No one wants a LNG terminal in their backyard (roflmao) !?!?!
- well no one wants "anything" in their backyard in today's world... not a LNG terminal, not a Nat Gas pipeline, not a nuclear plant... not even New Construction Bubblemania Homes if it disturbs the spotted newt.
How about we start with the LNG Terminal in Chesapeake Bay...that is in opertation and will furnish energy for 6 Million New England Homes very shortly...ie:
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from Kansas.com
U.S. Importing More Liquefied Natural Gas
H. JOSEF HEBERT
Associated Press
COVE POINT, Md. - Once or twice a week, a tanker unloads millions of gallons of frosty liquid at a terminal on the Chesapeake Bay, bringing to the United States a fuel that many economists believe will help temper energy prices in the coming decades.
For years, liquefied natural gas (LNG) was too expensive. It really was not needed. Even today, there are safety and terrorism worries, exaggerated or not, about shipments of the fuel.
But as growing demand for natural gas outstrips North America's conventional supplies, many experts view imports of LNG as the only way to head off decades of soaring prices for businesses and the tens of millions of households that rely on the fuel for heat and electricity.
While politicians talk of the need for greater U.S. energy independence, American consumers are expected to be relying increasingly on LNG imports from Algeria, Qatar, Russia and elsewhere.
If current trends continue, the United States "by far will be the largest consumer of LNG in the next decade," says Guy Caruso, head of the government's Energy Information Administration.
"If we don't have the capacity to bring in the amount of gas we need and domestic supply goes the way we think it will, the clear implication is higher prices," Caruso says.
Nowhere is the emerging global LNG market more evident than on the shores of Chesapeake Bay 70 miles south of Baltimore.
It was only two years ago that Dominion Resources Inc.'s LNG import terminal, in the shadow of the Cove Point lighthouse, was in mothballs. Its offshore docking platform, able to handle two LNG tankers at a time, sat idle - a monument to a business gone awry.
Now, the platform built in 1974 and shut down in 1981 unloads a tanker full of imported LNG on average every four days. The cold liquid is piped through a 1.2-mile underwater tunnel to four huge storage tanks. Delivered at minus-260 degrees Fahrenheit, the fuel is warmed and turned back into gas, then shipped over pipelines to mid-Atlantic customers.
*** A larger tank is near completion and two more tanks are planned. By 2008, the terminal will be able to handle 1.8 billion cubic feet of imported gas daily, more than double today's volume and enough fuel to serve 6.1 million homes, Dominion spokesman Daniel Donovan says. ***
*** LNG import terminals in Louisiana, Georgia and the Boston area also are expanding. ***
<EXPANDING NOW ...not presently uneconomic potential future alternatives.>
Despite community opposition, more than 40 new LNG projects are proposed around the nation. About a dozen probably will be built, according to experts.
* < at $50+ crude and summer gas prices to ramp...double number > *
LNG imports still account for less than 3 percent of the 61 billion cubic feet of natural gas used every day in the United States.
* But LNG's share could grow tenfold in the next 20 years, some analysts predict.*
Still, there are concerns about how the fuel is shipped and stored.
LNG cannot explode and is not flammable as a liquid.
*< ever see a Nat Gas pipeline, or an Oil refinery go up >*
But a government study by the Sandia National Laboratory concludes terrorists could blast a large hole into a double-hulled LNG vessel. That would release millions of gallons of fuel that would quickly turn to gas and ignite.
The fire would be so intense that it could cause major injury and burn buildings one-third of a mile away. Within seconds, the fire could give second-degree burns to people who are a mile away.
"The risks of a catastrophic accident ... is a real one. Far too little is known about the vulnerability of LNG terminals and ships to terrorist attacks," says Philip Warburg, president of the Conservation Law Foundation. The group has lobbied against putting LNG terminals in populated areas in the Northeast.
Industry officials say there has never been a leak of LNG from a double-hull tanker and that protection of LNG shipments has improved since the attacks of Sept. 11, 2001.
Storage tanks, such as those at Cove Point, are designed so burning fuel would be confined within site boundaries, says Donovan, the Dominion spokesman.
---
There is little disagreement about the need to import more LNG.
