ITC breaks "Greening" world record!

ITC broke a Guiness record, when it coordinated the planting of, "3,00,587 saplings of eucalyptus and subabul in just 20 minutes in 264 acres spread across 17 different locations in and around Bhadrachalam on Monday". The previous record was for 134,000 saplings in one hour and was held by a Canadian agency.

Why did ITC plant all the saplings?

The effort was part of the "Sunfeast Hara Banao" campaign of the ITC foods division, and keeps in with ITC's long-term plan to encourage eucalyptus for the paper industry. In this case, the farmers planted the saplings and will take care of them. ITC will buy wood from them at market rates. Apparently the farmers should get about 2 lakhs an acre in the five years of the trees' growth. The effort cost ITC Rs 5,000,000.

In passing...

Tamil Nadu will build its second largest water desalination plant to overcome the water woes of the people of two municipalities. The proposed plant will supply 2.5 million litres per day, which is the total requirement of the 60,000 Ramanathapuram municipality. The entire supply will be shared between two municipalities however, at it supplements the existing water supply.

I am not sure how economical desalination plants are however, and if they are competitive to other sources, why cant we have more of them?

The El Dorado of the Gas Industry

Gas Hydrates are a huge potential source of energy for the future. In fact they are so huge that a country having access to just one percent of the gas from hydrates would make all gas-rich countries of today look like ants. The catch is in extracting it, and India is certainly at the forefront of research in this direction.

Quick Introduction

First, what are gas hydrates? Hydrates are essentially a union of water with some other substance, which results in a nuetral body - often solid like certain crystallized salts. So methane gas hydrates are essentially ice with gas trapped in between. The density of methane is so high that they are referred to as frozen methane - in fact one cubic meter of methane hydrate contains 164 cubic meters of the gas.

How much gas do hydrates hold?

Methane gas hydrates worldwide have been estimated to hold some 400 million tcf (trillion cubic feet) of gas. To put that into perpective, the huge GSPC find in the K-G Basin, Deen Dayal, holds between 20-40 tcf. Worldwide all known natural gas reserves total some 5000 tcf. That means hydrates hold 80,000 times as much gas as natural gas reserves.

While the regions under ice cap contain the richest concentrations of hydrates, India is not unblessed either, as hydrates occur in several marine settings around the world. In fact ONGC and Reliance are finding hydrate blocks a hindrance to their drilling activities in the K-G Basin. In fact India is estimated to have gas hydrate reserves of around 1,894 trillion cubic metres (67,000 tcf).

Can methane be extracted from hydrates?
In late 2003 an international research program including India, the US, Japan and Canada demonstrated for the first time that it was technically feasible to extract gas from frozen gas hydrates. The consortium conducted test drilling at a site called Mallik in the Mackenzie Delta in the Canadian Arctic. The site is located in an area known to have one of the highest concentrations of gas hydrates in the world.

Russia is already extracting gas from hydrates but its method is probably not viable enough in most other places of the world.

Where do we go from here?

Hydrates are not quite there, and few expect commercialization before another decade and a half. However research goes on. The recent US Energy Bill supports funding for research in this field. This should boost efforts from BP Exploration (Alaska) Inc. and Anadarko Petroleum Corp. who have been interested in gas from the Alaska hydrates.

The Indian Initiative

India has a National Gas Hydrates Programme (under the oil ministry) which helps coordinate the efforts of the various agencies involved in this effort. This includes the public sector gas giants like ONGC and GAIL, as well as government departments like the Department of Ocean Development (DOD) and the National Institute of Oceanography (NIO).

Bouyed by its experience from Mallik, India has plans to drill two deep sea wells for extracting gas from methane hydrates. The sites are yet to be finalized but action is taking place in the right direction.

Chhattisgarh going big on Jatropha

The Chhattisgarh government has before proved itself among the foremost proponents of the Jatropha revolution in India. The Chief Minister of Chhattisgarh, Raman Singh is already the first head of an Indian state to start using bio-diesel to power his official car, a Tata Safari. That was back in May, when the aim was to run all official vehicles on bio-diesel in three months, and make the state self-reliant in bio-diesel in ten years. (I know the three months are up, but dont know the scores yet)

Doesnt matter. They are doing something better now. They are offering fantastic initiatives to corporates and individuals to cultivate Jatropha in the state. Land disputes? No problem. No capital? No problem. "Under the Government scheme, an individual can lease up to 200 hectares of land at a price of Rs 100 per hectare, per year for the first five years. For subsequent years, these rates could be increased." The government will provide a total of 200,000 hectares of land for this purpose.

Not sure what the incentives for corporates is but companies like Indian Oil Corporation, IFFCO, ONGC and Emami, are making a beeline to the state to get into jatropha farming. As per the government estimates, at Rs 5 per kg of seed, jatropha biodiesel will cost Rs 20 a litre - which is comparable to the price of diesel at $45 per barrel of petroleum. With appropriate duty concession, biodiesel will compete against a $35 barrel too.

Among other figures thrown up were:
"plantation of jatropha in farm bunds; wasteland and fallow land of the State will generate extra income of about Rs 2,000 crore for the villagers by 2010."
"A target of planting eight crore jatropha saplings in State nurseries has already been met this year. We plan to distribute 16 crore saplings next year"

P.S.: Thanks to Sanjay for pointing me to this news item.

Relying on Jatropha

One of the biggest names in Indian corporate history is throwing its weight behind a Jatropha-based future for India motor fuels. Of course it is not abandoning its highly lucrative oil business yet, but the boost the bio-diesel industry will get from this show of support will be substantial, while the bottom line of the company itself will definitely be better off from the effort.

Recently Saudi Arabia, despite being the biggest oil producer in the world, announced a major bio-diesel initiative. Of course the reason given was "waste water usage" and "greening the desert", and not merely creating fuel.

India's biggest private sector name in the oil industry, Reliance Industries is now launching a major initiative to grow jatropha at Kakinada in Andhra Pradesh. Though the pilot is likely to be on 200 acres of land, it should grow to thousands of acres if all goes well. Going by Reliance's track record in India, it would be a wonder if all does not go well - which is great news for the alternate fuel industry.

The initiative will be spearheaded by Reliance Life Sciences, a subsidiary of RIL, while the Bhavnagar-based Central Salt & Marine Chemicals Research Institute will provide the know-how on crop and fuel extraction technology.

* A jatropha seed contains 31 to 37 per cent extractable oil
* A plantation of 100,000 hectares of jatropha is expected to yield 250,000-300,000 tonnes of crude jatropha oil per annum
* The initial 100,000 hectare jatropha farm may yield revenues of $100 mn a year

- Rediff

Among other things Reliance's interest is seen as a vindication for the profitability of the bio-diesel industry.

Revolutionary Reactor Design by BARC

Scientists at the Bhabha Atomic Research Centre, Bombay, have designed what they claim is the safest and most economical nuclear reactor in the world. BARC scientists V Jagannathan and Usha Pal revealed the design, which has been in the making for seven years, in their paper presented at the week-long 12th International Conference on Emerging Nuclear Energy Systems (ICENES 2005) in Brussels.

There are some nice and unique things about this reactor. The design presented was for a reactor that can produce, "600 MW of electricity for two years 'with no refuelling and practically no control manoeuvres.'" Most accidents are because of human error. So automation would mean minimal chances of accident - plus reduction in cost. Importantly for India, the reactor does not need uranium, and runs of thorium instead (which India has in plenty). I have doubts about that being an advantage. Though it does not need uranium, it still needs plutonium (800 kg a year), and in comparable quantities to the thorium (1100 kg a year).

The design is called ATBR (A Thorium Breeder Reactor). It uses plutonium as the seed to start the reaction cycle, which then carries on with thorium getting converted to fissionable uranium-233. It is a thorium breeder of sorts (a first with thorium in the world - fast breeding is normally done with plutonium), so it produces as much fissile material as it depletes, extending a single cycle over a period of two years. Thus the minimal human interference required.

World reserves of thorium are about three times that of uranium, and India has 32 per cent of the world's thorium. Thus India is rather anxious to start exploiting this huge resource, which incidentally also cannot be used to create nuclear weapons.

India has a so-called "three-stage nuclear program". In the first stage, plutonium is created in its pressurized heavy water reactors (PHWRs) and extracted by reprocessing. In the second stage, fast breeder reactors (FBRs) use this plutonium in 70-percent MOX-fuel to breed uranium-233 in a thorium blanket around the core. In the final stage, the FBR's use thorium-232 and produce uranium-233 for other reactors.

The first stage has been realized with India's 10 nuclear power plants. The second stage is only realized by a small experimental fast breeder reactor (13 MW), at Kalpakkam.

