Delhi Cabinet approves policy on electric vehicle to curb pollution
The Aam Aadmi Party (AAP)-led Delhi government on Monday approved a policy on electric vehicles (EVs) with a focus on two-wheelers and commercial vehicles to lead the change to switch, at a time when the state is grappling with severe levels of pollution. “The Delhi electric vehicle policy has been passed by the cabinet today. This policy in its scope and vision is very ambitious. Pollution levels are very high in Delhi and vehicles have a lot to contribute to that. We had circulated the first draft in November 2018. After several rounds of discussions and taking their comments, this policy has been made. By 2024, we want that 25% vehicles be electric vehicles. The aim is to reduce air pollution and create large scale jobs. The emphasis is on two-wheelers and public transport because they operate more,” Kejriwal said at a state cabinet briefing By 2024, one-fourth of the new vehicles registered in the state should be electric, Kejriwal said, adding that the policy will have special emphasis on having more electric two-wheelers, buses, and goods carriers, as these are one of the key contributors to air pollution. “Currently, electric two wheelers are less 0.2% and three wheelers are close to zero today. We hope that in the next year there will be 35,000 vehicles and 250 charging stations. In five years, we hope that 5,00,000 electric vehicles will be registered,” he added. The government will also set up a state EV fund and board to manage it. Subsidy amounting to ₹30,000 per vehicle will be given to electric auto rickshaw and e-rickshaw, along with subsidy on loans, the minister said, adding that ride hailing service providers such as Ola, Uber will get special provisions for electric two-wheelers. The AAP government had come out with a draft report in November last year. The government is also looking to put in place measures to support the creation of jobs in driving, selling, financing, servicing and charging of EVs. In September, a report by Dialogue and Development Commission of Delhi and Rocky Mountain Institute had suggested that Delhi will need to register approximately 5,00,000 new EVs in the next five years to achieve the target of having 25% EVs and these EVs are estimated to avoid approximately ₹60 billion in oil and liquid natural gas imports and 4.8 million tonnes of CO2 (carbon dioxide) emissions.
Why the govt asked a court to restrain $15 bn Saudi Aramco-RIL deal
The government has taken the unusual step of asking a court to restrain a $15 billion deal in which the world’s most profitable company and top oil exporter Saudi Aramco would acquire a stake in India’s biggest conglomerate Reliance Industries Ltd, controlled by India’s biggest billionaire Mukesh Ambani. ET looks at the issues involved. The Dispute Govt has a dispute with Panna, Mukta and Tapti oilfield contractors Shell and RIL (which holds 30%) Govt has accused them of wrongly accounting for costs and profits in the fields, which reduces the state’s share of income Govt says cos calculated state’s share of profit by deducting higher income tax than actually paid It also says contractors reduced govt share by not including marketing margin in field revenue The tribunal’s rulings so far favour the govt in many points, and the companies in a few Timelines The 25-year old contract for oil and gas fields expired last week The depleting fields are now under full control of ONGC The dispute is under international arbitration for 9 years Initial ruling that upheld several points of the govt came in 2016 Next ruling in 2018 upheld some issues raised by the contractors Final phase of arbitration is in March and April 2020
Is LNG Actually The Future Of Energy?
