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Prime Minister of India, Dr. Manmohan Singh made the following statement while briefing the Planning Commission meeting on September 15, 2012: We ended the Eleventh Plan with some notable achievements. The economy grew at an average annual rate of 7.9 percent. This is commendable for a period which saw two global crises one in 2008 and another in 2011. We should then try to accelerate growth to reach around 9 percent by the end of the Plan period. As the Plan document points out, our objective is not just growth of GDP, but growth that is inclusive and also sustainable. Our fiscal deficit is too high and is attracting adverse comment from analysts. It must be brought down over the medium term to release domestic resources for productive deployment in the economy. Because export prospects are not very encouraging, the Plan projects a current account deficit of 2.9 per cent of GDP. Energy is a difficult area where our policy needs a comprehensive review. We are energy deficient and import dependence is going up. It is vital for our energy security that we increase domestic production and also increase energy efficiency. Rational energy pricing is therefore critical. Our energy prices are out of line with world prices. The recent increase in diesel prices is an important step in the right direction. Energy security represents a radical solution to the underperforming Indian economy and basis the current situation, energy security is not merely an aspiration but a critical imperative for an economy with the potential to sustain its performance as a Breakout Nation. Following the statement, the burning question being discussed at the Planning Commission meeting was how to design Indias energy policy for the coming five years in order to ensure it meets the demands of its burgeoning population as well as help revive the drowning economy.
to be inefficient. The price vagaries of imported coal coupled with domestic infrastructure constraints make this a difficult proposition1. While hydroelectric power plants account for 19% of power generated in India, developing them involves major rehabilitation and resettlement, land acquisition as well as environmental clearance. Nuclear power currently constitutes only 1% of the total primary energy consumption of the country and its share in the primary energy mix is expected to increase only marginally to about 3% in 2035 indicating limited potential for nuclear fuels in India.1 This situation thus highlights the importance of crude oil to Indias energy future and the dire need to work towards ensuring oil security in the quest of energy security. In the past decade, India has faced increasing consumption of oil with marginal increase in production of oil making India more susceptible with respect to its energy security. The increasing difference between crude oil production and consumption requires us to explore solutions both on supply and demand side in order to take steps towards attainment of oil security.
Problem Statement
In this context, we need you to look for solutions for the following problems: 1. What can be done to make India energy secure? 2. What measures can be adopted by the Government to boost domestic exploration of O&G?
References 1. Its our turn now: E&P Partnership for Indias energy security, Report by PriceWaterhouse Coopers http://www.pwc.in/en_IN/in/assets/pdfs/publications-2012/e-p-report-8.pdf 2. Economic Times Dialogue on Energy Security, June 16th 2012 3. The Energy Debate: Can India reduce its import dependence, organized by Network 18, October 1st 2012 4. Statistical Review of World Energy 2012, BP 5. Approach Paper to 12th Five Year Plan, Planning Commission of India
Appendix
2030 Coal Oil Gas 2020 Nuclear Hydro Bioenergy 2010 Other renewables
0%
20%
40%
60%
80%
100%
Fig 1: Energy Demand (Mtoe) of India Source: New Policies Scenario, World Energy Outlook 2012, IEA
25000 20000 India 15000 10000 5000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 China UK US Brazil
Brazil
Fig 3: Import Dependence (Crude Oil): India Vs. Brazil Source: BP Statistical Review of World Energy 2012
60 50 40 30 20 10 0
44 22 22
50
Per cent
15
17
18
12
Unexplored
Fig 4: Exploration Landscape of India Source: Hydrocarbon Exploration & Production Activities, 2011-12, DGH
2193
2039
Norway
Fig 5: Production in thousands barrels per day Source: BP Statistical Review of World Energy, 2012
31 76
Remaining Discoveries
Fig 6: Status of 107* Hydrocarbon Discoveries under NELP. *A total of 111 discoveries (40 oil and 71 gas) have been made in 38 NELP blocks. Segmented data available only for 107 discoveries Source: 15th Report of the Standing Committee on Petroleum & Natural Gas