- Bellona

August 20th - Renewable Energy Day in India

Last Saturday, India observed the birthday of former PM Rajiv Gandhi as Renewable Energy Day - Rajiv Gandhi Akshay Urja Diwas.

Some celebrations were rather symbolic. In Manipur the main observation was held at the office premises of the Manipur Renewable Energy Development Agency (MANIREDA), where the 2030 deadline on energy independence was stressed again. Others saw a little more than just that.

New Delhi

In New Delhi, Prime Minister Dr Manmohan Singh addressed a function:
- a community biogas plant for every village
- micro-hydel projects in the hills

The Minister of State (Independent charge) for Non-Conventional Energy Sources Vilas Muttemwar
- the biogas initiative would be a major objective of the ministry
- "grid quality electricity to 25,000 remote villages, which cannot be connected with grid, by 2012 through the renewable energy (RE) sources."
- "Renewable Energy Clubs are being formed in 1300 engineering colleges and technical institutions with a grant of Rs 25,000 per annum by the Ministry of Non-Conventional Energy Sources, which would help development of renewable energy technology and present this as a career option."
-"District Advisory Committees (DACs) have been set up in 465 Districts for accelerating use of RE devices and removing obstacles in the way," said Muttemwar

India's Largest Wind Energy Producer honored

MSPL Ltd was awarded the ''Highest Investor Award in the field of Renewable Energy'' for 2004-05 by the Karnataka Renewable Energy Development Limited (KREDL).

"...the company had invested about Rs 460 crore during the financial year 2004-05 for installing wind mills of 105 MW.

An ISO 14001 certified company, MSPL has the unique distinction of being India's largest 'Wind Energy' Producer. They have a total installed capacity of 140 MW of Wind Energy as of date that has been put up at an investment of about Rs 650 crore. MSPL Limited alongwith group companies exports about 385 million units of energy to the Karnataka State grid per annum.

One of the major upcoming projects of MSPL Limited in the field of renewable energy for the current financial year 2005-2006 is the expansion of the existing Wind Farm Projects with an additional capacity of 75 MW."

Integrated Energy Policy - almost there...

India has been working (for a while now) on an Integrated Energy Policy a draft of which was recently released by the Planning Commission. The draft gives an indication of the direction the policy is likely to take and the areas of concentration.

Firstly it has suggested an overhaul of the current fuel pricing mechanism. More than 50% of the retail selling price of petrol is made up of taxes in India, and taxes mandate that petrol is significantly more expensive than diesel in the country. The policy however aims at interlinking the prices of all fuels in the country.

It points out that the high cost of fuel affects competitiveness of industry, agriculture and commerce, thus negatively affecting the economy. Which is rather true. The high prices would have been justified when we were a more closed economy highly concerned with outflow of foreign exchange. Now if the price of petrol is lowered, we will see an increase in sales. But this increase will have a cascading effect on other areas of the economy. Sales of automobiles will go up. More people will travel more often, leading to an increase in business for the services sectors. The cost of a whole range of commodities for local consumption and export will fall, thus further fueling the growth of the GDP. And yes, we will be that wee bit more competitive with respect to China where petrol costs the equivalent of Rs 18 per litre.

The role of the government as both regulator and principal owner of almost 75 per cent of all fuel resources, came in for mention. Considering the current fuel pricing crisis, this it is especially relevant that the separation of both roles was suggested. "It also says that each regulatory body should be charged with the responsibility of creating enabling environment to foster competitive and transparent markets for energy supplies/services."

The policy could look at some rather "out-of-the-box" thinking. Companies like NTPC could be asked to increase their fuel efficiency (through acquired technology) by 30%. They could also used cleaner ways to use the coal reserves like, recovering coal bed methane, in-situ coal gasification, carbon-capture and sequestration; and integrated gasification combined cycle (IGCC).

And now for the best part - the policy stresses on the importance of reinforcing the National Solar Mission, "to promote innovation and acquisition of state-of-the-art technologies aimed at reducing cost of solar photo-voltaic technologies, exploring the use of solar thermal technologies for power generation and enhancing applications aimed at effective recovery of heat energy from available solar insulation."

The automobile industry will be asked, "to seek technology for super batteries and engage in research to develop such batteries in a time-bound manner." Does this indicate a move towards electric and/or hybrid vehicles?

BHEL's Solar Lamps for Jharkhand Schools

BHEL (Bharat Heavy Electricals Ltd) in a joint initiative with the Jharkhand State Tribal Development Corporation, has installed solar lighting systems in tribal schools in various parts of the state. The solar power plants commissioned were in the 2-5 KW range, and each is equipped with solar photovoltaic panels, battery banks and power conditioning units for generating electricity using sunlight.

Jharkhand has one of the biggest backward tribal populations in the country, and the initiative is expected to help students who, "were earlier forced to call it a day at dusk itself". I am rather skeptical regarding schools conducting classes beyond dusk - only evening colleges do that. But classrooms must have enough lighting inside the class even in the day time and so this is good. More than that however, this initiative is likely to help showcase solar power in the tribal areas, and possibly generate interest. The experience should help further the role of solar power in achieving the targets of the Remote Village Electrification Programme.

Bio-diesel - Another Small Step

Bio-diesel in India came one step closer to consumers, as Indian oil companies, IOC, HPCL and BPCL, have agreed to buy bio-diesel for blending with diesel. In fact, at a price of Rs 23 per liter, they have offered to buy "any quantity". The government however is in favor of a Rs 25 per liter to include an encouragement premium.

The 3 oilcos between them plan to set up 20 depots all over the country to collect bio-diesel. Each will have a laboratory facility to check for the quality of the bio-diesel being supplied. However the program to actually sell diesel mixed with the bio-fuel could take 4-5 years to launch on a commercial scale.

The growth of the bio-diesel industry in India is expected to benefit from the setting up of a Bio-Diesel Credit Bank in New Delhi, by the Petroleum Conservation Research Association (PCRA). The bank will provide, "provide all relevant information - right from people engaged in the cultivation of non-edible oil seeds to those engaged in collection and processing of bio-diesel and the desired quality of bio-diesel."

Pushing The Prius - Faster, Longer, Cheaper

The hybrid Toyota Prius is the darling of alternate energy enthusiasts in the US. Though there are other hybrids in the US market, I suspect the most endearing factor of the Prius is its super best-selling status which gives hope that there is a lot of interest in the country in moving away from traditional fuels. People pay as much as five thousand dollars to jump a two month waiting list for a Prius. Others buy a Prius only to immediately sell it at a profit.

Essentially all that the Prius does is to improve the efficiency of a petrol car by running an electric motor on energy generated via a flywheel during actions like braking the car. However the introduction of the electric aspect opens up the doors for all sorts of alternate energy. Enthusiasts are converting Prius' into plug-in hybrids, so that their batteries can be charged overnight - just like an electric car. Unlike petrol, electricity can come from a variety of renewable sources, and very little petroleum is used in the US for generating electricity.

Then some take that concept even further to build a photovoltaic hybrid. While a regular Prius can top out at 47 miles per gallon (about 20 km per litre), a photovoltaic hybrid can reach 71 mpg (30 kmpl). Under special conditions folks have managed up to 110 mpg (46 kmpl) over 1400 miles using what is called the Pulse and Glide Technique. Plug-in pybrids however are reported to have returned as much as 250 mpg (106 kmpl). The idea is to put additional batteries in your hybrid, and charge all of them overnight. If you dont travel more than 20-30 miles every day, you may not need any petrol at all. What does it cost to run your car on electricity? "To drive a hybrid car about 1 km, takes about the same electricity as to light a 150 watt bulb for one hour!"

The President on Energy Independence

President APJ Abdul Kalam had an image as a dreamer even before he became the First Citizen of this country. No wonder then that visions are a usual feature when he addresses the nation. On Republic Day this year he gave us a vision of universal employment via sustainable development. This time he talks about energy independence.

The first half of the speech was dedicated to talking about the recent floods in various parts of the country, including the financial capital of the country. He also mentioned that action was being taken on some of the 8 areas he had mentioned in his Republic Day speech.

Energy is the lifeline of modern societies....As it is said, energy and water demand will soon surely be a defining characteristic of our people's life in the 21st Century.

Energy security rests on two principles. The first, to use the least amount of energy to provide services and cut down energy losses. The second, to secure access to all sources of energy including coal, oil and gas supplies worldwide, till the end of the fossil fuel era, which is fast approaching. Simultaneously, we should access technologies to provide a diverse supply of reliable, affordable and environmentally sustainable energy.

Energy scurity, which means ensuring that our country can supply lifeline energy to all its citizens, at affordable costs at all times... ...energy independence has to be our nation's first and highest priority. We must be determined to achieve this within the next 25 years, therefore by the year 2030. This one major 25-year national mission must be formulated, funds guaranteed, and leadership entrusted without delay as public-private partnerships to our younger generation, now in their 30s, as their lifetime mission in a renewed drive for nation-building.

