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DECEMBER 2019
P.20FEATURE
Contents.....................P.1
Editor’s Note..............P.2
Asst. Editor’s Note.....P.3
Policy .........................P.4
Cover Story ...............P.6
Opinion ....................P.12
Special Feature ........P.14
Alternative Energy ..P.16
FEATURE
BPCL CHAIRMAN OPPOSES UNIONS CRITICIZING STAKE SALE IN THE COMPANY
P.12SPECIAL FEATURE
PRESS RELEASE P.28
P.32GUEST COLUMN
P.34IN THE NEWS
P.42GLOBAL ROUNDUP
POLICY
PM IN SAUDI ARABIA : INDIA PLEDGES TO INVEST HUGELY IN ENERGY SEGMENT
P.4
P.18
DIGITAL TRANSFORMATION OF OPERATIONS & MAINTENANCE – HOW WILL IT SHAPE THE OIL AND GAS INDUSTRY IN INDIA 2020?
P.46ENERGY DIARY
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s the year 2019 comes to an end, the global energy scenario seems gloomy. The
stranglehold of polluting fuels such as coal doesn’t appear to be loosening despite various valiant endeavors on the part of developed and developing countries to bring down pollution and cut greenhouse gases. The rise of EV’s and the solar thrust are two areas that have shown impressive momentum. Teething troubles remain no doubt, but the movement is in the right direction. India for one, has largely lived up to the pledge it had taken at the historic Paris climate change conclave.
The global environment situation is fast turning critical and every move to combat pollution –both at the micro and macro levels- need to be encouraged. In that backdrop, it is good to know that PM Narendra Modi himself, has stepped in to expedite the government’s four-year-old ‘Green Corridor’ project for installing a 19,000 MVA intra-state transmission system for renewable energy across eight states. The PM has deputed cabinet secretary Rajiv Gauba to resolve issues of land, right of way and forest clearances that the PM had said at a recent meeting were hurdles on the path of progress of the Green Corridor. The original deadline of the project was March 2020. As on November 18, Modi asked Gauba to work with the state governments and the ministry, and especially to immediately resolve the issue of land required for the projects within 10 days.
The Rs 10,141-crore project is being implemented by the state transmission utilities of Tamil Nadu, Rajasthan, Karnataka, Andhra, Maharashtra, Gujarat, Himachal and Madhya Pradesh. It includes building of transmission lines and substations with a total capacity of 19,000 MVA by March 2020 to evacuate about 20,000 MW of large-scale renewable power and improvement of the grid. Modi observed at the meeting that solar and wind power companies were facing difficulties in starting new projects, especially in the land acquisition process. But he had a good word for the Karnataka and Andhra Pradesh governments for their progress. Despite all the bottlenecks and hurdles, we still get to say “Happy New Year” if only for the PM’s personal intervention to give a welcome fillip to the alternative energy movement in the country.
India Bites The Bullet In Climate Change Combat-‘Green Corridor’ To Be Fast Tracked
Manish Gandhi
Oilasiajournal
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Amitabh Roy, Assistant Editor
India Needs To Tweak Its Energy Strategy Now….Or Never
or a long time, India has been in ‘status quo’ mode when it comes to crude
security in particular. Import crude at high cost, refine it at added cost, and
sell it to public at petrol pumps at subsidized cost. All along, the state lost
money-for decades. Political compulsions never allowed the governments
of the past to sell fuel to the public at actuals, leave alone with profits. As a result, the
chasm between actual cost and subsidized cost widened steadily.
So what has changed now? The new government has bitten the bullet, that’s
what. So the follow up strategy needs to be swift and decisive to get the country
back on a positive track.
India is the world’s third-largest importer and consumer of crude oil,
depending on imports for more than 80 per cent of it oil needs. The International
Energy Agency (IEA) says that oil demand in India increased by 5 per cent last year
over the previous year and it forecasts that its energy requirements will grow by
more than any other country over the next 20 years.
The rising demand for oil in Asia’s third-largest economy comes despite the
country’s efforts to boost renewable energy and its attempts to control the severe
pollution problems found in several of the country’s major cities, including its
capital, New Delhi, which has been gripped by severe smog in recent days. “The
potential for domestic oil and gas production in India is very limited,” says an expert,
“And my view is that import dependence is only going to increase.”
Now, the move to bring fuels at par with global markets has already begun.
The opposition went to town kicking and screaming with the hope that public
anger at high prices of oil and gas may get them back in the saddle but thus far,
the public seems to have avoided the trap and understood the long term logic.
With Indian prime minister Narendra Modi’s recent visit to Saudi Arabia, the
Indian government made huge headway and announced that Indian Strategic
Petroleum Reserves Limited (ISPRL) had signed a memorandum of understanding
with Saudi Aramco, which could mean that the Saudi company would keep
millions of barrels of oil in India’s underground storage facilities, designed to meet
emergency needs. The sweetening of the deal being in the subtext that in case
India needs fuel urgently, it gets to use it on priority.
Adding more storage, getting more foreign capital in and speeding up
the alternatives thrust is the three-pronged strategy that India is looking at.
The course is right.
Amitabh Roy
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DECEM
BER 2019
he government’s new disinvestment thrust has evoked extreme responses from either side of the spectrum. While some see it as a practical
and logical move towards rejuvenating the economy others see it has selling away the family jewels. With the BPCL green signal, the debate has intensified.
“The strategic disinvestment of BPCL, of the Government of India’s shareholding of 53.29 per cent, along with transfer of certain management control to strategic buyer is approved. The entire management control in BPCL will be transferred. However, this is excluding BPCL’s equity shareholding of 61 per cent it holds in Numaligarh Refinery Ltd,” F M Nirmala Sitharaman said.
She said a “carve out” has been made of NRL in Assam that shall not be disinvested and NRL will be moved out of BPCL before the disinvestment and acquired by another PSU.
As part of the decision, 74.23 per cent of hydro power major THDC and 100 per cent in North Eastern Electric Power Corporation Limited (NEEPCO) will be sold to NTPC.
BPCL Chairman Opposes Unions Criticizing Stake Sale In The CompanyThe union cabinet chaired by Prime Minister Narendra Modi today approved 20th November, the sale of the government’s entire 53.29 per cent stake in oil refiner and retailer Bharat petroleum Corporation (BPCL), Finance Minister Nirmala Sitharaman said after a cabinet meeting in Delhi. Chairman D Rajkumar of BPCL has hailed the government move to privatize the company terming it a ‘tremendous value’ creator. This has pitted him against the union of employees of his own company and other state oil firms who are strongly opposing the move.
“The resources unlocked by the strategic disinvestment of these CPSEs would be used to finance the social sector or developmental programmes of the Government benefiting the public. The unlocked resources would form part of the budget and the usage would come to scrutiny of the public,” an official statement said. It added that the strategic buyer or acquirer may bring in new management or technology or investment for the growth of these companies and may use innovative methods for their development.
Sitharaman had said in an interview the previous week, that the government would wrap up the sale of the fuel retailer by March 2020. The government is selling its entire stake in BPCL to a strategic investor as part of a larger plan to meet its disinvestment target of Rs 1.05 trillion for this fiscal year. The statement said strategic disinvestment is guided by the basic economic principle that the government should discontinue its engagement in manufacturing of goods and services in sectors where the competitive markets have come of age, and such entities would most likely perform better in the private hands due to various factors, for example, technology up-gradation and efficient management practices; and would thus add to the GDP of the country.
Chairman D Rajkumar of BPCL has hailed the government move to privatize the company terming it a ‘tremendous value’ creator. In a letter to BPCL employees, Mr. Rajkumar tried to address their anxieties on privatization and sought their support in ensuring that daily business goes on ‘without any disruption’ during transition. “As the organization experiences this transition, I urge all of you to be the ambassador of this change, in your own unique ways,” Rajkumar wrote. “Disinvestment of BPCL is expected to unlock tremendous value by way of enhanced professionalism, access to advanced technologies, newer global market, diversified product portfolio and improved availability of resources, further propelling our growth journey.”
Employee unions have been outraged at the government’s decision to sell its entire stake in BPCL. “The decision is ill thought, regressive & anti-people and other avenues for raising finances without sale of stake or without transfer of management has not been examined,” the Federation of Oil PSU Officers (FOPO) and Confederation of Maharatna Companies (COMCO) said in a press statement after their executive committee meeting on Friday.
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e are in OALP licencing era in the upstream oil business. The earlier NELP model had a profit-sharing structure, allowing companies to
first recover their capital and operating expenditure before sharing the profits with the government.
Open Acreage Licensing Policy (OALP) gives an option to a company looking for exploring hydrocarbons to select the exploration blocks on its own, without waiting for the formal bid round from the Government. Under Open Acreage Licensing Policy (OALP), a bidder intending to explore hydrocarbons like oil and gas, coal bed methane, gas hydrate etc., may apply to the Government seeking exploration of any new block (not already covered by exploration). The Government will examine the Expression of Interest and justification. If it is suitable for award, Govt. will call for competitive bids after obtaining necessary environmental and other clearances.
This replaces the earlier NELP method. New Exploration Licensing Policy (NELP) was conceptualised by Amit B Singh after request by the Government of India, during 1997-98 to provide an equal platform to both Public and Private sector companies in exploration and production of hydrocarbons with Directorate General of Hydrocarbons (DGH) as a nodal agency for its implementation. At present 1.06 million km2 area is held under Petroleum Exploration Licenses in 18 basins by national oil companies viz. Oil and Natural Gas Corporation Limited (ONGC), OIL India Limited (OIL) and Private/Joint Venture companies. Before implementation of the New Exploration Licensing Policy (NELP) in 1999, a mere 11% of Indian sedimentary basins were under exploration, which has now increased extensively over the years.
OALP Replaced NELP- Hailed As A Positive Move With PotentialIndia has an estimated sedimentary area of 3.14 million km2 consisting of 26 sedimentary basins, of which, 57% (1.79 million km2.) area is in deepwater and remaining 43% (1.35 million km2.) area is in onland and shallow offshore. The upstream oil business has been India’s Achilles heel in the sense that the success levels have by and large been below par. The KG find gave an impression that this would change but by and by, that dream has also proved to be a chimera. Now the government has changed its stance and opted for Open Acreage licensing policy or OALP to replace the NELP system followed earlier.
What distinguishes OALP from New Exploration and Licensing Policy (NELP) of 1997 is that under OALP, oil and gas acreages will be available round the year instead of cyclic bidding rounds as in NELP. Potential investors need not have to wait for the bidding rounds to claim acreages. Successful implementation of OALP requires building of National Data Repository on geo-scientific data.
OALP was introduced vide a Cabinet decision of the Government dated 10.03.2016, as part of the new fiscal regime in exploration sector called HELP or Hydrocarbon Exploration and Licensing Policy, so as to enable a faster survey and coverage of the available geographical area which has potential for oil and gas discovery. (India has a sedimentary area of 3.14 million sq. km. comprising of 26 basins. At the end of 2012-13, about 48% of this sedimentary area remains unapprised. This includes, 65% of the total on-land sedimentary area, 22% of the shallow off-shore basin (bathymetry upto 400m) and around 49% of the deep off-shore (bathymetry beyond 400m) sedimentary area. Further, it is estimated that India has exploited only 3% of its proven natural gas reserves and around 5% of its proven oil reserves).
Till 2016, exploration was confined to blocks which have been put on tender by the Government. There are situations where exploration companies may themselves have information or interest regarding other areas where they may like to pursue exploration. Currently, these opportunities remain untapped, until and unless Government brings them to bidding at some stage.
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DECEM
BER 2019
ust as Rome wasn’t built in a day, climate change that has grown into a global Godzilla did not happen overnight. It hurts more when we realize that we cannot blame the government, the wife, the boss
or the neighbor for it. It’s we, you and me, who are squarely to blame. The apple actually fell when a group of scientists from across the globe got together and announced that climate change was a man-made phenomenon and not a natural one.
When you tossed that wrapper out of the vehicle window, or merrily added on to your collection of plastic shopping bags every time you visited the grocer, left your engine running while stopping at a red light or even puffed that cigarette and blew smoke rings in the air deeply immersed in intellectual thought, you contributed to what we are seeing today.
Come to think of it, while browsing online, and using the cyber space you and I have been indirectly contributing to industrial pollution as well, where the harmful effects may not be experienced in the country of consumption (hence industrial pollution is trans-boundary in nature). We have to look into the various stages (and countries) of production of electricity, computers, transportation of computers etc. to understand this unhealthy add-on that online activities have contributed to generously.
Currently, there is a strong scientific consensus that the Earth is warming and that this warming is mainly caused by human activities. This consensus is supported by various studies of scientists’ opinions and by position statements of scientific organizations, many of which explicitly agree with the Intergovernmental Panel on Climate Change (IPCC) synthesis reports.
This scientific opinion is expressed in synthesis reports, by scientific bodies of national or international standing, and
by surveys of opinion among climate scientists. Individual scientists, universities, and laboratories contribute to the overall scientific opinion via their peer-reviewed publications, and the areas of collective agreement and relative certainty are summarised in these respected reports and surveys. The IPCC’s Fifth Assessment Report (AR5) was completed in 2014. Its conclusions are summarized below:
“Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia.”
“Atmospheric concentrations of carbon dioxide, methane, and nitrous oxide have increased to levels unprecedented in at least the last 800,000 years.” Human influence on the climate system is clear. It is extremely likely (95–100% probability) that
The Reality Of Climate Change: Ignorance Coupled With Greed, Disdain And Lack Of VisionPollution is the biggest challenge in this day and age. The uncertainties in the weather patterns are due to a curse that we have put upon ourselves. Burning of coal or hydrocarbons indiscriminately, excessive use of plastic, poor foresight, greed and willful neglect are all responsible for this and none of them can be termed acts of God. So what actually is climate change and how is the world responding? Let us go a little deeper and try to understand this very serious, very urgent, very real and very dangerous pit we have pushed the planet into.
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Atmospheric concentrations of carbon dioxide, methane, and nitrous oxide have increased to levels unprecedented in at least the last 800,000 years.” Human influence on the climate system is clear. It is extremely likely (95–100% probability) that human influence was the dominant cause of global warming between 1951–2010.
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human influence was the dominant cause of global warming between 1951–2010.
“Increasing magnitudes of [global] warming increase the likelihood of severe, pervasive, and irreversible impacts.”
“A first step towards adaptation to future climate change is reducing vulnerability and exposure to present climate variability.”
“The overall risks of climate change impacts can be reduced by limiting the rate and magnitude of climate change”
Without new policies to mitigate climate change, projections suggest an increase in global mean temperature in 2100 of 3.7 to 4.8 °C, relative to pre-industrial levels (median values; the range is 2.5 to 7.8 °C including climate uncertainty).
The current trajectory of global greenhouse gas emissions is not consistent with limiting global warming to below 1.5 or 2°C, relative to pre-industrial levels. Pledges made as part of the Cancún Agreements are broadly consistent with cost-effective scenarios that give a “likely” chance (66–100% probability) of limiting global warming (in 2100) to below 3 °C, relative to pre-industrial levels.
The IPCC Fifth Assessment Report followed the same general format as the Fourth Assessment Report, with three Working Group reports and a Synthesis report. The Working Group I report (WG1) was published in September 2013. The report’s Summary for Policymakers stated that warming of the climate system is ‘unequivocal’ with changes unprecedented over decades to millennia, including warming of the atmosphere and oceans, loss of snow and ice, and sea level rise. Greenhouse gas emissions, driven largely by economic and population growth, have led to greenhouse gas concentrations that are unprecedented in at least the last 800,000 years. These, together with other anthropogenic drivers, are “extremely likely” to have been the dominant cause of the observed global warming since the mid-20th century.
Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components
of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems. Limiting climate change would require substantial and sustained reductions in greenhouse gas emissions which, together with adaptation, can limit climate change risks.
Reporting on the publication of the report, The Guardian said:
“In the end it all boils down to risk management. The stronger our efforts to reduce greenhouse gas emissions, the lower the risk of extreme climate impacts. The higher our emissions, the larger climate changes we’ll face, which also means more expensive adaptation, more species extinctions, more food and water insecurities, more income losses, more conflicts, and so forth.”
The New York Times reported: “In Washington, President Obama’s science adviser, John
P. Holdren, cited increased scientific confidence “that the kinds of harm already being experienced from climate change will continue to worsen unless and until comprehensive and vigorous action to reduce emissions is undertaken worldwide.”
The Telegraph predicts:“The impact of humans on Earth is unparalleled, with
scientists arguing our actions have tipped the planet into a new era - the Anthropocene - with fallout from nuclear bombs now written into the rocks beneath our feet, and species facing extinction at 1,000 times the usual rate.
Yet global warming could turn out to be the most devastating consequence of human progress. If temperatures continue to increase, experts forecast catastrophic sea level rises, a surge in hurricanes and cyclones, the spread of lethal disease, drought, famine and deadly heatwaves.
A Random Case Study That Tells The Tale:Todd Bentley stepped onto his porch and saw the
storm swelling the creek near his home. If this kept up all night, he feared, the creek could overflow its banks and wash out his neighborhood’s road. He headed out into the rain with his teenage son to secure his mother’s trailer across the street.
In minutes — before they could finish — they were up to their waists in floodwater. They had to clamber into the hills to escape. There they crouched for hours in their family cemetery, lightning striking around them, the water below them carrying cars, ripping up pavement and lifting homes off foundations.
“Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems.“
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“He started crying on me, it was happening so fast, and I, literally, I shook him,” Bentley recalled. “I said, ‘Son, listen. We’re fighting for our lives now — you’ve got to keep it together.’” Nine years after they survived the flood, storms fill Bentley with dread. He watches the creek. He paces. What if it happens again?
Flash floods have troubled Kentucky for decades. Now, extreme rainstorms are worsening with climate change, increasing the odds of more disasters like the one Bentley’s community endured. For Kentucky’s poorest residents, the people living in flood-prone hollows with surface mines nearby, that means an ever-present threat to both life and hard-won possessions.
But the state isn’t on the front lines of the fight against global warming. Its leaders, concerned about the impact on coal, have positioned themselves on the other side of that battle.
So Where Do We Stand Today? Closer home in Mumbai the rains were still on end-
October bringing an unprecedented wet Diwali. There were two major floods in the city alone this monsoon and many lost lives and limb to this unprecedented quirk of weather moods. Similar stories came from across the country and every city or town had a similar story to tell.
Framed by highrise buildings and the Diamond Head crater, when you think of Hawaii, you think of Waikiki Beach. Sadly, the beach is at risk of sinking beneath the very waves that bring surfers to it within the next 15 to 20 years, according to a 2017 Hawaii Climate Commission report.
It’s easy to see why millions of people flock to the beach every year. They are dynamic places -- and not just because they’re great for relaxing, surfing or people watching. With each crashing wave and changing tide, billions of pieces of sand and rock are constantly rearranged. This is what nature intended. What it did not, some scientists say, are the buildings that tower over some of the world’s most popular beaches.
In many cases, this real estate that is coveted for its proximity to the beach is disrupting natural processes and in many places, increasing the rate of erosion. Compounding the problem are the jetties, groins and other man-made structures built to keep sand from moving.
“Once you block the movement of sand, it may move to deeper areas offshore instead of replenishing the beach,” said Kristina Hill, an associate professor at the University of California, Berkeley. Combine this with rising seas and more intense storms caused by the climate crisis, and you have an existential threat to some of the best beaches around the world.
“As sea levels rise, that beach wants to be somewhere inland. And in order to try to get there, we expect that it will take away the beach much faster than it is right now,” said Orrin Pilkey, director emeritus for the Program for the Study of Developed Shorelines.”Sea level rise will spare nobody.” Here’s how some of the world’s most famous beaches are imperiled by sea level rise.
So what do we do now? That must be the obvious question. Unfortunately it’s extremely difficult to answer that one. For the simple reason that the ‘We’ in that question must mean each and every one of us on the planet. Climate change as we know it today has always been a down to up process where every small act of indiscriminate nature abuse committed by individuals added on to the bigger offences by corporate, big industry and governments that framed policies oblivious to climatic repercussions.
Industrial Pollution-Biggest Single Contributor To Global Warming
Coming to Industrial pollution, it is generally referred to as the undesirable outcome when factories (or other
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It’s easy to see why millions of people flock to the beach every year. They are dynamic places -- and not just because they’re great for relaxing, surfing or people watching. With each crashing wave and changing tide, billions of pieces of sand and rock are constantly rearranged. This is what nature intended. What it did not, some scientists say, are the buildings that tower over some of the world’s most popular beaches.