Traditionally, U.S. demand for natural gas has been met almost entirely from pipeline-accessible fields in the United States and Canada. Experts, however, say wells in the Gulf of Mexico are in decline, Canada's production will fall off after 2015 and gas fields in the Rocky Mountain states and Alaska will not meet future demand.
By 2025, the United States is expected to need 31 trillion cubic feet of gas a year, a 38 percent increase, but North American supplies by then will be only 24 trillion cubic feet, 11 percent higher, the government says.
The government projects LNG will account for 20 percent of the gas used by 2025. Some private consulting firms and oil industry estimates put the LNG share as high as 30 percent by then.
< economics will determine the share...it's viable & competitive at $3.50 gas it's here now, it's ramping...want to own oil sands that are uneconomic, or LNG ? >
"We have not been able to increase gas production for a decade," says energy consultant Daniel Yergin, chairman of Cambridge Energy Research Associates. "U.S. gas productive capacity, like oil, is now in permanent decline."
At the same time, he says, the world "is awash with gas," most of it far from eager markets, and awaiting LNG's emergence as "a second global energy business," rivaling oil.
Federal Reserve Chairman Alan Greenspan views LNG as a needed "safety valve" for a U.S. gas market that otherwise faces decades of tight supplies and volatile prices.
Departing Energy Secretary Spencer Abraham foresees trouble for gas users without more LNG. "If we don't have more LNG terminals ... you're talking about huge increases in (gas) prices," Abraham says.
According to the American Gas Association, 61 percent of U.S. households, or about 63 million, use natural gas, mostly for heating; the number is growing. In many parts of the country, 90 percent of new homes are fueled by gas, according to the association, which represents gas utilities.
Donald Norman, an economist for the Manufacturers Alliance/MAPI, a private research group, says natural gas prices that have been in the range of $5 to $6 a thousand cubic feet in recent years are already pushing companies to relocate overseas.
If LNG supplies do not materialize as expected, these prices could become permanent or increase, forcing more U.S. businesses to flee abroad for cheaper fuel, Norman says.
***Ironically, higher gas prices - two or three times what they were a few years ago - are why LNG is so popular. Even if gas prices retreat, they probably will be higher than the roughly $3.50 per thousand cubic feet needed to make LNG imports profitable, experts say.***
No wonder that some of the energy industry's heaviest hitters <SOTB ! <vbg> have embraced LNG's development.
ExxonMobil Corp., which has invested heavily in gas projects in Qatar, has plans for 28 LNG vessels, including supertankers that can carry two-thirds more volume that today's fleet.
Shell is involved in several LNG import facility projects. ConocoPhillips is part owner of a large new LNG terminal proposed near Freeport, Texas, and is looking to build several more.
Energy companies are expected to pump more than $250 billion into the global LNG business, according to the International Energy Agency. A single LNG "train" - gas production, liquefaction and export facility, tankers and re-gasification plant - can require $4 billion to $6 billion, according to energy executives.
"It's billions of dollars of investment and the lead time is five to six years," says Darcel Hulse, president of Sempra LNG. The Sempra Energy subsidiary is spending $1.8 billion on two LNG import terminals and related pipelines in Baja California and in Louisiana.
Until recently, gas producers concerned about wide swings in prices have been reluctant to make such a commitment. Hulse said that is changing. Global suppliers "now are convinced ... we're running out of natural gas and that there are good opportunities to market stranded gas" in the United States, he said.
How many LNG terminals will be built is anyone's guess.
"What will ultimately determine the number ... will be the market and the demand for gas," says Mark Robinson, the Federal Energy Regulatory Commission's director of energy projects.
The commission approves onshore LNG facility permits. The Coast Guard approves offshore facilities, several of which have been proposed.
The commission has promised timely consideration of the dozen LNG permit requests now before it.
Last month the commission approved what will be the largest LNG import terminal in the country, at Sabine Pass in Cameron County, La. It is capable of handing 2.6 billion cubic feet of gas a day.
Regulators also has approved expansions at the four existing LNG facilities and permits for two other projects - near Freeport, Texas, and Lake Charles, La.
The Mexican government also has approved a new LNG project in Baja California that will serve the U.S. market and Canada has given a permit for one that could serve New England.
None is expected to be completed before 2008.