What are the envisioned energy sources for the future?

Firstly, better using our coal thus: "...a movement towards energy independence would demand accelerated work in operationalising the production of energy from the coal sector through integrated gasification and combined cycle route." In 2030, "the power generated from coal-based power plants would increase from the existing 67,000 MW to 200,000 MW". Simultaneously "fossil fuel imports need to be minimised and secure access to be ensured. Maximum hydro and nuclear power potential should be tapped."

The best part comes after that: "The most significant aspect, however, would be that the power generated through renewable energy technologies may target 20 to 25% against the present 5%. It would be evident that for true energy independence, a major shift in the structure of energy sources from fossil to renewable energy sources is mandated."

"Solar Farms"

"Solar energy in particular requires unique, massive applications in the agricultural sector, where farmers need electricity exclusively in the daytime. This could be the primary demand driver for solar energy. Our farmers demand for electric power today is significantly high to make solar energy economical in large scale.

Shortages of water, both for drinking and farming operations, can be met by large-scale seawater desalination and pumping inland using solar energy, supplemented by bio-fuels wherever necessary.

The current high capital costs of solar power stations can be reduced by gridlocked 100 MW sized Very Large Scale Solar Photovoltaic or Solar Thermal Power Stations. In the very near future, breakthroughs in nanotechnologies promise significant increase in solar cell efficiencies from current 15% values to over 50% levels. These would in turn reduce the cost of solar energy production. Our science laboratories should mount an Research & Development Programme for developing high efficiency CNT based Photo Voltaic Cells.

We thus need to embark on a major national programme in solar energy systems and technologies, for both large, centralised applications as well as small, decentralised requirements concurrently, for applications in both rural and urban areas."

Municipal Waste, Energy Efficiency and Bio-diesel

He also spoke of the potential for power generation from municipal waste: "Today, two plants are operational in India, each plant generating 6.5 MW of electric power. Studies indicate that as much as 5800 MW of power can be generated by setting up 900 electric power plants spread over in different parts of the country, which can be fueled by municipal waste."

Transmission losses, which encompass power theft, came in for special mention. The President pointed out that reducing these losses from 30-40% to 15% will save as much power as Rs 70,000 crores (about $15 bn) worth of investment can produce.

He also repeated his Republic Day commitment to bio-fuels, pointing out that India can produce 60 million tonnes of bio-fuels annually. Interestingly again he did not mention ethanol. When he spoke about the full economic cycle, the phases were conspiciously those for the bio-diesel cycle.

Nuclear Power

In the only disappointing aspect for the greens, he also stressed on ramping up on the nuclear power front. His stance however moves away slightly from the US' potential "helping hand". The President stressed the need to build Thorium-based reactors because India has good reserves of the metal.

India Petroleum Update

The Shale Story

We all know that petroelum is formed when organic matter decays under an appropriate amount of pressure and temperature. Coal is actually formed somewhere along the journey from just-dead organism to petroleum. We saw how conversion of coal to petroleum products is getting hot as a propect with the maturing of technology in that area. Now if coal is good enough, then why not oil shale, which is a little closer to petroleum in the formation process?

Oil Shale is a kind of shale that contains kerogen, which can be processed to get oil. The cost depends on who you ask, but it will definitely be competitive compared to coal. Now comes the interesting part. ET reports that Oil India Ltd geologists claim that India has enough oil shale to meet all our oil requirements (at current levels) for the next 100 years. Swaminomics comments on this here.

Here is a quick look at the statistics. If India has to have the kind of shale reserves being claimed here, it would have to be the world's best kept secret in that department. 140 million tonnes every year for the next 100 years translates to current reserves of 14 billion tonnes - that is proven (or at least estimated) recoverable reserves. According to the world energy council survey 2001, only the US at 60-80 billion tonnes has more recoverable reserves than that. Now since the US is estimated to have over 60% of world reserves, India's share comes up to above 10%. The survey does not mention India at all - and that means that if true this is the world's best kept secret in the field of geology.

Iran-Pak-India-(China?) gas pipeline

While an Indian delegation reaches China today to discuss cooperation in exploring energy resources in third countries, one proposal that will loom large over all discussions would China's participation in the Indo-Iran gas pipeline project. China's participation will mean a big win-win situation for India. For one the transit fees will more than make up for whatever India would be paying Pakistan. Secondly if the same pipeline feeds China too, then Pak will be far more enthusiastic about ensuring the security and sanctity of the gas flow. Thirdly the Chinese angle is likely to make it far easier to tie up an international consortium to build and maintain the pipeline.

So how likely is this? TOI reports that "Officials of the petroleum ministries of India and China are engaged in a serious dialogue about the possibility of Chinese participation in the India-Iran gas pipeline". The US is against such a deal with Iran, and China is smarting under the recent failure of its bid for UNOCAL. Please do the math. To speak the truth, China has not yet officially commented on the proposal.

Domestic Developments

HPCL chairman M.B. Lal told Rueters of plans to set up three new refineries - one on the east coast in Vishkhapatnam to process 300,000 barrels per day, the second in Bhatinda in Punjab to process 180,000 bpd and the third (oil ministry willing) in Rajasthan to process Cairn's crude. Cairn and ONGC have already submitted a proposal for a joint-venture refinery in Rajasthan and the oil ministry will take a final decision on this.

For its part, Indian Oil Corporation has put its own projects on hold citing mounting losses from under-recovery on the petro-product sales. This also being the first quarter ever when all four oil retail PSU's have recorded a loss, the current under-recovery rates mandate that IBP, BPCL, HPCL and IOC will all become sick in sequence from September 2005 to July 2008.

The Eko Cosmic - I

In January this year, Bangalore-based Ekovehicles launched an electric scooter, which had caught public attention just a month before at the Grahak Utsav-2004 in Bangalore. Here is an interview with Anil Ananthakrishna, Chairman of Ekovehicles, where among other things he announces plans to launch an electric motorcycle sometime next year.

About the electric scooter: Launched on Jan 21, 2005 in Bangalore, it was christened Eko Cosmic-I. Costing Rs 30,000 onroad in Bangalore, it returns 50 km on a single charge that costs Rs 3, thus returning the amazing mileage of just 6 paise per km. The top speed though is just 40 kmph. The good part is it looks as good as the best scooters in India, and considering the low output (500 watts or 10cc), it needs no road tax to be paid or even a driving liscense.

Is this India's first electric scooter? No. The first scooter was Vidyut-24, also launched by Eko Vehicles in Bangalore way back in the 1980s. The product bombed back then. Since then Mr Ananthakrishna, an electric vehicle technologist has worked on several types of battery operated vehicles in Germany, the US and China. (In fact China has sold about 4 million locally manufactured electric two wheelers.)

Is this truly a Made-In-India product?Trick question! Though the Eko Cosmic-I is his own design, the components are almost completely imported (a majority from China), and only assembled in Bangalore. However, talks are on for localization. Crompton Greaves could supply the motors, Roloform the wheel rims and Fiem the headlights and taillights. An 80-85 percent localization is the immediate target, with high-end electronics from Japan and Europe the only imports.

So whats the future? At a rapid battery charging station, the vehicle needs just 10 minutes to charge. Eko is setting up 140 such stations in Bangalore this year. A tie-up with reliance to introduce charging stations at petrol pumps along the highway is on the anvil. A lithium-ion battery can increase the range from 40 to 100 kms, but will cost substantially (Rs 20,000) more.

The Karnataka government is likely to give a sales tax rebate of Rs 3,300 on the Eko Cosmic.

While the company is targeting 100,000 in sales in the next one year (only 400 have been sold so far), they are also planning to launch an electric motorcycle, an electric cycle called the E-bike and sometime next year a 3 or 4 wheeler costing just Rs 80,000.

Y2K, Peak Oil and Cassandra

Jamais Cascio has a great post on WorldChanging titled "Peak Oil and the Curse of Cassandra".

Just to be safe, here is some background. I guess everyone knows all about the Y2K, but just in case someone has forgotten, here is a primer. We are also well aware with the term Peak Oil, I suppose, but here is a link (via treehugger) anyway. Now Cassandra is probably not as famous except among history/mythology buffs. She was the Trojan seeress who could correctly predict the future, but was cursed to be always ignored. She correctly cried out when Paris brought Helen home, though the city rejoiced. She similarly knew of Achilles and company hiding in the wooden horse, but no one believed her. She was also the sister of Paris and Hector.

Now for the interesting part. Jamais believes that the Peak Oil scare is like Y2K. And no, Y2K was not a hoax. It was a desperate and herculean effort that averted the Y2K crisis, and a similar thing will happen with Peak Oil. Then people will call Peak Oil a hoax. But the scare was vital to mobilizing the resources to beat Y2K, and a similar emotional frenzy will help with Peak Oil too. Beyond this, I would urge you to read the original article..