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industrial plants) emit harmful by-products and waste into the environment such as emissions to air or water bodies (water pollution), deposition on landfills etc (land pollution) or emission of toxic chemicals into the atmosphere (air pollution). This form of pollution has been exacerbated and aggravated by industrial revolution.
Industrial wastes are one of the top sources of environmental pollution. Across the world, untreated or improperly treated industrial effluents pollute the air, water, and soil in and around industrial sites. The pollution caused by an industry often depends on its nature with some industries generating more toxic wastes than others. Pure Earth, an international non-profit organization, has compiled a list of the 10 worst polluting industries in the world. They are listed below:
10. Dye Industry
Dyes are used for adding color to numerous products like paints, plastics, paper, textiles, etc. Due to their richer color and durability, artificial dyes are most often preferred over natural ones. The former type is produced through complex chemical processes involving the use of numerous chemicals in factories. Copper, chromium, sulfuric acid, etc., are some of the chemicals used in dye preparation. Wastes from this industry are thus heavily loaded with chemicals, many of which are harmful to human health.
9. Product Manufacturing
The product manufacturing industry has rapidly grown in the recent decades. The economic growth of many nations has promoted the growth in consumerism in the population of such nations which has, in turn, triggered a demand for consumer goods. Thus, product manufacturing factories have cropped up everywhere. Often, such industries fail to meet the environmental safety standards and a lack of strict monitoring allows such industries to thrive. Product manufacturing involves the use of many chemicals and effluents from the manufacturing units are often loaded with pollutants like chromium, lead, cyanide, mercury, cadmium, etc., that pollute the environment around such units.
8. Chemical Manufacturing
Chemical manufacturing refers to the production of a wide variety of chemicals like plastics, paints, explosives, dyes, pharmaceuticals, petrochemicals, and more. There is no doubt that these chemicals are beneficial to us in different ways but it is also true that significant volumes of toxic wastes and by-products are also generated during their production. The constantly changing market for chemicals leads to an alteration in technologies and processes used in these chemicals. These changes make monitoring such industries an arduous task. Irresponsible and unscrupulous practices often endanger the lives of those living near such chemical manufacturing due to environmental contamination induced diseases and disorders.
7. Industrial Estates
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Industrial estates are areas reserved specifically for the growth of industrial plants, ancillary units, and related infrastructure facilities. Such areas are usually located at safe distances from cities and towns but often have residential facilities for the workers of such industrial estates. In many industrial estates across the world, stringent monitoring of pollution is not executed leading to pollutants contaminating the environment. Pollutants vary with the nature of industries present. A majority of the industrial estates releasing harmful chemicals into the environment are located in South Asia, especially in India and Pakistan according to data by Pure Earth. 100 contaminated sites have been identified putting 5.8 million people living near these sites at risk.
6. Industrial Dumpsites
Mismanagement of municipal solid waste handling and dumping processes lead to environmental pollution. Although such kind of waste cannot be avoided since it results from basic human activities, every country sets out rules and regulations for the proper management of this waste. However, lack of funds, corruption, or an inefficient system often leads to unmanaged dumpsites that are potential threats to human and environmental health.
5. Artisanal and Small Scale Gold Mining
The artisanal gold mining industry is a subsistence industry that is usually run by an individual on a small-
scale. Such industries lack the capital to employ modern technology in the extraction of gold from its ores. Hence, primitive methods are used in the process that leads to the generation of toxic wastes like mercury that are irresponsibly dumped into the environment. Artisanal gold-mining industries thrive in countries with a less powerful economy and less stringent laws for small-scale enterprises like the African and Latin American countries. The lucrative business employs about 10 to 15 miners in 55 countries of the world. Although this industry accounts for only 20% of the global gold production, it is the single biggest cause of mercury pollution in the world.
4. Tanneries
Tanning is the process of production of leather from raw animal hides and skins. It involves the use of a variety of chemicals to remove flesh, oil glands, and hair from the raw hides. A significant volume of waste is generated in the process. Irresponsible industrial practices often lead to the contamination of the environment with harmful chemicals like chromium, alum, tannins, etc., that are used in tanning. All these chemicals are highly detrimental to human health and some are even cancerous in nature. More than 100 such toxic tanning sites have been identified by Pure Earth. These sites endanger the lives of 1.5 million people living in or around such sites.
3. Lead Smelting
According to Pure Earth, the lead smelting industry is
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also one of the top 10 polluting industries in the world. Lead smelting involves a series of steps that leads to the extraction of pure lead from its ore. The industry generates wastes in the form of toxic wastewater, solid waste, as well as volatile compounds like sulfur dioxide that are released into the air. Pure Earth’s data mentioned that about 1.1 million people are at risk from the pollutants generated by this industry at over 70 polluted sites worldwide.
2. Mining and Ore Processing
A large number of industries depend on the mining and ore processing industry for the supply of minerals, metals, and gems. These products occur in nature in the form of ores in rocks and must be mined and concentrated prior to use. Such processes result in the production of large volumes of waste that are often loaded with pollutants like mercury, lead, cadmium, etc. With the development of new technologies, the pollution generated from this industry has been curbed to a certain extent. However, not every mining and ore processing company adopts clean technology. Irresponsible practices often lead to the contamination of the environment with industrial waste. About 7 million people are threatened by this industry worldwide.
1. Used Lead-Acid Batteries
According to Pure Earth, the industry dealing with ULAB is one of the world’s 10 most polluting industries. Lead-acid batteries are used for a number of purposes with their most common use being as automotive batteries in vehicles. Although these batteries are rechargeable, after a certain period, these batteries lose their capacity to hold the electrical charge. The unused batteries are graded as hazardous waste and enter the recycling industry where every part is upcycled. In most cases, industries do not maintain required safety standards and workers often use crude methods to handle toxic waste. Some of the steps of recycling the ULAB’s are carried out in unprotected environments leading to the toxic waste contaminating nearby air and water. According to Pure Earth, 150 such sites have been identified and nearly 1 million people are at risk from the pollutants generated by this industry.
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Framed by highrise buildings and the Diamond Head crater, when you think of Hawaii, you think of Waikiki Beach. Sadly, the beach is at risk of sinking beneath the very waves that bring surfers to it within the next 15 to 20 years, according to a 2017 Hawaii Climate Commission report.
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BER 2019
Environmental Level Reforms – Oil And Gas Perspective
he Ministry of Petroleum and Natural Gas (Government of India), along with the Directorate General of Hydrocarbons (DGH) have introduced a plethora of policies, such as: (i) Hydrocarbon Exploration and Licensing Policy (HELP), (ii) Open Acreage
Licensing Policy, (iii) Policy framework to permit exploration and exploitation of unconventional hydrocarbons in existing acreage of Production Sharing Contracts (PSCs), CBM contracts and Nomination fields, etc., in order to escalate the supply side of the sector. However, the hydrocarbon sector in India today is facing challenging times, where the balance between energy security and environmental sustainability is being tested at each level.
In general, the Government has been taking overarching initiatives towards environmental sustainability. Some of such initiatives include introducing the Swachh Bharat Abhiyan, enacting the Compensatory Afforestation Fund Management and Planning Authority Act, etc. As such, the Government is showing keen interest towards environment sustainability, and this interest is currently transcending into the oil and gas sector as well.
In the recent past the Government has been moving towards clean energy technologies, promote the usage of natural gas and move towards a gas-based economy in the long run, committing towards reduction of emissions, etc. Along with the adoption of cleaner fuels such as natural gas, renewable resources, and other, the Government has envisioned substitution of fossil fuels (which are polluting and limited) with biofuels. The Government came out with the National Biofuel Policy in 2018 to enable availability of biofuels in the market thereby increasing its blending percentage. The policy is more welcoming because of the financial as well as fiscal incentives being provided by the Government to the investors. This policy is a typical example of how the Government’s vision is towards moving the economy to a clean fuel economy.
Alongside the MoPNG, Ministry of Environment, Forest and Climate Change also issued guidelines specific to hydrocarbon sector for undertaking operations in order to ensure that there is better water management, no surface and ground water contamination, reduction in air and noise pollution and seismic surveys and exploratory drilling in forest areas (September 2019).
India’s energy requirements are increasing at a rapid pace, and tagging along with such increased demands, is the increased operations in the oil and gas sector. In India, the Oil and Gas sector is one of the dominant sectors/industries catering to the energy needs of the country, with the Government also playing a major role in pushing natural gas as a cleaner fuel for use as feedstock, and as a major substitute to fossil fuels/coal.
Another step towards ensuring environment protection in the oil and gas sector was the codification of the good international petroleum industry practices (GIPIP), which contains a whole chapter on guidelines to minimize environment damage. The GIPIP has been instrumental in providing direction to regulator(s), operators and other stakeholders with respect to the accepted industry practices. However, the implementation of the GIPIP may be questioned.
Let’s take a recent incident where the DGH directed oil companies to reduce gas flaring as India burns about 850 million standard cubic metres of natural gas annually, about 2.6% of the total gas it produces. In order to truly appreciate this move, it would be prudent to note that the limits or standards for gas flaring have already been provided under the GIPIP issued by the Government in 2016. This GIPIP states that apart from ‘venting’ (which is a requirement for controlled release of gas during exploration and production), all gas should be sold rather than flared. As such, the GIPIP is clear on the limitation for gas flaring. However, the GIPIP are only guidelines and may only have persuasive nature for the regulator(s), operator and other stakeholders. The direction by the DGH in January 2019 appears only to be an extension of what is already present in the GIPIP. The question then to be raised is why was such a direction required in the first place? The answer may lie in the implementation of such guidelines and the oversight of the regulator on the operator’s adherence with environmental requirements. Another aspect to be looked at is the lack of infrastructure for transportation of such gas. In order to ensure adherence with environmental requirements, introduction of policy level initiatives appear to be inevitable.
Despite the possible implementational issues with respect to environment protection, we are seeing an active behaviour in the Government and its regulatory bodies to ensure that measures are taken by the relevant parties towards sustainability of the environment. The Indian oil and gas companies are actively pursuing, and investing in developing renewable energy projects for self-consumption and for supplying to the grid. The National Oil Companies are also actively striving for better environment management in its operational project. There have also been discussions that the time is ripe for the blending of electricity generated from gas with renewable energy. This suggests that in the near future, policy frameworks cutting through all energy sectors may be put it in place. This is the opportune moment for the Government to tick all the boxes ensuring energy security, as well as environment sustainability towards COP 21 obligations.
* Views are personal
Ashish Suman, Partner,
J. Sagar Associates I Advocates & Solicitors
Ashwin Nayar, Associate*
J. Sagar Associates I Advocates & Solicitors
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About the Authors
Alok Raj Gupta, Founder & CEO, Envecologic
Alok Raj Gupta is Founder & CEO of Envecologic. He has worked on many international projects in Europe, North America, South America, Middle East and Africa. He uses his expertise in supply chain management, cost engineering, business sustainability strategies and in-depth economic analysis to help corporations in oil & gas, power, mining, water and manufacturing sectors reduce cost while incorporating sustainability.
Seerat Kaur, Associate, Envecologic
Seerat holds a Master’s degree in Supply Chain and Logistics Management and Bachelor’s in Economics from the University of Warwick, UK. She works as an associate with Envecologic. Seerat’s focus areas include Sustainable Development Goals, Energy, and Climate Change. She is an avid reader and loves to play basketball.
ntil we get to a point where renewable energy contribution can match up with the European energy mix, for example, there is a dark horse India must rely on, and that is natural gas – the protagonist of India’s energy
transition story. This assertion is not without reasons. Natural gas emits 50-60% carbon dioxide when used in a natural gas power plant compared with emissions from a typical new coal plant. Considering only tailpipe emissions, natural gas also emits 15-20% less heat-trapping gases than petrol. Cleaner burning than other fossil fuels, the combustion of natural gas produces negligible amounts of NOx, SOx, mercury and other particulates. Hence, it becomes imperative to introduce appropriate reforms that promote the production and consumption of natural gas as transition fuel. This can even be looked upon as an extension of environment reforms, given its virtues and contribution in making our environmental less polluting than it would be with higher reliance on dirtier and pre-dominant hydrocarbons.
Policy interventions and reforms have been taking place from time to time in order to boost gas-based economy in India. Let’s take a look at some of the major policy reforms in the past.
In order to make the exploration & production (E&P) activities of natural gas more attractive for private sector players, the 1999 New Exploration & Licensing Policy intended to provide a fair ecosystem for E&P sector players, particularly in the context of natural gas. While NELP improved the competitiveness, it failed to attract any significant foreign investment.
NELP was succeeded by HELP regime or Hydrocarbon Exploration and Licensing Policy in 2016, an effort towards reforming the predecessor. It laid down very clear mandate of encouraging exploration and boosting production by addressing all of NELP’s lacunae. Open Acreage Licensing Policy (OALP), for example, was a part of the new reform which gave freedom to select exploration blocks and bid for any acreage without waiting for a formal government bidding round, aimed at enabling faster survey and assessment of areas with oil and gas potential.
Another important policy intervention pertains to coal bed methane (CBM), an unconventional source of natural gas trapped in the coal seams. India is the third largest producer of coal in the world and has an estimated potential of around 28 bcm of CBM. Although this policy
was initially introduced in 1997, the first CBM block was awarded in 2001. One of the key highlights of this policy was the freedom to sell gas to the domestic market, and has witnessed recent amendments including pricing flexibility to CBM contractors to boost gas production.
Despite efforts in increasing reliance on natural gas, there continues to challenges where we require more reforms. The most immediate need is to address lack of coordination between the Ministry of Petroleum and Natural Gas (MoPNG), the Directorate General of Hydrocarbons (DGH) and the Petroleum and Natural Gas Regulatory Board (PNGRB) is a major discouraging factor for market forces to act efficiently. The other need for further intervention must address the cost factor. Natural gas is taxed more heavily than crude oil, making it uneconomical and costlier to consume. Even in case of CNG vehicles, the initial costs can be prohibitive due to specialized requirements to store natural gas. This is a big deterrent even though long term benefits are high. While efforts along the lines of NELP and HELP have tried to encouraged greater adoption of natural gas, the complex regulatory procedure and lengthy approval time still major hurdles.
The government has set an ambitious target of raising the contribution of natural gas in its energy mix from current single digit to 30% by 2030. In absolute terms, this could lead India to become one of the world’s largest gas consumers, as it is driven by a growing population, an expanding economy and the pressing need to observe climate change commitments made on international UN platforms. The government will have to look into developing a robust framework that allows for market forces to drive the prices down, boost investment and encourage more players to participate that would lead to a healthy competition led growth.
India’s Hope For Energy Transition Lies In Natural Gas GrowthThe collective prosperity of over 1.3 billion Indians largely depend upon access to energy. While overall mix includes largely coal, crude oil, natural gas, hydro power and nuclear, besides small yet growing contribution of renewable energy sources like solar and wind. The energy access has been improving, ensuring that we are moving towards cleaner source of energy is equally critical. Though the economics of renewable energy has been evolving rather impressively in the last few years, however its share is still not as significant as we would like (still below 3.5%).
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PM In Saudi Arabia : India Pledges To Invest Hugely In Energy SegmentAll eyes were on PM Narendra Modi’s Saudi visit in the last week of October. The takeaways were good overall, be it in the energy segment or in bilateral relation-building terms. “India will invest a massive $100 billion in oil and gas infrastructure to meet energy needs of an economy that is being targeted to nearly double in five years,” Prime Minister Narendra Modi said on Tuesday, 29th October as he sought investment from oil kingpin Saudi Arabia and other nations to boost supplies.
“India and Saudi Arabia are moving from
a purely buyer-seller relationship towards a
closer strategic partnership that will include
the resource-rich Kingdom’s investments in
downstream oil and gas projects in the country,”
Indian Prime Minister Narendra Modi said.
Speaking at Saudi Arabia’s annual investment
forum, also known as ‘Davos in the desert’, Modi
promised stable, predictable and transparent
policy regime to catalyse foreign investments.
“India is investing heavily in oil and gas
infrastructure,” he announced adding that as
much as $100 billion will be spent by 2024 in
creating additional oil refining capacity, laying
new pipelines and building gas import terminals.
India is touted to be the world’s third-largest
energy consumer and is 83 per cent dependent
on imports to meet its oil needs and about half of its gas needs are shipped
from abroad. Its per capita energy consumption is a fraction of the global
average and it is now investing heavily in physical infrastructure as well as
city distribution to boost availability in a growing economy.
Prime Minister Narendra Modi receives Prince Mohammad bin Salman of Saudi Arabia
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Saudi Arabia is India’s second-largest supplier
of crude oil and New Delhi is keen to expand this
partnership beyond the buyer-seller relationship
into a strategic one with cross investments, a fact
that was actually articulated by the Indian PM.
Indian Strategic Petroleum Reserves Limited
recently signed an agreement with Saudi Aramco
to lease part of the 2.5 million-tonne Padur
storage in Karnataka. India has already built 5.33
million tons of underground reserves in three
locations, which can meet about 10 days of the
country’s oil needs. Delhi plans two new reserves
with a combined capacity of 6.5 million tons,
sufficient to cover for an additional 12 days.
Modi highlighted the recent opening of
the fuel retailing sector for non-oil companies
to attract investment into the world’s fastest-
growing consumption centre. “India needs
investments in the energy sector to meet the
demand of a fast-expanding economy. And I
request energy companies present here to take
advantage of this opportunity,” he said.
Modi said Saudi national oil company
Aramco has decided to invest in the 60 million
tonnes a year West Coast refinery project in
Maharashtra - which will be Asia’s biggest
refinery. Aramco, whose planned initial public
offering is touted to be as big as the size of the
Indian economy, too is keen to venture into fuel
retailing and the petrochemical sector so as to
lock-in consumer for its oil in a world that is fast-
moving towards renewable energy sources and
electric vehicles.
“I want to ensure you that India’s rate of
growth is going to rise further. We are taking steps
for the growth of our economy,” he said. “We are
improving on our ease of doing business ranking.
Due to political stability, predictable policy, and
big diverse market, your investment in India will
be most profitable.”
West Coast refinery
Stating that infrastructure is a technology multiplier, he said it not only
provides investment opportunity but it also important for the growth of
the business. “The requirement of physical infrastructure is in developing
countries. Asia requires $700 billion per year for infrastructure development.
We have set an investment target of spending $1.5 trillion on infrastructure
development in the next few years,” he said.
This target includes oil and gas plus other infrastructure such as
roads, airports, and ports. The prime minister said India is targeting to
nearly double the size of its economy to $5 trillion in the next five years.
“Roadmap for reaching the $5 trillion economy target is ready. The target
is not only about quantitative growth but also about improving the
quality of life of every Indian.”
He said five big trends impacting global businesses are technology
and innovation, infrastructure, human resources, compassion for
the environment and business-friendly governance. Transformative
technologies such as Artifical Intelligence, Genetics, and nano-technology
have become part of daily life, he said adding India has become the world’s
third-largest startup ecosystem.
“Indian start-ups are acing everything, from food delivery to
transport, to hospitality, to medical treatment, to tourism,” he said
urging venture funds to invest in start-ups in the country. Stating that
infrastructure is an opportunity multiplier, he said infrastructure is
needed for the business to grow.
India, he said, is adopted an integrated approach for infrastructure
development. “India is integrating infrastructure through one nation
one power grid, one nation one gas grid and one water grid, one
nation one mobility card, one nation one optical fibre network.”
Infrastructure growth in India will be in double-digit and there is no
possibility of capacity saturation.
For international investment depends on quality manpower and
so skilling of human resources is essential, he said, adding 400 million
people will be skilled in different streams in 3-4 years. “International trade
agreements should not be restricted to goods alone. Manpower and talent
mobility should be an integral part of it,” he said.
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ossil fuels are a recognized necessary evil today and
the transition to alternatives seems a bridge too
far. India is projected to see an increase of death
rates due to climate change, equal to about 10 per
cent of the current death rate. That is, 60 deaths per 100,000
population by the end of the century under a scenario of
continued emissions. A study conducted by Climate Impact
Lab in collaboration with the Tata Centre for Development at
UChicago just about confirms that.
The study has found that spike in average summer temperature
and number of extremely hot days has an impact on mortality. The
average number of extremely hot days around the country over 35°C
are likely to increase by more than eight times per year from 5.1 (in
2010) to 42.8 per year in 2100. To establish the relationship between
extreme heat and mortality, mortality-temperature relationship
estimates were used in the study to generate projections of the
future impacts of climate change on mortality rates.
Six states, Uttar Pradesh (402,280), Bihar (136,372), Rajasthan
(121,809), Andhra Pradesh (116,920), Madhya Pradesh (108,370),
and Maharashtra (106,749) are estimated to contribute 64
percent of the total excess deaths.In total, 1.5 million more
deaths each year are projected from 2100 onwards due to
extreme heat caused by climate change.
