Delta outbreak unlikely to derail oil rally this year, UBS says
Investment bank UBS expects oil prices to resume their upward trend despite concerns over a surge in infections of the coronavirus Delta variant and projects Brent crude to trade between $75 and $80 per barrel in the second half of 2021. Brent futures were down 0.6% at $69.99 a barrel on Thursday, while U.S. West Texas Intermediate (WTI) futures were trading around $67.84 a barrel. Both benchmarks fell by more than $2 a barrel on Wednesday. “While regional differences remain significant in terms of reopening and the pace of vaccination, we believe the return to economic normalization will continue globally, lending support to oil prices in the months ahead,” the bank said in a note. Coronavirus cases worldwide surpassed 200 million on Wednesday, according to a Reuters tally, as the Delta variant threatens areas with low vaccination rates. UBS expects global oil demand to exceed 99 million barrels a day this year, driven by the pace of economic recovery. “With the OPEC+ group firmly in control of supply, and maintaining its cautious stance, the crude market is likely to tighten further. We think ongoing declines in global oil inventories should see prices resume their upward trend,” it said. Last month, the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, reached a compromise to increase oil supply from August to cool prices. Oil prices have fallen more than 10% since scaling their highest level in more than two years in early-July. “We continue to advise investors with a high risk tolerance to be long Brent, add exposure to longer-dated oil contracts, or sell its downside price risks,” analysts at UBS said.
Biden seeks to boost fuel economy to thwart Trump rollback
The Biden administration wants automakers to raise gas mileage and cut tailpipe pollution between now and model year 2026, and it has won a voluntary commitment Thursday from the industry that electric vehicles comprise up to half of U.S. sales by the end of the decade. The moves are big steps toward President Joe Biden’s pledge to cut emissions and battle climate change as he pushes a history-making shift in the U.S. from internal combustion engines to battery-powered vehicles. They also reflect a delicate balance to gain both industry and union support for the environmental effort, with the future promise of new jobs and billions in new federal investments in electric vehicles. The administration on Thursday announced there would be new mileage and anti-pollution standards from the Environmental Protection Agency and Transportation Department. It said the auto industry had agreed to a goal that 40% to 50% of new vehicle sales be electric by 2030. Both the regulatory standards and the voluntary target will be included in an executive order that Biden plans to sign later Thursday. The standards, which still have to go through the regulatory process including public comments, would reverse fuel economy and anti-pollution rollbacks done under President Donald Trump. At that time, the increases were reduced to 1.5% annually through model year 2026. The White House didn’t release information on the proposed annual increases late Wednesday, but Dan Becker, director of the safe climate campaign for the Center for Biological Diversity, said an EPA official gave the numbers during a presentation on the plan. The official said the standards would be 10% more stringent than the Trump rules for model year 2023, followed by 5% increases in each model year through 2026, according to Becker. That’s about a 25% increase over the four years. Last week, The Associated Press and other news organizations reported that the Biden administration was discussing weaker mileage requirements with automakers, but they apparently have been strengthened. The change came after environmental groups complained publicly that they were too weak to address a serious problem. Transportation is the single biggest U.S. contributor to climate change. Autos in the U.S. spewed 824 million tons (748 million metric tons) of heat-trapping carbon dioxide in 2019, about 14% of total U.S. emissions, according to the EPA. The voluntary deal with automakers defines an electric vehicle as plug-in hybrids, fully electric vehicles and those powered by hydrogen fuel cells. Environmental groups praised the higher standards but said the administration should be moving faster. “This proposal helps get us back on the road to cleaning up tailpipe pollution,” Simon Mui of the Natural Resources Defense Council said in a statement. “But given how climate change has already turned our weather so violent, it’s clear that we need to dramatically accelerate progress.” Scientists say human-caused global warming is increasing temperatures, raising sea levels and worsening wildfires, droughts, floods and storms globally. “We urgently need to cut greenhouse gas pollution, and voluntary measures won’t cut it,” Becker wrote in an email. Several automakers already have announced similar electric vehicle sales goals to those in the deal with the government. Last week, for instance, Ford’s CEO said his company expects 40% of its global sales to be fully electric by 2030. General Motors has said it aspires to sell only electric passenger vehicles by 2035. Stellantis, formerly Fiat Chrysler, also pledged over 40% electrified vehicles by 2030. The Trump