Ethanol - the Net Energy Debate continues

The Alternate Energy Blog has this post on how ethanol may actually need more (fossil fuel) energy to produce, than it can give out. The cartoon is telling enough actually.

One reason The Indic View does not wax eloquent on the virtues of ethanol is the uncertainty over its net energy status. Alt-e has some figures here, which apparently depend on who you ask:

"The ethanol lobby claims there's a 30 percent net gain in BTUs from ethanol made from corn. Other boosters, including Woolsey, claim there are huge energy gains (as much as 700 percent) to be had by making ethanol from grass."

However according to, "David Pimentel, a professor of ecology at Cornell University who has been studying grain alcohol for 20 years, and Tad Patzek, an engineering professor at the University of California, Berkeley,...ethanol from corn requires 29 percent more fossil energy than the ethanol fuel itself actually contains." The corresponding figures for soybeans is 27%, switch grass 50%, wood biomass 57% and sunflowers 118%.

On the Indian scene, the government is committed to ethanol-ing retail petrol soon, and a 5% blend has already been made mandatory. However the roll-out is currently not on track because of the unavailability of ethanol (sugar crop was bad last year). With a good crop expected this year (until recently at least), the government and the ethanol groups were confident of supplying enough to get the roll-out on track.

What about the cost? The last time I heard, the sugar mills were going to sell ethanol to the oil companies at something between Rs 19-21 per litre. Yes, the numbers looks rather unrealistic even to me. Does someone have any other numbers though?

India in Six-Nation clean technology pact

The US joined 5 Asia-Pacific nations, Australia, China, Japan, India and South Korea to build a six-nation grouping that aims at reducing global greenhouse gas emissions through new technology. The member nations account for about half the world's population - and half the greenhouse gas emissions too.

On the Action Agenda

"Technology that enables coal to be burned more efficiently and captures carbon dioxide before it reaches the atmosphere is top of the agenda" - Guardian

"... the six countries might work on developing benign technologies related to bio-energy, geothermal power, liquefied natural gas, methane, non-polluting coal, nuclear power, rural energy, and solar and wind power. Long-term projects could include creating safe energy from nuclear fission and fusion." - Times

So you will cooperate on nuclear power? Isnt this announcement suspiciously close to the US announcing that they will share nuclear power technology with India?

"...[Member] countries will focus on developing low emissions technologies and transferring them from developed to developing countries. Private industry will be given incentives to invest. A fund will also be established by partner members to help develop technology-based solutions." - The Australian

Is this treaty about undermining Kyoto?

Of the six, Japan has committed to a 6% reduction under Kyoto. India and China, as developing countries did not have reduction targets. Australia and the US did not sign up for reductions alleging... whatever.

Further, "Talks on the pact have been going on in secret for 12 months but it was only at the last minute that Japan was approached and decided to join. Suspicion of US motives was fuelled by the fact that the EU and Tony Blair were not informed of the plan, even though climate change was a big item on the agenda of last month's G8 meeting".

This is what The Australian had to say: THE Kyoto Protocol is over. Get over it. It doesn't have a future if the US-inspired Asia-Pacific Partnership for Clean Development and Climate gets off the ground. The ballast on the issue of global warming and climate change is shifting to the New World - now including China and India - and away from the punitive system of limits and targets set by Old Europe for 2008-12.

Among others, Rueters called it the "Beyond Kyoto" pact.

Now this new pact has no emission reduction targets - good intentions are all that count. So if it manages to become as big as the Kyoto pact, then its members will not look so bad for not having signed Kyoto, and yet will be under no signed obligation to reduce emissions. It is thus getting called, "Self-Serving".

The Sunflower Solar Concentrator

I got to this Wired article via Emergic

Bill Gross, a dotcom millionnaire and survivor, is the force behind another potentially revolutionary solar concentrator called the Sunflower. The revolution aspect relates to the fact that this device moves all its concentrator panels to always point to the sun, using a novel method that uses only two motors for all the huge panels. The device is currently undergoing stringent stress testing to ensure it survive 15 years or so.

Some interesting points are made in the article.

Even in sunny places like California, the pre-rebate cost of PV-generated electricity is roughly 21 cents per kilowatt-hour. Coal (from 4.74 cents per kilowatt-hour), natural gas (5.15 cents), nukes (5.92 cents), even windmills (5.15 cents) offer cheaper ways to keep the lights on.

Solar panels are small enough to fit on rooftops...solar has the potential to cut out the middleman...

[so] instead of competing with wholesale power from distant power plants, rooftop solar competes with retail kilowatt-hours delivered by the local electric company, which often are marked up as much as 1,000 percent over their original generating cost.

...retail prices typically peak on hot, sunny summer days...precisely when solar panels are most productive.

"Right now, PV solar has a 20-year payback, but people are still buying it," he [Gross] says. "Our target for California is five. In Phoenix we could do 3.3."

Here is how it works

Coal To Oil - the Next Big Thing?

India has coal to last us the next few centuries, while the oil reserves will last us only a few more years. But coal is dirtier on the environment and bulkier on the transporters. So what is the solution? Simple - convert coal to oil.

South African SASOL, is the leading coal-to-liquids (CTL) technology and producing company in the world. Since the 1950's the South African government has been promoting the Fischer-Tropsch process that Germany used during WW-II, to get oil from its massive coal reserves. Germany however was facing a global supply blockade, while in SA it was a political decision, though SASOL could never bring its products to within range of commercial oil rates - till oil hit $40 (now its $60).

Four Indian corporate houses are holding talks with SASOL to set up such plants in India. All four are big names in the Indian steel industry - Jindal, Essar, Tata and Bhushan Steel. The talks are at a preliminary stage, but Jindal and Essar are also exploring the Coal-to-Gas technology.

How big can CTL get?

China has huge coal reserves, and SASOL is setting up two plants in China at a total cost of $6bn. Alright $6 bn is a lot of money, but for that kind of money China gets an annual output of 60 million tonnes of oil, which is 60% of the current annual import of 100 mn tonnes. India currently imports roughly the same amount.

Any potential catches?

The process is capital intensive, and scale is important. So China gets an output of 10 mtpa for every billion dollars invested. If the total investment is lower though, the output will be lower still. In India it is doubtful whether state economic muscle will help the four private sector companies. On their part PSU's like ONGC and GAIL are already exploring CTG technologies like Underground Coal Gassification, with Russian and Canadian partners respectively. ONGC however suffered a setback recently when CIL refused to be a part of the project.

Also the fact that all the private sector companies here are steel majors is no coincidence. They hope to use their existing coal licenses/expertise on this. So it maybe unlikely that they would see great synergies from working together on this.

Also CTL needs a certain quality of coal and it is not clear whether such coal is available in the country in huge quantities. Apparently, SASOL "has examined some samples of Indian coal, and found one of them promising."

Renewables in India - A Tale of Two States

Tamil Nadu, India's southern-most state, hopes to consolidate its position as the number one state as far as using renewable energy sources goes.

At 2,317 MW, 20% of Tamil Nadu's electricity comes from renewable energy sources. The national average is 4.8%. The share of the state in the total renewable energy produced in the country stands at 30%, further validating its leadership position.

The state is actively pursuing a variety of renewable sources including wind, biomass, biofuels and solar power.

In wind power the state already has 61% of the total capacity in the country, owing to inherent advantages resulting from it getting winds from both the south-east as well as the north-east.

In biomass, the Tamil Nadu Energy Development Agency recently recommended 37 bio-mass projects to generate a total of 260 MW, of which 15 projects with a total capacity of 145MW have been approved by the government. Biomass gasifiers were also being promoted for thermal and electrical applications.

The state has mandated the installation of solar water heating systems on certain types of buildings. Another proposal "to make mandatory the installation of solar lighting system in the common area of multi-storied residential apartments", was awaiting State Government approval.

Way up north, the government of Jammu and Kashmir, recently announced a new state hydro power policy, which had an arrangement for Independent Power Producers. Several private sector companies have thus come forward to install hydel projects in the state. The Chief Minister recently laid the foundation stone for the first such project - the Arhabal Power Project which will generate 15 MW of power and cost Rs 105 crores to construct. The cost per megawatt is rather high because of the lack of scale, but that only means that payback will take longer. Still the government hopes to start about 25 mini and micro hydel projects with a cumulative capacity of 2000 megawatts during the current year.

Strictly speaking while hydro-power is renewable, it is often considered environment unfriendly and thus does not qualify for the clean sobriquet.

Indo-Iran pipeline in focus again

“... I am realistic enough to realise that there are many risks because, considering all the uncertainties of the situation there in Iran, I don’t know if any international consortium of bankers would probably underwrite this. But… we desperately need the supply of gas that Iran has.”

