Iraq topples Saudi Arabia to become India’s top crude oil supplier
In a historic development, Iraq toppled Saudi Arabia to become the largest crude oil supplier for India, the world’s fastest-growing oil consumer, last financial year (2017-18). Iraq’s rise in supply — with crucial ramifications for India’s crude mix — is mainly attributed to Indian refiners’ growing hunger for heavier grades of crude and Saudi Arabia’s decision to over-confirm on output cuts decided in the January 2017 OPEC meet. Fresh data sourced from Director General of Commercial Intelligence and Statistics (DGCIS), an arm of the commerce ministry, showed India imported 220 million tonne (MT) crude oil last financial year, 3 per cent more than 214 MT imported in the previous fiscal (2016-17). In value terms, the country’s crude oil imports rose 25 per cent to $87.8 bn in 2017-18. Oil imports from Iraq jumped 21 per cent to 45.74 MT in 2017-2018 from 37.75 MT imported in 2016-17. In value terms, India imported $17,544 million worth of crude oil from Iraq last financial year, a huge 51 per cent increase over $11,617 million worth of crude imported from that nation in the previous fiscal. “This is the first time that Iraq has overtaken Saudi Arabia as the largest crude oil supplier to India. Iraq has been steadily ramping up its production and exports in the last five years and has been seeking to aggressively increase market share in the global oil market. As part of this strategy, the nation also tends to give higher discounts than comparable crudes, which works out well for the Indian refiners,” said K Ravichandran, Senior Vice-President at research and rating agency ICRA. Saudi Arabia, the OPEC’s largest crude oil producer, which has traditionally been the largest supplier of crude to India, slipped to second place mainly because of over-confirming on production cuts decided by OPEC in January 2017 to rein in output and prop up global prices. Iraq topples Saudi Arabia to become India’s top crude oil supplier India imported around 36 MT crude oil from Saudi Arabia in 2017-2018, an 8 per cent drop over 39 MT imported in the previous financial year. In value terms, India imported $15,263 million worth of crude oil from Saudi Arabia last fiscal, a growth of 12 per cent as compared to $13,674 million imported in 2016-2017, due to increase in international crude oil prices. “This is mainly because of voluntary cutback in production by Saudi Arabia and increased availability of heavy grades of crude from Iraq, at a higher discount over comparable crudes, which are beneficial for complex refineries. With the steady progress in the complexity level of Indian refiners, demand for heavy crudes has been on the rise in India, which Iraq has been able to capitalise on,” Ravichandran said. Iran, which had increased output and export of crude oil after the lifting of economic sanctions in 2016, overtook Venezuela to become the third-largest oil supplier to India in 2016-2017. Iran retained its spot as the third-largest supplier to India in 2017-2018, too. However, Iranian crude supplies to India fell by over 16 per cent to 23 MT in financial year 2017-2018, as compared to an all-time high volume of 27.14 MT exported to India in the previous fiscal. The drop in import of Iranian crude for financial year 2017-2018, as compared to the preceding financial year was mainly due to government-owned Oil refiners reducing imports from the nation in protest against the Farzad – B gas-field row. India imported crude oil worth $8,979 million from Iran in 2017-2018, increasing marginally over previous fiscal’s $8,908 million imports because of increased global crude oil prices. India’s region-wise crude oil import data for the past five years shows Middle-East countries have increased their market share while the share of Africa and South America has decreased during the period. The share of Middle-East nations increased to 64 per cent in 2017-2018 from 61 per cent in financial year 2013-2014. African countries witnessed their market share falling slightly to 15 per cent last financial year as compared to 16 per cent in 2013-2014. Similarly, South American countries’ market share of crude oil supplied to India fell to 10 per cent in 2017-2018 as compared to 17 per cent five years ago, mainly due to a rapid decline in Venezuela’s crude oil production. The three regions – Middle-East, Africa and South America – together account for nearly 90 per cent of India’s crude oil imports. Ryan Suter USA Womens Jersey
Petrol, diesel cars may be taxed more to push electric vehicle sales