With the number of extremely hot days increasing, 16 out
of the 36 states and union territories are projected to become
hotter than Punjab, which is currently the hottest state in India.
Punjab is expected to continue to be India’s hottest state in
2100, with average annual temperature around 36°C.
Odisha, however, is projected to top the list when it comes
to highest increase in the number of extremely hot days,
rising from 1.62 in 2010 to 48.05 by 2100. In addition, Haryana,
Rajasthan and Delhi are also likely to register significant increases
in the number of extremely hot days.
While the national capital is projected to experience 22
times more extremely hot days (3 to 67) by 2100, Haryana (20
times), Punjab (17 times) and Rajasthan (7 times) will not be
much better off.
While Delhi will experience 22 times more extremely hot
days (3 to 67) by 2100, Haryana (20 times), Punjab (17 times)
and Rajasthan (7 times) will not be much better off, the study
said. Commenting on the findings of the report, Gajendra
Singh Shekhawat, Union Jal Shakti Minister said, “We are calling
for rejuvenation of traditional water bodies, talking about
giving incentive to crops that are less water-intensive and also
promoting participatory groundwater management—all of
which will help build India’s resilience to climate change.”
Climate Change Will Directly Begin Killing Indians Every Year From 2100-StudyClimate change has begun its dance of death already-officially that is. Continued high emissions of greenhouse gases are projected to result in the deaths of 1.5 million citizens in India every year post 2100, according to a study conducted by Climate Impact Lab in collaboration with the Tata Centre for Development at UChicago. Michael Greenstone, faculty director at the Tata Centre for Development at UChicago and a co-founder of the Climate Impact Lab said that these finding makes clear that the continued reliance on fossil fuels globally will greatly harm the well-being of Indians in the coming years and decades.
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t the epicenter of the global effort to cut greenhouse gases is the transformation of the road transport segment with the influx of EV’s. India too has taken the cue and the government is already upped the
ante on creating support infrastructure for EV’s to move in and replace polluting fuel-run vehicles. Power ministry is targeting all cities with over 4 billion population under phase-1 for E-mobility coverage By 2030, the government wants to have at least one charging station every 3 kilometres across urban India.
Responding to the exponentially growing volumes of electric vehicles (EVs), the number of charging points globally grew by around 44% between 2017 and 2018. Reaching an estimated 5.2 million points worldwide (IEA, 2019). Electric vehicle charging infrastructure is critical to enable the scale-up and development of a seamless ecosystem for EVs. This requires a coordinated approach bringing together technology solutions with appropriate and enabling policies, programmes and framework conditions.
The Bureau of Energy Efficiency, in association with the International Energy Agency and the Electric Vehicle Initiative under the Clean Energy Ministerial, organised an “International Workshop on Policy framework to deploy Electric Vehicle Charging Infrastructures” on 19 November in Delhi. The workshop brought together leading experts, policy makers, distribution companies, industry and innovators.
“In a grid of 3-by-3 kilometere (km), at least one public charging station will be set up in urban areas. For the highways, atleast one fast charging station is planned
for every 100 kms,” ministry’s joint secretary Vivek Kumar Dewangan said at the event. The Power ministry had in April last year announced that charging of electric vehicles is not a licensed activity and would be considered as a service. The de-licensing made sure that any entity can set up a public charging station in the country.
The ministry had revised the charging infrastructure guidelines for EVs in October relying on the proposals and suggestions received from stakeholders. The revised guidelines covered the issues of location for setting up public charging stations.
“In the next 10 days, we will be able to finalise the agencies for setting up EV charging infrastructure in the country, in response to the overwhelming expression of interest we received from various stakeholders and agencies,” said Dewangan, speaking at an international Workshop on “Policy framework to deploy Electric Vehicle charging infrastructure in India”.
He said that the ministry is committed to increase the share of renewable energy in the overall energy mix to 175 gigawatt (GW) by 2022 and the way forward is to achieve 450 GW of renewable power by 2030.
The official also informed that the plant load factor of renewable energy, particularly solar power plants is low and the balancing power for renewable energy has to come either through hydro or through thermal power plants. The ministry is trying to ensure thermal power plants meet the environmental emission norms.
The EV Age Is Here- GovernmentMoves On Charging InfrastrctureIn the first phase of Electric Vehicles (EV) rollout plan, the power ministry is targetting 4 billion-plus population cities under the EV policy initiative. Charging points are in focus. The plan is to cover all the state capitals, union territories, major highways and key cities under the second phase.
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n the morning of November 3, pollution levels peaked to a three-year high in the Capital and a thick smog enveloped the city, prompting hundreds of distraught people to say they wanted to leave the city due to poor
air quality. On Monday, the Air Quality Index (AQI) showed major pollutants PM 2.5 and PM 10 were both at 500 — in the
‘severe’ category.
According to the Central Pollution Control Board (CPCB),
the national capital’s 24-hour average air quality index (AQI)
stood at 494 at 4pm on Sunday, the highest since November
6, 2016, when it was 497. The spurt in pollution levels also
prompted the administrations in Ghaziabad, Noida, Greater
Noida, Gurgaon and Faridabad to shut all government and
private schools till November 5. The Delhi government on
Friday directed closure of schools till November 5.
“Wind speed increased significantly on Sunday. But
the smog, due to high humidity after scattered rains, and
a cloud cover didn’t let sun rays reach the ground. As a
result, the air near the ground remained cold and heavy,”
Mahesh Palawat, a senior scientist at Skymet Weather, a
private forecaster, explained.
NASA satellite imagery showed vast swathes of the
northern plains, covering Punjab, Haryana, Delhi, Uttar
Pradesh, Bihar, and parts of Jharkhand and West Bengal,
blanketed under a smoky haze. Weather experts said any
significant improvement in the situation is highly unlikely
unless there a rainfall, which may on November 7 and 8 under
the influence of Cyclone Maha and a western disturbance,
washes away the pollutants.
Stubble BurningPunjab and Haryana meanwhile, are under fire for stubble
burning in huge volumes and contributing to Delhi’s smog.
Punjab Chief Minister Amarinder Singh said on 3rd November,
that he had requested Prime Minister Narendra Modi twice for
compensation to farmers on the management of agricultural
stubble, but there has been no response. “The central govt. has
to step in and find a solution to the crisis,” he tweeted as the
pollution levels in Delhi and its neighbouring areas spiked in
the morning, leading to low visibility that affected air and road
traffic. Pollution levels crossed the 600-mark, covering the city
in a grey blanket of smog.
Pollution In Delhi - Blame Game Rages As Citizens Wear MasksThe quintessential question “What came first, the chicken or the egg” seems to be the plinth on which the blame game between Delhi and the Centre is being played on air pollution. While Delhi trumped Lahore as the global toxic air capital (by 7 times), the odd-even band aid was pulled out of the Delhi CM’s first aid box once again.
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Chief Minister Arvind Kejriwal, who made it clear that
smoke from burning stubbles across Punjab and Haryana has
been the main contributor to the smog, today tweeted that
the people of Delhi were suffering for “no fault of theirs”.
“Punjab and Haryana has 27 lakh farmers. How do we
reach all of them? How many more years do we have to take
it? These issues need to be discussed,” said the Delhi Chief
Minister, who had already written to the Centre asking for
urgent intervention.
Amarinder Singh, who had expressed concern about
the pollution in Delhi earlier, tweeted: “Compensation by
Central Govt to the farmers for stubble management is the
only solution in the circumstances. I had written to PM @
NarendraModi ji on 25th Sep & had written to him yesterday
as well. The central govt has to step in and find a consensus to
resolve the crisis”.
In an emotional letter to PM Modi on Saturday, Mr
Singh wrote, “No Indian, and definitely no person in
Punjab, is oblivious to the misery of our brethren in the
national capital, whatever many around the country might
have been led to believe.”
Pointing out that his own children and grandchildren live
in Delhi, the Chief Minister said the prevailing situation “has
exposed the hollowness of our claims of being a progressive
and developed nation.”
“How can a country be called developed when its capital
city has been reduced to a gas chamber, not by any natural
disaster but a series of man-made ones?” the letter read.
Centre Holds Urgent Meeting On PollutionThe principal secretary to the prime minister and the
cabinet secretary held a high-level meeting on Sunday in the
evening, to discuss the issue of air pollution in Delhi-NCR after
it reached its worst levels in recent years. Besides Delhi officials,
the meeting was attended by representatives of Punjab and
Haryana governments via video-conference. P K Mishra, the
principal secretary to the prime minister, and Cabinet Secretary
Rajiv Gauba held the meeting.
During the meeting, it was decided that the Cabinet
Secretary will monitor the situation with these states on a
daily basis. Chief Secretaries of these states have been asked
to monitor the situation in various districts of their respective
states on a 24x7 basis. The Centre has asked neighboring
states to reduce fire incidents and dust levels due to adverse
meteorological conditions.
Pollution levels in Delhi and satellite towns shot up
again on Sunday morning, with the reading on the air quality
index shooting up to 999-mark in several areas. “Pollution has
reached unbearable levels,” Delhi Chief Minister Arvind Kejriwal
tweeted Sunday.
Visibility was so poor that major carriers Air India and Vistara
said Sunday flights were being delayed or diverted to and from
Delhi’s airports. Thirty-seven flights have been diverted to Jaipur,
Amritsar and Lucknow. Authorities have announced a public
health emergency in the nation
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perations and maintenance in the Oil & Gas
infrastructure is highly critical to ensure
safe and efficient plant management. There
is a crisscross maze of thousands of miles
long pipelines, facilities and pumping stations located
at remote as well as hostile sites. About 40% of the plant
budget is used for maintenance of infrastructure and
gets even higher in case of breakdowns & replacements.
The traditional operations and maintenance methods are
logistically and economically puzzling for many Oil & Gas
companies, considering the hazardous environments, they
operate in. It becomes important to remain competitive
while reducing financial excesses, ensuring safety and
reliability of plant operations.
As it becomes tougher to get new sources of oil, there
needs to be sufficient exploration and innovation to cope
up and maintain the existing oil fields and plants. The Oil
& Gas industry is now looking at embracing high-yielding
technologies for a better and smarter future.
Key Challenges Faced by the Oil & Gas Industry in Operations and Maintenance
No other industry operates in more physically and
politically perplexing environments on earth than the Oil &
Gas industry. And unless the operations and maintenance
processes are tight and thorough, it can become next to
impossible to get around these discrepancies without doing
a course correction. Adding to this, equipment malfunction
can threaten the operations of any O&G company and create a
slowdown in the exploration or production processes resulting
in huge loss. Remote locations and unskilled labor, unsafe
processes, inspection timelines, lack of visibility and stiff targets
make it even more complex.
Challenging data collections from remote locations – Consistently collecting assets and
equipment related data is essential to derive
operations and maintain insights as well as
knowledge. Without the right data, it becomes
difficult to analyze or deploy preventive or corrective
measures.
Lack of mechanism for optimizing plant/equipment availability – Preventive scheduled
maintenance plans are based on designer’s initial
assessment. Availability optimization which can happen
based on near real time data and trend analytics, and
most traditional industries do not have a system in place.
Reducing maintenance cost – Most Oil &Gas
companies have preventive maintenance schedule
which is not optimum and new predictive methods can
reduce both maintenance cost and OPEX.
Time consuming and exhausting training processes – Since the Oil & Gas industry deals with
large and complex machinery, it becomes difficult to train
resources to fix field issues especially if the plants and oil
wells are located in hostile territories.
Lack of standardization for documentation –
Digital Transformation Of Operations & Maintenance – How Will It Shape The Oil And Gas Industry In India 2020?India is poised at a transformational stage currently and with the dawn of 2020; our nation will be taking a new path in its journey of becoming the largest technology hub. As a result of an integrated action across our country’s core competencies and technology advancements, Industry 4.0 is expected to deepen its roots in India 2020 and provide robust growth opportunities to key industries, including Oil & Gas industry, in the country. The current metamorphosis of digital technologies and its expedited implementation will force the entire Oil and Gas industry to shift its focus on advancing manufacturing methodologies that could reduce costs and improve efficiency.
Srikanth Subba Rao, Technology Solutions Leader,
Technology Excellence Group, QuEST Global
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Many plants face challenges in terms of non-updated
documentation due to lack of information. These
documents or activity logs are highly important for the
smooth functioning of the plants.
Safety and compliance issues – Security and
regulatory compliances also need to be taken care
of in a timely manner to avoid legal and governing
concerns without fail.
Powering up operations and maintenance with digital solutions
Emerging technologies are enabling the Oil & Gas industry
to increase safety, efficiency and speed of operations by creating
smart oil fields. Today, operational data is mostly collected from
multiple sources with the use of sensors and sensor networks such
as vibration, acoustic sensors & thermal imaging; and this data is
used by experts and sophisticated algorithms to analyze systems.
The data also offers unprecedented visibility and clarity into
operations, for analysts to come up with insights decision making
that is easier and strategically correct. Digital enablers such as
robotics or automation also help optimize operations and achieve
business objectives such as cost savings, safety and efficiency.
Digitalization offers the opportunity to recognize full
potential and to transform field data into actionable insights
that improve operations many folds.
Pipeline hydrostatic/pneumatic pressure testing -Hydrostatic testing with tracer or fluorescent dyes to the
liquid enhance cracks and leak detection capability
Oil & Gas drone inspection solution - Supported
by back-end data analysis and processing capabilities,
inspection drones are a useful tool for managing risk
by making informed decisions on the maintenance
requirements and frequency of inspections. Drone
inspection is highly effective in cases of high-rise & high-
risk stack inspections.
Robotic pipe scanner/pipeline inspection gauge (PIG) - As a multi-sensor platform, robotic pipe
scanners and PIGs carry a variety of condition assessment
tools inside the pipeline in a single deployment which
provides live video to aid in detecting anomalies
(corrosion, crack & erosion) within the pipe.
Remote monitoring capabilities - With various
Geographical Information Systems (GIS) to monitor
geographically spread assets, it becomes easy to combine
spatial data and layered information in GIS, along with
real-time critical data from the sensors to monitor and
ensure equipment health and performance.
Predictive maintenance - With the help of the data
collected through remote monitoring using sensors, and
analytics companies can plan predictive measures to
reduce downtime and ensure the plant operations are
not hindered while also regularizing (scheduling and
planning) shutdown and craft maintenance.
Vision analytics - Along with AI, surveillance
machines can enhance safety measure compliance
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by resources stationed at hostile locations. Trace
identical elements and help keep track of access to
continually improve monitoring.
Photogrammetry - 3D panoramic view of the entire
refinery, captured by drones to allow operators to have
close monitoring options for machines and equipment
while in operation. The end goal is to replace the
complete visual inspection that is so far manual.
Training and maintenance - Augmented Reality (AR)
technologies can improve training programs in plant
facilities and bridge the skills gap while also allowing easy
repair functions. AR can provide a step-by-step procedural
guide, operator set-up, as well as changeover instructions,
processes, workflows and more.
Data collection & analysis - During complicated drilling
(mud, cement engineering and wireline, completion)
activities and downstream operations, real-time and
continual (collected through the help of digital solutions)
as well as legacy data can be analyzed for streamlining
and improving plant, product and process efficiency.
The Way ForwardAs a global product engineering and lifecycle services company,
QuEST Global is equipped to contribute significantly towards the
technology advancements in the country. With the digital revolution
in its peak, the Oil and Gas industry has the opportunity to redefine
its boundaries through state-of-the-art innovations.
QuEST Global offers an exhaustive list of Engineering
Services for the Oil & Gas industry that will cover the
360degree plant operations including solving challenges in
product design and development, manufacturing, supply
chain management, product sustenance, operations and
maintenance optimization, asset management and pipeline
integrity management. QuEST Global’s deep domain
knowledge in the oil and gas industries, and engineering
expertise in Mechanical, Electronics, Software and Digital
Technologies help drive business outcomes for equipment
manufacturers and operators.
About the Aithor
Srikanth Subba Rao
Srikanth is working as Technology Solutions Leader in
Technology Excellence Group, at QuEST Global providing
solutions to customers along with operations team. He has 23
years of experience in Design and Detail Engineering of Process
/ Piping for Process Industries & Auxiliary system of Power Plants.
He has handled new customer engagements from the stage
of understanding the customer requirement, preparation of
proposal, estimation and project execution. He is responsible to
setup “Plant Design and Engineering” Center of Excellence and
also supporting new programs for establishing processes. He is
conversant in ASME, API, EN and JIS standards.
23
n the drive against pollution, coal-fired power plants have been ordered to retrofit equipment to curb emissions within given time frames. But half of them appear to have missed the deadline private industry estimates and
a Reuters analysis show, even as millions in the country wake up to toxic air each day. India has a phased plan for plants to comply with the emission norms, with some plants having until end-December 2019, while others have up to the end of 2022 to comply. A total of 440 coal-fired units that produce 166.5 gigawatts (GW) have to comply with the regulations by December 2022.
In a letter to the government dated May 24 and reviewed by Reuters, APP’s Director General Ashok Khurana said the installation of Flue Gas Desulphurization (FGD) units - which cuts emissions of sulphur dioxides - take about 27-30 months and warned that banks were withholding funding for these units due to stress levels in the power sector, among other factors.
A Reuters analysis of Central Electricity Authority (CEA) data indicates 267 units, which produce 103.4 GW of power, have to be compliant between December 2019 and February 2022, which is 27 months from now.
The data shows that of these, 224 units, which produce 84.8 GW of power, have not yet awarded contracts for installing FGD units, meaning that based on the industry’s own estimates of installation timelines, they are set to be non-compliant.
That means at least 51% of all coal-fired units which have the emission targets could fail to comply with the deadlines. The Ministry of Power did not respond to a request seeking comment. Khurana did not comment beyond what is in the letter, saying the matter was sensitive and sub-judice. Less than 2% of the power plants for which the retrofitting rules apply were currently complying with the norms, according to end-October CEA data.
The progress around FGD installation for plants situated in and around the National Capital Region (NCR) of New Delhi - one of the areas worst affected by the toxic haze that has shrouded much of north India in recent weeks - is also alarming.
The 33 coal-fired units around NCR, which produce some 12.79 GW of power, all have to be compliant with the emission norms by next month, but only two have installed FGD units so far. The data analysed however, shows that 22 units have not even awarded FGD installation contracts, while contracts for nine others were only awarded in 2018. This means 94% of the coal-fired units in the NCR area are poised to fail to comply with next month’s deadline, at a time when New Delhi has declared a public health emergency with its Air Quality Index (AQI) at hazardous levels.
While computing its air quality index (AQI), India’s central pollution control board takes into consideration sulphur dioxide and PM 2.5 - particles which are formed in the atmosphere by reactions with chemicals like sulphur dioxide. APP, which counts dozens of private players including Adani Power and Reliance Power, estimates it will cost private companies roughly $38 billion to comply with the norms and install FGD units to tackle sulphur dioxide emissions.
Power Generators Unable To Keep Pace With Emission Curb DeadlinesIndia, currently struggling with some of the worst air pollution levels on earth, has previously already extended its December 2017 deadline for its utilities to meet emissions standards, after extensive lobbying by the Association of Power Producers (APP). Thermal power companies, which produce three-quarters of the country’s electricity, account for some 80% of India’s industrial emissions of sulphur- and nitrous-oxides in India, which cause lung diseases, acid rain and smog.
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BER 2019
e are heading in 2020 at the lightning rate and it would be appropriate in the current scenario to know about the unexpected circumstances that altered the situation in
the oil and gas industry eventually paving the way for several trends. As we are aware, oil and gas industry has always been a capricious industry which drives on sharp edges but this year the numerous trends have created diversified environment wherein, if the trends utilised in suitable manner, can help the organisation to overcome the unpredicted storms.
1 AI –The Resolver
Artificial Intelligence, if I may say in the current lingo as ‘somethingburger’ which as we talk about, has created hysteria in the science world. AI is one of the most innovative technologies that have taken the world to the storm. In a matter of a few years, it will be a commonplace tool used to accomplish business as well as operational performance. AI can be integrated into the multiple areas of the oil and gas industry as currently reducing the carbon footprint, deep sea exploration of hydrocarbons and implementation of innovative, sustainable energy strategies are driving the pace of evolution in the field.
Apart from that pattern recognition, natural language processing, and image analysis and recognition will be among the most common practiced cases. This trend will help the organisation to the chart the strategy in the accurate direction, maximise the performance and create a sustainable environment. Companies such as Gazprom, Total, ExxonMobil, Shell and China Petroleum and Chemical Corp. have already
implemented AI applications and have been highly benefited from the technology.
