BP’s 2019 energy outlook projects that big things are in store for India’s energy sector. The country’s energy demand is set to balloon by 156 percent by 2040, at which point BP has projected that the subcontinent will account for a whopping 11 percent of global energy consumption--double its current share.
BP’s biggest takeaways for India’s role in the future of our global energy landscape are:
- India accounts for more than a quarter of net global primary energy demand growth between 2017-2040.
- 42 percent of this new energy demand is met through coal, meaning CO2 emissions roughly double by 2040.
- Gas production grows but fails to keep pace with demand, implying a significant growth in gas imports.
All this goes to say that India needs to be proactive about securing a greater and more diversified energy supply in the face of a demand that is not only going to grow, but is going to grow by a huge margin at a time that clean energy alternatives and cutting carbon emissions have never been more important. So far, however, India has been looking to ramp up their energy sector at all levels, including intensive investment in fossil fuels.
Last year India achieved the distinction of being the third-largest importer of crude oil in the world, coming in just behind the United States and China. “Of late, few countries are being as proactive as India when it comes to courting foreign investment in the oil and gas sector,” reports Forbes. “It isn't hard to guess why, as the Indian economy is largely driven by imported oil to the tune of over 80 percent of its headline requirements.” The report, titled “India Seeks Global Petrodollars To Cope With Burgeoning Energy Demand Through 2035” goes on to expand on this argument with the assertion that “with the consumption of petroleum products expected to grow at a compounded annual growth rate of ~5 percent to 2035, and Prime Minister Narendra Modi's commitment to reduce energy import requirements below 70 percent of headline demand, the strategy appears to be one of being loud and proud in courting petrodollars.” Related: The Natural Gas Nation Every Exporter Is Targeting
This strategy was notably on display at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2019, where India was well-represented, with Oil Minister Dharmendra Pradhan heading a pavilion housing “nine of the country's oil and gas companies from the upstream, midstream, downstream and engineering segments, along with Federation of Indian Petroleum Industry (FIPI), India Directorate General of Hydrocarbons (DGH) and Confederation of Indian Industry (CII).” Pradhan used this platform to tell the reporters gathered at the event that "India will be a driver of global energy demand in coming decades. There is no better place to invest if you are in the business of energy. More so, as we are working to make India a more natural gas-based economy." Later, in his keynote speech, Pradhan went on to say that India will need to secure around $100 billion of foreign investment in its oil and gas sector (including pipelines, gas terminals, and other infrastructure for transport and refining) by 2024.
At the same time that it courts petrodollars, however, India is also busy at work developing other energy sectors, both clean and carbon-intensive. This is extremely important on a global scale, as the route India will choose to take and which sectors they continue to invest in hold major implications for the planet as a whole. In a Reuters op-ed titled “China, India are both the problem and solution for coal, climate change,” columnist Clyde Russell writes that “in practical terms, the future of coal is largely in the hands of just two countries, China and India, which currently account for 60.2 percent of global electricity generated by the polluting fuel, according to data from the Institute for Energy Economics and Financial Analysis (IEEFA).” India may be appealing for petro-dollars now, but we can only hope that this is not the nation’s primary energy strategy.
By Haley Zaremba for Oilprice.com
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