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India Crafts Fossil Pathway to Secure its Future

By Vijay Jayaraj – GWPF – 13/07/20

India is on the way to become a fossil fuel-based energy powerhouse of the 21st century.

India’s developmental goals for the future are quite ambitious. They ought to be: From tackling the surging poverty rates to providing affordable utilities, the country faces a steep challenge. The key to achieving any of its developmental goals is a strong energy sector. India is the third largest energy consuming nation and is following the fossil fuel pathway (like the West did during the 20th century) to achieve energy independence in the near future.

Relationship to Paris Agreement

The transformation of the energy sector in 21st century India is a remarkable story and it can be singularly credited to fossil fuels, especially coal and oil. The predominantly fossil-based energy sector has grown by leaps and bounds in recent decades. But ever since the country’s membership in the Paris agreement, and its decision to pursue billions of dollars’ worth Renewable projects (like the Asia’s largest Solar Plant that was inaugurated this week), there were doubts and uncertainty surrounding how the country would move ahead with its fossil fuel sector. Green crusaders believed that India’s inclusion in the agreement and their proclivity to large renewable projects would make them a major player in the global effort to offset fossil fuel dependency.

However, that has not been the case. Anti-fossil fuel lobbyists and international bodies like the UN have had zero success in limiting India’s coal use. This is because the country’s “Nationally Determined Contribution (NDC)”—a set of promises that were pledged as a part of Paris agreement—clearly states that the country has sovereign rights to excavate, import, export, and use fossil fuels, and that it will not be determined by non-binding treaties made with UN or other developed countries.

No Holds Barred

India’s recent approach towards fossil utilization can be summed up in three words, “No Holds Barred”. The country has been unapologetic in its pursuit of fossil fuels, especially coal. This attitude was more evident than ever during the recent global COVID-19 lockdown. Despite staring at a big slump in GDP for the foreseeable future, the government allocated a significant sum of its COVID-19 stimulus package to enhancing coal productivity in the country. In May 2020, the country’s Finance Minister Mrs. Nirmala Seetharaman announced a massive stimulus package for coal infrastructure. The Rupees 500 Billion plan (USD 6.7 billion) was directed at improving evacuation of the mined coal at India’s coal mining blocks.

The country’s Prime Minister Narendra Modi has been unequivocal in his support for coal and oil. In the recent move to enhance coal production and make the sector more competitive, the government decided to auction 41 coal mining blocks to private miners. During the inauguration of the auction process, PM Modi commented, “Allowing private sector in commercial coal mining is unlocking resources of a nation with the world’s fourth-largest reserves.”

India’s Coal Minister Pralhad Joshi said that these measures are unprecedented and will give a boost to the country’s coal sector: “Allowing commercial mining in the coal sector, the Govt has completely opened it up for investments. Several restrictions have also been removed, promoting free trade of coal. These are some of the biggest-ever reforms in the coal sector to boost Ease of Doing Business.” As of July 5, 2020, there were 1140 bidders, including 60 international companies. The mines are expected to make up 15% (225 Million Tonnes) of the country’s total coal production in 2025 and generate 280,000 jobs.

Last year alone, India imported 235 million tonnes of coal to meet demand-supply gap, costing the country USD 23 billion. Despite the COVID-19 lockdown and the subsequent drop in energy demand, Coal India Limited’s production dropped just by 11% in April and May 2020. GlobalData has predicted that India’s increased coal production in 2020 (forecasted to be 8.3% higher than previous year) will offset the slight global pause in coal production due to the lockdown, resulting in an overall global coal production of 8.1 billion tonnes by the end of this year. In order to meet the growing demand, India has set a target to produce 1 billion tonnes of coal by 2023-24.

Oil and Gas

The import and production of oil and natural gas have skyrocketed too. Gas accounts for 6% of the total energy demand in India and will more than double in the coming decade. To meet growing demand, India has increased its oil and gas imports from the U.S. significantly and also announced a string of measures to increase production. . Last week, India announced that it will pump USD 140 Billion of new direct investments in gas over the next eight years. Gas production is predicted to reach 90 billion cubic metres in 2040.

The ministry of petroleum and gas has reported that 859 oil and gas related domestic projects, valued at approximately Rupees 3.57 Trillion (USD 48 Billion), are currently being pursued to improve the oil and gas accessibility in the country. The Minister of Petroleum & Natural Gas Dharmendra Pradhan said that, “India plans to almost double its oil refining capacity to 450-500 million tonnes in the next 10 years to meet the rising domestic fuel demand as well as cater to the export market.” The current refining capacity stands around 250 million tonnes and exceeds the domestic fuel demands.

Beyond Imports

Besides increasing imports, the country has also earned global recognition as a fossil fuel destination. Despite sacking employees from the COVID-19 fallout, the European Oil and Gas giant British Petroleum (BP) is set to hire 2000 workers for its upcoming new global business service center in India. Earlier this year, Royal Dutch Shell’s Indian arm entered into partnership with an Indian firm to provide door-step delivery of Natural gas to customers who do not have access. Saudi Aramco, the oil company with the highest revenue in the world, has entered into a USD 60 Billion deal with India to build an oil refinery. The refinery will be based in the coastal state of Maharashtra and will produce 1.2 million barrels per day.

India, like its neighbour China, is aware that energy independence and rapid poverty alleviation can happen only with the complete utilization of fossil fuels available in the country. In order to rescue its dependency on imports, India is also opening up more coal mines, oil refineries and hydrocarbon wells. With a strong fiscal support from its government and continued investments from major fossil fuel enterprises, India is truly on the way to become a fossil fuel-based energy powerhouse of the 21st century.