ON THE NET
An accompanying video presentation is available at wid.ap.org
Federal Energy Regulatory Commission: ferc.gov
Center for LNG: lngfacts.org
American Gas Association: www.aga.org
Energy Department: www.fe.doe.gov/programs/oilgas/
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The natural-gas explosion
Feb 28th 2005
From The Economist Global Agenda
A giant contract between Shell and the Gulf state of Qatar to supply liquefied natural gas to America and Europe is the latest in a series of deals that should lead to gas providing a far larger share of the world’s energy needs. Since the world’s gas reserves are more widely spread than is its oil, the growth in facilities for handling LNG should also mean greater energy security
IN 1959, the Methane Pioneer, a converted second world war ship, set out from Lake Charles in Louisiana, bound for Canvey Island, site of an unlovely oil terminal east of London. On board was a cargo of liquefied natural gas (LNG). The pioneering transatlantic voyage proved that gas in this state could be transported safely from producer to consumer and from remote areas where reserves are large to the places where there is a market for natural gas. Over the intervening years, there has been much talk of LNG being a “fuel of the future” but the amount of gas transported by this means (as opposed to being sent by pipeline) has remained fairly modest, due to the expense of liquefying, transporting and regasifying it.
In the past few years, however, with oil prices rising sharply and energy consumers becoming ever more anxious to diversify their sources, there has been a surge of interest in LNG. On Sunday February 27th, Royal Dutch/Shell signed a deal with Qatar’s state-owned gas company for a 30% stake in a $7 billion project, in which 7.5m tonnes a year of LNG will be produced for the American and European markets, starting in 2010. The Anglo-Dutch firm is just the latest in a succession of oil companies that have committed themselves to LNG projects. The same day, work began on the construction of another huge LNG project, also in Qatar. This one, 30% owned by America’s ExxonMobil, is expected to produce 15.6m tonnes a year of LNG when the $12.8 billion project is completed in 2007. France’s Total, not to be left out of the boom, announced on Monday that it was also buying a stake in this venture.
Besides the high cost of oil and the desire to seek new fuel sources to improve energy security, another important factor supporting the growing demand for gas has been the pressure on electricity generators to seek cleaner and less carbon-intensive inputs for their power stations. The recent coming into force of the Kyoto protocol, aimed at reducing greenhouse-gas emissions, only adds to this pressure. Since the early 1970s, natural-gas production has increased by more than 120%. In 2002, gas accounted for 21.2% of the world’s total energy supplies, a five-percentage-point increase since 1973, according to the International Energy Agency. Projections from America’s Energy Information Administration (EIA) suggest that it is set to become an even more important component of world energy supplies. By 2025, world consumption of gas could top 151 trillion cubic feet, 25% of the world’s total energy consumption.
Currently some 95% of the gas the world consumes is delivered by pipeline. But some consuming countries, such as America, are fast depleting those gas reserves that can easily be reached by pipe. Big, new gas fields are being discovered all the time—but are often separated from the big consuming countries by oceans, or by highly unstable regions. LNG is the answer to this, providing it can be made cost-effective. At present, only 1% of the gas America uses arrives in the form of LNG. The EIA cautiously estimates that this could rise to about 3% by 2020. Others in the industry are far more optimistic, saying LNG could account for as much as 20% of American gas consumption within 20 years.
Liquefying natural gas, by cooling it to –161ºC, reduces its volume by 600-fold. It can then be transported by sea in specially built tankers (see picture) and reconverted to gas at the point where it enters an importer’s pipeline system. This is a costly investment, but then so is laying a pipeline. According to America’s Gas Technology Institute, liquefying gas, shipping and then regasifying it is cheaper than sending it by undersea pipeline over distances of more than 700 miles, or 2,200 miles in the case of overland pipelines. What is changing the economics of LNG now is that soaring demand is spurring innovations that are bringing down the cost of liquefaction plants, tankers and regasification plants. One expert reckons that these costs have tumbled by a quarter over the past decade. Further savings will make LNG ever more attractive despite the large up-front costs that have so far deterred all but the biggest oil companies.