So said Dr Manmohan Singh to The Washington Post. The Acorn sees it as an endrosement of a long-held stand.

Dr Singh might have just been a good host, as I pointed out here. But Oil Minister Mani Shankar Aiyar followed up with this: "The Iran-Pakistan-India gas pipeline is fraught with terrible risks. It will be extremely difficult to put together an international consortium to finance the project". For good measure he also said, "God willing, we'll succeed".

Now look at the PM's statement for a while. He plainly states that the project is frought with risks. Nothing new. If it was not, the pipeline would have been ready in the last millenium. Aiyar reiterating the difficulty in getting the international guarantees in place is also straight talk. So far so good. What bugs me is something else.

India has consistently maintained that unless all security risks are mitigated, which means we have adequate and economically viable insurance policies against them, India will not go ahead with the project. However, this is probably the first time that the difficulties being faced in this direction are being publicly announced. And that despite the fact that construction start dates, and commercial commencement dates have already been bandied around.

Does this mean that India is preparing to go ahead with the project without adequate guarantees? That would be suicide.

India Petroleum Update

ONGC joins hands with LN Mittal

The bringing together of India's most profitable company, and the country's richest citizen, to bring some steel into India's quest for energy security, has been correctly called "pathfinding".

It all started in early June, when Oil Minister Mani Shankar Aiyar, probably frustrated with India's inability to bag anything of substance in Kazakhstan, called up LN Mittal to ask him if he could use some of his clout in Kazakhstan for the purpose. Rightly so because, "Mittal commands tremendous goodwill in the Kazakh establishment for resuscitating the Temirtau area after taking over and turning around the sick steel complex there in 1995."

Mittal might or might not have had a hand in Kazakhstan offering India a stake in one of two medium sized blocks some time in May, but Mittal showed his business acumen by converting call into a business opportunity.

So sometime this weekend, two MOU's will be signed by Mittal International Sarl, a Luxembourg-based subsidiary of flagship Mittal Steel. The first will be signed with ONGC, and will for setting up a company called ONGC-Mittal Services Ltd. This company will invest in projects for trading and transporting oil and gas. The second will be with ONGC subsidiary, ONGC Videsh Ltd, and will be for setting up a company called ONGC Mittal Energy. This one will invest in overseas oilfields.

ONGC will hold 51% in both companies, and they will be registered in some European tax haven - possibly Luxembourg again?

Incidentally LN Mittal is not the only private infusion of strength for ONGC's forays. While Mittal provides strength to Indian forays in Central Asia, the Khemkas of Russia's Sun Group could be roped in similarly for Russian projects, while a deal between ONGC and Reliance back home, has been in the works for a while.

The Synergy for Energy committee meanwhile has suggested Oil India Videsh Ltd. The committee had also rejected the idea of public sector oil monopolies, here is a small "myth-buster" on the purported evil of monopolies.

Domestic

Despite the recent hike in petrol and diesel prices, international prices have been keeping up the pressure, as result of which oil companies are likely to ask the government for a hike in prices again. Under-realization has reached Rs 3 and Rs 5.30 per litre of petrol and diesel respectively, and the subsidy burden is mounting. Petrol prices in India are already higher than in Nepal, Bangladesh and Pakistan.

An informative interview with India's director-general of hydrocarbons (DGH), V K Sibal. He further reinterates that India remains largely unexplored with huge opportunities. True. Tiny Cairn through its finds in India so far stands to make £82bn at current oil prices.

The award of blocks under NELP-V will be done by July 31st, pending a Cabinet clearance.

There is some traction on the policy front. Apart from the possibility of converting the DGH into an upstream regulator, the Prime Minister also set up the Energy Coordination Committee to guide energy policy. Here is why it should not be dsimissed as “yet another committee”.

Pipelines

While India and Myanmar explore a bypass to Bangladesh, that country remains keen to milk India by getting involved.

More Solar Breakthroughs

Two new potentially revolutionary technologies for generating solar electicity from WorldChanging:

Electrolytic Bacteria: Researchers in Stanford have stumbled upon anaerobic bacteria that electrolyte water releasing hydrogen and oxygen. Since they are anaerobic, the oxygen kills them. So researchers are breeding them for a species that is aerobic.

Novel Solar Concentrator: This one is more of a here-and-now solution. This new solar concentrator from Pyron Solar, is called the Boeing-Spectron-Pyron Solar Generator and uses Spectrolab solar cells that are upto 37% efficient. (Spectrolab is a leading supplier of solar cells for space craft). Their only prototype thus far is 23 feet in diameter, which works out to 7.01 metres. So the total surface area is 38.59 sq m. Now this generates 6.6 kW. 100% efficiency is considered to be 1 kW/sq m - for photovoltaic cells. So that makes this new device 17% efficient as a whole, which is still pretty good.

Importantly concentrators cost significantly less than photovoltaic cells per sq m. Independent estimates of the installation cost puts it as between $2.00 to $3.00 per watt. Even at the higher end that makes it reasonably competitive. These costs are mostly based on informal estimates, and not on actual commercial project costs, so accuracy is not entirely reliable. But Pyron themselves put the cost at just $1.24 per watt for large plants - significantly lower than the cost of fossil fuel-based plants.

It just keeps getting better and better...

Indian Company Powering the Jatropha Revolution

D1 Oils, a British company, is making news the world over as a leader in Jatropha based bio-diesel production. D1 Oils basically procures Jatropha oil or the trans-esterified version which is bio-diesel. Thus an important strategy for D1 is contract farming.

As part of contract farming, the company gives Jatropha plants to farmers. Now an Indian company could become the global hub for providing Jatropha plants to D1 Oils.

Mysore-based Labland Biotech, which has been in the news for its Jatropha oil procurement JV with D1 Oils, will initially produce 10 million tissue-cultured Jatropha plants, and is in a Rs 60 lakh deal with D1 oils to promote the cloned plants globally. The linked story provides some useful pointers.

Jatropha provides about 1000 barrels of diesel per square mile annually. The entire process for producing bio-diesel from Jatropha is pretty low-tech and it thus has the potential to become an important grass-roots movement as a cottage industry. Jatropha is ideal for an estimated 50 to 130 million hectares of wastelands, which for a variety of reasons like salinity are unavailable for agriculture.

Plastic Solar - Threshold of Revolution

While we were going all ga-ga over nanotech based solar photovoltaics, a major comeback of sorts has been achieved from a less celebrated source - plastic solar cells.

Researchers at a Danish group Risø claimed they have built plastic solar cells that cost less than 2% of silicon cells. So where one square meter of silicon cells would cost $800, plastic solar would cost only $15. Of course the revolution is still not on us, and here is why.

Plastic cells are not new and have been around for a while. But while earlier they only had a life span of a few days, the researchers at Risø claim their cells last two and a half years. So that is still workable. The problem remains the efficiency. While silicon cells manage 12% to 15% efficiency (in labs they have managed 50%), the plastic cells only manage 0.2% to 5%.

But come to think of it, even at 0.2% 5% efficiency with a life span of just 2.5 years, at $15 a sq m, it is still close to being competitive. As Jamais Cascio comments on his own post, "Assuming 50 watts power for a pessimistic average of 2 usable hours/day x 200 usable days/year, for 2.5 years and $15, the result is (by my calculations) thirty cents/kilowatt-hour. A place with better sunlight patterns would be close to competitive (e.g., 5 usable hours x 300 days/year, otherwise the same, equals 8 cents/kwh)."

A lot of places in India would fall in the "place with better sunlight patterns" category. 8 cents/kwh translates to about Rs 3.5 per unit. So even if the average efficiency is increased from 0.2% (the lower limit) to 0.4% (still very far from the current upper limit) 5% to 10%, we get power at Rs 1.75 per unit, which is less that say the Rs 2.25 that MSEB will pay Dabhol. And Rs 2.25 is almost considered a steal at current world gas prices.

Some years from now, will you remember that you read about it here first (or at least at all!)? :)

A Nanotech-based Photovoltaic Future

Over at Trends..., Myke has a post on how nano-technology could be the next big boost that could finally get solar energy past "just around the corner" status. Currently solar energy costs $4 - $5 per unit, whereas the market would pay only around $2 - $2.5.

Currently photovoltaic cells are made in facilities almost as expensive and sophisticated as those used to make micro-chips. However, "With nanotechnology, tiny solar cells can be printed onto flexible, very thin light-retaining materials, bypassing the cost of silicon production. The companies also say that the printed rolls of solar cells would be lighter, more resilient and flexible than silicon photovoltaics."