rollback of the Obama-era standards would require a projected 29 mpg in “real world” stop-and-start driving by 2026. It wasn’t clear what the real world mileage would be under the Biden standards. Under Obama administration rules, it would have increased to 37 mpg. Automakers said they would work toward the 40% to 50% electric vehicle sales goal. “You can count on Toyota to do our part,” said Ted Ogawa, the company’s North America CEO. General Motors, Stellantis and Ford said in a joint statement that their recent electric-vehicle commitments show they want to lead the U.S. in the transition away from combustion vehicles. But they said the change is a “dramatic shift” from the U.S. market today, and can only happen with a policies that include incentives for electric vehicle purchases, adequate government funding for charging stations and money to expand electric vehicle manufacturing and the parts supply chain. The United Auto Workers union, which has voiced concerns about being too hasty with an EV transition because of the potential impact on industry jobs, did not commit to endorsing a 40% to 50% EV target. But UAW said it stands behind the president to “support his ambition not just to grow electric vehicles but also our capacity to produce them domestically with good wages and benefits.” Under a shift from internal combustion to electric power, jobs that now involve making pistons, fuel injectors and mufflers will be supplanted by the assembly of lithium-ion battery packs, electric motors and heavy-duty wiring harnesses. Many of those components are now built overseas, such as China. Biden has made the development of a U.S. electric vehicle supply chain a key part of his ambitious plan to create more auto industry jobs. “We are in a global competition for who gets to make the clean cars of the future, and President Biden’s leadership means that we’ll develop that manufacturing and those supply chains right here in America,” said Sen. Tom Carper, D-Del., who chairs the Senate Environment and Public Works Committee. He praised the announcement Thursday as “good news for our planet and our auto industry.” In the infrastructure bill awaiting passage in the Senate, there is $7.5 billion allocated for grants to build charging stations, about half of what Biden originally proposed. He wanted $15 billion for 500,000 stations, plus money for tax credits and rebates to entice people into buying electric vehicles. Only 2.2% of new vehicle sales were fully electric vehicles through June, according to Edmunds.com estimates. That’s up from 1.4% at the same time last year. The Alliance for Automotive Innovation,
Driving the energy economy through bio-fuels
There are immense benefits on the economic, environmental and social front India’s population is expected to grow from the present 1.35 billion to 1.7 billion by 2042. Quite predictably a large proportion of this population will settle in the urban areas. The trajectory over the period from 2017 to 2042 indicates that urban population will increase from 30-40 per cent in these 25 years and by 2027 itself it would have crossed the 40 per cent mark. The present per capita energy consumption in India is 1208 KWH vis-a-vis the global average of 3200 KWH. Given India’s growth and development needs, its usage still stands somewhere between the two ends of the spectrum. The country clocked a steady annual rise of 3.5 per cent in energy demand between the first two decades of this millennium. Energy consumption had doubled in this period. An annual growth rate of 4.5 per cent in the energy demand by 2035 is hardly surprising given the country’s development imperatives. The present consumption of energy is in industry, transportation, construction, agriculture and households in descending order. Understandably, demand shall rise in all these sectors in the coming years. While efficient methods of use can ease the stress on resources, it certainly cannot slow down the rate of increase in demand for energy. India accounts for 18 per cent of the world’s population, but produces only 0.6 per cent of the world’s natural gas and 0.4 per cent of crude oil. India imports 83.6 per cent of its crude oil requirement. Also 47.2 per cent of India’s natural gas requirements are imported. The total expenditure towards this amounted to ₹9,250 billion in 2019-20. India follows only the US and China in fuel consumption and is set to precede China in the consumption of mineral oil. With around two-third of the imports coming from West Asian and Gulf countries, India’s skewed reliance on them can be a matter of concern. As observed by the International Energy Association, the political disturbances in this region are very likely to impact the supply to India, impacting its economy. Search for domestic sources It makes sense therefore, to explore possibilities of finding indigenous sources, including alternative forms of fuel. Prime Minister Narendra Modi is optimistic in this regard. He expressed that bio-fuels would reduce India’s dependency on mineral oil and also contribute to mitigating pollution. It will prove to be an additional source of income to farmers and also generate employment. Work is already progressing on mixing ethanol in transportation fuel. We have also started using Compressed Natural Gas (CNG) in public transport vehicles. However, in order to reduce import of CNG, prospects