Qatar’s government is pushing to become the world’s predominant LNG supplier by giving foreign investors a friendly welcome. The small Gulf emirate has the world’s third-largest reserves of natural gas and the world's largest single gas field. Russia and Iran do have bigger reserves overall. But Russia’s treatment of Yukos, one of its own private oil companies, and indeed its recently announced restrictions on foreign participation in tenders to extract mineral resources, are unlikely to encourage investment in LNG. Iran’s constitution bars foreigners from any ownership within the oil sector, ruling out the kinds of production-sharing agreements under which foreign companies usually develop oil resources. By contrast, Trinidad & Tobago, in the Caribbean, is busy developing its LNG potential while nearby Venezuela’s volatile politics have hampered investment there.
Political unrest and suspicion of foreign investment are likely to continue holding back some countries’ development of their potential as LNG producers. But, fortunately, the world’s gas reserves are more widely dispersed than its oil. So as demand for LNG grows and the big oil firms go looking for new sources, they may find it easier to avoid those countries that are unstable and unwelcoming to foreign investment, and seek instead places like Qatar, which has reduced bureaucratic barriers and given the multinationals a warm welcome.
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China
hydrocarbontechnology.com
GUANGDONG LIQUIFIED NATURAL GAS (LNG) TERMINAL, CHINA
This project involves the construction of China's first Liquefied Natural Gas (LNG) terminal and associated high-pressure gas pipelines to supply Guangdong Province with 3.3 million t/y of LNG (4 billion m³/y of natural gas) by 2005. Guangdong province is currently the largest importer of Liquefied Petroleum Gas (LPG) in China and the new LNG terminal is expected to impact greatly on the LPG market and other fuels currently used in the Province.
The project was first launched in 2002 and is due to be constructed in two phases. Phase 1 is to be completed by 2006 (first LNG is to be onstream by 1 June 2006) and Phase 2 by 2008. The project is in joint development and is shared by:
China National Offshore Corporation (CNOOC) - 33% share
Guangdong Province consortium (includes Shenzen Investment Holding Company, Guangdong Electric Power Holding Company, Guangzhou Gas Company, Dongguan Fuel Industrial General Company and Foshan Municipal Gas General Company) - 31% share
British Petroleum Amoco - 30% share
Hong Kong Electric and Light Company - 3% share
Hong Kong and China Gas Corporation - 3%
India...
India and its energy needs: Demand is rising but lags rest of the world
FT.com site; Jan 17, 2005
By Kevin Morrison
India, a sleeping giant in the energy world, may have finally awoken with energy consumption projected to grow by the second fastest rate during the next 25 years, putting it just behind China, its bigger neighbour. Future energy usage, however, will still fall well short of consumption rates in the developed world.
India's population of about 1bn represents about 16 per cent of the world's population but accounts for less than 2 per cent of its energy consumption.
Even if the country achieves the forecast growth rate of 2.3 per cent for energy use during the next 25 years, each person would still be using less than half of the energy used by the average person in the developed world by 2030.
Nevertheless, the growth in energy consumption in India is expected to result in a more than doubling of greenhouse GAS emissions over the next 25 years, according to the International Energy Agency (IEA), the energy watchdog for the developed world.
The IEA projects India's CO2 emissions to reach 2,254m tonnes in 2030, or about half of the European Union's CO2 emissions and less than one-third of the projected US greenhouse emission levels in 25 years. China is expected to reach more than 7,000m tonnes during the same period.
"The increased amount of CO2 emissions to come out of India and China, will negate whatever we are trying to do in the west in attempting to reduce emissions," says John Waterlow, an energy analyst at Wood Mackenzie.
The IEA estimates that almost half of global CO2 emissions will come from developing countries by 2030, from 36 per cent at present, while OECD countries will see their share decline from 54 per cent to 42 per cent in the same period.
Neither India nor China is signed up for the Kyoto Protocol pact to reduce greenhouse emissions.
"This is the conundrum," says Mr Waterlow. "How can the west tell the developing world that it must limit the amount of emissions it can emit, which, in turn, affects the development of their economies."
In spite of the strong increase in emissions in India and China, developed countries will have far higher per capita emissions than in India. This is largely due to India's wide use of wood and cow dung in rural areas for cooking and heating.
Biomass and waste accounts for more than 50 per cent of India's total energy use. Although its share is expected to decline during the next 25 years as India's consumption of oil, GAS and coal increase, it will still remain the most common fuel for residential energy consumption, the IEA said in its World Energy Outlook report for 2004.
The IEA forecasts that Indian oil demand will rise from 2.39m barrels a day in 2002 to 5.4m b/d by 2030, with more than 90 per cent of this consumption to be supplied by imports.