Drillers and investors who are getting pummeled in the threadbare LNG market might not be sold anymore on the idea that natural gas is the fuel of the future, but it’s not only the future: It’s the key to every major global energy strategy in the world right now. It’s the key to dominion, and there’s every reason to be patient. Patience is hard when gas prices have tumbled to multi-year lows. Gas futures NGc1 prices have dropped to $2.29 per million British thermal units (mmBtu) at the time of this writing, down more than 40% over the past 12 months and the lowest level since May 2016. A big part of the blame can be pinned on a supply glut coupled with not nearly enough pipeline capacity to transport the commodity. Gas prices have even turned negative for some Permian Shale drillers Gas prices at the Waha Hub in West Texas have remained severely depressed, touching a record low of negative $9/mmBtu in April; in essence meaning some drillers are paying other producers to take their gas. This rather quirky situation happens because drillers who failed to commit to shipments in advance are only allowed to flare their gas for a certain amount of time–up to 6 months in Texas–when faced with low prices after which they must pay other drillers with pipeline space to take it. Oil and gas output in the Permian has doubled over the past three years making it tough for pipeline infrastructure to keep up despite concerted efforts to add new capacity. Yet, against this rather depressing backdrop, to be narrowly rational and overly focused on the short-term outlook could mean leaving big money on the table. Gas demand continues to grow at a torrid pace (4.9% in 2018, the highest clip since 2010), while big-time infrastructure spending continues to flow into the industry (~$360 billion in 2018)–low gas prices be damned. Indeed, some industry experts have nailed their colors to their masts with bullish long-term projections for the natural gas industry. The International Gas Union (IGU) has presented yet another strongly bullish yet compelling forecast for the industry. The bottom line in the bullish theory is that LNG is the kingmaker when it comes to energy strategies. As far as two decades out, this is the key to energy dominion, if not immense geopolitical power. Cost Competitiveness The biggest reason why gas is likely to remain the cornerstone of our green economy is, ironically, the same reason why many investors are fleeing for the hills–low gas prices. Gas prices have become very competitive vis-a-vis other energy sources. While low spot prices at key hubs due to LNG surplus continue to hog the limelight, the media is missing the big picture here: Deep structural changes including new technology in the upstream market continue to lower breakeven costs, making it economical for drillers to continue production at prices that would have put them out of business just five years ago. Nearly 70% of the world’s proven gas reserves are fields with an average breakeven price of less than $3/MMBtu. In the midstream section of the market, LNG prices have dropped by an average of 20% over the past two decades while growth of carbon pricing is helping close the gap between natural gas and coal. In 2018, natural gas cost 1.72x per MMbtu more than coal compared to 2.2x in 2014. The closing price gap, coupled with carbon pricing, are a big reason why natural gas is rapidly replacing coal as the favored fuel for electricity generation across the globe. In fact, natural gas prices have been falling much faster than any other energy sources–the commodity fuel index that tracks oil, gas, and coal prices has declined just 9% vs. 40.2% by natural gas over the past 12 months. Better Supply Security We’re a lot more flexible now. The globe no longer has to rely on a narrow pool of producers with a stranglehold on supply thanks to no less than 21 new producers joining the fray over the past decade. Supply has also become a lot more diversified with the US and Australia becoming major exporters. Further, the LNG market has become much more liquid with spot and short-term sales representing 30% of global sales–a record high. The pool of natural gas reserves keeps growing every year. According to the EIA, proved reserves of natural gas by the United States increased 9% to 504.5 Tcf at year-end 2018, making the country the fourth largest producer and owner of natural gas reserves. Qatar, the world’s largest natural gas producer, has vowed to become the world’s largest LNG producer as well, while production in Australia, the world’s second largest natural gas producer, has been growing at a quick pace. Gas as a sustainable resource The sui generis credential that makes natural gas a standout amongst fossil fuels is its sheer potential to mitigate climate change. When used in power generation, natural gas emits ~50% less CO2 than coal and 30% less than oil, not to mention that it results in negligible emissions of nitrogen oxides, (NOx), mercury (Hg), sulfur dioxide (SO2), and particulates. The sobering reality is that as much as we would love to quickly ramp up our renewable energy initiatives and put fossil fuels out of business, we simply won’t be able to do so fast enough to keep up with rapidly growing energy demand. The fossil fuel trifecta of oil, natural gas and coal supply 80% of the world’s energy and have cemented themselves as powerfully incumbent technologies greatly favored by “system inertia” i.e., the resistance to change. The EIA estimates that natural gas will maintain its current 22% slice in the global energy market by 2040, whereas the fraction by oil+ coal combined is expected to fall quite dramatically. Further, the IPCC (Intergovernmental Panel for Climate Change) has demonstrated a clear and sustained role for natural gas even under the ambitious 1.5° Celsius target wherein natural gas would still supply 19%