2 Transparency and Automation
Well, operational transparency is only now establishing to become an industry reality. It is the time to integrate a smart solution that will not only provide prominent visibility into the operational performance but also allows them to improvise their ability to implement the decision effectively. Not to forget, such systems would create economical and less hazardous fieldwork, which eventually again helps the organisation in reducing the risk of human life as well as of the asset. One shouldn’t be stunned if they sight fully automated offshore oil rigs in the future. Even though there are data analytics, cloud computing, automation, Internet of Things (IoT) and artificial intelligence (AI) available there are companies who are coming out with their own process solution such as, Honeywell Process Solutions (HPS) which works on multiple application and adds to value proposition. Major automation companies have also emerged with their own IoT platforms to help customers embark on their journey to digitize oil fields, including ABB’s Ability, Honeywell’s Sentience, Siemens’s MindSphere, GE’s Predix, and Schneider Electric’s EcoStruxture. Not to leave, in order to bring transparency on functions dealing with customers, state-owned Bharat Petroleum Corporation Ltd has automated some of its pumping stations while it has made applications for LPG only through online.
3 The Redefined Era Of Talent So when one expects another colour flowers on the stem,
they definitely are looking at the changed roots. Talent source is the foundation of any organisation and it won’t be erroneous to say that human resources are the workers that build the castle. And as we know human mind cannot be confined as it grows,
10 Trends Which Shaped 2019’s Energy LandscapeThe world as we know today is juggling between the alarmed rising demand for the energy and immense mounting pressure to decarbonize the energy provision. Well it definitely sounds ironical circumstances but it is the stark reality and also the need of the hour. The need to decarbonize is the path to the future modern industry and minimising the climate risks. And not to contradict, but with the upsurge in standards of living, the demand of energy is never ending, especially in developing countries where the further development is directly proportional to the energy available.
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the talent management professionals need to introduce various parameters that will redesign the future of work. As the oil and gas industry is aggressively approaching to reshape the market, human resources are walking hand in hand to bring in smart and innovative technologies such as real-time data, artificial intelligence, mixed reality, augmented reality. These technologies will not only assist the employees but will also boost employee productivity. The industry needs to prepare the next generation by empowering them and creating workforce and workspace efficient enough that will enhance their talents and capabilities. Companies like BHGE are bringing a lot of innovation in the HR and learning and development strategy to build a sustainable system for the future. Whereas, Manpower solutions such as Aarvi Encon are saying that Big Data Analytics in the stream of Human Resources has helped the organisation even in the disrupted market scenario.
4 Evolution Is Essential
Evolution has been the essential key of mankind on this planet. It’s not just organisation that needs to evolve but nobody can survive without change and in the similar fashion, oil and gas companies are speedingly evolving their ways to manage the physical assets. In the current era of aggressive technology sprint, IoT and digital twins are changing the game for numerous organisations by enhancing the ability to monitor asset condition, foresee problems and forthcoming performance. The evolution does need to alter its foundation, for a transformation in the business model will require creating new ecosystems, skill sets, operating models and culture to support the evolution. The rise of cyber physical assets will accelerate the evolution of work in the future. From the development of offshore drilling, technological advances, Drones and equipment sensors to Data analysis and cloud computing, the industry has evolved immensely and should continue to evolve for a better future.
5 Digital Will Move The World Digitalisation has bought tremendous change in the mindset
of organisations, industries and communities. The global economy as we know is highly unpredictable and is also prompt to every action. It is vital that the industry and organisation learn and adapt to control the volatile market and even though it seems complexed equation, the industry at least need to be resilience. Digitalisation has improved the business resilience in an ambiguous and volatile market. Introducing digital resources will definitely help to reduce the risk as well as create an elastic structure. Finding the right equilibrium between supporting digital resources will pave for the CIO to develop a sustainable business model. The dependence on capabilities that fuel agility, innovation and ultra-low-friction transactions is increasing as organizations are aiming for higher business performance. One must remember that the agile and better responsive IT operating systems will help in sailing the uncertain market waves smoothly. It just not the companies but even the governments are taking a leap of faith and have introduced digital campaigns, for instance, Digital India Campaign, Denmark’s 2020 Digital Strategy. In fact, according to World Economic Forum, Digitalization can help recognise the UN’s Sustainable Development Goals (SDGs) and encourage the three foundation pillars of development, to illustrate are improving people’s quality of life, fostering equitable growth and protecting the environment. The potential impact of digital solutions in comprehending UN SDG will save approximately 25 billion equivalent barrels of oil by 2030 which is to say a 70 per cent reduction on the current consumption rate. Eventually, in the process, we will be able to curb immense global emission.
6 Rise Of Disruptive Business Models
The fact that kingdoms should rise from ashes and restore the integrity of the reign is the sign of true leadership. The leaders should devise themselves to impart the change in leadership as the new chapter of the organisation begins. We cannot deny that around 20 per cent to 30 per cent of oil and gas companies have commenced developing expansionist ambition which is thoroughly based on a disruptive business model that brings out the best from worst. It can be termed as a path to the transformation from optimization. In
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Oilasiajournal
DECEM
BER 2019
layman language, the disruptive business model disrupts the market by recognising the suppressed demands and providing efficient and commercially viable solutions to the current industry which failed to deliver or have been negligent to the demands. Well, one needs to understand this thoroughly that a disruptive business model cannot even exist without innovation. Innovation is the key to structure a disruptive business model as one needs to capitalize on the opportunities missed by the industry.
To give an example, Vionx Energy is attempting to solve one of the significant and prolonged issues in renewable energy. They have introduced durable storage units which are similar to the batteries that can hold and utilise energy for up to 20 years. It has definitely filled one of the voids and solved a critical challenged faced by the renewable industry.
7 Energy Transition
One cannot deny that not just industries but the whole world is going through a distinguished transition. The energy industry is one of the most cumbersome industries that cannot be defined by any single equation. Traditionally, dominated by oil and gas, the energy sector has witnessed the rise of unconventional energy which is now sweeping its way in the industry aggressively. Defined as a long structural change, in the nation’s energy mix can be called as energy transition which is the path towards optimisation.
In India, the switch from oil and coal to natural gas or unconventional energy is the energy transition that came into existence as we were and are still looking to reduce the import dependency, thus the transition is need of the hour. In recent years, numerous governments across the world and organisations have been drafting energy policies to encourage an energy transition from coal and oil to renewables and cleaner sources of energy. The Indian government have committed itself to renewable energy by announcing and implementing various policies to encourage renewable energy. Revised tariff policy mandating renewable purchase obligation (RPO), Renewable generation obligation (RGO), Waived Inter-state transmission charges for solar and wind energy, offshore wind policy, etc., are some of the policies that have helped the renewable energy sector. Recently, India declared to establish 500 gigawatts (GW) of renewable energy capacity by 2030 which could potentially help the country reshape the global energy market dynamics.
It is surprising, recently, a non-metropolitan city in western India has emerged as a winner in rooftop solar energy. According to data from Bridge to India, a renewable energy consultancy, Pune, the second-largest city in Maharashtra, has beaten Delhi, Mumbai, and Chennai with its 130 megawatts (MW) of rooftop solar power generation capacity.
BP has induced some remarkable transition in their overall energy strategy as they are expanding their renewable business. BP has partnered with DuPont on a technology called Butamax, which converts corn sugar into bio-isobutanol – a biofuel that is more energy rich than ethanol and can be blended with gasoline in higher concentrations and transported through existing fuel pipelines and infrastructure. Their renewable portfolio includes bio-power, solar and wind energy. Apart from these, they are also investing in low carbon ventures and startups which will accelerate their renewable expansion. Vermilion has been diversifying its portfolio and exploring renewable energy. Though some of the vermilion’s locations are already using renewables within the operations department, the company recently implemented successful geothermal energy projects which are providing heat to the agricultural and residential sectors.
8 Climate Change Will Make The Thunder
Post the Paris Agreement on climate change, countries are required to better document their mitigation, adaptation challenges and efforts as well as progressively revise their nationally determined contributions (NDCs) towards achieving the global goal of limiting mean temperature rise to well below 2°C. In recent times, one can witness, the thunder going around climate change as it has been showing a tremendous impact on the industry. Organisations across the world have commenced individual initiatives to overcome the challenges posed by the industry. 2019, not only saw organisations, but even government announcing policies that will curb the emission and control the damage to environment. The Directorate General of Hydrocarbons (DGH) has directed the oil producers to take quick steps to curb flaring. Companies such as BHGE have committed themselves to reduce CO2 equivalent emissions to Net Zero by 2050, Total in 2014 was the first company to join the World Bank in creating and launching the Zero Routine Flaring by 2030 project.
27
9 Natural Gas Is Here To Stay
The fact that natural gas is a cleaner source of energy steals the show and allows its presence in the oil and gas sector even when oil and gas have been in the line of fire since decades. In the environment where the undermining warnings about tackling climate change would require a rapid switch to renewable energy, natural gas has made it clear that it is here to stay.
Though Royal Dutch Shell, BP, and Total (TOTF.PA) are familiarising with an intense urgency to the need of developing cleaner energy sources and thus are investing heavy money in solar, wind power and electric vehicle technology and even forestation.
Yet, they perceive oil, and especially natural gas, the least polluting fossil fuel, playing a major role throughout the decades of transition and beyond as demand for electricity and plastics grows.
Recently, Oil Minister Dharmendra Pradhan mentioned that the country is investing $60 billion in gas infrastructure, including setting up cross country pipelines and LNG import terminals to connect gas-starved regions to supply hubs and by the end of Prime Minister Narendra Modi’s current term in 2024, India will be ready with a cross country natural gas grid.
Even though India is one of the largest importers of natural gas, industrialist believe that India’s current gas consumption is not a true reflection of its demand potential as the nation lacks infrastructure to transport gas. So if LNG transportation is established as mentioned by the government, it won’t be long that natural gas will increase its share in the energy mix.
10 Powering Our Future With Trash - Solid Waste:
It cannot go unnoticed but India itself produce 62 million tonnes of municipal solid waste per annum and due to rapid urbanisation, the country is facing an enormous waste management challenge. Even though almost all municipal corporations deposit solid waste at the dump yards within or outside the city haphazardly, we cannot deny that our country follows a flawed system of waste disposal and management leading to pollution.
The Ministry of New and Renewable Energy (MNRE) is also enthusiastically encouraging the production of energy from waste, by providing subsidies and incentives for the projects. Indian Renewable Energy Development Agency (IREDA) estimates indicate that India has so far realized only about 2 per cent of its waste-to-energy potential.
Bringing out the best from the worst is an apt statement for waste-to-energy technology, which utilizes trash to produce viable energy and has the potential to address two of the most urgent needs of this century —waste destruction and energy demand. In 2019, not only the industry but even the government have highlighted the importance to reduce the carbon emission and opt for various methods that will substitute as a replacement for coal and gas; solid waste fuel can be burned to generate electricity with a smaller carbon footprint than fossil fuels.
The government, as well as the industrialist, need to capitalise in the concept and stay committed even though at present it may not seem commercially viable. Of course, the industries will go through a phase wherein initially such projects may be expensive but eventually, the cost will come down as the process matures and thus won’t need subsidies. It is essential to find out commercially viable projects because subsidies will not sustain an industry.
As seen in 2019, Mr Harsh Vardhan, Minister of Health and Family Welfare inaugurated a demonstration plant for converting plastic waste to diesel based at the Indian Institute of Petroleum (IIP) of Council of Scientific and Industrial Research in Dehradun. The fuel will be of automotive grade and does meet the specifications for use in the vehicles. Even in the private sector, organisation such as TechnipFMC India has also been working with the Indian Institute of Petroleum as their Hummingbird technology can generate petrochemicals from biomass. If India pursues the concept dedicatedly, it will surely bring significant changes in the Indian energy mix.
These trends not only signify a huge transition but also address that in the ever rising demand for energy, the Indian energy industry will have to look beyond the horizons and embrace new methods. We can’t just think of 2020 but will have to craft road for 2050. The government and industrialist will have to embark a journey wherein they have to teamp up to encounter India’s growing oil consumption and almost stagnant domestic production, ensuring energy security. The only way to run race is to stay updated, embrace innovation and explore numerous horizons.
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DECEM
BER 2019
etso is delivering three
Lokotrack® crushing and
screening plants retrofitted
for extreme cold for the
reconstruction of the U.S. National Science
Foundation’s (NSF) McMurdo research station in
Antarctica. The equipment enables crushing in
temperatures as low as -40 °C.
McMurdo Station, located on an island
in the Ross Sea, is the U.S. Antarctic Program’s
logistics hub and the largest of the three stations
that the U.S. operates in Antarctica. McMurdo is
being rebuilt under the Antarctic Infrastructure
and Modernization for Science (AIMS) project, a
long-range initiative to upgrade the station to
make it logistically and energy efficient.
Metso’ equipment will be used for three
years in crushing the ground materials for the
new buildings. All in all, this will amount to more
than 126,000 cubic meters of aggregates.
In the extreme conditions of Antarctica,
the equipment can only be used during the
Southern Hemisphere summer, which lasts from
October to April. The hard basalt to be crushed
will come from an area near the station.
“Metso’s solution offered the best value”
The Lokotrack equipment was procured
by Leidos, the NSF’s prime contractor for the
Antarctic Support Contract as well as the AIMS
project. The seller was Wagner Equipment, a
Metso distributor in the United States.
“After a comparison of several equipment
manufacturers, Metso and Wagner offered a
freeze-proofed crushing solution with the best
value,” said David DesAutels, Leidos Antarctic
Support Contract fleet analyst. “The equipment,
specifically designed for cold conditions, will be
maintained by personnel with close proximity in
New Zealand.
Metso To Deliver Freeze-Proofed Crushing And Screening Plants To Antarctica – Operating Temperature As Low As -40 °C
Development work for protection against cold, packaging materials with consideration for the environment
The equipment to be delivered to Antarctica – the Lokotrack LT106
jaw crusher plant, the LT200HP cone crusher and the ST3.8 mobile screen
– are all retrofitted for extreme cold. In addition, the mechanics at Metso’s
Technology Center for track-mounted equipment in Tampere, Finland have
also developed additional protections for the equipment.
“Every part sensitive to cold has been fitted with immersion heaters
and extra insulation. The selected oils and other fluids are suitable for the
Antarctic climate and the specially manufactured conveyor belts run even
in extremely cold weather,” says Marko Salonen, Project Manager at Metso’s
Aggregates Equipment business area.
The international team which inspected the equipment at the Tampere factory found the Lokotracks
ready for their journey to Antarctica.
David DesAutels (left) of Leidos, Rick Sack of Wagner Equipment and Marko Salonen of Metso
discussing the equipment inspection.
29
he Assam Power Generation
Corporation Limited (APGCL) has
issued a request for proposal (RfP) for
a 20 MW solar power project at the
state’s Namrup Thermal Power Station.
The scope of work includes the
design, construction, installation, testing,
and commissioning of the solar project.
The tender also includes the associated
transmission system along with the operation
and maintenance of the project for five years.
The last date for the submission of bids is
December 2, 2019.
The bidders need to deposit a sum of
`200 million ($2.8 million) as the earnest
money deposit (EMD) to participate in the
tender. According to APGCL, the bidder
should have designed, supplied, installed,
and commissioned at least 15 MW of solar
projects in India during the last five years.
Out of the 15 MW, at least one should be a
5 MW grid-connected project.
Regarding the financial eligibility, the
successful bidder should have a minimum
average annual turnover of Rs. 45 million ($6.4
million) in the preceding three financial years.
Further, the internal resource generation capability of the bidder
for the financial year that ended on March 31, 2019, should be less
than `125 million ($1.8 million), which is `5 million (~$70,500)/MW of
the quoted capacity.
The solar photovoltaic modules used should have an efficiency
of more than 15.5 % for multicrystalline, and 17% for monocrystalline
silicon-based modules. The project should be completed within 180
days from the issue of letter of allotment.
The freeze-proofed Lokotrack LT106 jaw crusher plant will be crushing icy basalt for the extension of
the McMurdo research station as of next February.
“Alongside the equipment, we also
prepared the maintenance and spare
parts service in such a way that everything
conceivable can be anticipated and serviced
independently on site. Even the packaging
materials were chosen in a way that
ensured that nothing unnecessary would
be transported to the unique Antarctic
environment,” adds Salonen.
Production target 250 tons of crushed stone an hour
As they oversee the AIMS project, Leidos
intends to operate the machines for two
months after their arrival in 2020, before ceasing
operations for the winter.
“We aim to work 16 hours a day and
produce 250 tons of 63 mm crushed stone per
hour,” said Jeffrey Huffman, Leidos Antarctic
Support Contract operations manager. “We
also want to include some degree of fines, to
gain more compact material for the buildings’
foundations.”
Almost around the world to reach AntarcticaThe crushing plants began their long journey, spanning nearly the
entire globe, at the beginning of October. From Finland, the equipment
was shipped to Germany and from there to Port Hueneme, California, from
where it will travel onward to Antarctica via Christchurch, New Zealand.
The final leg of the journey will be led by an icebreaker, followed by two
vessels carrying a total of 35 earthwork machines. The cargo is expected to
reach the McMurdo harbor at the beginning of February next year.
AGPL Asks For Proposal For 20 Mw Solar Project In Assam
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Oilasiajournal
DECEM
BER 2019
ONGC Signs MoU With EXXONMobil For Study In PEL Offshore Blocks And Open Acreage Areas
il and Natural Gas Corporation
(ONGC) Limited has signed a
Memorandum of Understanding
(MoU) with US petroleum giant
EXXON-Mobil on 14 October 2019. This MoU
will enable the two petroleum companies to
undertake joint technical studies and cooperate
in frontier areas like deep water and other
Petroleum Exploration Licence (PEL) blocks of
ONGC in east and west coast and open acreages
for joint bidding.
The MoU was signed on the side-lines
of IHS-CERAWeek at Delhi by ONGC Director
(Exploration) Mr. R. K. Srivastava and EXXON-
Mobil CEO, South Asia Mr. William P Davis in the
presence of Minister of Petroleum & Natural Gas
and Steel, Mr. Dharmendra Pradhan, Petroleum
Secretary, Dr. M. M. Kutty and ONGC CMD Mr.
Shashi Shanker.
The work under the MoU will be carried out
in three phases. This will lead to a joint technical
study for potential collaboration areas.
Talking after the MoU, Vice President Asia
Pacific EXXONMobil Mr. Michael Deal said, “We
welcome the opportunity to work with ONGC
and apply our collective expertise to be an even
bigger part of India’s bright energy future”.
ONGC CMD Mr. Shashi Shanker said, “This
meaningful partnership with EXXONMobil will
be a step towards unlocking value in ONGC PEL
offshore blocks, study open acreage areas and
enable us to get closer to meeting Country’s
energy aspirations”.
The MoU being endorsed by ONGC Director (Exploration) R. K. Srivastava and EXXON-Mobil CEO, South
Asia William P. Davis
The MoU being exchanged by ONGC Director (Exploration) R. K. Srivastava (left) and EXXON-Mobil CEO,
South Asia William P. Davis (right); Petroleum Minister Dharmendra Pradhan (center), ONGC CMD
Shashi Shanker (extreme left) and Petroleum Secretary M. M. Kutty (third from left) rejoice
“This meaningful partnership with EXXONMobil will be a step towards unlocking value in ONGC PEL offshore blocks, study open acreage areas and enable us to get closer to meeting Country’s energy aspirations.“Shashi Shanker,CMD, ONGC
31
BB is deploying artificial intelligence
(AI) to help commercial and
industrial buildings revolutionize
their energy management and
tackle rising electricity peak tariffs. The company
has added two new AI-powered applications
to the ABB AbilityTM Electrical Distribution
Control System (EDCS): Energy Forecasting and
Intelligent Alerts.
ABB has developed the AI functions in
partnership with Silicon Valley AI specialist
Verdigris Technologies as part of the company’s
Open Innovation program. The Energy
Forecasting app will enable users to reduce
their electricity bills by reducing peak demand
charges. The Intelligent Alerts app uses machine
learning algorithms to help customers better
manage their assets, identifying underlying
issues before they become problems.
Andrea Temporiti, Digital Leader for
ABB’s Electrification business, said: “Our use
of AI to help customers make better energy
management decisions demonstrates ABB’s
commitment to innovation in our products and
quality in our services. With the new Energy
Forecasting and Smart Alerts apps, AI drills
down into the facility’s power data to pinpoint
actionable opportunities for productivity
improvements and energy cost savings.”