In an effort to incentivize electric vehicle buyers through cross-subsidies, the government is considering a proposal to impose a marginally higher tax on conventional petrol and diesel cars. The finance ministry thinks the proposal should be considered to avoid the additional financial burden that the government incurs as it incentivizes buyers under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. The move will also act as a catalyst for the promotion of electric vehicles, the finance ministry has said in a memorandum to the executive finance committee for phase two of the FAME scheme. Mint has reviewed a copy of the memorandum. Industry experts say the move could impact car sales as it will discourage customers from buying petrol and diesel vehicles in a price-sensitive market like India. A detailed email sent to the finance ministry remained unanswered till press time. Auto lobby group Society of Indian Automobile Manufacturers (SIAM) declined to comment. However, an executive at the rival lobby group that represents electric vehicle makers welcomed the move. “The government is cash-strapped to offer subsidies. Customers will only get drawn towards EVs when the prices become equal to an ICE (internal combustion engine) vehicle. So, this move makes sense,” said Sohinder Gill, director, corporate affairs, Society of Manufacturers of Electric Vehicles, adding that an increase in taxes to the tune of 100 basis points on traditional vehicles will fetch a huge amount, which can provide a subsidy for the first one million electric vehicles. The finance ministry’s view comes in the backdrop of a demand raised by the department of heavy industries for a budgetary requirement of ? 93.81 billion to run the FAME scheme till 2022-23. Since Fame is a central government scheme with allocation of more than ? 10 billion, approval is required from either the cabinet or the cabinet committee on economic affairs. Avik Chattopadhyay, the founder of brand consultancy firm Expereal, called the move “very regressive”, saying that a separate fund should be allocated for promotion of alternative fuels. The burden should not be shifted to the buyers of conventional vehicles, he added. The implementation of the second phase of the FAME scheme has already been postponed thrice and the new scheme is expected to be in place before September this year. The scheme was introduced in 2015 to promote the manufacturing, development and sales of electric vehicles in the domestic market. Isaiah Oliver Jersey
Oil and Gas Companies Will Lead the Energy Revolution
When it comes to climate change, I have always been a believer: not in hand-wringing debate, not in unrealistic solutions like the elimination of hydrocarbons, but in the power of action. In 1997, as chief executive of BP, I was the first leader of a major oil company to acknowledge that climate change was a problem, and that the industry had a responsibility to acknowledge and address it. The head of the American Petroleum Institute claimed that I had “left the church.” Twenty-one years later, I returned to the church in a different way, along with a group of distinguished business leaders. Last month, Pope Francis hosted the chief executives of many of the biggest oil and gas companies, investors overseeing nearly $10 trillion of capital and many of the energy sector’s leading thinkers and policy makers. We convened to discuss ways of reducing emissions of carbon dioxide and methane. This is the first time in my 50-year career in the energy industry that such a gathering has taken place. The discussion was marked by humility and pragmatic optimism. Not everybody shares this bright outlook. Two investment managers argued recently in the Financial Times that the end of the “age of oil” is in sight. They urged oil and gas companies to commit to winding themselves down when the time is right, and return money to investors, who are more qualified to decide what to do next. As things stand, they are wrong. In areas such as aviation, maritime and heavy commercial shipping, there are no viable substitutes for oil. Natural gas has a long life ahead, as it replaces coal in the power sector, and provides a reliable complement to the intermittency of renewables. Based on current trends, IHS Markit expects total demand for oil and gas to rise by 30 percent between now and 2040. Consumption of renewable energy is expected to triple, but from a lower base: By 2040, it will account for just 6 percent of the energy mix, roughly the same as nuclear power today. It is also premature to discount the ability of today’s oil and gas companies to adapt. When I took over as CEO of BP in 1995, the industry invested almost nothing in renewable energy. Today, the “supermajors” allocate more than $4 billion every year to low or zero-carbon energy. These giants have the resources to make large capital commitments, and in many cases, skills that can be adapted and redeployed to deliver energy solutions at the immense scale that is needed. If leaders can redirect their organizations toward a new lower-carbon purpose, and if they can successfully engage their staff, there is every reason to believe they can be active participants in, or even drivers of, the energy transition. The