An interesting point is made in this post. Imagine that every structure in the US is linked to the electricity grid. And then photovoltaics are made cheap enough that everyone can afford them. Now if every rooftop in the US is covered with photovoltaics, the total power generated will be 710 GW, slightly less than the current total electricity capacity 950 GW. And built-up area is usually a miniscule fraction of a percentage of the total land area in a country.

Distribution is automatically solved, because every grid connected household can sell excess power back to the grid. And if you dont want to cover your entire roof with photovoltaics because you cannot afford it, someone else could do it for you for a small consideration.

But this is a rather unlikely direction for the future, because if photovoltaics become affordable, you would have huge photovoltaic power plants bringing power to your homes using the very same power lines that now power your homes.

India Petroleum Update

The roundup this week will concentrate on Indian moves to secure energy supplies through a range of initiatives in various parts of the world.

Kazakhstan
ONGC Videsh Ltd has opened a regional office in the capital city, Astana. This will be followed by ONGC selecting one of two blocks in the luctrative Caspian region - Satpayev and Makhanbet - for exploration.

Also OVL will spearhead Indian initiatives for involvement in oil infrastructure development in that country, especially in two pipelines, one to the Black Sea and the other to China.

Burma

There has been further traction on the idea of excluding Bangladesh in the Indo-Myanmar pipeline proposal.

"New Delhi and Rangoon have formed a techno-commercial committee to examine the possibility of laying a pipeline from Burma to India bypassing Bangladesh.

The joint group will also explore the possibilities of importing gas by ship in its liquefied (LNG) or compressed (CNG) state, Indian Petroleum Minister Mani Shankar Aiyar said after the talks with his counterpart in New Delhi.

They have also assigned Italian Snam Progetti for a feasibility study for taking gas from Burma to India without using Bangladesh territory, sources in Dhaka said...

... Industry sources said that India is now trying to bypass Bangladesh from the project as New Delhi is not willing to give into Dhaka's conditions for allowing right of way for the cross-border pipeline over the territory of Bangladesh."

Sudan

Sudan could be the oil world's best kept secret, and India could be a major player in the development of the oil industry there. So says an article from the Sudan Tribune. Still the comparisons with Saudi Arabia are almost ridiculous. Sudan has proven reserves of 563 million barrels of oil - Saudi puts its reserves in the 200,000 million barrels range.

Turkey and Romania

On a visit to Turkey last month, Oil Minister Mani Shakar Aiyar, met his turkish counterpart Hilmi Guler, and agreed upon several avenues where the two nations could cooperate.

While Turkey does not have any hydrocarbon reserves to boast about, it is a critical state for accessing Western Caspian Sea and Northern Persian Gulf nations' reserves, due both to its cultural links to these states and also its strategic location that leads to a lot of pipelines from these regions to end up going through Turkey. Some the deals will result in India and Turkey investing in E&P in the other country, and forming joint ventures to invest in third countries. While Turkey would lead the consortia in Central Asia, India would do the same for South East and East Asia, Africa and Latin America. On the issue of cross-investment, while India was invited to invest in pipelines connecting Central Asia to Europe via Turkey, Turkey was invited to invest in Indian EOU-refineries in the coastal regions.

With Romania the cooperation would relate more to development of capabilities in the area of oil and gas equipment, including drilling rigs and refinery equipment. This includes tie-ups between organizations (trade, research and academic) in the two countries.

New World Warrior

GSPC, the latest entrant to the list of Indian corporates with big oil and gas reserves, via particularly its K-G Basin find, will now forage into the world market to get oil/gas equity and/or other cooperation in the field. Apparently it is, "Close to inking deals with companies in Libya, Oman and Qatar".

Jatropha Targets - India on track

ET reports that the cost of Jatropha-based bio-diesel in India has gone below the cost of regular diesel.

This is great news. In the past Indian Railways would pay as much as Rs 70-80 for a litre of bio-diesel to meet its trial requirements. For a pilot in 2003, BEST and HPCL paid as much as Rs 78 per litre to Lubzoil India Ltd for 20,000 litres. Now with the price of jatropha seeds down to Rs 5 a kilo, from Rs 30 a kilo earlier, bio-diesel cost has come down to just Rs 24 a litre.

Regular diesel vehicles can run on diesel blended with upto 20% of bio-diesel. Vehicles on slightly modified engines can run on 100% bio-diesel too.

Now India uses about 45 million tonnes of diesel every year. So with 20% bio-diesel, which the government will likely mandate as a target under the National Biodiesel Policy in August, about 9 million tonnes of bio-diesel produced within India will mean an India bio-diesel industry as big as Rs 250 billion, or $6 billion. That is only about 7 years away. But is that just another number for the future that is thrown at us?

There are already indications of huge commitments from corporates in India. For example a single Mohan Breweries-D1 Oils JV in Tamil Nadu is into contracting farmers for Jatropha production, and is already working on an immediate aim of 120,000 tonnes of jatropha oil annually. This could go up to 300,000 tonnes based on the plantations targets for this year alone. In Mysore, Labland Biotech is in a deal with D1 Oils to procure upto 50,000 tonnes of jatropha oil a year, from contract manufacturing farmers.

There are other names too. Among the earliest big adopters is likely to be the Indian Railways. Then there are oil PSU's like HPCL and MNC's like Diamler Chrysler.

India Petroleum Update

Bangladesh to be bypassed for Myanmar gas

India just might call Bangladesh's buff in the Myanmar-India pipeline deal. In addition to a rather high $125 million transit fee, Bangladesh was asking for free access to Nepal and Bhutan, for allowing India to use its territory to get a gas pipeline from Myanmar (where India owns gas equity in some pretty lucrative fields).

If India decides to build the pipeline in its own territory, the length and hence cost increases, but the transit fee saving compensates for that. In addition it will allow gas from the North Eastern states to be sold to the rest of India, proving a boon for those states. Why did anyone think of Bangladesh in the first place? :)

YAOCOC (Yet Another ONGC-Chinese Oilco Confrontation)

Another Canada-based company that ONGC will fight it out with a Chinese company to takeover. This one is called Petrokazakhstan, and as the name suggests it has huge interests in Kazakhstan. This property is expected to be on the agenda when Chinese President Hu Jintao visits Kazakhstan today for talks. China has huge advantages here as it already has some oil equity (unlike India) and is in the process of building an oil pipeline from that country to China. Of course ONGC and the Chinese CNPC are not alone. Among others there is Chevron Corp with which another Chinese company is in battle for Unocal.

Pakistan has meanwhile refused to buy diesel from India. Pak had agreed to consider the proposal, after Aiyar's recent visit to that country. Even though petroleum product prices in India are much higher than in Pakistan, the reasons for refusal on grounds of cost remain flimsy.

India's oil reserves

When India's oil reserves were last assessed almost 10 years ago, the estimate was 30 billion barrels. A re-assessment is being planned and the results should be interesting.

Follow-up on India's Biggest Gas Find

Size Disputes

First the Indian Director General of Hydrocarbons, VK Sibal, and then the Canadian partner in the consortium, GeoGlobal Resources, came out against the size claims on the find. Both said that current data is rather premature to decide the size of a reserve.

Trivia and Implications

Apparently GSPC almost did not get to bid for the K-G Basin block back in 2002, and Gujarat had to increase the net worth of the company by Rs 300 crore within 48 hours at the height of the Akshardham crisis.

Here are some calculations on possible implications on other gas projects in India.

The deal with Iran is to import 5 tonnes of LNG every year. This works out to 13,700 tonnes a day, which is slightly less than 19 million cubic meters per day.

As per current plans, in 2008 (2006?), Reliance will start commercial production of a little over 14 million cubic meters (mcm) of gas per day, from their KG Basin find. Estimates say that this could go up all the way to 40 mcm per day - within months. The ONGC find in the KG basin stands between 4 and 8 tcf (Reliance's is anywhere between 9 and 14 tcf) based on who you ask. So ONGC could produce another 10 mcm. The GSPC find at current estimate stands at a giant 20 tcf. But because it is from older sediment, compared to the Reliance find, the ultimate flow per day would be around 40-50 mcm per day. Cairn also made a 1 tcf find in the KG Basin.

So sometime around 2009, when the pipeline from Iran would start bringing gas to India, the KG Basin will be supplying almost 100 mcm of gas to Indian consumers everyday, at competitive and maybe even lower cost. By then Iran (7.5) and Qatar(10) together could be supplying India almost 17.5 mcm of gas per day in the form of LNG. Piped gas is about 40% cheaper than LNG, and if we include the Iran pipeline, it looks like there will surely be a shortage of demand for LNG in the country by then. Also consider this then.

Follow-up on Friedman's Geo-Green Strategy

Here is an interesting post from TreeHugger, especially when seen as a follow-up to the post on Friedman's Geo-Green Strategy. In that post we looked at Friedman's analysis stating that all the technologies to make the US independent of oil imports are already here and only need implementing.