ABB’s Open Innovation program engages
incubators, accelerators, innovation centers and
start-ups in the co-development and design of
innovative new digital solutions and business
models. The company is building an ecosystem
of innovation partners to work on digital
energy management services for applications
that range from smart buildings to e-mobility.
The collaborations help start-ups to develop
services that can be marketed directly to ABB
ABB Uses AI To Revolutionize Energy ManagementABB and Verdigris Technologies have developed machine-learning algorithms to predict unplanned peaks in power consumption – and identify strategies to prevent them.
customers via its Digital Marketplace; the innovation strategy also enables
ABB customers to benefit from cutting-edge digital technologies much
sooner.
ABB AbilityTM Energy Forecasting uses AI to give facility managers
accurate power consumption predictions. Energy Forecasting enables
them to take timely action to reduce unplanned consumption spikes by re-
scheduling or switching off non-critical loads – and taking full advantage of
Time of Use (TOU) tariffs.
The Energy Forecasting AI uses neural network methods
to identify and learn patterns in a circuit or a building’s energy
consumption, while also factoring in weather data. Using weather
forecasts and historical data, Energy Forecasting is then able to predict
power consumption (kW) for the next 24 hours, updating its forecast
every 15 minutes with best-in-class accuracy.
“This innovative digital service makes it easy to take the necessary
corrective actions to minimize any peak demand charges,” said Temporiti.
“The precision of the forecasting reduces hedging positions, narrows
variability and produces meaningful energy cost savings for commercial
and industrial buildings.”
ABB AbilityTM Intelligent Alerts uses machine learning to help
customers better manage critical assets. Intelligent Alerts learns how
various factors affect the building and key assets so that it can minimize the
distraction of false alerts and information overload, allowing facility teams
to focus their time more productively. Intelligent Alerts also identifies the
relevant circuits and makes potential recommendations to ensure any
response can be swift and decisive.
Thomas Chung, Head of Product Strategy at Verdigris said: “Verdigris AI
is 10 times more effective than traditional energy management methods.
Our partnership with ABB enables our AI capabilities to reach a significantly
larger ecosystem of ABB users. These energy and asset management tools
will cut through the noise to deliver actionable insights, identify real energy
savings and make resource allocation more effective.”
Energy Forecasting and Intelligent Alerts are available now to
subscribe on the ABB Digital Marketplace. Further developments by ABB
and Verdigris are planned.
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Oilasiajournal
DECEM
BER 2019
IntroductionInternational Marine Organization (IMO) has announced
the regulation (MARPOL Annex VI) that will limit the sulphur contained in the ship’s onboard fuel oil to 0.50% from 3.5%, by 1st January 2020, after reviewing that sufficient compliant fuel is available to support the regulation. The regulation primarily aims to protect the environment by reducing the airborne emission from the ships (sulphur oxide SOx, nitrogen oxide NOx, ozone-depleting substance ODS) and to develop the sense towards global climate change1. Shipping bunker fuel is mainly the leftover of the oil refineries’ output contains high sulphur (HSFO) and the said accounts only 7% of transport oil demand but causes12% of global sulphur dioxide emission. IMO puts a cap on the sulphur emission and allows the Flag States to monitor the compliance of the regulation & in case of breaching the ship is marked as “unseaworthy” that signifies
loss in insurance or fine payment2.
The scenario in the Shipping IndustryThe primary hurdle for adopting LNG as a marine fuel is the
availability of the bunkers because the said requires a specific infrastructure (keep the temperature -161 degree Celsius) and transportation of the LNG from offshore liquefaction facility is another complication. Apart from the technical issue, the number of ports, equipped with the bunkering facilities, is insignificant and the ships assigned for spot marketing have no specific destinations, so these vessels will face the challenge.
Europe advances to evolve the framework of LNG bunkering facility at the early stage and European Commission provided a fund to excel the initiative3. North Sea, Baltic Sea, Rotterdam, Barcelona, Marseilles, London and other 40 coastal ports across Europe have been equipped with LNG bunkering facilities. In Asia, Singapore is the pioneer in thriving alternative marine fuel dynamism. Singapore focuses to institute a leading bunkering hub for the Far East & collaborated with the Chinese Port of Ningbo-Zhoushan & Japan4, 5. At the Port of Keihin in Tokyo Bay, infrastructure for vessel-to-vessel LNG bunkering is in the budding stage6. In 2017 Woodside, the largest LNG producer in Australia, introduced the Siem Thiima, the LNG support vessel, in order to mitigate the urge for greener marine fuel7. United States has two functional LNG bunkering facilities. Jacksonville is the largest bunker and it started its operation as truck to ship (TTS) bunkering facility since 20168. The other bunker situated in the Port Fourchon which is furnished with TTS facility. Tacoma port in Washington is working on the development of the bunkering facility to support the vessels, travel between Washington & Alaska9.
In India, the scenario is less intense and the progress is in the inconspicuous phrase. In Kochi terminal, Petronet LNG has successfully performed the terminal bunkering operation in order to load 127 tonnes LNG to The Kvitbjørn in 2015. But the said operation was taken place under a specific situation and at the present, the terminal is designing to explore the bunkering
IMO Regulation 2020: Where The Global Shipping Industry Stands & India’s Relative Orientation
1 http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/Sulphur-oxides-(SOx)-%E2%80%93-Regulation-14.aspx2 http://www.weltinnenpolitik.net/wp-content/uploads/2018/06/IMO-2020-Global-Shipping-Blue-Sky-Moment.pdf3 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L00944 https://www.lngworldnews.com/eu-approves-investment-in-lng-bunkering-studies-across-europe/
https://www.lngworldnews.com/singapores-mpa-awards-grant-for-two-lng-bunkering-vessels/5 https://www.mpa.gov.sg/web/portal/home/port-of-singapore/services/bunkering/lng-bunkering-pilot-programme
https://www.sumitomocorp.com/en/jp/news/release/2019/group/114507 https://www.maritime-executive.com/article/australias-first-lng-bunkering-completed8 https://www.lngworldshipping.com/news/view,jacksonville-the-premier-us-lng-bunkering-port-moves-into-higher-gear_51438.htm9 https://www.everycrsreport.com/reports/R45488.html
33
opportunity10. At Ghazipur, bunkering facility is set up to support inland water services and the first phase of the construction is expected to be finished in the next year11. But no such initiative is accomplished to boost the process of modification of the international ports. Refineries situated near the coast will provide an advantage for developing the bunkering facilities. The country has major refineries like Paradip, Haldia, Cochin, etc. close to the Paradip, Dhamra, Haldia, Kolkata, Cochin ports
and these can be easily converted into LNG bunkers.
The supply & demandIn the last few years, notable growth has been witnessed
in the production of natural gas. Significantly, Australia & the U.S have boosted the global supply to meet the rising demand in Asia. In the last four years, the import of LNG in China & India has been scaled up by two times and one & half times respectively. But the change in the shipping industry is not solely responsible for this sudden growth. It is obvious that the transition in the shipping industry will impact global demand. A report by Oxford Institute for Energy Studies, explains that the demand will rise between 1.2-3 million tonnes to support the presently available LNG vessels. IEA, PWC & Lloyds Register studies demonstrate that the forecasted LNG demand will lie between 10-30 mtpa
by 2030. In order to meet the forecasted demand, a significant number of large cruise vessels & carriers are required. According to the said report, 170-400 new shipping is required to be built every year to 2030 to satisfy the prediction. In conclusion, it can be interpreted that the demand figure is not so detailed and if the assumption is lowered down to 15mtpa; it sounds realistic12.So the present scenario implies the boom in the LNG vessel manufacture and supply chain network.
What should be India’s proposition? Government of India is progressing toward the
modification of the country’s energy mix by encouraging the natural gas mix to 15%. So from that point of view, the country has an opportunity to build LNG bunkering facilities in the coastal terminals, in order to sustain the new global transition. Dahej, Hazira, Dabhol & Kochi are the existing LNG terminals that have a total capacity of 30mmtpa. Out of these terminals, only Dabhol is developed by public sectors-GAIL & NTPC and rests are jointly developed with global players & private sector like Shell, Petronet. Mundra & Ennore LNG port is under construction and Dhamra, Kolkata port, Kakinada is proposed projects . Liquefaction facilities can be set up on the site to provide good capacity bunkering facilities and the said project can be implemented with the help of major global players. Also, TTS infrastructure can be developed to support small vessels & carriers. Though Oman, Nigeria and Qatar are the primary suppliers of LNG, taking the political instability on the account, joint ventures between government-owned OMCs and global players, especially Australian, U.S & European groups will secure the supply of LNG as well as the latest technology will be installed. By prospering in the field of LNG bunkering facility, the country can play a major role in this
global energy transition.
10 https://sea-lng.org/wp-content/uploads/2018/01/FINALrevised_SEALNG-case-study_Petronet-LNGs-Kochi-Terminal.pdf11 https://shipandbunker.com/news/apac/953284-india-planned-inland-terminal-to-have-lng-bunkering-facility12 https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/07/A-review-of-demand-prospects-for-LNG-as-a-marine-fuel-NG-133.pdf13 https://www.petronetlng.com/PDF/CorporatePresentation.pdf
34
www.oilasia.com
Oilasiajournal
DECEM
BER 2019escribing climate change as the biggest threat
to sustainability, UN Secretary-General Antonio
Guterres has voiced deep concern over the rising
level of oceans and said the most vulnerable
areas are in Japan, China, Bangladesh and India.
Guterres, speaking to reporters in Bangkok where he
is attending the ASEAN Summit, said the biggest threat to
sustainability today in the world is climate change.
He cited a recent report by a research center that said
the level of the oceans is rising much faster than what was
forecasted because of climate change.
The UN Chief stressed that unless nations are able to
reverse this trend, because climate change for the moment
is running faster than actions being taken by governments,
the research forecasted that 300 million people will be
flooded by sea water in the world by 2050.
“Dramatically, the most vulnerable areas are exactly in
Southeast Asia, in Japan, China, Bangladesh and India,” he
said adding that Thailand risks to have 10 per cent of its
population in flooded areas by the sea.
The recent study by non-profit organisation
Climate Central was published in the journal Nature
Communications.
Guterres emphasised that people can discuss the
accuracy of these figures, but it is clear that climate change
is “running faster than what we are and is the biggest threat
to the planet at the present moment, the defining issue of
our time”.
He said the UN is deeply committed to raise
attention to governments, business community, civil
society, local authorities to the needs to abide by what
scientists are telling the world that there is urgent
Japan, China, Bangladesh, India MostVulnerable To Rising Sea Levels: Antonio GuterresGuterres, speaking to reporters in Bangkok where he is attending the ASEAN Summit, said the biggest threat to sustainability today in the world is climate change.
United Nations Secretary-General Antonio Guterres ( Photo | AP )
35
need to contain the rising temperatures 1.5 degrees
until the end of the century.
“And for that to be possible, we need to be carbon
neutral in 2050 and reduce the emissions by 45% in the
next decade.” The UN chief underscored that to achieve
this there is need for lot of political commitments, saying
nations have to put a price on carbon.
“We need to stop subsidies for fossil fuels. And we
need to stop the creation of new power plants based on
coal in the future. And this question is particularly sensitive
in this part of the world because there is still a meaningful
number of new coal power plants for electricity production
that is foreseen in the future in East Asia, in Southeast Asia
and in South Asia.”
Guterres said there is an ‘addiction’ to coal that nations
need to overcome because it remains a major threat in
relation to climate change.
Those nations that are in one of the most vulnerable areas
to climate change need to lead by example and be in the front
line of carbon pricing, of stopping subsidies to fossil fuels and
of stopping the construction of coal power electricity plants in
order to be able to defeat climate change, he said.
Global warming could cause sea levels to rise higher than the height of a three-storey
building, study suggest. (Courtesy : The Independent)
Tepid Response To OALP-IV
n a highly disappointing scenario, India’s offer of seven oil blocks on revamped licence terms attracted just eight bids from state-owned firms including six single bids in the latest licensing round. The offer was all but ignored
by both private and foreign companies.
The Directorate General of Hydrocarbons (DGH) in a statement said state-owned Oil and Natural Gas Corporation (ONGC) bid for all the seven blocks while Oil India Ltd (OIL) put in an offer for one block at the close of bidding on Thursday, October 31.
The block in Rajasthan saw competition from ONGC and OIL but the five in Madhya Pradesh and one in West Bengal saw single bids from ONGC, DGH said. “Seven onland blocks were on offer (in the fourth round of Open Acreage Licensing Policy) with an area of approx 18,500 sq km,” DGH said.
“The results demonstrate continued interest of established players in Indian E&P (exploration and production) with bids received for all 7 blocks. The evaluation of the bids would be undertaken in a time-bound manner.” The fourth round of bidding under OALP had the lowest number of blocks. While the first round got 110 bids for 55 blocks, the second round attracted 33 bids for 14 blocks. The third round saw 42 bids for 23 blocks. In the previous three rounds together, 87 blocks have been awarded covering an area of 1.18 lakh sq km.
“Expression of interest submission window for the OALP-V bid round is open till November 30, 2019, and companies have another opportunity to take part in the blossoming Indian exploration and production sector,” the DGH said in the statement. OALP-IV was the first round on revamped terms approved in February 2019.
36
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Oilasiajournal
DECEM
BER 2019
he term “disruptor” has become an overused
phrase that has cheapened the perceived
impact that new tech, new processes, new
ideas, and new generations have on the world.
But there are a handful of true disruptors in the energy
industry that may rather unexaggeratedly change the
way in which the world works.
The EIA’s chief energy modeler disagrees. “First, there are
no revolutions between now and 2050, no structural breaks,
no technology breakthroughs. Sure, technology can lead us to
evolve, prices get cheaper, technology continues to improve,
but no breakthroughs, no dilithium crystals,” Daniels said earlier
this week at Rice University’s Baker Institute.
True, the slower changes are much more common. But
every now and then, something comes on down the line
that surprises us all. In today’s faster-paced environment,
and with the next generation of thought leaders stepping
up to the plate, combined with the growing need to arrest
the damaging effects that some of these energy sources
have had on the environment, the race is on to do more, to
do better, to do cheaper.
But there’s a catch, even with the cleverest of inventions,
and that’s that even great ideas struggle with implementation.
But this challenge hasn’t stopped some trendsetters from
forging ahead with new ideas. From kinda nutty to astonishing,
we have listed some of these true energy breakthroughs here.
#1 California’s Solar Mandate — One of the
potentially largest energy innovations is not technology
based. Instead, it is a legislation that capitalizes on existing
but relatively underutilized technology--solar panels. The
tech is there, and soon the legislation will be too--at least
in California. Mid-2018, California approved a measure that
would require all new homes built in California in 2020 and
later to include solar panels.
It is the first US state to adopt such a bold requirement,
which was not without its opposition due to the cost it would
burden homebuyers with. This upfront cost, however, will be
partially offset by lower utility costs down the line. Longer
term, this will affect energy needs in California, which is
currently plagued with repetitive blackouts during the windy
season for fear of sparking wildfires, which California blames
on climate change, or PG&E, depending on which argument
suits them on the day.
The ambitious solar panel requirement is expected to
add a cost of almost $10K to each home built, in a state that
already has the highest home costs in the country. While
this will be burdensome for homebuyers, proponents of
the change estimate that it will drastically curb electricity
consumption in the state, which contributes 14% of
California’s greenhouse pollutants.
How much of a game-changer is this? It will likely spur
on other states to follow suit, and not only will it change the
amount of fossil fuel-derived energy consumed, it will also
ignite a race to develop better and less expensive PV panels,
paving the way for an even broader adoption.
#2 Data Management and Digitization — It
sounds less exciting than some of the other breakthroughs
in energy, but this one has the potential to reap the most
benefits for the energy industry. Good data, collecting data,
and analyzing that data are essential tools for squeezing
out additional gains from all forms of energy. While some in
the energy business are focused on moving towards more
sustainable energy, others are more practically moving
to seek out more gains on existing forms of energy by
improving the data.
Arguments for this method of improving the way we do
energy are compelling. But data is data, and data is boring--it
hardly elicits the same thrill as Musk’s BFR that will change the
way we transport people around the world. But even as long
ago as in 2017, the IEA’s Digitalisation and Energy 2017 report
suggested that digitalisation could save 5% on annual power
generation costs. Specific gains can be made through smart
drilling, fault prediction through AI, improved AI to sift through
seismic images and geology models to improve oil and gas
exploration, and predictive algorithms that will allow utilities
to better plan for peak usage.
Five Energy Innovations To Transform The World
37
#3 Thermal Resonator — MIT has come up with a
device called the thermal resonator that draws heat from the
air around it before turning it into electricity. It doesn’t require
sun like solar panels--it actually can sit in perpetual shade. For
now this is just generating a small amount of power, but it has
the potential to render batteries obsolete.
#4 Fusion — This one is not right around the corner, and
some joke that fusion has been a decade away for the last forty
years. But new advances here are being made all the time, and
it’s possible that by 2030, it may be a reality. Of all the ideas
on this list, it has the greatest potential to change the entire
energy industry for good. Fusion reactors can’t meltdown
(hello, Chernobyl), don’t create eternal radioactive waste, and
therefore will not spark the same public fear that normal fission
nuclear reactors have had.
The International Thermonuclear Experimental Reactor
(ITER), funded by the China, India, Japan, South Korea, Russia,
and the United States, is probably the furthest along with this
tech, and hopes to build the world’s largest fusion device that
is expected to be ready in 2035.
#5 PET Recycling — One of the most recent breakthroughs
will have an indirect effect on the energy industry, and it
is a transformative one. BP is soon rolling out a $25 million
prototype plant to recycle PET containers again and again. This
is a deviation from the current way of doing things, which has
PET bottles landfilled after a single use, or at best, allows for
recycling PET bottles just one time. This doesn’t directly apply
to energy, but because PET is derived from crude and nat gas,
solving the environmental problem associated with PET will go
a long way to securing future demand for fossil fuels. This could
have a significant but indirect effect on the energy industry
by bolstering confidence in this sector which will encourage
research and investments into new tech for fossil fuels.
Some honorable mentions include the quantum
battery that never loses its charge, the itty bitty battery
that can work in the extreme cold, Tesla’s million-mile
battery, and a way of extracting hydrogen from oil without
releasing greenhouse gases, but the total number of energy
developments are far too numerous to count. It is only a
matter of which one will be the next breakthrough that will
change the course of energy forever.
NGC Videsh has recorded discoveries of oil in its onshore exploration block CPO-5, Colombia in the Llanos basin and major gas in
the deep offshore exploration block BM-SEAL-4, Brazil in the Sergipe Alagoas Basin.
Well Sol-1, ColombiaWell Sol-1, in the block CPO-5 encountered
the oil bearing sands of 8 meters at a depth of 2852m. Oil discovery in Sol-1 confirms the extent of oil pay further south of the block. ONGC Videsh had earlier discovered commercial oil in the same pay in wells Mariposa-1 and Indico-1 in 2017 and 2018, respectively. Both the wells are under production now.
ONGC Videsh, as Operator, holds 70% participating interest (PI) in CPO-5 block. The balance 30% PI is owned by Petrodorado South America S.A., Sucursal (PDSA), Colombia.
Well Moita Bonita-2, BrazilPetrobras as operator of BM-SEAL-4 consortium with
ONGC Videsh, completed drilling of the well Moita Bonita-2
in deep offshore Brazil located in the Moita Bonita Area (block BM-SEAL-4) at a water depth of 2629m and encountered gas bearing sand of total thickness of 39m at the depth of 5227m and oil bearing sand of total thickness of 24m at deeper depths. Drill Stem Test (DST) was performed in the gas carrier interval 5252m to 5291m, and the result showed good production from the reservoir.
Petrobras is the Operator of the consortium (75% PI) and partners ONGC Videsh (25% PI). The consortium plan to continue the operational activities to evaluate the discovery to ascertain its commerciality.
ONGC Videsh has a significant presence in oil & gas sector of Brazil and Colombia. It holds stakes in seven exploratory blocks. In addition, ONGC Videsh is the joint owner of the oil producing company Mansarovar Energy Colombia Ltd (MECL) along with its partners Sinopec of China. In Brazil, ONGC Videsh holds 27% PI in the offshore BC-10 block.
ONGC Videsh Makes Two New Discoveries In Colombia And Brazil
38
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
ndia is ramping up its efforts to improve its oil
security to ensure it can meet the country’s rising
energy demands.
With Prime Minister Narendra Modi’s visit to Saudi Arabia
last week, the Indian government on Tuesday announced that
Indian Strategic Petroleum Reserves Limited (ISPRL) had signed
a memorandum of understanding with Saudi Aramco, which
could mean that the Saudi company would keep millions of
barrels of oil in India’s underground storage facilities, designed
to meet emergency needs.