This, therefore, would require a significant investment in new refineries, storage and port facilities.
This growth may push India among the top tier of oil consumers in the world, but still puts it well behind China, which is projected to rise to 12.81m b/d by 2030, and about one-fifth of projected US average daily consumption in 25 years' time.
"India's oil demand growth is significant, but it will be dwarfed by China," says Mr Waterlow. However, the growth in oil demand for both India and China will account for the majority of global oil demand growth during the next decade. This, of course, will continue to have a significant factor on oil prices.
India's small levels of car ownership is the main factor for the relatively low use of oil. Even a more than doubling in the number of car owners in the next decade from the present nine cars per 1,000 people to 24 cars per 1,000, is still lower than China's growth rates and a fraction of the levels of car ownership in Europe, where one in two own a car, and well below the eight in 10 people in the US who drive.
"India will never be able to have the same rate of car ownership as the west because there is simply not enough oil in the world," says Mr Waterlow.
The IEA's projected strong economic growth rates of more than 4 per cent a year on average over the next 25 years will stimulate GAS demand among industrial users. The IEA estimates Indian GAS demand to rise fivefold to 110bn cubic metres by 2030, which will represent a little more than 2 per cent of global GAS demand.
Despite a recent significant GAS discovery, local GAS output is expected to grow from 27bn cubic metres to 66bn cubic metres in 2030, but this will not be enough to meet future demand.
Therefore a substantial increase in GAS imports is forecast, mainly through shipments of LIQUIFIED NATURAL GAS (LNG), the first of which arrived last year. Earlier this month, India signed a $40bn deal to import LNG from Iran. India is also negotiating with Bangladesh and Burma about building pipelines to import GAS.
Nevertheless, coal will remain the preferred energy for industrial users. At present, coal accounts for one-third of total demand in India.
The IEA projects Indian coal demand to rise at similar rates to total growth rates of energy use in the country during the next 25 years.
Mr Waterlow says the growth in the Indian coal market will be a significant contributing factor to the rise in greenhouse emissions in the next 25 years.
Compressed NATURAL GAS: New Delhi reaps results in drive against diesel pollution
FT.com site; Jan 17, 2005
By Edward Luce
India's sprawling capital has added more than a million private vehicles since 1998 and is expanding at more than 200,000 a year. And yet, over the same period, New Delhi's air pollution level – or the respirable suspended particulate matter – has not risen at all.
Against the odds, a group of activists in the city overcame opposition from public bus owners, state-owned oil companies and politicians to persuade India's Supreme Court to force the city's diesel-spewing public transport vehicles to switch to compressed NATURAL GAS (CNG).
As a result, New Delhi has become the world's best test case for CNG, having phased out the last diesel-using public vehicle more than two years ago. More than 100,000 vehicles in New Delhi are now running on CNG, including taxis, buses and tens of thousands of rickshaws.
Sunita Narain, head of the Centre for Science and the Environment, a non-governmental organisation which helped to persuade the courts to deliver a series of landmark rulings in the last six years, says the experiment is already more than justified by the results. New Delhi's air pollution would be 30 per cent higher now but for the introduction of CNG, she estimates.
"There were so many myths peddled about CNG," says Ms Narain. "People said it was more expensive, that it would add to global warming and that it would not reduce air pollution. None of these were true and people no longer make these arguments. We think the case is proven."
And yet expanding the availability of CNG to private vehicles in New Delhi, or to public and private vehicles in other Indian cities is by no means easily achievable. It is quite expensive to convert a private vehicle to CNG, even if there were a strong environmental case to do so.
Many, including Ms Narain, argue it would be more cost-effective to continue imposing higher standards on India's diesel emissions and to encourage private vehicles to move to normal petroleum, which is as clean as CNG, although much more expensive. In addition, there are still strong lobbies in the domestic oil sector and among Indian vehicle manufacturers which oppose any move to phase out diesel. But they are not all-powerful.
Sheila Dikshit, the chief minister of New Delhi, recently faced down strong industry opposition to impose a 2 per cent tax on private vehicles that use diesel.
