Government is focused to move towards a gas-based economy
Union Minister Petroleum & Natural Gas and Steel Shri Dharmendra Pradhan today said that the clarion call given by Hon’ble Prime Minister Shri Narendra Modi for an ‘Atmanirbhar Bharat’ will drive our efforts in evolving a comprehensive energy security architecture in the country. In his keynote address to ‘GCTC Energy Security Conference 2020’ organized by Global Counter Terrorism Council, he said that it will be marked by continuity of robust energy policies put in place over the last six years, and a change to address the Covid- 19 unleashed challenges. He said “We are determined to build back better after COVID-19 to ensure that the energy system is secure, clean, resilient and responsive to our citizens’ needs. I am confident that, energy companies in India have powered through COVID-19 relatively intact, and look forward to a revival by embracing Atmanirbhar Bharat through innovation.”
Shri Pradhan said that there is an all-of-the Government approach in implementing Atmanirbhar Bharat initiative in energy sector, and in realizing Hon’ble Prime Minister’s Energy Vision of energy access, efficiency, sustainability, security and affordability. The Minister referred to some pathways energy consuming Ministries are aiming to improve energy independence, which include Indian Railways going in for 100% electrification of Indian railway routes by 2023, targeted installation of over 15 lakh standalone solar pumps under Kisan Urja evam Utthan Mahabhiyan by MNRE, Road Transport Ministry supporting Hydrogen enriched CNG as an alternate fuel, Accelerating clean coal technologies by developing coal Gasification projects, and Green Port initiative by Ministry of Shipping.
Shri Pradhan said that our five-pronged strategy to reduce crude oil import dependency including increasing domestic oil and gas production, promoting bio fuels and renewables, energy conservation and energy efficiency, improvement in refinery processes and demand substitution, is making an impact.
Shri Pradhan said “In the past, energy security has been seen in a narrow approach, mainly aimed at managing supply. Our government has widened the scope of energy security by making it much more inclusive, and taking into account geo-political, economic, social and environmental dimensions. India’s energy diplomacy and its alignment with our foreign policy over the last six years has delivered tangible and substantive results. We have enhanced our engagement with key global energy players, and firmed up of strategic and comprehensive energy engagements with producing countries such Russia, US, Saudi Arabia and UAE on hand, and close engagement with consuming countries such as Japan and South Korea.”
Talking about the impact of Covid-19, Shri Pradhan said global pandemic is having enormous impact -both on health and economic fronts. He said that the existing energy frameworks are already witnessing unprecedented transformation. He said “It is imperative that we position ourselves well to handle the current energy challenges to be able to develop our strategies in the post Covid-19 world. India, as world’s third largest consumer of energy, has not only been impacted but also could potentially define the way how global energy trends would emerge. Our energy sector particularly Oil & Gas sector was affected significantly in the initial stages of Covid-19 till May 2020. We are already witnessing significant restoration of consumption of several of the petroleum products to pre-Covid levels since July onwards.” The minister said that the oil & gas sector PSUs alone will have CAPEX spending Rs. 1.2 lakh crore in 8363 projects/economic activities during the current financial year, and other ministries in energy sector also have similar ambitious CAPEX spending projects, to help boost employment and economic growth. India’s energy sector has shown greater resilience in the face of the COVID-19 pandemic with supplies holding up admirably, despite the global turmoil in financial and commodity markets.
Talking about the need to overcome energy poverty, Shri Pradhan said that with over 16% of global population, we are currently using only 6% of the world’s primary energy. He stressed on the need to develop a reliable and compatible energy infrastructure in the country. The Minister said that with the per capita consumption of energy still one-third of the global average, India will have continue to develop all possible energy sources to meet this energy deficit, while fully cognizant of the sustainability dimensions of it. “The energy landscape in India is evolving like never before. Our Government is also taking a constant reality check on the undercurrent of energy transition that is underway in the country”, he added.
Shri Pradhan said that India has shown greater resilience in economic, financial, regulatory and infrastructure terms, for an effective energy transition. He referred to the findings of World Economic Forum, listing India among the select countries making consistent and measurable progress on energy transition over the past six years. He said “Suffice to say that at the height of geo- political tensions in the Middle East and country-specific restrictions on crude exports during the last year, we had sufficient supplies of crude oil & LNG. It is as a result of our policy of diversification of sources of hydrocarbons pursued over the last six years. Our oil marketing companies are now importing crude oil from over 30 countries, including from Africa, North and South Americas as well as Southeast Asia. New long-term contracts have been entered into by our companies with their counterparts in the US, Russia and Angola. Our LNG imports have also been diversified from traditional supplier Qatar to US, Australia and Russia.”
On pricing of crude oil, Shri Pradhan advocated a responsible and affordable pricing mechanism. He said “At the G20 Emergency meeting of Energy Ministers as well as other international fora including OPEC and International Energy Forum (IEF), India has been articulating this position, and there is much greater resonance to our approach to this matter.”