“Because of the ongoing geopolitical risk, India needs
to focus on developing more strategic oil reserves to avoid
crude oil supply disruption risk,” says Sumit Pokharna, a
research vice president, oil and gas, at Kotak Securities,
based in Mumbai. “Notably, so far, Abu Dhabi National Oil
Company (ADNOC) is the only foreign company storing oil
in India’s strategic reserves. We believe India needs to tie up
with more energy rich countries.”
India is the world’s third-largest importer and consumer
of crude oil, depending on imports for more than 80 per cent
of it oil needs. The International Energy Agency (IEA) says that
oil demand in India increased by 5 per cent last year over the
previous year and it forecasts that its energy requirements will
grow by more than any other country over the next 20 years.
Analysts say that while building up strategic
petroleum reserves is part of India’s efforts to improve
its oil security, global producers also stand to benefit
from bolstering their energy ties with India and gaining
access to a market that is increasingly thirsty for oil, as it
economy expands. India’s aim is to become a $5 trillion
economy in the next five years.
“We need oil exporters and exporters need India,” says
Amit Bhandari, a fellow of the energy and environment studies
programme at Gateway House, a foreign policy think tank in
Mumbai. “If we look at the global oil demand today, the US is
producing more oil, so their imports are going to decline. Japan
and western Europe have been seeing their oil consumption
fall for the last 25 years.”
He adds that “if I’m a large exporter like Saudi Arabia or
Abu Dhabi, I worry about demand security – they need to sell
oil for the prosperity of their economies”.
India’s already a critical market for oil exporters, with crude
oil imports in the financial year to March 2019 reaching 207.3
million tonnes, according to official data published by the Press
Trust of India news agency. Iraq was the top supplier, followed
by Saudi Arabia, Iran, and the UAE.
The rising demand for oil in Asia’s third-largest economy
comes despite the country’s efforts to boost renewable energy
and its attempts to control the severe pollution problems
found in several of the country’s major cities, including its
capital, New Delhi, which has been gripped by severe smog
in recent days.
“The potential for domestic oil and gas production in
India is very limited,” says Mr Bhandari. “And our view is that
import dependence is only going to increase.”
He explains that for a long time, India did not keep
strategic petroleum reserves, noting that this was because “it
cost money and India didn’t have it, and second, we are very
close to the Arabian Gulf, just a week’s sailing time, so chances
of a supply chain disruption were limited”.
“Certain problems you start addressing when you reach a
certain level of development,” he says.
“Like other major economies, we’re now also trying to
create strategic petroleum reserves. Historically, we have
largely relied on the commercial stocks that the oil refineries
and marketing companies have maintained. Typically, that
would be around 35 to 40 days of oil in storage.”
How India Is Striving To Meet Its Oil And Gas Needs
39
Currently, India’s strategic petroleum reserves can hold
about 10 days’ worth of oil.
Under an agreement, countries that are part of the
IEA have an obligation to hold emergency oil stocks
equivalent to at least 90 days of oil imports. India is not a
member of the IEA, though.
China, which has not joined the IEA either and is the
world’s largest importer of oil, does not disclose how much
it holds in its strategic reserves. But China’s National Energy
Administration in September said that it had about 80 days of
oil in storage, including the supply in its strategic petroleum
reserves. Analysts point out that China is much further away
than India from many oil exporting countries, putting it at
higher risk of having its supply disrupted.
It was only in 2005 that the India actually launched its
strategic petroleum reserves initiatives, and started building
5.33 million tonnes of strategic crude oil storages at three
locations: Visakhapatnam, Mangalore, and Padur, on the east
and west coast of India. These storages are constructed in
underground rock caverns. Last year, India announced that
would construct two new reserves: a 4 million tonne storage
facility at Chandikho in the eastern state of Odisha, and another
2.5 million tonne facility at Padur. In total, all of these facilities
would give India 22 days of emergency coverage.
ADNOC is storing 5.86 million barrels of crude oil in the
Mangalore facility and a year ago it signed a memorandum of
understanding with ISPRL to look at keeping its crude oil at the
facility in Padur.
ADNOC is also a stakeholder, along with Saudi Aramco
and a consortium of Indian state-run companies, in a vast
refinery and petrochemical complex, planned for Ratnagiri in
the western Indian state of Maharashtra.
“Global oil producers want to gain a foothold in India,”
says Abhishek Bansal, the chairman of Abans Group, an India
financial services company. He adds that it is critical that India
is able to source oil reliably at attractive prices “to ensure both
our economic and geopolitical stability”.
A Reuters report, citing an Indian government official, says
that India plans to lease a quarter of its Padur reserve to Saudi
Aramco, which would hold about 4.6 million barrels of oil.
Saudi Aramco declined to comment and ISPRL did not
respond to a request for comment.
The oil that is stored in the reserves is primarily
intended for India’s strategic purposes, but Reuter’s
reports that Saudi Aramco would be able to sell some of
the oil to Indian refiners.
India has taken other steps to improve its oil security,
including diversifying its crude oil sourcing, importing
crude oil from the US and Russia, for example. It has also
made investments in oil fields in Russia and an Indian
consortium comprising of ONGC Videsh, Indian Oil
Company and Bharat PetroResources, was last year
awarded a 10 percent participating interest in Abu Dhabi’s
offshore Lower Zakum concession.
Nilesh Ghuge, an analyst at HDFC Securities, says that
the fact that India has few natural resources to produce
its own oil and limited investments abroad, mean that
its efforts to secure oil “are inadequate this point of time”.
Strategic reserves are only intended to cater to short term
emergencies, he points out, and are not a long term solution
to meeting the country’s oil needs.
Mr Ghuge, however, also adds that “for the last two
decades, we’ve imported oil without any interruption, so I
don’t think there’s a problem”.
But the incident in September when drones attacked
Saudi Aramco processing facilities in eastern Saudi Arabia
highlighted the potential risks to India’s oil supply and the need
for it to continue its strategy to secure its crude oil supplies,
some analysts say.
“Earlier, India was only importing crude oil and only a few
global energy companies made strategic investments in India,”
says Mr Pokharna. “Now, the scenario has changed a lot. Large,
energy-rich countries are looking for strategic investments in
India to capture the huge market, diversify country risk and
ensure their regular crude oil supply. Needless to say, this will
ensure energy security in the long term.”
But there is still more to be done to be fully
prepared, he adds.
“The government should plan more such storage
capacity,” says Mr Pokharna. “In this regard, India should invite
global upstream companies to invest in crude oil strategic oil
reserves and allow them to store oil reserves. This is a win-win
situation for both the countries.”
Source: The National
40
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
nvironment ministers of the BASIC countries have
called for “comprehensive” implementation of the
Paris climate deal amid threats by US President
Donald Trump to withdraw from it.
They also called on the developed nations to deliver on
their commitment to provide USD 100 billion climate finance
to the developing countries to mitigate losses suffered in the
implementation of the climate action plan.
Environment Minister Prakash Javadekar, who attended
the 29th BASIC (Brazil, South Africa, India and China) ministers’
meeting here on Saturday, said the meeting worked out
priorities and issues as a group to be highlighted at the UN
Climate Change Conference to be held in Chile in December.
“The meeting is successful. Practically we had no issue
where there was difference of opinion among the four
countries,” Javadekar told the Indian media here on Saturday.
The Chile meeting will discuss the implementation of
the Paris deal to cut the greenhouse gas emissions as well as
mitigation, adaption and climate finance.
China and the US are listed as top polluters of the
world. While both the countries signed the accord, it ran into
problems after President Trump threatened to pull out of the
deal signed by his predecessor Barack Obama.
Trump said on Saturday that the US will definitely
withdraw from the Paris deal, which he described as a “bad
deal.” He claimed that his pro fossil fuel policies had made the
US an energy superpower, BBC reported.
The US pullout will take effect next year, the day after
the 2020 US presidential election, assuming that Trump is re-
elected, it said.
Javadekar said the main issue is that developed countries
should keep up their annual commitments for the USD
100 billion climate fund which aims to mitigate the least
developing countries to manage climate change issues as the
Paris agreement comes into effect.
“The developed world has promised USD 100 billion per
year till 2020,” he said, adding that only about USD 10 to 20
billion has been contributed so far.
“Cost of combating climate change results in trillions of
dollars but USD 100 billion is goodwill gesture to help the very
least developed countries,” he said.
A joint statement released after the BASIC ministers’
meeting said the “Ministers emphasised the faithful and
comprehensive implementation of the Paris Agreement, in
particular of its goals and principles.”
They “underlined the importance of a full, effective and
sustained implementation of the UN Framework Convention
on Climate Change (UNFCCC), its Kyoto Protocol and its
Paris Agreement, in accordance with the principles of equity,
common but differentiated responsibilities and respective
capabilities (CBDR-RC),” it said.
They urged developed countries to propose the new
collective quantified goal on finance as soon as possible,
including detailed roadmap and timetable.
“The goal should be from a floor of USD 100 billion per year,
significantly publicly funded and of greater transparency. The
BASIC Ministers Call For Comprehensive Implementation Of Paris Climate DealEnvironment Minister Prakash Javadekar, who attended the 29th BASIC ministers’ meeting said the meeting worked out priorities and issues as a group to be highlighted at the UN Climate Change Conference.
41
2020 deliberations should draw lessons from the experience of
meeting the USD 100 billion pledge,” the joint statement said.
It also said the BASC countries have been implementing
ambitious climate action based on their national circumstances
and have achieved great progress with significant contribution
to global efforts in combating climate change.
“In 2018, China has reduced carbon dioxide emissions per unit
of GDP by 45.8 per cent from the 2005 level, increased the share of
non-fossil fuels in primary energy consumption to 14.3 per cent.
“South Africa has recently implemented carbon tax,
and announced massive renewable energy program in its
latest electricity plan. India has already achieved 21 per cent
reduction in emission intensity of GDP in 2014 compared to
2005 levels, thereby achieving its pre-2020 voluntary target,”
the statement said.
“In 2015, Brazil had already achieved a 58 per cent
emission reduction in the business as usual scenario set for its
NAMAs, thereby overachieving its target of 36 per cent- 39 per
cent reductions set for 2020,” it said.
Javadekar said he has invited China to join India’s
initiatives, the International Solar Alliance (ISA) and
Coalition for Disaster Resistance Infrastructure (CDRI). The
CDRI was announced by Prime Minister Narendra Modi
at New York last month.
Besides Javadekar, the meeting was attended by
China’s Minister of Ecology and Environment LI Ganjie,
China’s Special Representative on Climate Change Affairs
Xie Zhenhua, Brazil’s National Secretary for International
Relations Roberto Castelo Branco and Chief Director of
International Climate Change Relations and Negotiations of
South Africa Maesela Kekana.
inister of Petroleum & Natural Gas and Steel
Mr Dharmendra Pradhan appreciated the way
Sakhalin-1 project in Russia is being managed
by ONGC, during his recent visit to Russia.
ONGC’s 100 per cent subsidiary ONGC Videsh Limited has 20
per cent stake in Sakhalin-1 project, a joint project of India and
Russia. This prolific oil-producing project was initiated during
the time of former Prime Minister Mr. Atal Bihari Vajpayee.
The Petroleum Minister said, “I am happy at the way
this project has been setting records in the industry and
has become the most successful investment decision of
India till now. It happened due to vision of our former
Prime Minister late Shri Atal Bihari Vajpayee for developing
energy links with Russia”.
The Minister was accompanied by ONGC CMD Shri
Shashi Shanker. Shri Shanker shared the technological
advancements achieved in the project and emphasized
on replicating some of the relevant technologies in ONGC
domestic projects in India.
The Petroleum Minister was also accompanied
by officials from the Ministry and Indian Embassy in
Moscow, EIL CMD and senior management officials from
Rosneft (partner National Oil Company in the Sakhalin-1
project) and professionals from Exxon Neftegaz Limited
(Operator of the project).
During his visit, the Minister spent time and interacted
with ONGC engineers who work in temperatures around
minus 40 degree Celsius in winter.
Mr. Pradhan also visited the Rig ‘Krechet’ which is
the biggest and most powerful land rig in the world. It is
a covered rig which allows people to work in extreme
temperatures (-40° Celsius in winter) and has capability to
drill up to 14 kilometers horizontally.
Petroleum Minister Dharmendra Pradhan Appreciates Management Of Sakhalin Project Of ONGC
42
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
Saudi Prince Salman Green Flags Aramco Stake SaleSaudi Crown Prince Mohammed Bin Salman finally gave the go-ahead for the initial public offering of Aramco, on November 1, deciding there was enough support from local investors for what is likely to be a record share sale. First suggested by Prince Mohammed in 2016, the IPO was postponed several times as international investors balked at the $2 trillion valuation he placed on the company. Local asset managers, including those looking after government funds, have also been asked to make significant contributions, while domestic banks have been told to lend generously so retail investors can buy Aramco shares, according to people familiar with the situation.
ne of the world’s prolific crude churners, Saudi
Aramco is all set to go under the hammer
as the supreme ruler Prince Mohammad Bin
Salman announced his consent to stake sale in
the company under IPO on November 1. “The crown prince
made the decision at a meeting he chaired on Friday and an
official announcement is likely as soon as Sunday, according to
people familiar with the matter, who asked not to be named
before an official statement”, said a news report.
The partial privatization will be a deal like few others
and the biggest change to Saudi oil industry since the
company was nationalized in the 1970s. Aramco, , is the
most profitable company globally and the backbone of
the kingdom’s economic and social stability. It pumps a
whopping 10% of the world’s oil from giant fields beneath
the kingdom’s barren deserts.
An earlier plan to kick off the share sale in mid-October
was shelved after bankers received lukewarm interest from
money managers, and this time around, the deal will likely rely
heavily on Saudi money. It’s not clear if the prince is willing to
accept a lower valuation.
The valuation will probably be closer to $1.5 trillion,
Reuters reported, citing people familiar with the matter.
Aramco officials are meeting with global institutional investors
and have approached governments in the Gulf and Asia,
including China, the report said.
43
The sale is key to Prince Mohammed’s Vision 2030 plan to
overhaul the Saudi economy and end the kingdom’s reliance
on oil exports. The proceeds from the IPO will boost the
firepower of the OPEC nation’s sovereign wealth fund.
Grabbing a role in the deal has been one of the most
hotly contested mandates for global banks. More than 20
are working on the deal, with the top roles going to firms
including Citigroup Inc., Goldman Sachs Group Inc., and
JPMorgan Chase & Co.
But the path to today’s decision hasn’t been smooth. After
investors pushed back on the Prince Mohammed’s $2 trillion
valuation, the original plan to list Aramco in either New York or
London was dropped in favor of a Riyadh-only flotation.
To get the deal done, Aramco’s bankers will need hefty
contributions from the kingdom’s wealthiest families, many
of whom have already been targeted in the 2017’s corruption
crackdown that saw scores of rich Saudis detained in Riyadh’s
Ritz-Carlton Hotel. Authorities said they raised over $100 billion
in settlements from people accused of graft.
Aramco must also contend with the strengthening global
movement against climate change that’s targeted the world’s
largest oil and gas companies. Many fund managers are
concerned the shift away from the internal combustion engine
-- a technology that drove a century of steadily rising demand
-- means consumption of oil will peak in the next two decades.
Aramco could be listed before the end of the year, in
which case the world’s most valuable company will no longer
be traded in the US but on the Saudi bourse. The exchange
lifted restrictions on foreign investors four years ago.
In a bid to make the stock more attractive, Aramco plans to
pay $75 billion in dividends next year. That would give investors
a yield of 3.75% if the company achieves its ambition of a $2
trillion valuation. That’s a decent payout in a low-interest-rate
world, but it’s a lower dividend yield than at other big oil firms.
Investors who buy into the IPO have been guaranteed that the
dividend won’t fall until after 2024, regardless of what happens to oil
prices. Instead, Aramco will cut back on payouts to the government
if it has to reduce the total dividend to less than $75 billion.
he jury is still out on
the prime source
of the capital’s
pollution. But by all
accounts, Delhi’s air quality is
the outcome of the complex
interplay of the pollution
footprints of local activities
and pollutants from upwind states. Barely two days after
the Diwali festival, the city’s Air Quality Index exceeded the
“severe level”. True to character, Delhi’s Chief Minister Arvind
Kejriwal tried to peddle the theory that the bad air this
year was due to reasons beyond his government’s control.
“The people of Delhi are doing what they can to control
pollution. I request the BJP to talk to their governments in
Uttar Pradesh and Haryana and the Congress to speak to
their government in Punjab to ensure that they don’t burn
stubble,” he said. The Delhi CM’s statement has drawn an
angry reaction from his Punjab counterpart, who accused
Kejriwal “of blaming others for his lapses”. “Delhi’s air pollution
is directly related to construction activity, industrialisation
and mismanagement of traffic,” says Amarinder Singh.
However, there is no denying stubble burning has been a
main villain for Delhi and its neighboring areas without doubt.
Data from the Punjab Remote Sensing Centre shows that the
state recorded more than 15,000 stubble burning incidents
between September 23 and October 28. The Centre-run System
of Air Quality and Weather Forecasting and Research estimates
that more than 35 per cent of Delhi’s pollution on Wednesday
was a fallout of stubble burning in the city’s neighbourhood.
Governments in Punjab and Haryana have been providing
subsidies to farmers to buy modern farm equipment for
management of paddy straw. But, as a report in this paper shows,
many farmers in Punjab do not want to invest in these machines
because they lie idle for most of the year — unlike tractors.
It would be unfortunate if the battle for clear skies in Delhi
and its neighbourhood is reduced to a confrontation between
the national capital and its neighbouring states. At “very poor”,
the post-Diwali AQI in Ludhiana and Jalandhar in Punjab, and
Ambala, Kurukshetra and Sirsa in Haryana is only a notch better
than that of Delhi. It is imperative, therefore, that Delhi and its
neighbouring governments acknowledge the local and regional
sources of the problem — and cooperate to resolve it.
Delhi CM Uses Buck-Passing Tactics To Shed Blame For Pollution Woes
44
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
“Africa is set to become increasingly
influential in shaping global energy trends
over the next two decades as it undergoes
the largest process of urbanisation the world
has seen” a new report from the International
Energy Agency (IEA) has said.
Africa Energy Outlook 2019’, a special
in-depth study, finds that current policy and
investment plans in African countries are not
enough to meet the energy needs of the continent’s young and
rapidly growing population. The report makes clear however,
that Africa’s energy future is not predetermined. Today, 600
million people in Africa do not have access to electricity and
900 million lack access to clean cooking facilities. The number
of people living in Africa’s cities is expected to expand by 600
million over the next two decades, much higher than the
increase experienced by China’s cities during the country’s 20-
year economic and energy boom.
Africa’s overall population is set to exceed 2 billion before
2040, accounting for half of the global increase over that
period. These profound changes will drive the continent’s
economic growth, infrastructure development and, in turn,
energy demand, which is projected to rise 60 per cent to
around 1,320 million tonnes of oil equivalent in 2040, based on
current policies and plans.
The new report is the IEA’s most comprehensive and detailed
work to date on energy across the African continent, with a
particular emphasis on sub-Saharan Africa. It includes detailed
energy profiles of 11 countries that represent three-quarters
of the region’s gross domestic product and energy demand,
including Nigeria, South Africa, Ethiopia, Kenya and Ghana.
Current plans would leave 530 million people on the
continent still without access to electricity in 2030, falling well
short of universal access, a major development goal. But with
the right policies, it could reach that target
while also becoming the first continent to
develop its economy mainly through the use
of modern energy sources.
Drawing on rich natural resources and
advances in technology, the continent could
by 2040 meet the energy demands of an
economy four times larger than today’s with
only 50 per cent more energy.
“Africa has a unique opportunity to pursue a much
less carbon-intensive development path than many other
parts of the world,” IEA’s Executive Director Fatih Birol said.
“To achieve this, it has to take advantage of the huge
potential that solar, wind, hydropower, natural gas and
energy efficiency offer. For example, Africa has the richest
solar resources on the planet, but has so far installed only
5 gigawatts of solar photovoltaics (PV), which is less than
one per cent of global capacity.”
If policy makers put a strong emphasis on clean energy
technologies, solar Photovoltaic (PV) could become the
continent’s largest electricity source in terms of installed
capacity by 2040. Natural gas, meanwhile, is likely to correspond
well with Africa’s industrial growth drive and need for flexible
electricity supply.
