Bookmark and Share

Why does India need Energy Security reforms

0 Comment

Energy security

Energy security is one of the areas where the government needs to work. The lack in the reforms, governance is doing no good to the state. Policy needs to be formulated so that investment in Oil overseas could be supported and also embargoes could be secured.

Videocon Industries recently announced the selling of its stake in Mozambique Oil field so as to use the proceeds to pay debt. The Company however has shown no sign of its intention to sell its stake in the Brazilian Oil fields. State owned Oil and Natural Gas Corporation (ONGC) did the same with its stake in Sakhalin Oil off Russia’s Siberian Coast. Indian companies have been the prospects of buying Oil and Gas fields along with the Coal Mines with an aim to meet the country’s rising energy demand which in most cases is met with the high import.

Several questions are being raised by the energy experts about such investment in energy by the state owned companies. Investment by the private players is justified to some extent, as trading in carbon is something which is allowed in India. Several questions regarding investment in energy sources in dodgy places has been in news because it is regarded as waste of money and time. It was argued that these investments are made with a view to produce and ship energy back home. The theory looks great when brought down to paper but in reality it is a real pain.

Read on GWI Advantages of Oil.

China stops India from plunging in the South China Sea

China has been busy shutting down India out of energy market in a queue. Our neighbor is well ahead of us in the race for African resources, creating only problems for us. The Chinese government with their different so called state policies has always out-casted India from several energy markets. Despite being the front runner in the race, the Chinese government wants India to stop prospecting for energy from South China Sea. Under such race of resource, is it really possible for India to trade freely in energy? Well the answer is yet very difficult.

United States to Contain its Shale Gas

The United States have made their intentions clear to retain shale gas within their territory not allowing export so that the country can retain competitiveness with itself. The super power is determined to take advantage of the cheap energy available in its land which will help revive the manufacturing activities in the US.  When the state of energy is such in US, India too should refrain from exporting its Iron Ore and should focus more upon its use in manufacturing domestically.

Read more about Advantages of Natural Gas.

India too needs its Energy Security

Going by the current demand of energy and oil, it is expected that the imports of Oil will rise manifold in days to come. India is likely to surpass US and will remain a major oil importer. It is undoubtedly true that the US economy being the super power booked several embargo with countries having Oil Field to meet its current demand. The same trend is being followed by several other countries who are either trading freely in energy or are booking embargoes (in Iran, Iraq, etc.) to meet the demand. For India, the story is however different and the country currently needs to develop on a strategy of energy security. It is important for the nation to ensure safety across the lines of sea lanes with the help of naval forces. This will help India safeguard its future requirement of energy to meet its rising demand.



Niraj Satnalika

Niraj is an MBA in International Business (Finance). Prior to this he completed B.Tech in Electronics and Instrumentation. He is currently working with Confederation of Indian Industry (CII), Kolkata in capacity of Consultant. Satnalika is actively involved with an NGO and works towards promoting education among the underprivileged.

No Responses so far | Have Your Say!