July 13, 2020 Posted by | Economics | | 2 Comments

India should not participate in Washington-led anti-China coalition

By Lucas Leiroz | July 13, 2020

For years, the US, Japan and India have maintained Malabar military exercises on an annual basis. As the US and Japan are absolutely aligned countries and India is a Washington regional strategic partner, the common objective of the three participants is to face the Chinese advance and to strengthen a coalition against Beijing and its presence in the Indian Ocean. Now, with the increasing of tensions between China and the United States for naval supremacy and between China and India for territorial reasons, Malabar exercises take on a new dimension, being the moment of greatest risk of war in the region in recent years.

Since 2017, Australia has asked to join Malabar naval exercises. The US and Japan have already voted in favor of the Australian participation, but India has not allowed it – the US, Japan and India are the permanent members of the tests and the adherence of a new country depends on a unanimous vote. There was a logistical disagreement between India and Australia, which prevented them from reaching a consensus on the execution of the exercises. In June, both countries signed a mutual logistical support agreement, thus removing the obstacle to Australian participation. Now, as the impasse with China increases, India can change its vote and finally approve Australian participation. The result would be an even stronger coalition scenario against China, which would certainly respond accordingly.

Beijing will not allow its oceanic region to be the target of powerful military exercises by enemy powers without offering high-level war tests in return. China has recently reached an advanced stage of naval military power, practically equaling American power by crossing the International Date Line. In addition, China has significantly increased its military campaign in the South China Sea and has built a large fleet for the Arctic. It is this adversary that the Malabar coalition is facing when promoting a siege in the Indian Ocean. So, what will happen if China invests even more in naval power, modernizing its Navy and devoting itself to a military strategy focused on maritime defense?

On the other hand, Beijing’s reaction may be different and even more effective: investing in Sino-Pakistani military cooperation to affect India. If China and Pakistan start joint naval exercises in the Indian Ocean, a coalition dispute will form, in which both groups will begin a series of regular tests and demonstrations of strength, seeking to intimidate each other.

In all scenarios, a central point is inevitable: the increase of tensions and violence in the Indian Ocean. Perhaps this is, in fact, the American desire in the region, taking into account that the increase in the crisis will inevitably forge the strengthening of the anti-China coalition and its ties with Washington, in addition to encouraging regional reactions from the Chinese Navy and delaying Beijing’s global projections – like the Chinese presence in the Arctic, for example. Having been subjected to the American naval umbrella for decades, Japanese and Australian participation is predictable and it is not surprising that Tokyo and Canberra support aggressive operations against China in the Indian Ocean. However, the same cannot be said about India.

India should not be part of a Washington-led coalition against China. The rivalry between India and China is different from the dispute between the US and China, and the mere fact that Beijing looks like a “common enemy” does not justify a coalition. China and India have an historic dispute of a territorial nature – a regional conflict over a physical, continental space. This is different from the American quest for global hegemony – to which China poses a threat today. China and India have much more in common than opposites: both are emerging Asian nations, with enormous growth potential and which aim to increase their degree of participation in the international scene, at the economic and geopolitical level. Washington, in this sense, is against both – because it seeks to preserve unipolarity and the American global dominance. Beijing and New Delhi can reach a common agreement sovereignly, with regional negotiations and bilateral diplomacy, as, in fact, they have been doing recently, resulting in the reduction of the border violence and the evacuation of troops.

By maintaining its participation in the exercises and encouraging the growth of the coalition, India will be making a big mistake – both in its relations with China and in its relations with Pakistan. Japan and Australia are nations willing to collaborate with American hegemony – India is not. The best path to be taken by the Indians is the abdication from the Malabar exercises, or, if it is not possible, at least, to prevent the Australian entry again, avoiding the strengthening of the anti-China alliance.

Lucas Leiroz is a research fellow in international law at the Federal University of Rio de Janeiro.

July 13, 2020 Posted by | Militarism | , , , , | Leave a comment

Russia supplies first shipment of Arctic oil to China

RT | July 13, 2020

Russian energy giant Gazprom Neft has started supplying crude from its Novy Port Arctic oil field to China. The first batch amounting to 144,000 tons of crude was delivered to Yantai port, the company announced.

The tanker route from Murmansk to Yantai crosses the Arctic seas and three oceans, and takes 47 days.

“Successful experience in the sale of Arctic oil in the European market and in-depth insight of Asia-Pacific markets allow Gazprom Neft to offer Novy Port oil with a unique year-round logistics scheme to Asian partners,” said Deputy Director General of Gazprom Neft for Logistics, Processing and Sales Anatoly Cherner.

“Taking into account the company’s plans to expand the geography of Arctic oil supplies, the development of cooperation with buyers in China and other countries of the Asia-Pacific region is of strategic importance for us,” he added.

Gazprom Neft started exporting oil produced in the Russian Arctic in 2013, having delivered more than 40 million tons to European countries. Blend varieties include ARCO (Prirazlomnoye field) and Novy Port (Novoportovskoye field).

With its 250 million tons of reserves, Novy Port oil field is one of the largest oil and gas condensate fields in the Russian Arctic. It is located on the Yamal Peninsula. A new grade of crude called Novy Port is produced at the field.

To supply oil from the Arctic fields, Gazprom Neft uses a unique transport and logistics scheme that ensures year-round export at minimal cost. It includes the Prirazlomnaya oil production platform, the Arctic Gates oil terminal in the Gulf of Ob, a reinforced ice-class tanker fleet, including LNG-fuel vessels, escort icebreakers and an offshore oil shipment terminal in Murmansk. Efficiency and safety is ensured by the world’s first digital Arctic logistics management system, called “Captain.”

July 13, 2020 Posted by | Economics | , | 2 Comments