However, the biggest constraint is the supply of CNG, which, unlike liquefied petroleum GAS – an alternative favoured by some – cannot be transported by road. Prasanto Banerjee, managing director of GAS Authority of India Ltd (GAIL), the state-owned GAS monopoly, says Mumbai, India's commercial capital, which is second only to Delhi in the number of vehicles, would already be using CNG if it were more widely available.
Other cities, such as Hyderabad and Bangalore, also lack supply. GIL is planning to extend its nascent pipeline network over the next five years – although government approval for India's first national GAS grid is taking longer than expected.
In addition, GIL recently opened a liquefied NATURAL GAS terminal in Gujarat, which will ensure much greater supply. India's GAS import capacity will rise sharply during the next few years. Mr Banerjee says CNG can also be used by the country's manufacturing sector, particularly fertiliser producers, that currently run their plants on highly polluting coal or diesel generators.
"We are strongly in favour of CNG because it is cheaper, safer and cleaner," says Mr Banerjee. "We believe India has an opportunity to reach much higher environmental standards, much more rapidly than you would have expected a few years ago."
But persuading other state governments in India, or metropolitan authorities, to facilitate the move to CNG will not be easy. New Delhi has given incentives to CNG by waiving sales tax and punishing diesel users. But Ms Dikshit is seen as a relatively unusual politician in India and there are few signs other leaders are preparing to take the same stand.
Furthermore, CNG and other GAS fuels do not benefit from the cross-subsidy provided to vehicles that use petroleum. GAS producers and environmentalists are lobbying for CNG and LPG to get the same benefits as petroleum, but with little success so far. They face a powerful array of state oil companies and private car manufacturers.
"All we are asking for is a level playing field for CNG – not for it to be subsidised," says Ms Narain. "Our sole objective is to reduce the air pollution levels in India's cities. And CNG is one way of helping accomplish this."
Growth sparks a race for supplies
FT.com site; Jan 17, 2005
By Edward Luce
India's energy sector used to be known for its provincialism – run mostly by bureaucrats and habitually inward-looking. But the pressures of a growing economy of more than 1bn people that depends on imports for much of its energy supply has forced a radical change of outlook on its oil and GAS entities.
In the past few weeks alone, the Reliance Group, India's largest private sector company, has been invited to bid for oil exploration rights by Oman; the Oil and NATURAL GAS Corporation (ONGC), the country's largest state-owned energy company, has submitted a $2bn bid to take a 15 per cent stake in Yukos, the Russian energy company; and the Indian Oil Corporation, another state-owned entity, has unveiled a $3bn deal to exploit Iran's vast offshore GAS field in South Pars.
Five years ago such announcements would have hit the headlines. Nowadays they are routine. What has changed? The most important is an alteration in mindset by India's policy-makers. ONGC and the eight other navratnas – or state-owned energy "jewels" – have a great deal more freedom to take corporate, rather than bureaucratic, decisions.
For the most part, they are putting their autonomy to imaginative use. But underlying the increasingly aggressive overseas expansion of the navratnas is a growing realisation that energy security is one of India's most pressing challenges in the 21st century.
Per capita consumption of oil in India is roughly one-third of the global average and one-fifth of the level in the US. As India's economy expands that gap will narrow rapidly. Tying up future supply is critical.
"If you look at the world there are really two countries which are chasing oil and GAS: China and India," says Subir Raha, chairman of ONGC. "We are coming to a situation when both China and India are looking for large and growing new sources of energy."
Meeting India's future energy needs is a threefold task. First, the country is restlessly hunting for overseas oil and GAS assets. At the moment, it imports 70 per cent of its oil and that proportion is likely to rise unless there are significant domestic finds or India switches more dramatically to nuclear and hydro-electric power – both of which are seen as under-exploited.
ONGC has led the way in securing "equity oil" deals around the world, most notably in Russia's Sakhalin oil field. ONGC competes head to head with CNPC, its China counterpart, for exploration and production rights in several continents, including Africa, central Asia and south-east Asia.
The strategy makes commercial sense since it reduces India's oil import costs under royalty sharing agreements with the relevant governments. But it does not necessarily enhance India's oil security, since the drilling sites are often in unstable parts of the world, such as Sudan and Burma.
"I think the 'equity oil' route has been oversold as an energy security strategy," says Kirit Parekh, who is head of a government committee devising an energy strategy for India. "But it is a very good investment strategy," he adds.