of indigenously manufacturing bio-CNG from waste are being explored. The transportation sector contributes roughly 6.3 per cent of our Gross Domestic Product (GDP). While 72 per cent vehicles rely on diesel, 23 per cent uses petrol and the remaining run on CNG and LPG (Liquid Petroleum Gas). It thus becomes imperative to substitute diesel with alternative fuel. India is also the largest consumer of vegetable oil. With the right resources and processes 220 crore litres of vegetable oil used in cooking can be reused, to manufacture bio-diesel by 2022. With a capacity to produce 40 per cent of the total requirement of diesel India would be able to save on the import of 32 crore barrels amounting to more than $22 billion of foreign exchange. This can bridge one-third of the current account deficit caused by oil imports. This will also ease the pressure on the Rupee in the international market and help in improving forex reserves. In an effort to accomplish the goal of sustainable and environment friendly development by 2030, the government has decided to step up domestic manufacture of bio-fuels by 10 per cent every year. The government has advanced the target of blending 20 per cent ethanol in petrol to 2025, from 2030. It is evident that a stronger strategic plan and integrated efforts are necessary to match this right intent. The impact of crude oil and gases on climate change is alarming. This will be one of the key agendas at the sitting of the United Nations Conference of Parties (COP26) at Glasgow in November 2021. Use of biofuels is likely to gain momentum as a result of this conference. Biofuels are a renewable source of energy and being captive in nature, facilitate energy security. Biofuels use agriculture-based feedstock and, therefore, contribute to sustainable decarbonisation through circular bio-economy.Collection of agriculture waste as feedstock creates employment in rural areas, and is a sustainable revenue stream for farmers to boost the rural economy. Rural entrepreneurship gets a fillip to build a robust ecosystem to facilitate supply chain for feedstock, bio-aggregations and transportation.
India pushes back on calls to set net-zero target ahead of COP26
India is under diplomatic pressure to commit to a net-zero climate target ahead of the 26th UN Climate Change Conference of the Parties (COP26) meeting in Glasgow in November, but the country has pushed back on tougher targets and asserted the developing world’s right to economic growth. Its refusal to set a net-zero target is at odds with other major Asian economies. In October 2020, China committed to achieve net-zero emissions by 2060, shortly after Japan’s 2050 pledge. Now Indonesia is targeting for 2060. With India the world’s third largest emitter of CO2 behind China and the US, its administration was expected to make a strong, positive statement at the July 22-23 G20 summit in Naples. This it did — restating its determination to stick to existing commitments under the 2015 Paris Agreement — while highlighting the disparity between developed countries’ emissions and those of emerging economies. “We should not be shifting goalposts and setting new benchmarks for global climate ambition,” Indian Minister of Environment, Forest and Climate Change Bhupender Yadav said July 23 following the summit. Instead, developed countries should be doing more to ensure the developing world had the “carbon space” to grow. “Keeping in view of the legitimate need of the developing countries to grow, we urge the G20 countries to commit to bringing down per capita emission to global average by 2030,” a ministry statement said. India has a strong case to argue when it comes to per capita emissions. According to S&P Global Platts Atlas of Energy Transition, India’s per capita CO2 emissions was 1.66 mt in 2019, compared with 15.55 mt for the US, 16.56 mt in Australia and 8.11 mt in Germany. A diplomatic faceoff is clearly brewing, with the G20’s official Naples communique unable to agree much more than “to update or communicate ambitious Nationally Determined Contributions (NDCs) by COP26.” Delivering on NDCs Under its existing NDCs, India has committed to 40% installed generation capacity from non-fossil fuels by 2030 and to reduce emissions intensity by 33%-35% by 2030 from 2005 levels. India is on track to achieve this with renewable energy capacity, including hydropower, standing at 143.28 GW, or 37% of India’s total installed capacity of 384.12 GW. Further, India has already achieved carbon emission reductions of 28% on 2005 levels, according to the Power Ministry. A voluntary 2030 target of 450 GW of renewable capacity, meanwhile, is seen as a stretch but one that could be met with the help of large industrial sector investments by parties seeking to reduce their carbon footprint. Other recent steps include a vehicle scrappage policy to promote fuel efficient vehicles, electric vehicle subsidies, incentives for renewable component manufacturing and for solar rooftop installations. A hydrogen policy placing a purchase obligation on consuming sectors is awaited. India’s climate policy was “development centric,” according to Kaushik Bandyopadhyay, chairperson, Centre for Business Sustainability at Indian Institute of Management in Lucknow. “Mitigation and adaptation actions are not only intended to serve the cause of emission reduction, but also to provide