oil and gas industry has come a long way, but even today, it accounts for a tiny share of low-carbon investment. To accelerate the transition and reduce the risk of damaging climate change, the International Energy Agency estimates that the current rate of investment in the energy sector would have to double, with 85 percent of all investment allotted to renewable energy and energy efficiency. To transform the pace and scale of investment, I have long advocated for a global price on carbon, most likely in the form of a consumption tax. This levy would need to be high enough to encourage the shift toward lower carbon energy sources on the supply side, and to drive adoption and improvement of efficiency measures on the demand side. So far, no pricing proposal has been able to achieve those goals. Implementation of a carbon tax without exemptions, and with measures to penalize countries that do not comply, will require courage and determination to face down vested interests. Most of the technologies to build the low-carbon energy systems of the future already exist. There are designs — if not yet public confidence — to turn proven nuclear-fission technology into a safer and cheaper power source by making small, modular reactors. Every year, the efficiency of solar and wind generators improves, and the costs fall. Energy storage technologies are increasingly viable for widespread application in transport systems and power grids. We also have extensive experience developing systems for carbon capture, storage and use. Many of the world’s experts in these technologies are employed by oil and gas companies. Not all of these technologies work at scale or are economically viable, but they need refinement, rather than reinvention. There is a law of engineering stating that as a new technology is adopted and deployed, its price falls, predictably, and sometimes precipitously. Something of the kind is at work in the energy sector. Solar generation, for example, has become cheaper by a factor of 250 over the past four decades, and it is now the cheapest source of electricity in parts of the U.S., Italy, Spain and Australia. The same will soon be true in much of China and India. If other technologies follow the same trajectory, then demand for hydrocarbons could plateau, and even decline, sooner than expected. But today’s oil and gas companies need not be victims of the energy transition; they can be a critical part of it. This great shift must not come at the expense of the world’s poorest. The provision of abundant energy has reduced the number of people living in absolute poverty by a factor of seven during my lifetime. Nevertheless, more than 1 billion people still do not have reliable access to electricity, while more than 2 billion still cook using low-quality fuels such as biomass or animal waste, which are a danger to health. Future energy systems must provide more to more people, while extracting a lower economic, humanitarian and environmental cost. The meeting at the Vatican last month reaffirmed my conviction that we now have the tools to solve this pressing and complex global puzzle. The decisions we make about energy in the years ahead are among the most profoundly consequential we will face. To
IOCL to invest Rs 36.63 billion to lay pipelines in eastern sector
Oil major Indian Oil Corporation Limited (IOCL) will invest Rs 36.63 billion for laying two pipelines originating from Odisha under the aegis of South Eastern Region Pipelines (SERPL). The oil PSU will lay the Paradip – Hyderabad pipeline line (PHPL) to evacuate products like motor spirits, high-speed diesel, kerosene and aviation turbine fuel (ATF) from its refinery at Paradip. The construction of the 1212 Km pipeline has already commenced and the project is listed in National Perspective Plan under the Sagarmala Programme announced by Prime Minister Narendra Modi. The pipeline will ensure uninterrupted supply of the petroleum products for catering the growing demand in the states of Odisha, Andhra Pradesh and Telangana. The project is slated to be operational by August 2020. Similarly, the second pipeline- Dhamra-Haldia-Paradip LNG (DHPPL) pipeline will be laid from Dhamra Port to Haldia and Paradip for a dedicated supply of natural gas to Paradip and Haldia refineries for captive consumption. While the PHPL will be laid with an investment of Rs 23.21 billion, DHPPL will see an investment of Rs 13.42 billion. “Since inception, the region has made capital investment of Rs 31.27 billion in various (pipeline) projects. Again investments of another Rs 40 billion will be done by IOCL”, said P C Choubey, executive director, South Eastern Region Pipelines (SERPL), Bhubaneswar in a media interaction. IOCL also has plans to lay a new pipeline in the name and style of Paradip- Somnathpur (Balasore)-Haldia product pipeline (PSHPL) for evacuation of the products from the Paradip refinery. It may