Well the TreeHugger post points to paper that was released to influence the US Senate's debate on the Energy Bill - to try and get subsidies for renewables instead of for fossil fuels. The paper reiterates the same points that Friedman makes - promote plug-in hybrids and bio-fuels. In addition to these points the paper also mentions improving the mileage of all new vehicles (which in case of Friedman's analysis came in as part of using hybrids).

What is interesting though it the TreeHugger comment in the end: "Of course, nothing here is a solution to the end of oil; if implemented, these things wouldn't give us a sustainable post-oil society, but things would still be better than with the current situation...". I hope this was a casual statement and not based on solid costing.

Reliance going green?

In the post titled Reliance's Power Play, which was basically a round-up of Reliance Energy's big ambitions in the power sector in India, I mentioned that given its track record, Realiance was unlikely to go green like Godrej and Ramco for example. Two things happenned after that, that made me reconsider that idea.

The day of the Reliance Split, Anil Ambani was addressing a press conference live on several channels. During what was looking like a great public wooing exercise, he slipped in that REL remains committed to non-conventional sources of energy - and he only mentioned solar and wind. Solar sounds nice, but mentioning wind obviously meant he was serious. Now a lot of Reliance's foray into the energy sector was based on RIL's oil and gas finds. Thus the biggest-of-its-kind gas plant in UP, and a proposal for a bigger one in Maharashtra. The first indication that there was a move away from oil and gas was the proposed Orissa investment in coal. So this made great sense. REL is moving away from RIL, and a future linked closely to oil and gas, which is no longer "in-house" so to say. Thus it was logical to move into wind. (Actually non-conventional sources were also mentioned at the REL AGM slightly earlier in the month too).

Next came the announcement today, that Reliance Energy and GE were setting up India's largest wind power project at 500 MW capacity, by 2007. So does this speak of a new leaf.

Not entirely. As part of the Electricity Act 2003 the government of India mandated that all power distributors ensure that a certain percentage of their power comes from renewable sources, and that just might have forced Reliance's hand. Also, despite the size of the investment relative to others in the industry, it would provide a very small percentage of the total power Reliance plans to produce and/or distribute in the near future.

Anayzing India's Biggest* Gas Discovery

History

It was a well-contested block, when it was put up for bidding "way back" under NELP-III (third round of National Exploration Licensing Policy). The last date of submission of bids was 28th August 2002, while Reliance announced their find only in November 2002. Going by industry rumour, that find was originally ONGC's. Even discounting that rumour, it is very likely that having already explored the area both Reliance and ONGC knew the area very well. Thus the winning bid was a surprise. For the record, ONGC and Reliance are likely to win all K-G Basin blocks on offer under NELP-V.

Drilling operations started on July 31, 2004. After abandoning the first two wells at depths between 2600 and 2900 m, the third well was spudded on January 17, 2005. The reserve was confirmed at a depth of 5,061 m.

Venture Partners

Joint ventures are usually the norm in the upstream oil sector. So GSPC is actually a part of a consortium and owns 80% of it. The rest is held by GeoGlobal Resources of Canada and Jubilant Enpro of Noida, India. The smaller partners generally bring in expertise and are likely to sell out by the time production is commercialized.

Future Plans

News reports claim that GSPC wants to get the gas onshore by 2007. Reliance plans to start production in August 2006, though they started out over 2 years ago. But then drilling three wells of those depths within 300 days is also a record of sorts. To commercialise production, GSPC needs Rs 1,500 crores and an IPO is planned (expect a stampede soon!). Currently the Gujarat government owns 99% of GSPC, while a British Gas subsidiary Gujarat Gas owns the remaining 1%. The government is likely to divest 20% of the company within 6 months. GSPC had been earmarked for divestment even before this find.

GSPC intends to drill four more wells, and tenders have already been floated for these. Drilling is scheduled to start after the monsoons.

Implications

This find can have likely impact on a range of gas deals for India from the proposed pipelines to LNG import to domestic pricing. Need to do some research (or find a news article with figures I can simply validate!), but I'll be back on this, hopefully, soon.

* While most media reports seem to agree that this is India's biggest find ever, this report from ET states that the Bombay High find (Vasai offshore), way back in 1976 was still bigger at 22-24 tcf. But even ET agrees that it is probably the biggest find in the world in the new millenium.

India Petroleum Update

India's Biggest Gas Find

The Krishna-Godavari Basin, that threw up the 14 trillion cubic feet (tcf) gas field for Reliance in 2003, has done it again - this time for relatively puny old Gujarat Petroleum. To be honest, GSPC has been attracting a lot of media interest of late, but nothing can beat this $50 billion addition to its asset list. The gas find is worth about 20 tcf, which is two thirds of Bangladesh's proven reserves.

As more details of the reserves pour in, it should be interesting to note the worth of the oil leg in this find, which could be decent too.

The Gujarat CM, Narendra Modi, revelled while announcing this to the press a short while ago, and went on to name the project, "Deen Dayal" or "Saviour of the poor".

Doubts are already being cast on the viability of the scheduled incoming pipelines. Similar doubts were cast after the Reliance find too - even then though the Reliance group itself remained firmly in favour of the pipeline.

Domestic Petro-product Pricing

The other big happenning this week was the price hike of petroleum products. Petrol was made dearer by Rs 2.50, and diesel by Rs 2.00.

As volatile as that decision to increase prices was, petrol pump owners were not impressed. They went on strike demanding higher commissions - which would naturally have to passed on to the consumers.

Gas for Dabhol

With the Dabhol plant all set to resume operations, India is now looking towards Qatar for additional supplies of LNG. This is in addition to the 5 mtpa Qatar is already supplying, and the additional 2.5 mtpa for which negotiations are in progress.

Tailpiece

After Bangladesh, illegal diesel imports are finding their way into India now from Nepal.

Freeing India of Oil Imports

After the post based on Friedman's article on reducing American dependence on imported petroleum, here is one on reducing Indian dependence on imported oil and gas altogether.

This was written by Arun Firodia, Chairman of the Kinetic Group, and was published last December. The article envisions an energy independent future for India based on methane gas from cow dung (from our 250 million cows), and bio-diesel from massive Jatropha plantations.

Weight-wise methane gas matches the calorific value of petrol, LPG or kerosene, and an average cow in India can produce enough dung to produce 225 litres of methane gas in a year.

Replacing LPG and kerosene

Estimating a per capita annual LPG and kerosene consumption of 15 kg each, for the urban and rural populations, just 75 million cows would produce enough methane (16.8 billion litres) to meet the LPG and kerosene requirements of 1 billion Indians (15 billion litres).

Replacing Petrol

40 million cows can produce enough methane to easily replace the 8 million tonnes of petrol India consumed in the year 2003-2004. Like CNG, methane can easily replace petrol in automobiles.

What about Diesel?

Jatropha! on just 15 million of our 25 million hectares of waste or fallow land, will produce at least as much bio-diesel as India's annual consumption of diesel.

All figures are from the original article. Though the figures seem exhaustive, and the article also gives more insights into the production of methane gas (or gobar gas) there isnt enough dwelling on the costing factors, which at least in the case of bio-diesel is still critical. The point being made is very valid. Imagine the potential for a country like New Zealand which has far more lifestock than human beings!

Update: Indra had posted on this article some time back. Some useful comments are available on his site.

Friedman's Geo-Green Strategy

Sunil pointed me to this excellent editorial by New York Times Op-Ed columnist, and much celebrated writer, Thomas L. Friedman.

Outlining what he calls geo-green strategy he talks of ridding the American economy of its addiction to and dependence on oil. Most importantly he states that the technology to that utopia is already available, and a lot of it has already been commercialized successfully.

Plug-in hybrids can ensure that 50% of Americans do not use petrol at all for their daily use. Those that do will get a mileage of 100 miles per gallon (210 kmpl). Step two would be using flex-fuel cars that can run on ethanol, petrol or any combination of the two. So a hybrid running on an 80-20 mix of ethanol and gasoline will practically give 500 miles for every gallon of gasoline.

As Friedman puts it, "In short, we don't need to reinvent the wheel or wait for sci-fi hydrogen fuel cells. The technologies we need for a stronger, more energy independent America are already here. The only thing we have a shortage of now are leaders with the imagination and will to move the country onto a geo-green path."

Energy Independence via Swadeshi

Gandhiji's Swadeshi movement broke the economic back of British Rule in India. The essence of the movement was that everyone invest a little time everyday to make whatever cloth they needed, and hence close the market for British textiles in India. The closure of the giant Indian market led to the shutting down of mills in England, but more importantly the poor Indians felt a little more self-sufficient, self-reliant and a little richer too.

In an excellent post, Gmoke points out that, "this type of practical labor has to be the core of any sustainable ecological action".