development co-benefits,” he said. Missing milestones What is missing is an emissions reduction policy, one that builds political consensus despite regional differences, according to another policy expert. “The government would have to identify the big polluters and mandate them to reduce emissions … it would need deadlines and milestones,” said G Chandrashekhar, a policy commentator and commodities columnist. “This is going to be a tough call — it needs enormous political will to achieve it.” A formal carbon market would help send a consistent price signal to polluters, but talks are yet to produce any material proposal. Meanwhile, India continues to push for developed countries to follow up on a pledge to provide $100 billion/year for developing economies to help in decarbonization efforts through to 2025. That commitment was “reaffirmed” in the Naples communique. “It is the big elephant in the room,” said Aarti Khosla, director, Climate Trends. “I am not sure if a serious finance package will be delivered. Any outcomes here might only be symbolic than real.” Coal-fired emissions growth About 70% of India’s energy needs are met by the combustion of coal. This share may fall in future but the fossil fuel is set to remain the dominant source of power demand growth, and this would rise by 4.4% from 2020 through to 2030, according to Roman Kramarchuk, S&P Global Platts Analytics head of Future Energy Analytics. “Our Platts Analytics Global Integrated Energy Model estimates that India is accounting for 7% of total global energy combustion CO2 emissions in 2021 and we project that, under a most likely scenario, emissions will grow faster than the rest of the world,” Kramarchuk said. “India’s most likely case: emissions in 2040 would account for 15% of our estimated 2 Degrees global 2040 combustion CO2 emissions,” he said.
Strong Henry Hub futures push rates of returns higher in dry gas plays
The Henry Hub average 12-month forward curve jumped nearly 50 cents in July, significantly increasing returns in US dry gas basins as the active rig count in the Haynesville reaches a multiyear high. The US dry gas basins improved in July as the average 12-month forward curve for Henry Hub settled at $3.62/MMBtu, an increase of 46 cents. The increase in natural gas prices lifted all of the major dry gas basins, with internal rates of returns in the Haynesville climbing to 29%, according to S&P Global Platts Analytics. In the Marcellus, IRRs are 31% in the wet window and 22% in the dry play. Utica IRRs improved this month as well to 26% in the wet and 28% in the dry. Given the relatively high prices of oil and gas this month, both the wet and dry portions of gas basins boast robust returns. Platts Analytics IRRs are based on a half-cycle, after-federal corporate tax analysis, which excludes sunk costs such as acreage acquisition, seismic expenses and appraisal drilling. Returns above 25% typically incentivize increased drilling and completion activity. Haynesville rig counts continued to increase for the week ended July 28, adding one rig to bring the total to 56, according to data by Enverus. Rig levels now sit at their highest since October 2019 for the core acreage of the basin. Expanding further to the non-core areas of the Haynesville, which include the non-Haynesville in Arkansas and Louisiana and East Texas non-Haynesville producing regions, total rigs pushed to 60 for the second time this year, tied for the highest level since November 2019. Haynesville production has steadily ticked higher during the second half of July as modeled production has averaged 12.9 Bcf/d since July 14, 150 MMcf/d stronger than the previous two weeks, according to Platts Analytics. The growth is forecast to continue in August with Haynesville production expected to average 13.2 Bcf/d, more than 300 MMcf/d above the July average. Rigs in the core Haynesville will need to remain above 55 for the majority of the year in order to incentive the current production growth in Platts Analytics’ forecast, reaching 13.9 Bcf/d by the end of the 2021 and 14.8 Bcf/d by the end of 2022. The average 12-month forward curve for the US domestic crude price benchmark, WTI, did not follow natural gas prices higher. It declined by $2.58 to $66.78/b in July. The decrease in oil prices caused returns within oil basins to fall by a couple percentage points. However, the Permian Delaware, Bakken, Eagle Ford and Permian Midland all still remained at or above 35% IRR. With prices holding relatively consistent for another month, it is expected drilling and completion activity will likely continue to climb in those basins, led by private operator activity. It remains clear public exploration and production companies are holding to their strategy to maintain capital discipline and working to pay down debt and returning value to shareholders. While rigs have steadily been increasing this year throughout most of the major basins, the Permian has seen a surprisingly slow recovery. When compared with pre-coronavirus levels, it remains down by roughly 40%. One potential explanation for the slower-than-expected recovery may be that many of the larger publicly traded exploration and production companies in the US have the bulk of their acreage in the Permian. Those companies have adhered to rigid capital discipline and have brought back fewer rigs than small and private operators.
