New challenges, opportunities are emerging in the global energy landscape.
The recently concluded Petrotech 2014, a biennial international event organised by the Indian hydrocarbon sector under the aegis of the ministry of petroleum and natural gas, brought energy strategists, government leaders, policymakers, entrepreneurs, corporate leaders and professionals from across the world to a common platform to deliberate on the challenges and opportunities in the energy sector.
Among other things, the conference highlighted two significant issues: the necessity of creating a more conducive business environment for India to be an energy destination and the indispensability of greater technological collaboration for ensuring energy efficiency and security.
Despite the financial crisis, the Indian economy has been growing, though at a slower rate than in earlier years. India continues to be one of the faster-growing large economies of the world with increasing energy requirements. Even at India’s current low per capita energy consumption of 700 kwh (the world average is 2,500 kwh and many developed countries’ is as high as 15,000 kwh), the energy deficit has adversely affected it, as seen by the non-utilisation of the installed capacity of 24,147 MW of power generation and about 3.4 million tonnes of fertiliser production. When the global economy regains its balance, the demand for oil, and its price, will increase. Focusing on exploiting our own energy resources as well as securing energy supplies from abroad at reasonable prices are going to be tough challenges.
India will remain an energy-deficit country for many more years. Its energy consumption is growing at the rate of 5 per cent per year and about 40 per cent of its energy requirement is met by oil and natural gas. While the demand for oil and gas is projected to grow, domestic production is likely to remain stagnant at 32 million tonnes, leading to a heavy dependence on imports, huge foreign exchange outgoes and an increasing current account deficit. Though India is currently the world’s seventh-largest energy producer and accounts for about 2.5 per cent of the world’s annual energy production, it is the fourth-largest energy consumer and is projected to become the third-largest by 2020.
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There is no way forward but to increase supply three to four times over the next two decades. There is a desperate need to redesign policy and technology initiatives in order to get back to the high growth trajectory envisioned in the 12th five-year plan. Within the energy sector, hydrocarbons need special attention to bridge the ever-increasing gap between demand and domestic supply.
Petrotech 2014 made the government’s stand to encourage both domestic and international companies to explore potentially hydrocarbon-rich areas clear. Partnerships and collaborations between various stakeholders can help improve recovery from mature fields, exploitation of ultra-deep water energy reserves and progress in complex frontier areas through the adoption of international best practices.
India intends to achieve high economic growth while reducing its carbon footprint. Effective demand management, conservation, energy efficiency and renewable energy technology all need focused attention, alongside research and development initiatives, in order for this to happen.
In the global energy landscape, new challenges and opportunities are emerging. Technological innovations can now enable the monetisation of categories of hydrocarbons that were so far commercially unviable. New technological solutions provide opportunities for revisiting the entire hydrocarbon sector, to address demand-supply chain management, the development of pipeline infrastructure, sustainability and local community development, carbon management and disaster management.
By adopting the latest benchmarked technological solutions, there can be advancements in the production of upstream, midstream, downstream, liquified natural gas and unconventional hydrocarbons. India is a globally recognised state-of-the-art refining centre, with a current capacity of 215 million tonne per annum. Indian energy companies have proven expertise. There is undoubtedly a huge market for energy products, and scope for investment and technological partnerships.
The adequate supply of energy at affordable prices is critical to economic growth. The present supply-demand dynamic needs to be studied along with the changing energy scenario and future projections, which take into account the economic, environmental and geopolitical implications of alternative energy landscapes. The best available sources of energy, likely prices and technological options in the coming years have to be factored into the nation’s policy formulation.
The energy mix is currently dominated by coal-fired systems. There is an increasing need for the diversification of sources of energy. Enhancing the share of public and rail-based transport, use of alternative fuels such as CNG, biodiesel and ethanol, enhancing automobile engine efficiency, increasing the number of mass rapid transit systems that ensure better connectivity, electrification of railway tracks, use of natural gas as the preferred fuel for power generation and production of nitrogenous fertiliser, and making renewable energy resources competitive, will go a long way in ensuring energy security.