ECONOMIC HIGHLIGHTS
New Delhi, 5 December 2007
Reduce Reliance On Fossil
Fuels
NEW ENERGY POLICY NEEDED
By Dr. Vinod Mehta
(Former Research Director, ICSSR)
A year-and-half ago, the Finance
Minister had said that the huge surge in the global price of crude was a matter
of concern. Since then the price of
crude has been rising steadily and is currently hovering around US $100 a
barrel. And, even as the rupee is getting stronger vis-à-vis the US dollar, meaning
that we pay less for the crude in terms of dollars, the import of oil continues
to cause concern.
It is common knowledge that India
does not produce enough of crude to meet its requirements and that 70 per cent our
oil requirements are met by imports. A
large part of our export earnings go to meet our import requirements of crude
and natural gas. This means that we have
less foreign exchange for import of other products and services. In addition,
it needs to be constantly monitored. Thus, our major effort should be to reduce
this dependence on imported crude for strategic reasons.
This can be tackled at various
fronts. At the first level, we need to increase the domestic output of crude
oil by improving the recoveries from existing oil fields and by exploring new
oil wells. At the second level, we need to reduce the consumption of fossil
fuel in a planned manner.
For the past few years, the Ministry
of Petroleum has been actively pursuing a strategy not only to increase the recovery
of oil from the Bombay High wells but allowing the Oil and Natural Gas Corp
(ONGC) to enter into deals with foreign
companies for oil exploration outside India on production-sharing basis.
The first such venture was 20 per
cent participation in a Russian oil firm Roseneft. The ONGC has invested about Rs 8,000 crore here
along with oil companies from the US and Japan and is expected to get about 2
to 4 million metric tonnes of oil and 5 to 8 millions metric tonnes of
gas.
In fact, the ONGC is giving out places
for oil exploration. The private sector company, Reliance, too is exploring oil
in the country and has met with some success. This strategy is likely to go a
long way in enhancing the oil security for the country.
At the same time, the Government
has not yet completely written off the Iran-Pakistan-India gas pipeline deal
and other gas sources in Central Asia and Myanmar
(Burma)
too are being tapped. But all this will
take time.
The previous NDA Government had
taken up the development of ethanol, which could be blended with petrol and
diesel to reduce the consumption of imported oil. Brazil is way ahead in the research
in ethanol. Three projects on Gasohol (blend of petrol and ethanol) have been
launched in Maharashtra and in Uttar Pradesh.
Ethanol which is extracted from
sugarcane bagasse can be successfully blended with petrol. It is estimated that a 5
per cent addition of ethanol would help save petrol to the tune of 3.3 lakh
tonnes per annum. If we could succeed in
blending 10 per cent ethanol the savings in the use of petrol would be much
more.
Interestingly, the researches
that have been done in Brazil
show that the blend of petrol and ethanol was good for the environment. However, it will take a few years before a
reliable blend of petrol and ethanol and diesel and ethanol is devised for
commercial use.
Moreover, the Central Government
is also conscious of the bad effect of fossil fuel on our environment. To fight the menace of pollution in
metropolitan cities, unleaded petrol has been introduced. Apart from this,
extra low-grade sulphur and low sulphur diesel have also been introduced in
major cities.
At the same time, effective steps
are being taken to check the adulteration of diesel which is playing havoc not
only on the environment but also reducing the effective life of diesel
engines. To top it all, the vehicle
manufacturers have been asked to switch over to the production of vehicles
which conform to Euro III emission norms.
There is no gainsaying, that all
this is going to have a salutary effect on our environment. Most of the pollution-related diseases like
asthma etc., which have increased in the past few years, will go down
substantially.
It must be understood that India
does not have large reserves of crude oil and that it would always be dependant
upon imports to meet its requirements of petroleum products. It must also be understood that whatever
refinements are introduced in fossil fuels like petrol and diesel, they would
continue to spread pollution and harm the environment.
Therefore, one has to think of an
energy policy that takes into account these two facts. It then leads us to think that India
should reduce its dependence on fossil fuel and switch over to the use of other
sources of energy.
Why we have not been able to
think in these terms is because of the fact that the country has no integrated
approach to energy requirements. We have separate Ministries and departments which
deal with different kinds of sources of energy like coal, renewable sources of
energy, nuclear energy and so on.
The users of these various
sources of energy are also treated as separate identities with very little
coordination among them. It is for this reason that instead of a coordinated
energy policy we have separate policies for each of these sub-sectors which are
contradictory at any point of time.
It is here that the Government
needs to bring a strong coordination among the Ministries which are dealing
with various kinds of fuels and the Ministries which oversee sectors which use
those fuels.
If we look at it in an impartial
manner, we should, in the next 10 to 20 years reduce our consumption of
petroleum products and gas and switch over to use of other sources of
energy.
For instance India has large deposits of coal
and water resources which are used for generation of electricity. If we switch our public transport system from
the use of fossil fuel to the use of
electricity then in one stroke we would not only be reducing our consumption of
petroleum products but also contributing to a cleaner environment and saving
our import bill. The Metro rail in Delhi
is the finest example of a clean fuel transport system leading to saving in the
use of fossil fuel.
But, the Metro rail system may
not be cost-effective in middle-level and small towns and cities. The answer
could lie in a mono-rail, tram and trolley buses. Many developed countries use
tram cars and trolley buses, which run on electric power for their urban
transport system.
This is the mode of transport
which should be encouraged in small and middle-sized towns and to the extent
possible in the large metropolitan areas, especially in the new districts which
come up in these mega cities.
However, to take a decision to
run trams and trolley buses would require coordination among many Ministries.
Clearly, it is high time the Government moves fast to develop a coordinated
strategy to reduce the consumption of fossil fuels. ---- INFA
(Copyright India News
& Feature Alliance)
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