Africa Is An Emerging Power Pivot In Global Energy- IEAA new report from the International Energy Agency (IEA) said on Friday, 8th November, that Africa was a major emerging force in the global energy horizon. Today, the share of gas in sub-Saharan Africa’s energy mix is the lowest of any region in the world. But that could be about to change, especially considering the supplies Africa has at its disposal -- it is home to more than 40 per cent of global gas discoveries so far this decade, notably in Egypt, Mozambique and Tanzania.
45
he last 6 odd months saw a sharp fall in diesel
demand. “India’s diesel demand has slowed down
sharply because of a sluggish economy and
structural changes like GST-induced road transport
efficiency, trucks being allowed to carry a bigger load,
increased power supply and consumer preference for petrol
vehicles”, reports ET energyworld.com.
Diesel consumption grew barely 1.1% in the six months to
September when it contracted 3.3%. Diesel makes up 40% of
India’s total oil demand, which grew just 1.4% in the first half of
2019-20. In FY19, the demand was up 3% for diesel, and 2.7% for
total oil. An extended monsoon too hampered transportation
and industrial activity this year, affecting demand for diesel.
The fall in demand has prompted Bharat Petroleum Corp
to weigh exporting 200,000 tonnes of diesel a month until
March – a rare step for state-run refiners as they often need to
buy the fuel from private peers to serve the local market. BPCL
executives do not expect diesel demand to pick up anytime
soon. Indian Oil and MRPL, two other state-run refiners, have
also recently increased diesel exports.
India’s economic growth slumped to a six-year low of 5%
in the June-quarter, and not many economists expect it to
perk up quickly. The slowdown in consumption has weighed
on diesel as well. Some structural changes in the economy are
also responsible for a slide in diesel consumption, according to
Hindustan Petroleum chairman MK Surana. “Better availability
of power is reducing demand from diesel generators. Second,
the increase in the load of vehicles is making the same vehicle
carry more load. And because of GST, time at toll booths
has reduced for vehicles,” he said. Last year, the government
allowed new trucks to carry about 20-25% more load than
earlier, which means fewer trucks are needed on road to carry
the same set of goods, cutting down on the need for the fuel.
“GST has eliminated idling of trucks and unnecessary
burning of oil at multiple checkpoints, sharply reducing
the time taken to complete a trip,” said Rakesh Misri, HPCL’s
marketing chief. Since diesel began selling at market rates
in 2014, the price gap with petrol has narrowed, prompting
buyers to opt for petrol vehicles, according to the oil ministry
report. This has pushed petrol sales up 9.1% between April and
September, despite an overall slump in vehicle sales.
Yet another structural shift building up to hurt diesel
demand is the growing thrust on electrification and
renewables. The railways’ plan to electrify all its tracks by March
2022 would cut diesel demand by 2.83 billion litres per annum,
worth around Rs 13,500 crore. Electric cars haven’t quite taken
off in India yet, but a boost can dent diesel’s prospect as solar-
powered farm pumps are already doing. A shorter window
between the end of rains and the beginning of festive season
meant lesser transport opportunity and lower diesel demand,
said HPCL’s Surana.
Diesel Demand Slumps And Extended Monsoon Adds To Demand Cuts
46
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
he government may cut its stake to below 51 per
cent in Indian Oil Corporation, ET NOW reported
quoting agencies. ET Now in a report said the
government is looking to become a minority
shareholder in the com-pany. It currently holds 51.5 per cent
in the oil major. Central government has been on a divestment
spree and is considering pruning stakes in a number of PSU
companies. Indian Oil is the third oil company in which it is
thinking of cutting stakes.
State-owned oil and gas explorer ONGC is looking to
sell its stake in recently-acquired refiner HPCL to a strategic
investor, possibly an overseas oil company, to regain debt-free
status of the company existing pri-or to the expensive buy. The
plan for Hindustan Petroleum Corporation Ltd (HPCL) follows
the government’s go ahead to invite a strategic investor for
Bharat Petroleum Corporation Ltd (BPCL) where the Centre
owns 53 per cent stake.
India’s fiscal deficit at the halfway mark in 2019-20 stood
at 92.6 per cent of budgeted estimates, lower than 95.3 per
cent in April-September, 2018-19, helped by transfers from
the RBI. With muted tax revenues, the government will have
to undertake spending cuts and divest to achieve FY20 fiscal
target of 3.3 per cent of GDP, say economists.
Government Keen On Cutting Oil Psu Stakes
olar power major Azure Power Global Limited
posted on 15th November, a 154 % increase in net
loss at ̀ 75.6 crore for the quarter ended September
2019 as against a loss of `29.7 crore reported in
the same quarter in 2018. “The higher losses are primarily
due to higher general and administrative expenses, higher
net interest expenses, partially offset by higher revenue,”
the company said in a statement. The operating revenue of
the company for September quarter stood at `284.6 crore,
an increase of 28 per cent over the revenue for the quarter
ended September 2018.
The company said its power generation during the second
quarter grew 238 million units (MUs) to 610 million units.
The increased generation was mainly a result of additional
operating capacity during the period.
Operating and committed capacity of the company
stood at 3,370 MWs at the end of second quarter, a 10 per cent
increase over the corresponding quarter. During the period,
the company cancelled its participation in 350 MW projects
and received letter of awards for 370 MW of new projects.
Azure Power’s Plant Load Factor (PLF) for the July-
September period stood at 16.8 per cent as compared to
16.4 per cent for the same period last year. This was mainly
attributed to additional capacity in high radiation areas,
which was offset by lower insolation due to extended
monsoon, the firm said.
The company expects its operational capacity to rise
in a range between 1,800 Mw and 1,825 MW by the end
of the current financial year in March 2020. It is working
on a revenue target between `1,277 crore and `1,335
crore for the current fiscal.
Azure Power Posts 154% Net Loss In Q2 This Year As Compared To Last Year
47
V pioneer Tesla may have to cut down trees in a pine forest near Berlin where the U.S. electric vehicle maker plans to build its first factory in Europe, but the paradox is that Tesla head Elon Musk pledged to
donate US$1 million for the planting of 1 million trees.
At the end of October, Musk said he would donate for the planting of 1 million trees in forests of need around the globe, and even used the “Treelon” Twitter handle for a few days.
Early November, Musk announced with heart emoticons the colors of the German flag that Tesla has picked Berlin for its Gigafactory in Europe. The plant “Will build batteries, powertrains & vehicles, starting with Model Y,” Musk said, and later noted that ‘Berlin rocks.’
Announcing the decision, Musk said “Everyone knows that German engineering is outstanding, for sure. That’s part of the reason why we are locating our Gigafactory Europe in Germany. We are also going to create an engineering and design center in Berlin, because Berlin has some of the best art in the world.”
The decision was not surprising - analysts had expected that Tesla would pick Germany for its European factory, although most had expected the location to be in the westernmost parts of Germany near the borders with Belgium or the Netherlands. The land for the factory on the outskirts of Berlin is a 300-hectare plot in the municipality of Grünheide, and there is a pine forest in the area, according to German outlet Welt.
Tree Planter Musk May Become Tree Cutter For Esla Plant In Germany
olorado regulators recently approved a set of
safety measures designed to increase citizen
protections in areas surrounding thousands of
miles of underground oil and gas pipelines in the
state. The decision by the Colorado Oil and Gas Conservation
Commission followed pleas by a survivor of the explosion
that regulators verify energy firms reporting compliance with
tougher safety rules are really doing so.
The new rules provide public access to a more detailed
and accurate state map of locations of flowlines, which
are pipelines that connect an oil or gas well to other pieces
of equipment. They also tighten procedures that must be
followed by energy firms and their reporting requirements
when they install, open, close and abandon flowlines.
The rulemaking process was prompted by a 2017 home
explosion in Firestone that killed two people and injured two
others. Erin Martinez lost her husband and brother in the blast.
Her 11-year-old son was injured, and she suffered severe burns
and internal injuries.
Investigators blamed odorless gas seeping from a long-
abandoned flowline just feet away from the home. She’s had 29
surgeries and counting, all while becoming a leading activist
voice in Colorado’s efforts to ensure that its multibillion-dollar
fossil fuels industry operates safely and in an environmentally
friendly manner.
Colorado Beefs Up Safety Rules Around Underground Pipelines
48
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
n the directions of the state Chief Minister Y
S Jagan Mohan Reddy, the APSRTC recently
cancelled its tender floated in September
seeking to deploy the electric buses in the
state of Andhra Pradesh.
“The Andhra Pradesh State Road Transport
Corporation (APSRTC) has dropped the move to
introduce 350 electric buses”, same the announcement
19th November. Initially, the plan was to introduce 1,000
such buses at one-go but later reduced the number to
350 because of ‘logistic reasons.’
Just days before the tender was supposed to be
opened, the Chief Minister wanted it to be referred to
the Judicial Preview Commission for scrutiny as per the
Andhra Pradesh Infrastructure (Transparency through
Judicial Preview) Act, 2019, following allegations that the
government was seeking to favour a particular company
in awarding the contract.
Videocon Under Hammer And Haldiram Is In The Race Among 8, Including A State Run Oil Company
edanta and Indonesian billionaire Robert Hartono
are among the eight competitors for acquiring
Videocon Industries under the Insolvency and
Bankruptcy Code (IBC) framework for resolution
of stressed companies, according to people familiar with
the matter. But the added spice comer with snacker giant
Haldiram’s entering the race too.
Others include strategic and financial investors, and
a state-run oil and gas company, according to banking
sources. The process to find a buyer for Videocon
started in August. All parties have submitted formal
expressions of interest (EoI) and will soon start due
diligence. Despite the diversified nature of Videocon’s
operations, all potential bidders are expected to submit
a comprehensive resolution plan and not bid for assets
or business verticals piecemeal. The Hartono family,
which owns Indonesia’s largest private sector bank and
tobacco company, is bidding through one of its holding
companies for Videocon’s electronics business. The
Hartonos’ combined net worth is estimated at $38 billion,
making them among the five richest families in Asia.
Andhra Cancels Tender To Introduce 350 Electric Buses
49
ndianOil’s Madurai LPG bottling plant located in
Mattaparai village in Dindigul district, will soon enhance
its storage capacity from the current 900 (3 x 300) metric
tonne (MT) by another 1,800 (3 x 600 MT). The plant is
awaiting regulatory clearance.
Speaking to newspersons in Madurai recently, DGM K
S Shankar, DGM (LPG), Tamil Nadu, and general manager R
Chidambaram, southern region said the 37-acre campus
which caters to Madurai, Dindigul, Virudhunagar, Tuticorin,
Tirunelveli and Kanyakumari districts through a network of
115 distributors, was equipped with state-of-the-art security
measures including fire safety equipment.
The plant has a capacity to fill and distribute 19,000
cylinders per day. While the annual capacity is the delivery of
60,000 cylinders, in 2018-19, it produced 93,000 cylinders, as
the demand went up. The electronic carousel fills 24 cylinders
per minute and 1,400 cylinders per hour. The loaded cylinders
are checked for valve leaks and o-ring leaks, through remote
monitoring. The defective valves are replaced immediately if
any anomalies are detected.
IOC’s Madurai LPG Bottling Plant Slated For Capacity Expansion
Dakota Access Pipeline Expansion Plan Hits Legal Speed Breaker
nergy Transfer, whose original Dakota Access pipeline began operations in 2017, plans to double the oil flow capacity of the pipeline to 1.1 million barrels per day (bpd) from the current 570,000 bpd to
meet rising production from the Bakken. But the road is laced with problems. North Dakota’s regulators began hearings on whether Dakota Access’s owner Energy Transfer should be allowed to double the pipeline’s capacity. The company says that so far the Dakota Access pipeline “has helped to improve the region’s drilling economics by lowering transportation costs for operators and is providing a safer means of transportation over truck or rail.”
North Dakota Public Service Commission started hearings on Wednesday, 13th November on whether to allow Energy Transfer to build pump stations in North Dakota in order to boost the pipeline capacity, and both the company and the Standing Rock Sioux Tribe weighed in on the issue. The commission is expected to come to a decision at a later date.
Even after Dakota Access entered into service, the Bakken shale play started to see at the end of 2018 all pipelines full to capacity again, leading to hefty discounts of the oil from the Bakken compared to WTI. Energy Transfer argues that “Optimizing capacity will enable further development in the Bakken, which means more jobs and economic benefits for local communities.” At the hearing on Wednesday, Energy Transfer officials said that the expansion does not increase the risk of an oil spill.
But the Standing Rock Sioux, who had opposed the original pipeline project too, beg to differ from the company’s assessment. “Worst case” spill will be far more dangerous under proposal to double pipeline capacity,” Standing Rock Sioux said before the hearing. “The Tribe is concerned that, if approved, the DAPL capacity expansion will set the stage for yet another Energy Transfer pipeline spill, with devastating consequences for the Tribe, the environment and the citizens of North Dakota,” they argued.
50
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
fter some insipid experiences, the government’s
latest offering of solar power projects based
on indigenous kits attracted bids for twice the
1,000 MW capacity offered by state-run SECI
(formerly Solar Energy Corporation of India) Ltd on Thursday,
14th November, marking a revival in investor sentiment as a
result of several progressive policy tweaks making domestic
manufacturing a viable option.
This marks the first over-subscription of a renewable
energy capsule in nearly two years during which auctions
for solar and wind energy projects of over 10 GW had to
be extended, postponed or retendered in the absence of
response from investors.
Industry sources estimate the latest domestic
manufacturing-linked capsule will lead to an investment of Rs
6,000 crore into setting up solar kit-making capacity, giving a
major boost to prime minister Narendra Modi’s ‘Make in India’
campaign that appeared to be losing steam amid the country’s
economic low. In the jobs front too, the capsule is estimated to
create up to 10,000 permanent direct employment and 40,000
indirect employment.
Hero Sues Andhra Discoms To The Tune Of `200 Cr
enewable energy companies are at loggerheads
with the Andhra Pradesh government on several
issues. In the latest faceoff between the Andhra
Pradesh government and renewable energy
developers, Hero Future Energies has filed a contempt
petition with the Andhra Pradesh electricity power regulator
for recovery of dues from the state’s discoms, which have not
been paid despite an earlier order from the regulator.
“Hero got the order to release the payment but we have
still not been paid,” said Sunil Jain, CEO, Hero Future Energies.
“Altogether the industry is owed several thousand crores by
AP discoms.”
Hero has claimed it has dues of `200 crore from various
Andhra Pradesh discoms pending since 2017. The company
approached the APERC (Andhra Pradesh Electricity Power
Regulatory Commission) for a resolution on the matter,
following which APERC directed the discoms to clear Hero’s
dues two months ago.
“The respondent shall pay the amounts due to the
petitioner towards the tariff/price payable under the Power
Purchase agreement towards the electricity generated and
supplied by the petitioner to the respondent from March
2017 to 31-08-2019 today, in installments of not less than
`16.40 crores per month by 15th of every month commencing
from 15-09-2019 till the entire liability for the principal sum is
discharged,” the APERC order said.
Latest Solar Power Projects Get Oversubscribed –Reverse Earlier Poor Run
51
India Ups Renewable Energy Ante To 200 GW By 2022
ndia will have over 200 GW of renewable energy
capacity by 2022. Power and New & Renewable Energy
Minister R K Singh exuded confidence when he made
the announcement early November. India has set an
ambitious target of having 175 GW of renewable energy
capacity by 2022.
“We have decided that by 2022 we will establish 175 GW
of renewable energy capacity. We are close to achieving the
target,” Singh said at BRICS Energy Ministers meet in Brasilia,
Brazil on Monday, 11th November.
“The renewable energy capacity which has been installed
is 83 GW and under installation is 31 GW and 35 GW capacity
is underbidding. So this becomes around 140-145 GW. In
hydro, we have installed capacity of around 45 GW and under
installation capacity is about 13 GW, which makes it (hydro)
around 60 GW. So we will cross 200 GW capacity of renewable
energy by 2022,” the minister said. Singh said that more than
55 per cent of installed power generation in India will be from
renewable sources by 2030.
hile there was a sharp plunge in India’s electricity demand in October in tandem with falling coal imports vehicle sales and fuel demand hasn’t waned and crude oil imports
remained high. Power demand in Asia’s third-largest economy slumped 13.2 per cent in October from a year earlier, the steepest monthly decline in more than 12 years, according to government data. Coal imports fell to 14.7 million tonnes in October, the lowest since January and the third straight month of declines, according to vessel-tracking and port data compiled by Refinitiv. Imports were also down 16.9 per cent from the 17.7 million tonnes recorded in October last year, a further sign that India’s coal demand is softening in the face of slower economic growth.
Coal Demand Waned But Crude Imports Remained High In October
OCL is in talks with oil major Rosneft to explore possibility of importing Russian oil, its chairman Sanjiv Singh said on Tuesday, November 12. “We have taken very small quantities from Russia in the past which can’t be
considered significant so we are trying to explore if we can increase the Russian crude volume coming to India...We are in discussion with Rosneft and we are hopeful that something should work,” Singh told reporters at an energy conference. Only a day earlier, Dharmendra Pradhan (Coal Minister) had declared that India was open to importing Russian oil.
“India, the world’s third-biggest oil importer and consumer, ships in about 60% of its overall crude needs from the middle eastern countries. The nation is gradually tapping new sources to hedge itself against geopolitical risks”, says an analyst.
IOCL Talking To Rosneft To Initiate Oil Imports
52
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
ero Future Energies (HFE) announced 11th
November, that Abu Dhabi Future Energy
Company or Masdar would be investing $150
million strategic investment in the company.
This will help fund the expansion of HFE’s renewable energy
portfolio, including in selected international geographies. This
is the second strategic investment in Hero Future Energies since
2017 following an initial $125 million made by International
Finance Corporation, part of the World Bank.
HFE hopes that around 25 per cent of its growth will
come from new international markets, including Europe and
the UK, and Asia, including Bangladesh, Singapore, Vietnam,
Philippines and Indonesia. “Hero Future Energies and Masdar
are ideal long-term strategic partners. We have clear alignment
in our core ambitions. We are committed to advancing
the development, commercialisation and deployment of
cutting-edge renewable power solutions,” HFE Chairman and
Managing Director Rahul Munjal said.
Masdar, the renewable energy arm of Mubadala
Investment Company, has a history of private sector
partnerships and has delivered renewable energy projects in
25 countries since 2006 representing a combined investment
of around $13.5 billion.
HFE To Get $150 Million From Investor Masdar Of Abu Dhabi
ran and US continue mind games vis-a-vis renegotiating
the nuclear deal which collapsed after fresh sanctions
were imposed on Iran by Donald Trump. Trump recently
attempted to reach a new agreement with the Islamic
Republic of Iran since withdrawing the United States of
America from the Joint Comprehensive Plan of Action in May
2018. Tehran’s leaders have a singular opportunity to craft a
new deal favorable to them due to his eagerness. They could
arrange for the lifting of economic sanctions and pumping in
of American and European finance, technology and industry.
In Trump’s own words, a new pact would “make Iran great”
without seeking “leadership change.”
France, Germany, Britain, Russia, China, Iran and even the
US discussed a new framework at the UN General Assembly
in late September, according to French President Emmanuel
Macron. The proposed new deal would have Iran permanently
abjuring nuclear weapons, conforming to a long-term
framework of peaceful nuclear technology, and contributing
to regional stability and noninterference in return for the US
lifting sanctions. Restricting the Islamic Republic’s ballistic
missiles was set aside for future discussion. Iran’s Foreign
Minister Mohammad Zarif disputed these terms, however,
upon returning to Tehran.
Conditions within Iran prevent the Rouhani administration
from working with the Trump administration to settle the
nuclear issue.
Trump Softens Stance On Iran But The Latter Reluctant To Renegotiate Nuclear Deal
53
he recent round of coal block auction for the non-
regulated sector is likely to give four states about
`43,000 crore over the life of the mines from the
extractable reserves, according to market gurus
who hold the pulse of the bazaar. This, however, assumes that
the entire extractable reserve of the six blocks auctioned under
the current round are mined by the companies that emerged
winners, they hasten to qualify.
“States will also benefit from additional revenue
streams like royalty on Coal India’s notified prices besides
the auction premium to be paid by the win-ning bidder,”
said Jayanta Roy of ICRA.
The highest revenue of about `37,000 crore will go to
Odisha, where Vedanta was the highest bidder at `1,674
per tonne for the Jamkhani block with 222 million tonnes
extractable. Chhattisgarh will get about `5,200 crore from two
blocks — Gare Palma–IV/1 and Bhaskarpara.