India's quest for GAS is even more sensitive from a diplomatic perspective. Neighbouring Bangladesh, which is widely seen as suffering from "little brother" hang-ups about India, has been prevaricating for years about whether to link its GAS fields to India by pipeline. There are some signs Dhaka could be preparing to consider its position – but many in Delhi remain sceptical.
"The Bangladesh stance is very hard to understand," says Proshanto Banerjee, chairman of GAS Authority of India Ltd (GAIL), the country's largest GAS company. "Their attitude is that they don't want to do anything that would benefit India – even at a cost to themselves."
Even more neuralgic for New Delhi is discussion of plans for a pipeline from Iran to India that would have to traverse neighbouring Pakistan. Any deal would sharply enhance India's GAS security, but at considerable risk to its geopolitical peace of mind. Officials worry about the "target-rich" temptations of an India GAS pipeline for Islamist terrorists.
Furthermore, Pakistan has yet to reciprocate Most Favoured Nation status for Indian goods, or transit rights for Indian overland exports to Afghanistan. The pipeline would earn Pakistan between $500m and $1bn a year.
"Until and unless Pakistan decouples the issue of the Iran pipeline from Kashmir [which Pakistan claims is illegally occupied], we will not see much progress," says an Indian official.
Then there is a pipeline from Burma which, in spite of suffering from pariah status because of its military regime, is probably the most amenable of all three partners. "There are several ways we can ensure the Burma pipeline does not cross Bangladesh, which would be the major obstacle," says Mr Banerjee. "It is a do-able project."
The second part of the strategy is to boost domestic supply. Foreign oil companies have long by-passed India because of its reputation for bureaucratic interference. However, India's regulations have recently become more attractive.
In January 2004, the Cairn Group, an Edinburgh-based energy company, struck the world's largest oil find of the year in India's north-west state of Rajasthan. The 1bn barrel field will not give India self-sufficiency but it does augur well for future finds.
Reliance, GIL and others are stepping up investments in the offshore oil and GAS exploration bids for the Bay of Bengal and the Gulf of Cambay, off India's western state of Gujarat.
Some, including Bill Gammell, chief executive of Cairn, see India as one of the world's final frontiers for oil. Prospects for domestic GAS finds are also good. In 2003, Reliance struck the world's largest GAS find of the year in the Bay of Bengal.
India still sources most of its GAS domestically. But with policymakers forecasting GAS will almost triple to 20 per cent of total national energy consumption by 2025, new sources are critical. "GAS will play an increasingly important role in India's future energy supply," says Mr Parekh.
The final plank of India's energy strategy is to improve environmental and energy efficiency standards. Most of its power generation comes from the highly polluting coal sector, which remains largely state-owned and unreformed. India has several decades worth of coal reserves.
But many believe the Coal Authority of India, a state-owned behemoth, should be broken up and privatised. That is unlikely given the coalition's reliance on communist party support. But it is desirable. "The cost of coal is still way too high and regulation of the sector way too complex," says one government official.
Another priority would be to reform India's railway management which, again, is subject to political constraints. Laloo Yadav, India's rail minister, is typical in belonging to a small and regional coalition party with little incentive to restructure the world's second most extensive rail network.
But rail freight charges, which are highly expensive since they cross-subsidise passenger fares, need to be reduced if India's carbon dioxide output is to be capped. For the same reason, trains need to switch from diesel to electric power.
These, and other critical reforms, such as building modern urban mass transit systems, remain largely untackled, given the complexity of India's governance process. But small gains, notably the roll-out of an impressive new underground rail system in New Delhi, are increasingly visible.
Such projects – coupled with the new era of overseas expansion by India's leading energy companies – serve to remind foreign investors what India is capable of when it gets its act together.
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...who needs the stinkin' oil sands (only an option on $80+ sustained crude oil anyway(vbg).
...the next Party is... LNG.
It's here now.
It's Economic now !!!!!!!!!!!!!!!!!!!!!!!
<read the above 10 x...post it on your monitor...then read it 10 x again>
It's Global.
...I repeat....it's GLOOOOOOOOOOOOOooooooooooooooooobal ~
US, India, China.... GlOOOOOOOoooooooo-baaaaaaaaaaaaaal.
Oh' Can-a-da ....give me your Beer - keep your Oil Sands.
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