In search of energy security
New Delhi   25-Jul-2008
<b>(The author is Mr. Sarthak Behuria, Chairman, IndianOil ) A mix of international cooperation and domestic reform is needed to reduce hydrocarbon use</b> Crude oil prices have moved up from about $70 to $145 a barrel in less than a year. The oil supply chain is currently fully stretched, global oil prices are at an all-time high and geopolitical tensions continue to plague the oil producing regions. In the recent times, oil prices have shown considerable volatility on account of geopolitical turbulence. What does this mean for a heavily import-dependent growing nation lie India? Three-quarters of our petroleum demand is met through imports. The rising crude prices mean our import costs will surge. Soaring energy, food and commodity prices are pushing up inflation. Political disharmony and inflation have lately disrupted the smooth functioning of the economy. The consensus has rallied around to the possibility that inflation will remain high in the short-term. Our country faces diverse challenges in coping with high oil prices, tackling costly fuel subsidies and attracting investments into the energy sector. Tb sustain an economic growth of 8-10% over the next decade in the country, the issue of energy security, especially that of fossil fuels, must be addressed upfront. The issue looming before the country's planners is how, from where and at what cost can India fulfill its energy needs in a sustainable manner. Talking of energy security, we can see that this journey is laced with a critical need for good diplomatic relations with energy suppliers, energy transit countries as well as other energy competitors. A collaborative approach and regional as well as international cooperation are required to access regional as well as global natural resources, which are not uniformly distributed. In this direction, the recently concluded 19th World Petroleum Congress at Madrid, Spain, afforded an excellent networking opportunity. The presence of ministerial delegations from the world over at a single platform in Madrid was indeed useful in establishing and consolidating long-term relationships. At the Congress in Madrid, India's manoeuvres were guided by the primary objective of widening die basket of crude oil supply sources. The event made it possible to explore business avenues, consolidate old relationships and gains, and position India's hydrocarbon industry at a global scale. Back home, we need to constantly look for answers to the challenge of rising energy costs that threaten to derail the nation's growth process. While it is true that efforts to secure hydrocarbons acreages abroad is part of the strategy India has adopted to enhance its energy security, the subject has other facets, too. While it may be tough to curtail demand in a burgeoning economy such as India's, initiating demand-side measures and ensuring the most optimum utilisation of the available energy can certainly be a useful exercise. Increased energy efficiency, better public transport and imaginative urban planning are vital to reduce demand without compromising on growth. The steep rise in crude oil prices has raised hopes for enhanced use of alternative and clean fuel technologies, hitherto found uneconomical, giving them a much-needed boost. Besides, in the ongoing work on clean coal-based options, India has already made a modest but firm beginning in the use of alternative, green fuels such as ethanol-blended petrol and biodiesel. India is already ranked fourth in the world in terms of installed wind power generation capacity. Hydrogen and hydrogen-CNG blends are undergoing trials as part of a detailed roadmap for moving towards a hydrogen economy in the country. Sustainable energy, to a great extent, depends on energy cooperation. By engaging in progressive dialogue on such global issues as sustainable development, energy security, public health and humanitarian assistance, it would be possible to attain international cooperation in related areas, which not only serves the interests of the people but also contributes to stability and development of the world. Energy security touches nearly every facet of societal activity. A solution is necessary.