be noted that the country’s largest oil marketing company’s 15-mtpa capacity refinery at Paradip is spread over an area of 3,345 acres with an estimated cost of Rs 345.55 billion. The refinery can process 100 per cent high-sulphur and heavy crude oil to produce various petroleum products, including petrol and diesel of BS-IV quality, kerosene, aviation turbine fuel, propylene, sulphur and petroleum coke. It is designed to produce Euro-V premium quality motor spirit and other green auto fuel variants for export. Both PSHPL and DHPPL are in the advance stage of detailed engineering survey. SERPL is operating 227 Kms section of Paradip-Haldia-Barauni crude oil pipeline (PHBPL) , 1073 km Paradip-Raipur-Ranchi product pipeline and 243 Kms section of Paradip-Haldia-Durgapur LPG pipeline (PHDPL). Tajae Sharpe Womens Jersey
Billionaire Adani Among 400 Bidders for India City-Gas Licenses
Billionaire Gautam Adani’s gas retailing unit is among firms that submitted 400 bids for the 86 areas the Indian government offered in its latest auction for city-gas licenses. Adani Gas Ltd. bid for 32 licenses, Chief Executive Officer Rajeev Sharma said Wednesday, while its joint venture with Indian Oil Corp. bid for 20. A unit of state gas utility GAIL India Ltd. bid for “close to 30 cities,” the Press Trust of India reported, without saying where it got the information. India Gas Solutions, a joint venture between BP Plc and Reliance Industries Ltd., scrapped its plans to participate, according to PTI. “We have got unprecedented response,” Petroleum & Natural Gas Regulatory Board Chairman D.K. Sarraf said by phone, declining to identify the bidders. “This will be a big boost to India’s effort toward increasing gas consumption.” Evaluation of the bids in the ninth round of auctions will run from July 12 to July 18, and licenses are expected to be awarded by October, the PNGRB said Tuesday. The regulator awarded a combined 56 licenses out of 106 areas offered in previous rounds since 2009. India is seeking to double the share of natural gas in the country’s energy mix to 15 percent by 2030, while slashing emissions by a third. The country, which the World Bank said in 2016 was home to 14 of the 30 most polluted cities on the planet, is building gas pipelines and new import facilities to increase use of the fuel. The areas in this week’s auction cover almost a quarter of the nation and are aimed bringing gas to 29 percent of its 1.3 billion people. The licenses in the latest round are expected to fetch investments worth 700 billion rupees ($10.2 billion) to develop gas infrastructure, the PNGRB has said. That is about four times the cumulative spending in the sector through March 31, according Crisil Ratings Ltd., the local unit of Standard & Poor’s. Alex Anzalone Jersey
LPG subsidy a distortion, provide fuel-agnostic cooking sop: NITI Aayog
The NITI Aayog has suggested to the Ministry of Petroleum and Natural Gas that eligible beneficiaries receiving subsidy on liquefied petroleum gas (LPG) should rather be given a ‘cooking subsidy’ through direct benefit transfer (DBT). While 4.6 crore LPG connections released under the Pradhan Mantri Ujjwala Yojana (PMUY) have led to smoke-free kitchens in rural India, the NITI Aayog in a note to the ministry said the ‘subsidy’ attached to LPG is creating distortions in adopting cleaner forms of fuel. The note advocates that piped natural gas (PNG) is the most efficient form of fuel in urban areas and biogas should be the preferred option in rural areas given availability of raw materials. The think-tank envisages that beneficiaries should be provided cooking subsidy through the DBT and the freedom to decide on the cooking fuel. As per the current practice, customers eligible for subsidy buy LPG cylinders depending on the prevailing market price and the subsidy amount is then remitted to beneficiaries’ bank accounts. However, no such subsidy is provided for fuels other than LPG and kerosene. The note compares pricing and carbon-dioxide emissions for various forms of fuel such as biomass, biogas, PNG, LPG and kerosene. However, the response of the petroleum ministry on the suggestion by the NITI Aayog could not immediately be ascertained by FE. Launched in May 2016, the PMUY was initially aimed at providing clean cooking fuel to 5 crore women from households classified as the below poverty line under the Socio Economic Caste Census 2011 over a period of three years. A sum of Rs 8,000 crore was allocated for the scheme to start with. However, given the success of the scheme, finance minister Arun Jaitley announced in the latest Budget to allocate an additional Rs 4,800 crore and increased the target to 8 crore beneficiaries. The scope of the scheme has also been widened. Under the PMUY, the government bears a burden of Rs1,600 per connection and almost an equal amount is borne by beneficiaries, who either pay upfront or take a loan