Shri Pradhan said that we are striving for alignment and a synergistic approach across the sectors to reduce import dependency for hydrocarbons. “Taking the advantage of low crude oil prices in April and May 2020, we filled the existing strategic petroleum reserves with 16 million barrels of crude oil, resulting in saving of over INR 5000 crore for the Government”, he added.
Talking about further improving energy security in hydrocarbons sector, Shri Pradhan said that we are gradually improving crude and petroleum products storage capacity from existing 74 days of national consumption to 90 days. He invited participation of companies in the development of 6.5 MMT of crude storage capacities at Chandikol and Padur in the next commercial-cum-strategic reserve programme. “We are also exploring overseas crude storage facilities in the US and other commercially viable locations”, he added.
Shri Pradhan said that to promote oil and gas production at domestic level, reinvigorating policy reforms are already underway–be it Hydrocarbon Exploration and Licensing Policy (HELP), Discovered Small Field (DSF) Policy, Open Acreage Licensing Policy (OALP), and exploitation of Unconventional Hydrocarbons. He talked about policy reforms including shifting of focus from ‘Revenue’ to ‘Production’’ maximization, marketing including pricing freedom for the gas from difficult Areas, and for new discoveries from March last year, as well as for CBM Gas. “We are also actively prompting participation of global oil majors to increase their domestic oil & gas exploration”, he added.
Talking about the Conference’s theme of Energy Security Towards Atmanirbhar Bharat, Shri Pradhan said that we have adopted a multi-pronged strategy for achieving sustainable energy growth with reduced oil dependency, and align with Atmanirbhar Bharat. We are developing alternative fuels as the next wave of transformative change with ethanol, second generation ethanol, compressed bio gas (CBG) and biodiesel in helping to reduce country’s import dependence. He said “Oil Marketing Companies are in the process of setting up twelve 2G bio- refineries with an investment of Rs.14,000 crores. We are well on our way to meet the target of 20% blending of ethanol in petrol and 5% blending of bio-diesel in diesel by 2030.”
Shri Pradhan said that the Government is focused to move towards a gas-based economy which is to be achieved by promoting free gas markets in synchronization with creation of gas infrastructure for increasing gas share in primary energy mix to 15% by 2030. He said that the Prime Minister Modi’s Vision to develop ‘one Nation one Gas Grid’, is guiding us in expanding gas infrastructure in the country. “An estimated investment of 60 billion US dollars is lined up in developing gas infrastructure which includes pipelines, city gas distribution and LNG re-gasification terminals. We also launched, India’s first automated national-level gas trading platform, to promote and sustain an efficient and robust gas market and foster gas trading in the country.”, he said.
The Minister mentioned about several initiatives aimed at supplementing domestic gas which will fulfill the needs of domestic sector and contribute towards Aatma Nirbhar Bharat Abhiyan. He said notable among them is the City Gas Distribution (CGD) network, which is expanding rapidly. More than 70 % of the country’s population spread across 28 States and Union Territories will be covered soon. PNG connections are to increase from 60 lakh to 4 crore. CNG stations set to increase from 2,200 to 10,000. LNG is being promoted as a transport fuel for long-haul trucking along expressways, industrial corridors and inside mining areas. Sustainable Alternative Towards Affordable Transportation (SATAT) was launched to establish an ecosystem for production of Compressed Bio Gas from various waste/ biomass sources in the country. “EOI have been invited from potential entrepreneurs for production and supply with an assured CBG off-take price by Oil PSUs. We have planned 5000 CBG Plants to be set up by 2030. 578 LOIs till date have been issued.”, he said.
The Minister said that increasingly, Indian oil &gas companies are actively taking part in this clean energy transition, and transforming themselves as Energy companies. He said that in order to reduce carbon footprint, these companies will be focusing more on green energy investments such as renewables, biofuels and hydrogen going forward. He referred to five oil & gas PSUs joining International Solar Alliance’s Coalition for Sustainable Climate Action as Corporate Partners.
Shri Pradhan said that at the national level, India is pursuing its unwavering commitment to energy security by constructing 175 GW of renewable capacity by 2022 and to 450 GW by 2030. India’s energy policy is being pursued in a much more inclusive manner. He said “Prime Minister Modi being awarded the “Champion of Earth” by the UN Secretary General in 2018 is yet another recognition of India’s growing normative leadership in tapping this new energy source.”
Shri Pradhan said that a major effort is underway to actualize Vocal for Local in the oil & gas industry. A major drive has been launched to increase localization of procurements of oil & gas sector to promote Atmanirbhar Bharat. He said that We are encouraging OEMs to make India as their production base, give boost to Start Ups and to make India integral to the global value chain of oil & gas sector.
Shri Pradhan said that Our quest for energy security will work under the framework of four ‘A’s: availability, accessibility, affordability and acceptability, which is to make energy accessible to all the sections and sectors at an affordable price.