Indian firms plan to invest $27 billion to boost refining capacity by 2025
India state refiners are set to invest 2 trillion rupees ($26.96 billion) to boost oil refining capacity by 20% in Asia’s third-largest economy by 2025, junior oil minister, Rameswar Teli, told lawmakers on Wednesday. India, the world’s third-biggest oil importer and consumer has refining capacity of about 249 million tonnes a year, equivalent to about 5 million barrels per day (bpd). Refining capacity is expected to climb to 298 million tonnes a year by 2025, Teli said in a written reply. “The refining industry has been modernized and upgraded continuously with the indigenous and imported technologies for refining cost reduction” and product upgrading, he said. The country’s top refiner, Indian Oil Corp, in its latest annual report said it would boost its annual oil refining capacity to 87.55 million tonnes by 2024/25 from the current 70.05 million tonnes to meet growing demand for petroleum products. India will be the main driver of rising demand for energy over the next two decades, accounting for 25% of global growth, and is set to overtake the European Union as the world’s third-biggest energy consumer by 2030, the International Energy Agency said in a report earlier this year. It is also nearly doubling its 3.2 million tonnes a year petrochemical capacity by adding another 3.1 million tonnes by 2024/25.
Gujarat: Natural gas supply goes ‘virtual’ in tribal areas of the state
Gujarat Gas, a government-owned entity, has begun supplying natural gas to consumers in the tribal areas of Narmada district by setting up a system where liquefied natural gas (LNG) is delivered using cryogenic trucks. This for the first time in the country where this new system is used in a tribal belt, said a senior official working with Gujarat Gas. Gujarat: Natural gas supply goes ‘virtual’ in tribal areas of the state “It is a very difficult terrain for laying pipeline networks. To make natural gas accessible and affordable in the most ‘aspirational tribal district’ in the shortest possible time, the company has rolled out a virtual CGD network in the district by setting up an LNG dispensing facility at Vavdi village in March this year,” said the official. Gujarat: Natural gas supply goes ‘virtual’ in tribal areas of the state The system comprises of LNG storage tank and re-gasification facility and is called virtual CGD network as it is not connected to the gas grid, he added. Gujarat: Natural gas supply goes ‘virtual’ in tribal areas of the state The total cost of the system, which includes an LNG tank of 24,000kg capacity, is under Rs 10 crore. Vavdi is about 19km away from the world’s tallest Statue of Unity at Kevadia and the system is used to supply natural gas for vehicular consumers as well as piped gas for cooking in villages and towns of the district, he said. At a time when Covid-19 pandemic has made setting up of physical pipeline infrastructure in the country a challenge, Gujarat government laid interior pipeline network at Vavdi and connected to 370 households through the system. Plans are in place to connect about 2,000 household in Narmada district using the virtual network over the next few months, according to a government official. While providing reliable and consistent supply of an eco-friendly energy source, the system also saves the cost and time spent to set up pipeline infrastructure. It also allows consumers to fulfil their specific needs through customizable supply. Till date, Gujarat Gas has laid about 33k of internal pipelines in Narmada, especially for last mile network connectivity to households. The company is currently catering over 10,000kg of CNG demand from vehicular consumers daily. Such pipeline systems play a significant role in gas distribution to remote locations in North America and the concept is slowly picking up in India. The systems can transport compressed natural gas (CNG) and liquefied natural gas (LNG) to consumers in the distribution network. Gujarat Gas won CGD license for Narmada district in the ninth round of bidding that was held by Petroleum and Natural Gas Regulatory Board (PNGRB). The company was the sole bidder for the Narmada geographical area (GA). The existing gas pipeline network is about 42km away from Jhagadia. The topography of Narmada district along with eco-sensitive belts demand considerable time to lay gas pipeline network to serve natural gas users across the district, said sources.