from the OMCs, the programme executors. The loan is repaid by beneficiaries by letting go the subsidy with each refill. However, to push the refill rate, OMCs earlier this year announced that they will defer loan recovery by six months for every existing as well as new beneficiaries. The NITI Aayog believes that PNG will be a better option even in tier-II, tier-III and large villages and the Petroleum and Natural Gas Regulatory Board should promote the cooking fuel in these areas by allowing more number of distributors. The regulator on Tuesday received more than 400 bids for 86 geographical areas (GAs) offered in the ninth city gas distribution (CGD) licensing round. These GAs will cover 24% of the country’s area and 29% of the population. In other words, they cover 174 districts across 22 states and Union Territories. Currently, 91 GAs with 24% of the population have piped natural gas (PNG) facility. A licence winner under the CGD round will have the exclusive right to offer PNG and CNG in a particular GA for eight years, extendable by two years. However, according to a person close to CGD licensing, PNG will not be economical for distributors in small towns and villages. “LPG and PNG will co-exist,” said the person, adding that it cannot be ruled out that cities in future will only have PNG, and LPG will primarily cater to villages. Eric Hosmer Womens Jersey
RIL plan to supply jet fuel to Mumbai airport using OMC pipelines faces hurdles
State-owned fuel marketers are pushing back against a regulatory suggestion to allow Reliance Industries Ltd (RIL) to use their pipelines to sell jet fuel at the Mumbai airport. Currently, the three public sector oil marketing companies — Bharat Petroleum Corp. Ltd (BPCL), Hindustan Petroleum Corp. Ltd (HPCL) and Indian Oil Corp. Ltd—fuel all aircraft at Mumbai’s Chhatrapati Shivaji International Airport through two pipelines from their refineries. RIL had written to the Petroleum and Natural Gas Regulatory Board (PNGRB) in November 2016 to declare these pipelines “common carriers” which would allow it to access them. On 4 May this year, the board suggested the same in a notice seeking public opinion, but OMCs are not giving up without a fight. BPCL and HPCL say PNGRB did not consult them, and does not have the authority to impose any direction. “Though BPCL owns the pipeline, PNGRB has not heard BPCL’s view on the matter. The ATF pipeline is outside the scope and purview of the PNGRB Act and as such, PNGRB does not have the jurisdiction to declare the ATF pipeline as a common carrier,” said BPCL in its reply. A common carrier system implies that the capacity in a pipeline over and above the owner’s own requirement can be made available to any other entity if not fully utilized by the owner. This can be done on an annual contract basis. Officials from HPCL and BPCL said on the condition of anonymity that if need be, they will have to take the legal route on this matter. RIL and BPCL did not reply to an email sent. HPCL declined to comment. A 2002 government notification says a pipeline less than 300 km is granted right of use treating it as a “captive pipeline”. “Therefore, pipelines such as BPCL’s ATF pipeline which is 15 km long (being a pipeline of a length of less than 300 km) is a captive pipeline, a dedicated pipeline and therefore outside the scope and ambit of a common carrier and beyond the jurisdiction of the PNGRB,” said BPCL in its reply to PNGRB. At present, the entire ATF demand of 1.4 mmtpa (million metric tonnes per annum) at the Mumbai airport is met by the three OMCs. Indian Oil, along with BPCL and HPCL, has a joint venture company called Mumbai Aviation Fuel Farm Facility Pvt. Ltd for the ATF supply. Airlines at the Mumbai airport consume more than a fifth of the India’s total jet fuel requirement. RIL plans to ship ATF from its Jamnagar refinery to the Pirpau Jetty in Trombay, and then use the pipelines to transport the fuel to the airport. RIL in its 2016 letter to PNGRB had said that in the absence of competition, airlines are not able to enjoy the benefit of competitive prices. “The three oil marketing companies are enjoying a monopoly to the exclusion of all other ATF marketing companies (OMCs) in the supply of ATF at the Mumbai airport. This resulted in entry barrier to other authorized ATF suppliers. It has deprived the airlines’ customer of the benefit of effective competition at the airport in effect impacted the cost to passengers at large.” According to the letter, BPCL has 70.8% of capacity remaining in its pipeline. Josh Martin Womens Jersey
Rovuma LNG Phase 1 Development Plan Submitted to Government of Mozambique
