd that a wonderfull article. I like to add that we normally do not pay attention to energy efficiency, which is think will be a major "energy source". as energy saved is energy produced. it has two aspect first at the production level second at the consumption level. while first is not difficult to work on but second one require a much shift in the mindset of users. which is not easy here in india.

#2
cynical nerd
URL
February 5, 2006
01:11 PM

Storms Of Mind: Thanks much. You have a point, though India's energy use/GDP is already 3x China, we can do much better.

best,

#3
cynical nerd
URL
February 5, 2006
01:14 PM

oops, make than 1/3 of China.

#4
mayank
URL
February 7, 2006
04:09 AM

Enlightening!
You seem to be an expert at energy and energy security. Great read.

#5
cynical nerd
URL
February 7, 2006
04:15 AM

Thanks mayank. But we are neither.

best,

Add your comment

(Or ping: http://desicritics.org/tb/310)

Personal attacks are not allowed. Please read our comment policy.






Remember Name/URL?

Please preview your comment!