Look at it this way. Gandhi used swadeshi, as what we shall call Sustainable Ecological Action, to make cloth, which in some ways was the life blood of the economy then. In the different world that is today, what cloth no longer has that position. So what does? In a lot of ways it has to be energy. Fossil fuels like oil, coal and natural gas, and renewables like solar, hydel, tidal and wind - all of these have only one thing in common - they give energy. And without energy their importance reduces to almost nothingness. So if Gandhiji were to start a Swadeshi today, he would choose to create energy instead of cloth.

Here is what Gmoke suggests:

In this "deregulated environment" with oil used as a weapon and national security identical to energy security, direct ecological and economic action toward renewables and away from the nuclear, gas, coal, and oil that we presently use can be a primary political as well as economic act. A treadle/pedal/crank powered generator with a flywheel can be the solar swadeshi, an ecological and economical electrical charkha.

One humanpower is about one sixth horsepower. A healthy person can put out 100 watts of power for hours on end and 300 watts in a sprint. Let's not be batteries in the Matrix but generators in a net metered ecological Network.

The ultimate goal I envision is to meet all electrical non-space-heating and refrigeration needs within the space of one south-facing window (4-10 square feet of photovoltaics) and a half hour to an hour a day's human power. The realistic goal today is most of the electrical load with the exception of refrigeration and space-heating: lighting, TV, audio, computer, phones...

This isn't Edward G. Robinson in "Soylent Green" pedalling a broken down three speed to light one sickly incandescent bulb. This is more like Lance Armstrong powering his energy efficient Spanish villa with a morning workout on his state of the art Tour de France simulator stationary bike and power generator.

India Petroleum Update

The Indo-Iran LNG Import Deal

The big deal was finally signed. Here is a quick reckoner for those interested in the line item details.
1. A consortium of state-run firms are representing India, while the National Iranian Gas Export Company (NIGEC) is representing Iran.
2. Iran will sell India 5 million tonnes of LNG every year for 25 years starting 2006. The size of the deal would be between $18 to $22 billion. Discussions for an additional 2.5 million tonnes per annum (mtpa) were postponed to, "after the polls".
3. At $3.515 per mmbtu, the price is 26% higher than the price fixed with Qatar, while the price of oil has almost doubled in the time between the two deals. The gas from Qatar however is rich gas, which Iran has a policy of not exporting. Though the Iranian gas will not be stripped of ethane before export, it is still not clear if the gas will be stipped of other chemicals or not.
3. ONGC Videsh Ltd gets full operatorship of the Juffier exploration block, though only 10% of Iran's biggest producing field - Yadavaran. The deal is worth 60,000 barrels per day to India. Another 10% could be given after the discussions on the additional 2.5 mtpa are complete. The initial deal suggested was that India would pay market price for this oil, and I am not sure that has changed - in which case it is a very minor victory indeed.
4. IOC-OVL get an exploration block in the possibly very rich North Pars gas field.
5. IOC will team up with Iranian Petropars for an LNG and petrochemical complex. IOC is also pushing for another 9 mtpa deal with Petropars.

The Indo-Iran Pipeline Deal

The "heads of agreement" has been signed. An official level special joint working group has been set up by India and Iran, to thrash out financial, technical, legal and commercial issues. The first meeting will be in New Delhi on June 23-24. The Indo-Pak joint working group (formed this month) will meet in New Delhi in July.

Once again, the inclusion of China in the Indo-Iran pipeline project was discussed. Extending the pipeline beyond India, and especially into China is wonderful for two reasons: India gets transit fees to easily offset the transit fees being paid to Pak, and energy security is enhanced, as Pak would hardly dare cut supplies to China even in case of hostilities with India. On the face of it, all parties have expressed willingness to go ahead at various levels.

Scenting the NELP-V winners

Phoenix Overseas, a near unknown in the oil industry, and better known as an arm of Phoenix shoes, might win one of the most prospective blocks under NELP-V. The block in Rajasthan is spread in three districts, and Phoenix was quizzed on its proposed drilling details under the exploration program. This is seen as a strong indication.

Otherwise the status remains the same - ONGC is likely to win 10 out of 20, while Reliance will get at least 2, and maybe even 9.

Though it is likely to draw a blank under NELP-V, the world's largest oil and gas company, Total might enter the refinery sector in India in a big way, en route a retail entry. More correctly the refinery entry is near mandatory to enter the retail sector.

Cairn continues to trumphet its commitment to the Indian oil exploration story by saying that it hopes to, "discover and land several billion barrels of oil", in Rajasthan. Maybe it was just euphoric over this. Good for us anyway.

From Greenhouse Gasses to Oil

The Kyoto Protocol mandated cuts dictate a cut in emissions - not a cut in production - of greenhouse gasses. Some countries are thus planning to collect the CO2 being produced by their industries, and store it under ground.

Citing the experience of Norwegian firm Statoil which has been storing CO2 below the seabed in a gas field, Britain believes doing this could cut upto 85% of emissions from power stations, and wants to help other countries adopt this technology too as and when it is available.

"The move comes as Britain prepares to put climate change issues center stage at next month's G8 Summit at Gleneagles in Scotland."

The technology is expected to be available in a decade. Further pumping in the gasses into depleted oil and gas fields is also likely to increase yield from the fields.

This is a good initiative. While it is not a pure-play clean-green technology, being as far as we are from Utopia we have to cling on to as many logs as we can. Energy efficiency is one. This is another.

Brazil's Huge Experiments with Bio-fuels

GCC links to this article in the BBC titled, " The rise, fall and rise of Brazil's biofuel". The history of bio-fuel usage in Brazil presents an excellent case study for economies (including India) that are today trying to move towards bio-fuels in a big way.

The Rise

In a politically inspired decision, Brazil's military dictatorship decided to reduce dependence on Middle Eastern oil (probably as a reaction to the oil price hikes in the 1970's). Thus was started a program to use ethanol made from sugar-cane, which was plentiful in Brazil, as a substitute for petrol in motor vehicles. The program subsidised farmers for growing sugar-cane, subsidised ethanol at the pumps to actually make it cheaper than petrol and ensured mass production of vehicles that ran on ethanol instead of petrol.

"As a result, in 1985 and 1986, more than 75% of all motor vehicles produced in Brazil - and more than 90% of cars - were designed for alcohol consumption."

The Fall

Then a combination of factors brought down the curtains on this major technological feat. The military government fell in 1985, and so did concerns of "national security". Oil prices fell steeply from their 1970's highs, while sugar prices rose (making ethanol also more expensive), and finally Brazil discovered huge internal reserves, thus vastly enhancing oil self-sufficiency.

Despite the great environmental benefits, production of ethanol powered vehicles fell to just 0.06% of production in 1997.

The Resurrection

That was about when ethanol and bio-fuels in general were getting popular in the US, encouraged by President Bush's vision to grow fuel instead of digging for it. This was of course helped by the fact that oil prices were rising steadily.

The big technological break came in 2003 when flex-fuel cars entered production in Brazil. Flex-fuel cars can run on petrol, ethanol or any blend of both, aided by an on-board computer that monitors the quality of the fuel and makes appropriate adjustments.

"In 2004, the first full year that "flex-fuel" cars were on sale, they accounted for more than 17% of the Brazilian market, and are on course for an even bigger share this year."

Appropriately more companies are adding flex-fuel cars to their offerings, and they are not all local companies.

The good news is other countries, including the US, are beginning to give Brazil a tough fight for its leadership in the crop-based motor fuel space. Like in any other renewable energy source, the bio-fuel resurgence in Brazil was a result of tax breaks and technological advancement - the tax breaks do the hand-holding till the technology is mature and strong enough to fend for itself.

Eliminate Garbage, Produce Oil

We have seen Power from Garbage initiatives before, but nothing on this scale for sure.

Via Trends... and Joe Kissel:

US company Changing World Technologies, has managed to make Thermal Depolymerization work to produce oil, using the same process that nature takes some millenia to, in a few hours. In nature, organic matter is subjected to high temperatures and pressure, and knowing this process lots of folks have replicated this model in the laboratory. The difference is till now it has not been const-effective. Changing World Technologies claims that their method can produce oil cheaper than drilling it from the ground.

The process takes any sort of organic waste, from biomass and sewage, to plastic and rubber (even tyres), and produces a vaporous gas (a mixture of methane, propane, and butane), liquid oil (similar to a mixture of gasoline and motor oil), and powdered carbon. So you have virtually no waste products.

Not all implications of this technology are clear though. It will take some detailed studies to predict whether it can replace petroleum altogether in major economies. If it can, then it might actually be a big blow against clean renewable sources, rendering them almost forever uncompetitive. Either way, it will still be a great way to treat garbage in cities, and use it to reduce dependence on fossil fuels.