Mozambique Rovuma Venture has submitted the development plan to the government for the first phase of the Rovuma LNG project, which will produce, liquefy and market natural gas from the Mamba fields located in the Area 4 block offshore Mozambique. The plan details the proposed design and construction of two liquefied natural gas trains which will each produce 7.6 million tons of LNG per year. ExxonMobil will lead construction and operation of natural gas liquefaction and related facilities on behalf of the joint venture, and Eni will lead construction and operation of upstream facilities. As the Rovuma LNG project progresses, every effort will be made to actively build the local workforce and supplier capabilities in Mozambique. “We are excited to be progressing the Rovuma LNG project, working with the government and leveraging the expertise and capabilities of all of the partners,” said Liam Mallon, president of ExxonMobil Development Company. “The Rovuma LNG Project is moving forward swiftly,” said Stefano Maione, Eni’s executive vice-president for the Mozambique Program. “The size of the project makes it not only an important investment in the country, but also supports economic growth and opens new opportunities for Mozambicans.” A final investment decision by the Area 4 joint venture parties is scheduled in 2019, with LNG production expected to commence in 2024. Marketing activities are progressing, with negotiations on sales and purchase agreements underway, targeting completion in parallel with the development plan approval process. Rovuma LNG is operated by Mozambique Rovuma Venture S.p.A., an incorporated joint venture owned by ExxonMobil, Eni and CNPC, which holds a 70 percent interest in the Area 4 concession alongside its partners Galp, KOGAS and Empresa Nacional de Hidrocarbonetos E.P. (ENH), each of which hold a 10 percent interest. Charles Mann Jersey
Does petroleum ministry consider itself ‘God’, asks SC
Does the Petroleum Ministry consider itself to be ‘God’ or a ‘super government’ and think that the “unemployed” judges are at their mercy, an anguished Supreme Court bench observed on Monday. The scathing remarks by a bench of Justices Madan B Lokur and Deepak Gupta came when the top court was informed that the Ministry of Petroleum and Natural Gas (MoPNG) had only yesterday apprised the Ministry of Environment, Forest and Climate Change (MoEF&CC) about the issue of ban on import of pet coke, which is used as industrial fuel. The court, which was hearing a matter relating to air pollution in the Delhi-National Capital Region (NCR), slapped a fine of Rs 25,000 on the MoPNG for “laxity”. The top court also imposed a cost of Rs 0.1 million on the Delhi government for not filing a status report giving a time-line for removal of traffic bottlenecks on several corridors in the city. The strong observations against MoPNG came when Additional Solicitor General (ASG) A N S Nadkarni, appearing for the Ministry of Environment, Forest and Climate Change (MoEF&CC), told the bench that they had received a response from the MoPNG on the issue only yesterday. “Is MoPNG a God? Are they God? They would respond whenever they want? Tell them to change their name from MoPNG to God.” “Is MoPNG a super government? Is it above the Government of India? What is the status of MoPNG, tell us. Why are they not complying with any order,” the bench asked. When the ASG said their affidavit was ready and he should be allowed to file it during the day, Justice Lokur shot back, “If they (MoPNG) do not feel like complying with the orders, they do not comply, and think that the unemployed judges of the Supreme Court will give them time. Are we supposed to be at the mercy of MoPNG?” The bench allowed the ASG to file the affidavit during the course of the day, but said “we are surprised by the attitude of the MoPNG in taking their own time in responding to the MoEF’s communication. The delay is entirely because of the laxity of the MoPNG”. It said if the cost of Rs 25,000 is not deposited by the MoPNG with the Supreme Court Legal Services Authority on or before July 13, it would enhance the amount of fine. The bench then fixed the matter for hearing on July 16. During the brief hearing, advocate Aparajita Singh, assisting the court as an amicus curiae, said the MoPNG was supposed to respond to the communication on the issue of ban on import of pet coke and supply of natural gas. Regarding the Delhi government not filing a status report on removal of traffic bottlenecks in the national capital, the bench said that as per its May 10 order, the Delhi government was supposed to file it within six weeks but they have not filed it yet and no lawyer on their behalf was present during the proceedings. The court referred to the orders passed by it and said it appeared that Delhi government was not concerned about them. On May 10, Delhi government had told the court that six task forces have been set up to look into the issue of traffic bottlenecks in several corridors in Delhi. It had said that such corridors were classified under categories A, B and C and steps were being taken with respect to 11 out of 28 corridors falling under category A. During the hearing today, the amicus told the bench about the issue related to the tenure of the court-mandated Environment Pollution Control Authority (EPCA). On being asked, the ASG told the bench that EPCA’s tenure was scheduled to end on July 4 this year which has been extended by three months through a government order. The court was hearing the matters arising out of a PIL filed in 1985 by environmentalist M C Mehta who had raised the issue of air pollution in the Delhi-NCR. Johnathan Joseph Jersey