West Bengal will gain about `900 crore from the
Jaganathpur-B block, for which Powerplus Traders Pvt. Ltd.
made the highest bid of `185 per tonne for 50 million tonnes
of extractable coal reserves. Madhya Pradesh is expected to
receive `490 crore as the estimated extractable reserves for its
two blocks are very small. It will be split between Bikram coal
block that has 20 million tonnes and Brahampuri block that has
12 million tonnes.
efining PSU giant IndianOil has got clearance to
set up a Rs 766-crore 2G ethanol plant in Haryana’s
Panipat district. Making the announcement
through a tweet on Sunday, 10th November, Union
Environment Minister Prakash Javadekar said, “Happy to inform
that Environment Clearance is given to IOCL to set up new 2G
Ethanol plant in Panipat.”
He also said that the project would help in achieving
the goal of doubling farmers’ income. “This project not only
promotes use of environment friendly fuel but also aids in
fulfilment of government’s goal of doubling farmers’ income,”
he tweeted. The IOCL had submitted a proposal seeking
environment clearance for its proposed 100 KLPD Ligno-
Cellulosic 2G ethanol plant at Baholi in Panipat district of
Haryana which has been duly granted.
The estimated investment in setting up the plant is
Rs 766 crore. Ethanol produced will be used for blending in
transportation fuel, an official source said. Recently, the central
government had notified that no environmental clearance
would be required by sugar mills to produce additional ethanol
from sugarcane juice.
IOCL Gets Green Signal For 2G Ethanol Plant In Haryana
Experts Estimate That Recent Coal Block Auctions Will Fetch Big Bucks For 4 States
54
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Oilasiajournal
DECEM
BER 2019
he Solar push forms the foundation of India’s overall
alternative energy preferences. The deal just got
a little sweeter. The renewable energy ministry
clarified on Wednesday, November 6 that solar
energy developers would be permitted to install additional
Direct Current (DC) capacity which can be higher than
the contracted alternate current (AC) capacity. Developers
convert DC into AC for supplies to discoms. “The installation of
additional DC Capacity of solar PV power plants should be left
to developers,” Ministry of New and Renewable Energy (MNRE)
said in a statement.
“In some cases, Solar companies have set up larger power
generation DC capacities than contracted AC capacities. The
government’s decision is likely to give some relief to solar
energy developers. Some states consider higher DC capacity
than contracted AC capacity as a violation of power purchase
agreements (PPAs)”, says a source.
Solar Companies Can Now Install Additional DCCapacities As Compared To Contracted AC Capacities
preliminary text agreed upon by EU member
states calls on the European Investment Bank to
stop funding fossil fuel projects, in what would be
a breakthrough in the bloc’s climate policy and a
setback for pollutants like coal, gas and oil. EIB figures show the
bank funded almost 2 billion euros ($2.2 billion) of fossil fuel
projects last year and 13.4 billion euros worth since 2013.
The document, seen by Reuters, was agreed on Tuesday,
November 5 by mid-ranking representatives of the EU’s 28
national governments, but still needs the green light from
more senior diplomats. The text for the first time calls on the
European Investment Bank (EIB), a multilateral development
bank (MDB) and the bloc’s top lender, to bring to an end its
multi-billion-euro funding of fossil fuel projects in a bid to
reduce carbon emissions.
The EU “encourages the MDBs to adopt responsible
investment policies and to phase out financing of fossil fuel
projects, in particular those using solid fossil fuels, taking into
account the sustainable development and energy needs of
partner countries,” the document said.
EU Urges European Investment Bank To Stop Funding Polluting Projects
55
mall oil drillers in the US are going through trying times. Wells Fargo, JP Morgan Chase, and Royal Bank of Canada, among others, have reduced the value of reserves of oil and gas companies, according to more
than a dozen banking and industry sources familiar with the borrowing base redeterminations. With the lowered value of reserves, drillers now face an even more restricted access to capital than in previous months.
The value of reserves estimated by banks serves as the basis for many small oil and gas firms to get funding for their drilling activity and operations. And in recent months, in many cases, this is the only source of funding that many of them can get because the equity and bond markets are practically closed for small oil and gas firms right now.
Small Oil Drillers Get FundChoke Whammy In USA
ith a $238 billion market cap, Royal Dutch Shell is easily one of the world’s largest integrated oil and natural gas companies. It has been working to increase its green credentials by investing in
electricity assets and clean energy, but the vast majority of its portfolio is still in the oil & gas sector. And according to CEO Ben van Beurden, it’s going to stay that way for a very long time.
The company itself grew and expanded the entire energy sector, from the upstream (drilling for oil and natural gas) to the midstream (pipelines) to the downstream (refining and chemicals). These three businesses account for virtually all of the company’s revenues. But carbon fuels are being displaced by cleaner alternatives, including solar and wind power. With more than a 100-year history behind it, Shell is used to shifting with the times. And today is no different, with the company
Shell Diversifies But Still Partial To Time Tested Oil And Gas Business
“India is going to spend a massive $100 billion in creating oil and gas infrastructure, including a $60 billion spend in the natural gas sector, over five years through 2024”, says Oil Minister Dharmendra Pradhan, outlining a clear roadmap for the future as envisaged by the government.
“India is investing close to $60 billion in developing gas infrastructure including pipelines, LNG terminals and CGD network. The country is spending a massive $100 billion by 2024 in the overall oil and gas sector,” Pradhan further said. Pradhan was speaking at an industry event early November.
The minister said an average Indian gets only a third of the per capita consumption of energy that the UN believes is necessary for human well-being and the country is finding ways to achieve the twin objective of more energy and less carbon by tapping into a healthy mix of all commercially viable sources.
“We took lead in the global energy transition by promoting International Solar Alliance and today more than 80 countries have joined this alliance. India has a huge appetite for energy and will be a driver of global energy demand in coming decades,” he said. Pradhan also added the oil and gas industry will continue to play a crucial role in meeting India’s energy requirement despite system-wide energy transition measures. “The country’s oil and gas companies have a proven track record of competence and can leverage their technology and business expertise to transiting from oil and gas to energy players,” he said.
He also highlighted that the government’s strategy for sustainable energy growth is multi-pronged and the share of renewable energy in the country’s overall electricity mix has gone up to 22 per cent from 10 per cent in 2014-2015. The country has an ambitious plan to increase renewable energy capacity to over 175 GW by 2022 and up to 450 GW subsequently. Talking about the government’s focus on alternative energy, Pradhan said under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme private entrepreneurs are going to set-up 5,000 Compressed Bio Gas (CBG) stations across the country with Oil Marketing Companies (OMCs) providing complete off-take guarantee with price stability. He added that ethanol blending in petrol has gone up to 6 per cent from 0.67 per cent in 2013 and the government plans to increase the blending of ethanol to 10 per cent by 2022.
India To Invest $ 100 Billion In Energy Infrastructure Through 2024 - Pradhan
56
www.oilasia.com
Oilasiajournal
DECEM
BER 2019
Sanctions-Hit Iran Begins To Show Nuclear Fangs
ran’s President announced on 5th November, that Tehran
would begin injecting uranium gas into 1,044 centrifuges,
the latest step away from its nuclear deal with world
powers since President Donald Trump withdrew from
the accord over a year ago.
The development is significant as the centrifuges
previously spun empty, without gas injection, under the
landmark 2015 nuclear accord. It also increases pressure
on European nations that remain in the accord, which at
this point has all but collapsed.
In his announcement, President Hassan Rouhani did
not say whether the centrifuges, which are at its nuclear
facility in Fordo, would be used to produce enriched
uranium. The centrifuges would be injected with the
uranium gas as of Wednesday, Mr. Rouhani said. There
was no immediate reaction from the International Atomic
Energy Agency, the United Nations’ nuclear watchdog
now monitoring Iran’s compliance with the deal.
Mr. Rouhani stressed the steps taken so far,
including going beyond the deal’s enrichment and
stockpile limitations, could be reversed if Europe
offers a way for it to avoid U.S. sanctions choking off its
crude oil sales abroad.
The centrifuges at Fordo are IR-1s, Iran’s first-
generation centrifuge. The nuclear deal allowed those at
Fordo to spin without uranium gas, while allowing over
5,000 at its Natanz facility to enrich uranium.
airn Oil & Gas, a Vedanta subsidiary, said Wednesday,
November 6 that it had secured a 10-year extension
of the production sharing contract for the Ravva
block in Andhra Pradesh. The extension was
approved by the Directorate General of Hydrocarbons. The
extension comes as Cairn completes 25 years of operations in
Ravva. With this, the PSC is now valid effective 28 October 2019.
“Ravva, the oldest producing asset in India for Cairn, becomes
the first large field to get PSC extension under the policy for
the grant of extension to the production sharing contracts
signed by Government awarding small, medium sized, and
discovered fields to private joint ventures (JVs),” the company
said in a statement.
The extension would enable the JV partners to recover
about 13 million barrels of oil equivalent. In addition, the JV
partners would invest `550 crore to drill seven wells under the
Revised Field Development Plan targeting additional reserves
of 11.7 million barrels of oil equivalent. “These campaigns put
the JV on course for yet another milestone in hydrocarbon
recovery from this world-class offshore asset,” it added. Ajay
Kumar Dixit, chief executive officer, Cairn Oil & Gas, Vedanta
said that fast-tracking decision making would help quicker
and timely recovery of these additional reserves. Cairn took
production up at Ravva field from 3,000 to 50,000 barrels of oil
per day and has sustained this production for nine years.
Anil Agarwal, chairman, Vedanta Resources, said, “...We look
forward to working with all our partners towards achieving our
vision of contributing 50 per cent of the country’s domestic
production and supporting the government in its energy
security goals.”
Cairn Gets 10 Year Extension For Ravva PSC
57
oal India has decided to advance its target year for achieving an annual production capacity of one billion tonnes by two years – 2024, reports energyworld.com. The company was earlier
planning to achieve the target by 2019-20. However, lack of adequate demand and a plethora of issues with respect to raising production levels had forced the company to push back the deadline to 2025-26.
Minister of Coal & Mines, Pralhad Joshi on Friday said state-run Coal India will produce one billion tonnes coal by 2023-24 and the company has to produce 750 million tonnes in the next fiscal. This year its production target is 660 million tonnes which, analysts believe, may not be achieved due to a series of issues. The minister was addressing employees at the 45th Coal India Foundation Day.
He also said the company will offer around eight thousand jobs in the near future to boost the employment and directed Coal India to take necessary steps to achieve these goals in light of growing energy requirements of the nation and assured all possible support from the government and ministry of coal to achieve these goals.
“Power demand is rising so fast and steeply that there is enough opportunity for both government and private sectors to produce coal without adversely impacting each other. Referring, the central government’s recent decision of 100% foreign direct investment under automatic route in coal, as one of the much-needed structural reforms in the sector, he said the decision will minimize the volume of coal import that is denting the government exchequer and will help the nation get much amount of coal. “He made it very clear that FDI in coal does not stand for FDI in Coal India and the government wants to strengthen Coal
India,” a statement issued by coal ministry mentioned.
Coal India Fast Tracks CoalProduction Target By Two Years
ndia should hold talks with the European Union for a free trade agreement, the government said on Tuesday, 5th November- a day after it refused to join a China-backed regional trade pact, mostly in apprehension of dumping
of more cheap Chinese goods in India. Trade Minister Piyush Goyal said sectors such as gems, textiles and agriculture have pushed for a trade pact with the EU. German Chancellor Angela Merkel has also called for talks to restart to finalise an agreement.
“We should engage in a FTA with the EU,” Goyal told a news conference where he explained the reasons for not joining the Regional Cooperative Comprehensive Economic Partnership (RCEP) that 15 nations concluded on Monday.
Goyal said India had put forward “strong demands” on services, investments leading to the prolonged negotiations for the RCEP, which includes the 10-member Association of Southeast Asian Nations (ASEAN), Japan, South Korea, Australia and New Zealand, besides China.
Meanwhile, China is pushing US President Donald Trump to remove more tariffs imposed in September as part of a “phase one” US-China trade deal, people familiar with the negotiations said on Monday.
The deal, which may be signed in November by Trump and Chinese President Xi Jinping at a yet-to-be determined location, is widely expected to include a U.S. pledge to scrap tariffs scheduled for 15 December on about $156 billion (£121 billion) worth of Chinese imports, including cell phones, laptop computers and toys.
India Doesn’t Join RCEP - Looks For Better Deal From EU
58
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Oilasiajournal
DECEM
BER 2019
Air Pollution Rubs It IntoDelhi’s Wounds This Diwali
ir pollution levels in Delhi ballooned way over
the safe limits on Diwali night. The overall
24-hour average of air quality index released
Monday settled in the ‘very poor’ category at
368. This is the worst recorded AQI in the national capital
since February this year.
Air quality in Delhi, which remained normal till Sunday
evening, went dangerously beyond the permissible limits in
the city as bursting of firecrackers picked up late at night. As
per official data collated by AirVisual, AQI in Delhi, which was
recorded at 163 at 5:30 pm, touched 1,005 around 11:30 pm.
An AQI between 0-100 is considered to be in the
”good+satisfactory” bracket, and 101-200 is termed as
”moderate”, while AQI between 201-300, 301-400, and 401-
500 falls in the “poor”, “very poor”, and “severe” category,
respectively. Anything above 500 is “severe-plus emergency”
category. According to World Health Organisation’s (WHO)
standards, an AQI of 10 is considered as safe.
In several locations, the air quality was recorded to be
far worse, as per Delhi Pollution Control Committee’s (DPCC)
real-time data. For instance, in Jawaharlal Nehru Stadium
area, concentration of major pollutant PM 2.5 — fine particles
having a diameter of less than 2.5 micrometers and capable of
reaching deep into lungs — touched 1,569 μg/m3 at 12 am.
Similarly, PM 2.5 levels in Anand Vihar touched 1,549 μg/m3 at
2 am on Monday.
ind power in India just got a fillip as the central government asked Gujarat to hasten the allocation of 60,000 hectares of land for the solar and wind park project in Kutch district.
The project is expected to attract an investment of about Rs 1.35 lakh crore. The proposed solar and wind park is one of the projects of national importance that are reviewed every month under the PRAGATI (Pro-Active Governance and Timely Implementation) programme.
This is all the more significant as the PM himself oversees PRAGATI. A top state government source further confirmed November 6, that the PM wanted to know the reasons for the slow pace of some key projects. “He specifically reviewed the land allocation process of 60,000 hectares which is close to the border with Pakistan,” the source stated.
“Unlike private land, of which acquisition is both challenging and expensive, this land is completely owned by the government. The PM has directed that the process of land allocation be completed quickly and a report on the action taken sent within a week.”
Gujarat Industries Power Company Limited (GIPCL), a state government undertaking, is the nodal agency for the implementation of the project. Around 30,000MW of solar and wind power is expected to be generated at the park. The power generation at the proposed park will be in addition to the state government target of developing renewable power generation capacity of 30,000MW by 2022.
“There is a huge chunk of government land in Kutch district where acquisition is not an issue at all,” the source said. “The PM has directed that all other necessary clearances also be expedited for this project.”
Government Allocates 60000 Hectares For Solar And Wind Projects In Kutch On Priority
59
India Plans Major Renewable Energy Hubs In Borderline States
olar parks account for 40% of the government’s target
to build 100GW of solar-power capacity by 2022.
However, faced with land-acquisition problems and
transmission challenges, the target appears a bridge
too far at the moment. The Indian government is also working
on yet another mega program to boost renewable energy
capacity in the country by utilizing barren areas and wasteland
along its border with Pakistan.
A senior official at the Ministry of New and Renewable
Energy has told media outlets that the government is
currently studying the feasibility of setting up projects along
the border with Pakistan in the states of Rajasthan and
Gujarat. Studies are underway to determine the possibility
to set up 30 gigawatts of solar and wind energy capacity in
Gujarat and 25 gigawatts in Rajasthan.
Both these states have large concentrations of desert
and wasteland land. Rajasthan already hosts several
large-scale solar power projects in the border district
of Pokhran. However, the marsh lands in Gujarat’s Kutch
have environmental significance, and it will be interesting
to see if the government would tap those areas to set up
renewable energy capacity.
The Charanka Solar Park, India’s first multi-developer
large-scale solar power park, is located just outside the
Kutch district and around 50 kilometers from the border
with Pakistan. Sites near this solar park may be tapped for
future project development.
.S. oil prices are down 17% and natural gas is
down about 31% from a year ago, undercutting
production increases. “Costs of job cuts and
retiring debt also will pressure profit at some
companies,” analysts said ahead of reports.
Investors are bracing for weaker results from U.S. shale
players in coming days as lower oil and natural gas prices
and cost-cutting measures have weighed on third-quarter
operations. Ironically, Shale was the market darling in the
early stages for the USA and the atmosphere was upbeat. That
seems to have changed drastically now.
As per a report on October 28, “Major shale producers
ConocoPhillips (COP.N) and Concho Resources (CXO.N) this
week kick off quarterly earnings reports for a group whipsawed
this year by volatile pricing and investor demands for improved
returns. Oil and gas producers have cut drilling and slashed
jobs amid worries over pricing outlooks.”
“I think we are moving from a growth to a value phase,”
said Brad Holly, chief executive at Whiting Petroleum Corp
(WLL.N) at a Denver oil conference earlier this month.
Whiting, Devon Energy (DVN.N), and PDC Energy (PDCE.O)
each pared staff in recent months as prices swooned. Cutbacks
have spread across the sector, with Halliburton (HAL.N),
Schlumberger (SLB.N), and Patterson-UTI Energy (PTEN.O)
idling equipment.
Investors will be watching for shale productivity updates.
Last quarter, Concho Resources’ (CXO.N) stock plunged 22%
in a day after cutting its production outlook, blaming well
designs that hurt output.
Price Reductions In Oil And Gas Hits America’s Shale Dream
60
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Oilasiajournal
DECEM
BER 2019
multi-agency operation to pump out naphtha
from a tanker that got stranded off the Panaji coast
late October received a setback after a hydraulic
pump, flown in from Mumbai by the Navy, fell into
the sea while being ferried to the site. The tanker ran aground
on October 26 on the rocky shelf. According to officials
involved in the operation, no oil spill has been reported in the
vicinity of the vessel. However, the Coast Guard has stationed
one oil spill response vessel onsite.
“That (hydraulic pump) accident would delay the process
of emptying the tanks of the stranded tanker Nu Shi Nalini by
a couple of days,” Goa Chief Minister Pramod Sawant said. The
Navy in a statement said, the machinery had to be dropped in
the sea for the safety of aircraft as well as tanker.
“While making its final approach to the ship, the aircraft
experienced increasing vertical oscillations. The crew
attempted to control the aircraft, but keeping in mind safety of
the aircraft and likelihood of damage to the ship’’s deck as also
risk of fire due to the highly inflammable naphtha on the ship,
considered it prudent to jettison the load into the water next
to the ship, preventing a potential mishap,” the statement said.
Naval divers had been deployed to retrieve the gear, it added.
Earlier, Sawant gave a clean chit to Goa Urban
Development Minister Milind Naik, who has been accused
by the Congress of bringing the tanker whose engine was
damaged in an accident in Kochi earlier this year to Goa’’s
Mormugao Port Trust to broker a deal with a buyer in the
coastal state.
“The process of emptying the vessel will be delayed by a
couple of days,” Sawant said.
The operation, involving the Navy, the Indian Coast Guard,
the Director General Shipping, the Mormugao Port Trust and
state agencies, to transfer naphtha and nearly 50 tonnes of
oil and 19 tonnes of diesel to other vessels has already been
delayed by several days on account of rough sea. Nu Shi Nalini
was anchored five nautical miles off Goa’’s coast on October
24, when weather experts had forecast stormy conditions off
the coastline, on the instructions of the Mormugao Port Trust.
The Goa government has filed an FIR and the police are
investigating the possibilities of criminal negligence that could
have led to the accident. But political blame game has already
begun. The Congress has, however, accused Goa Minister
Milind Naik of summoning the damaged vessel to Goa. “Since
the ship was handicapped and contained naphtha cargo, Naik
tried to strike a deal on behalf of a local firm to buy naphtha in
a distress sale. He is the one responsible for getting the vessel
here, which is now an ecological risk,” Goa Congress chief Girish
Chodankar alleged.
Giving a clean chit to Naik, Sawant said the Minister had
nothing to do with the incident. The cargo has been purchased
by an UAE firm.
Sawant also said two barges of 200 and 400 tonnes
capacity have been requisitioned to transport naphtha to
another tanker, which is enroute from the UAE.
“The barge will go into deep sea and transfer naphtha to
the tanker, which is coming from the UAE. After the naphtha is
emptied, the ship will be repaired,” Sawant said.
Hydraulic Pump Falls Into Sea In Transit-Delays Naptha Pumping From Stranded Oil Tanker
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