India Needs an Energy Security Doctrine - Livemint

8/12/2014 India needs an energy security doctrine - Livemint

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Recently China and Russia signed a natural gas deal under which the

Russian oil giant Gazprom will supply Chinas largest oil companyChina

National Petroleum Corp.38 billion cubic metres of gas every year for the

next 30 years, beginning 2018. The deal is worth $400 billion and is the

largest contract of its kind in Russias history.

The importance of the deal transcends its monetary terms and the volume

of the commodity sought to be exchanged under it. It not only points

towards the tectonic shifts taking place in the global energy landscape but

also brings into sharp focus Indias continuing ineptitude at securing its

energy future.

It is instructive to note how the deal came about to understand where India

falls short. The deal was stuck in the past decade, largely on the issue of

pricing. Russia was used to getting paid better, by its steady European

customers, than what China was willing to shell out. Further complicating

the matters was Russias involvement in Vietnam through defence deals as

well as its stake in Vietnams oil and gas blocks, which fall under disputed

territory.

The emergence of shale gas supply from the US, however, provides a

cheaper source of supply for European countries. Over time, it is expected

that Russia will lose out on the steady demand from the West. The move of

the US and west European countries to corner Russia on the Ukraine issue

made Russia further vulnerable. And this is exactly when China clinched the

issue. To get the desired price, China also threw in a $50 billion loan to

develop the Russian gas fields and build the pipeline up to the Chinese

border.

There are two salient points here. One, Chinas foreign policy is in sync with

its energy security targets. For China, neither Russian involvement in its

territorial disputes with Vietnam nor Russias actions in Ukraine came in the

way of securing the deal. Two, China follows up its deals with financial

might. When it comes to securing such international deals, it is never as

simple as paying for the gas. Indeed, it is about the whole bouquet of

services that a customer can provide. As a result, China has been able to

develop a well-diversified energy sourcing portfolio.

Compare that to Indias embarrassing past at sewing up deals and our

growing dependence on imports. Myanmar is perhaps the most outstanding

example. For years, India helped Myanmar to explore its gas reserves. This

FIRST PUBLISHED: MON, JUN 02 2014. 05 05 PM ISTHOME OPINION

India needs an energy security doctrineOur foreign policy must aggressively secure long-term energy supply

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Increase in EPF interest

rate unlikely this year

was the costly bit. Obviously the idea was to get the gas, through a pipeline,

to India. From the very beginning, it was matter of energy security, not

financial gain. As things turned out, Indias foreign policy was not in sync

with its energy interests. India dropped the ball and as a result China, the

late entrant, now has cornered the gas through a pipeline, which became

operational last in 2013. To add insult to injury, Indian Navratna company

Oil and Natural Gas Corp. (ONGC)is actually involved in building the

pipeline to China. Another, more recent example of such slippages is

Kazakistan, where India lost out energy contracts despite bidding higher

than China.

The story is the same when one looks at the India-China race for resources

in Africa as well.

So what should India do? There are two ways to look at the Russia-China

deal. One way would be to say that in any case this gas could not have

come to India through a pipeline. Our western border is too troubled and

unstable and the Himalayan range makes it impossible in the north and

east. While this is true, it would be missing the larger lesson.

The right way to look at it is to realize that India urgently needs an energy

security doctrine. India is the fourth largest energy consumer in the world

and its import dependence is expected to grow to 50% of its total demand

by 2030. Indias foreign policy must aggressively push to secure long-term

and stable supply of energy.

Thankfully, the global rearrangement also gives India some hope. With US

growing more capable of supplying its own fuel as well as that of Europe,

India can aggressively court the Middle Eastern and African countries, as

they look for newer customers.

What should India do to secure its energy future? Tell us at

[email protected]

Follow Mint Opinion on Twitter at https://twitter.com/Mint_Opinion-

49 Tweet 17First Published: Mon, Jun 02 2014. 05 05 PM IST

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energykya 2 months ago

China-Russia gas deal is also repudiating the doctrine of relating gas price to oil price, and

instead bringing it closer to cost of production. The more India tries to cultivate its

neighbours, for some bizarre reason, the more it seems to aliendate them. Bangladesh has

plenty of gas for which it has no use; but it won't sell to India. So is Nepal, with about 20 GW

of hydro potential, which it cannot use, but will not develop it and sell to India. As you pointed

out, Mianmar's gas is bought by China and hydro electricity by Thailand, but nothing for India.

Bhutan is the only exception. Vajpayee magnanimously agreed to a large increase in

electricity price, and in turn Bhutan took care of the militants. India's gas and oil interests and

islamic diplomacy should go hand in hand. You mentioned ONGC working for pipeline to

China; mention also GAIL. No one seems to have pulled them up for their act bordering on

treason.

1

Reply

Target RBI GR B 2 months ago energykya

Very informative comment bro.....Can you plz suggest a good book to read more

about india's energy security need and how the problem can be resolved ??

Thanks !!

Reply

vinsin 2 months ago

see more

Target RBI GR B

Thorium, Nuclear, Solar, Hydro as suggested above is the long term energy

plan. Electric cars and charging system, rebuilding indian cities for that.

Allowing foreign Companies to explore oil and shale gas in India with

collaboration. Forcing full integration of kashmir, giving aksai chin to China

officially and some other land areas, thus resolving bordering issue with

China. Once done get gas from Russia, Turkmenistan via China.

Population control for 30 years. Cancel liaquant nehru pact, held plebiscite in

Kashmir, implement uniform civil code in human rights, women rights, animal

rights and child rights atleast. OR trade Kashmir Valley with 30% of Sind.

Common currency and visa for Nepal, Bhutan, India and Sri Lanka. Exploit

Srilanka for Wind Energy. Connect Srilanka via bridge(name it new sethu ram

bridge) + Rail Connection. Exploit Wave energy b/w India and Sri Lanka.

Those countries dont like India because of huge Muslims appeasment in India.

Remove foreign policy of supporting Muslims Countries outside India specially

related to palestine issue.

Interlink all rivers with small hydropower projects.Use battery power public

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