Gadkari bets on alternative fuels to ease crude import strain
Union minister Nitin Gadkari is betting big on alternative fuels that will not only cut India’s burgeoning crude oil import bills but also create additional sources of income for farmers, who comprise more than 50 per cent of the country’s population. Alternative fuels are cleaner and cheaper, the Union minister for road transport and highways said. Speaking to , Gadkari said the use of ethanol, methanol, bio-compressed natural gas, dimethyl ether and electricity should be increased as alternatives to crude oil, 70 per cent of which has to be imported. “The benefit of these alternative fuels is that its raw material is available in the country and can be sourced in large quantities from the agricultural sector. It will help farmers increase their income too,” Gadkari said. Speaking about the financial strain crude oil imports place on the country, Gadkari said: “We spend Rs 7 lakh crore annually to import crude oil. The economy is facing challenges – one of which is the heavy crude import bill. The fall in the value of rupee against US dollar is also related to this.” He said increasing production of oil within the country has its limitations, adding that imports comprise 70 per cent of crude oil demands while domestic generation stood at only 30 per cent. “At present, ethanol is received from sugar mills and we mix 5 per cent of it to petrol. This mix can be raised up to 22 per cent but we do not produce ethanol in large quantity. Currently, we get about 4 per cent ethanol after crushing one tonne of sugarcane,” Gadkari said. He said the government has allowed the use of B-heavy molasses for ethanol production to increase its production. “Once ethanol availability goes up, we can blend more of it with petrol,” Gadkari said. He, however, is not satisfied with these small steps. He said he has decided to go for vehicles which are capable of running on 100 per cent ethanol or methanol. “The US and Canada make flex-engines (dual fuel engines) for buses and other transport vehicles. We can use 100 per cent petrol or ethanol in the same engine. The policy is ready for it. Its implementation will start in a few months,” he said. He cited Nagpur as an example where 35 public transport buses are powered by ethanol. The minister said private transport vehicle manufacturer Bajaj Auto was set to launch its vehicles that will have flex-engines. Listing his plans to increase the production of ethanol, Gadkari said the government has decided to make ethanol from cotton straws, rice, bagasse, bamboo and municipal waste. “Once we remove metal, glass and plastic, the rest is biomass, which can be used for ethanol. We have made a policy for it as well,” he said, adding that one of the reasons for Delhi’s air pollution was the burning of straw by farmers. “Once we start making ethanol out of it, no farmer will burn it. And this will decrease air pollution as well,” he said. The minister’s second choice for an alternative fuel is methanol, a product that can be obtained from coal. “We have coal fields and we can produce methanol in abundance. We can sell it at Rs 22 per litre. In China, metha nol sells at Rs 13 per litre,” he said, adding that companies such as Deepak Fertiliser, state-run RCF and Assam Petroleum produce methanol. “Mercedes and Volvo have decided to give 10 buses each for Guwahati and Mumbai as part of a pilot project and these will run on 100 percent methanol,” he said. He added that both ethanol and methanol cause less pollution when compared to petrol and diesel. “While producing methanol, DME (dimethyl ether) gas is also obtained and this can be mixed with LPG and used as a cooking fuel. In the US, 20 percent DME is mixed with LPG. If we do the same here, we can bring down prices by Rs 50 to Rs 60 per cylinder,” Gadkari said. “You have a methanol economy in China and Israel. Why not in India?” Electricity was another option, he said and added that his ministry is in favour of running electric buses. Talking about the mathematics behind the move to go in for alternative fuels, Gadkari said: “Diesel today costs around Rs 60 (per litre), petrol around Rs 80, ethanol is at Rs 47 and methanol at Rs 22. The per unit cost of electricity is Rs 10. The equation is simple and clear.” These alternative fuels, he said, were cleaner and would also bring savings to people. Malik Jefferson Jersey