Experts Favour Energy Strategy In The Genre Of Credit Policy

New Delhi, December 22: | Updated: Dec 23 2002, 05:30am hrs
In a situation where demand for affordable energy is met with supplies exposed to uncertainties of global energy market, the government response needs to be directed each time the variables change. Throwing light on the energy situation and to set the thinking pad, Tata Energy Research Institute (TERI) has brought out a report.

Can an energy policy be put in place based on a strategy agreed to by all stakeholders It can, provided it is dynamic. Speakers at a panel discussion on the issue felt an energy policy, in the genre of credit policy, revised periodically to suit market needs, is a necessity.

With half of the countrys population not having access to commercial energy forms, demand will rise, says former finance minister Manmohan Singh. Sitting on a demand steadily exploding, can anything be left to chance

It was the job of Planning Commission to forecast in the good old days, says Dr Singh. It is no more so, for all modern corporations do their own crystal gazing. He therefore reiterates the advice of a foreign acquaintance: Whatever oil men tell us, you should discount 50 per cent of it. Does this mean that preparing the country for the worst-case scenario is the best way to plan Whether power, hydrocarbons, coal or renewals, energy need an integrated view But it is getting fragmented, says former power minister Suresh Prabhu. With coalition politics seeing him out of power, Mr Prabhu laments the fragmentation of ministries. His was not the sole voice among those deliberating on issues confronting the national energy plan that is confident post Reliance groups gas discovery in the Krishna-Godvari basin, but feels threatened by price uncertainties in the event of American-led war on Iraq.

Energy derives demand from other goods and services. An integrated energy strategy will not treat demand as inflexible. An enlightened strategy will use resources optimally, cover actions and initiatives on both demand and supply, says the TERI document.

Recent experience shows that while physical restrictions in supply may not be a serious threat, it is the economic impact of fluctuating oil prices that needs consideration, says the document.

The first oil price shock in 1973 saw Japan doing away with energy intensive industry like steel, says TERIs director general RK Pachauri. A war like situation can pull up the oil prices to over $80 a barrel.

Says, petroleum secretary BK Chaturvedi, There will definitely be an impact of war on the oil prices but this should be seen as a temporary phase and there are means to handle such situations. Even a country like US, which imports over 50 per cent of its crude oil requirements, cannot afford to import crude at the rate of $80 a barrel for very long.

He said India was also working towards contingency plans to meet such uncertainities. While efforts are on to step up its indigenous oil production, India has already started the process of acquiring oil equity abroad. After Sakhalin in Russia and Vietnam gas block, India has also got some blocks in Iran, Iraq and Libya. The document sees hydropower option from Nepal and Bhutan and gas from Myanmar and Bangladesh as logical solutions, implementation of which requires sustained diplomatic efforts. Besides, for gas import from Iran, a secure and mutually beneficial arrangement with Pakistan will be essential. Indian Oil chairman MS Ramachandran therefore talks of an oil attache (it can be an energy attache) besides a military attache. However, all these options will need a fresh evaluation in light of the recent gas discovery in the KG basin.

Integrated energy strategy for a country is not about numbers and predetermined targets but about establishment of institutional links and incorporation of social and security goals. In a country like India, where the market is acustomed to subsidised pricing, having an integerated policy is must to address such issues. Pricing, environment safeguards and energy security are some of the main components for such a policy, added Mr Chaturvedi.