The US Congress had got into the act in 2009 through 2 Bills to regulate the Hydraulic Fracking Process and told EPA to study the process.The Stakes are high for the Oil and Gas Companies as Shale Gas represent a Huge Opportunity.North America has been a pioneer in this Technology with Shale Gas Extraction expected to spread rapidly in different parts of the world.The EPA Study and US Regulations will be watched closely by other countries which are formulating their own regulations in this regard.
Shale Gas Extraction has seen doubts being raised against its Environmental Safety Record.This new form of Fossil Fuel Extraction has seen a Gold Rush from Global Oil and Gas Majors looking to tap into this major new Energy Form.In the initial helter and skelter,environmental norms have been bypassed.Recently a NGO blamed regulators and companies of illegally diverting millions of tons of water in Pennsylvania.India’s Biggest Private Company Relaince Industries has invested a huge amount in acquiring Shale Gas Assets in order to assimilate this Technology. The Indian government is writing a new Shale Gas Policy as India is said to have geographical formations with potential Shale Gas Deposits.
Reliance Industries is known to have one of the smartest management teams in the country.The Reliance Group led by Mukesh Ambani is well connected with proven record in executing huge projects in the Oil and Gas Arena.However outside of their core competence,the Group has suffered.Its Retail Entry has not been much of a success despite big bucks being poured in the last 3-4 years.It entry into marketing of oil based fuels has also meandered without going anywhere.Now the Reliance Group has announced an entry into the Hotels Sector by acquiring a 14% stake in East India Hotels at a significant premium over the market price from the promoter Group.This ~$220 million investment is totally unrelated to Reliance’s activities and make no strategic sense.
Reliance’s Strategy in Shale Gas makes a lot of sense.The Technology is but new and unproven on a long time scale.There have been concerns about the environment impact of Shale Gas Extraction.Also low Gas Prices due to the GFC has made the industry growth slowdown.This is a good time to buy Shale Gas Assets relatively cheaply as Economic Recovery will again see Fossil Fuel Prices heading up.
Only communities adjacent to the rivers can use this water.An Environmental Group has also accused the state EPA of colluding with these corporate interests.This may lead to huge lawsuits against these companies and force the Boom to a halt.Shale Gas is supposed to be the new energy panacea as the deposits can meet US energy needs for 20 years.However like other fossil fuels it will deplete leaving behind a legacy of ecological degradation and destruction.
Solar Energy in India has the potential to be one of the biggest opportunities in the Energy Sector in the 21st Century.The government’s strong backing through JNNSM and India’s favorable location for Solar Energy is a win-win combination.This coupled with India’s huge energy deficit and scorching growth makes it a no-brainer investment.A number of Indian […]