Centre making all efforts to reduce crude oil imports: MoPNG in RS
The Minister of State (MoS) for Petroleum and Natural Gas, Rameswar Teli in a written reply to a question in the Rajya Sabha on Wednesday informed that the Central Government is making all efforts to reduce crude oil imports. The Minister stated that the ministry is working in collaboration with various Central Government Ministries to achieve the goal to reduce the dependency on the import of oil and gas. The five-pronged strategy comprises promoting energy efficiency and conservation measures, giving thrust on demand substitution, promoting biofuels and other alternative fuels and renewables, increasing domestic production of oil and gas, and refinery process improvements. The government has taken several steps to enhance exploration and production of oil and gas in the country among policy for relaxations, extensions, and clarifications under Production Sharing Contract (PSC) regime for early monetization of hydrocarbon discoveries, Policy Framework for Exploration and Exploitation of Unconventional Hydrocarbons under Existing Production Sharing Contracts (PSCs) Coal Bed Methane (CBM), Reforms in Hydrocarbon Exploration and Licensing Policy for enhancing domestic exploration and production of oil and gas, Natural Gas Marketing Reforms, he added. The minister said that the government is also promoting the usage of environment-friendly transportation fuel, that is, CNG by expanding the coverage of the City Gas Distribution (CGD) network in the country. The government has also taken a number of initiatives to encourage the use of alternative fuels like ethanol and bio-diesel through Ethanol Blending in Petrol (EBP) Programme and Bio-diesel blending in diesel. To promote the use of compressed biogas, the government has launched a Sustainable Alternative Towards Affordable Transportation and has also formulated the National Bio-Fuel Policy 2018 to boost the availability of biofuels in the country, he further stated.
Oil prices rise on Mideast tensions; crude stock build caps gains
Oil prices edged higher on Thursday, supported by tensions in the Middle East, but failed to regain most of the previous day’s losses after a surprise build in crude stockpiles in the United States, the world’s top oil consumer. Brent crude oil futures rose by 14 cents, or 0.2%, to $70.52 a barrel by 0132 GMT, while U.S. West Texas Intermediate (WTI) crude futures increased by 18 cents, or 0.3%, to $68.33 a barrel. Both benchmarks fell by more than $2 a barrel on Wednesday. Israeli aircraft struck what its military said were rocket launch sites in south Lebanon early on Thursday in response to earlier projectile fire towards Israel from Lebanese territory. Two rockets launched from Lebanon on Wednesday struck Israel, which initially responded with artillery fire amid heightened regional tensions over an alleged Iranian attack on an oil tanker in the Gulf last week. The exchange came after an attack last Thursday that Israel blamed on Iran on a tanker off the coast of Oman. Two crew members, a Briton and a Romanian, were killed. Iran denied any involvement. The U.S. State Department said on Wednesday it believed Iranians hijacked the Panama-flagged Asphalt Princess tanker in the Gulf of Oman but was not in a position to confirm. Helping check gains, a rise in locally transmitted COVID-19 cases in China, the world’s second largest oil consumer, that has promped restrictions in some cities and cancellation of flights is threatening demand, analysts said. Prices also fell steeply in the previous session after the U.S. Energy Information Administration (EIA) said crude stockpiles rose by an unexpected 3.6 million barrels last week. [EIA/S] Still, some analysts pointed to a bigger-than-forecast 5.3 million barrel fall in fuel stockpiles. “The fall in U.S. gasoline stockpiles to the lowest level since November 2020 suggests that fuel demand conditions in the U.S. are still quite resilient,” analysts from Commonwealth Bank of Australia said in a note on Thursday. The bank expects Brent oil prices to rise to $85 a barrel by the fourth quarter as oil demand outpaces supply growth.
Indian firms plan to invest $27 billion to boost refining capacity by 2025
India state refiners are set to invest 2 trillion rupees ($26.96 billion) to boost oil refining capacity by 20% in Asia’s third-largest economy by 2025, junior oil minister, Rameswar Teli, told lawmakers on Wednesday. India, the world’s third-biggest oil importer and consumer has refining capacity of about 249 million tonnes a year, equivalent to about 5 million barrels per day (bpd). Refining capacity is expected to climb to 298 million tonnes a year by 2025, Teli said in a written reply. “The refining industry has been modernized and upgraded continuously with the indigenous and imported technologies for refining cost reduction” and product upgrading, he said. The country’s top refiner, Indian Oil Corp, in its latest annual report said it would boost its annual oil refining capacity to 87.55 million tonnes by 2024/25 from the current 70.05 million tonnes to meet growing demand for petroleum products. India will be the main driver of rising demand for energy over the next two decades, accounting for 25% of global growth, and is set to overtake the European Union as the world’s third-biggest energy consumer by 2030, the International Energy Agency said in a report earlier this year. It is also nearly doubling its 3.2 million tonnes a year petrochemical capacity by adding another 3.1 million tonnes by 2024/25.