Oil Is Well

Updated: Dec 24 2002, 05:30am hrs
It is hardly surprising that with the potential for war hotting up in the Persian Gulf region home to two-thirds of the worlds oil reserves and a third of its supply experts have got down to addressing this countrys energy security concerns. The recent discussion organised by the Tata Energy Research Institute was one such, wherein bureaucrats, heads of public energy and power sector units and a former minister discussed the need for an energy strategy within the context of escalating tensions in West Asia as well as Indias rising demand for hydrocarbons. Interestingly, almost all agreed that even if a conflict did indeed take place between the US and Iraq, Indias oil supplies from that region were unlikely to be affected, and though a price spike was inevitable to as much as $80 per barrel of crude it would be only for a short period; in any case, the country has the means to handle such a situation. However, they all reiterated the need for a long-term energy strategy, given that India was not a well-endowed nation as far as energy resources are concerned and that demand is bound to burgeon over the next few decades. That such a policy is crucial for any energy-intensive society has been reiterated time and again since the early 1990s by various experts.

Oil and natural gas are projected to make up 50 per cent of the countrys total commercial fuel mix over the next decade, but oil production has been stagnating over the last three to four years, necessitating increasingly large crude imports every year. Also, environmental concerns will see the use of natural gas and therefore imports rising to alarming proportions over the next couple of decades, notwithstanding the discovery of the recent reserves by Reliance Industries, with serious consequences for the countrys exchequer. Yet, there is a conspicuous absence of an integrated energy strategy, incorporating both social as well as security goals. While the lack of any centralised planning sees ministries dealing with their resource problems individually and in an ad hoc fashion, with political considerations taking precedence, there is, so far, little more than mere rhetoric going into moving away from carbon-intensive fuels like coal and oil. Unless a well-coordinated strategy is put in place, incorporating infrastructure, environment, finance, external relations and defence, the countrys energy situation will continue to remain disjointed, limping from one crisis situation to another.