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India’s Insatiable thirst for oil

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In the Eighties, consumption of oil was the highest in Europe followed by North America. European oil demand, more or less, remained stagnant over the last 15 years, whereas Asian-Pacific countries picked up consumption in the Nineties. Notably, the current demand drivers are India and China. There are multiple competing arguments supporting oil consumption growth in the Asia-Pacific region. The most significant reason behind demand growth is linked to the development cycle of emerging economies in the Asia-Pacific region, especially India and China. Like China, India is undergoing a transition from ‘developing’ to ‘developed’ stage, resulting in an exponential increase in the demand for energy. India’s crude oil import increased from 99 million metric tonnes (MT) in 2005-06 to 214 MT in 2016-17, registering a compound annual growth rate of 7.2 per cent.

In 2016, India registered a GDP growth rate of 7.1 per cent compared to heavyweights like China (6.7 per cent), USA (1.6 per cent), France (1.2 per cent), Germany (1.9 per cent), and Japan (1 per cent). In 1980, India and China, with a combined GDP of $613 billion, contributed about 2 per cent of the world GDP of $27.8 trillion. In 2016, with close to $12 trillion combined GDP, India and China together enhanced their share to 15 per cent of $77.3 trillion world GDP.

Based on strong economic growth driven by fundamentals, market-linked reforms, and domestic demand, India is fast emerging as a challenger to the leading global economies. In the process, millions of citizens, already lifted out of poverty, are being empowered by financial inclusion and autonomy. Rapid economic growth led to infrastructure build up, enhanced disposable income, and higher purchasing power.

India still has a long way to go before establishing its authority in the global economic landscape. It needs supernormal growth to catch up with China in the medium term and with the US in the long term. Under the emerging global market dynamics, economic growth tends to be driven by green energy. Fossil fuel-dominant economy like India may face tougher challenges to swiftly change to green energy. Like China, oil being the second largest source of primary energy behind coal, India needs to strategically move away from conventional energy to curb fast-spreading pollution beyond cities. India confronts the challenges of maintaining higher economic growth, managing strong industrial growth, rapid modernisation, quick infrastructure development, efficient farming, and pushing millions of citizens to the middle class. Prime Minister Narendra Modi’s vision to transform India demands all citizens, government agencies, and industries to collaborate in a passionate manner to create conducive environment to perform beyond expectations.

India faces multiple hurdles, including technology development and diffusion to compete with China and developed nations like the US. India’s ambition to rapidly expand its renewable infrastructure and electric vehicle penetration is constrained by lack of indigenously developed affordable technology, sufficient charging infrastructure and massive investment.

Indian Space Research Organisation (ISRO) has proven that capability can be developed within to achieve extraordinary results on the technology front. I believe the areas which demand high-end research include developing technologies for exploiting fossil fuel, advancement in battery technologies, energy storage, and solar component manufacturing. China today is miles ahead and India needs humongous efforts to leapfrog China.

India’s robust domestic demand and a strong push for ‘Made in India’ initiative for products or services might create a stronger demand for energy; especially demand for oil and gas. Earlier this year, Goldman Sachs predicted peak demand for oil by 2024.

As per Petroleum Planning and Analysis Cell, between April and November, 2017, motor spirit consumption registered a growth of 8.6 per cent owing to very good support from growth in passenger vehicles (8.5 per cent) and two-wheelers (9.6 per cent) in India. Light commercial vehicle sales recorded 17 per cent growth over the previous year resulting in strong demand for diesel. Similarly, a healthy growth in demand for liquefied petroleum gas (8.8 per cent) and aviation turbine fuel (8.9 per cent) was observed. Similar demands for petroleum products are expected in 2018 and beyond. International Energy Agency projects that India’s share of global energy would rise to 11 per cent[1] by 2040, the largest contributor to the global demand growth.

US Energy Information Administration forecasts US dry natural gas average production to be around 80 billion cubic feet per day (Bcf/d) in 2018, a 6.1 Bcf/d[2] higher than the 2017 level, which means global natural gas price will be influenced by US supply. Additional natural gas supply from US may lead to higher export; which may benefit India.

Modi government’s strong commitment to implement reforms, bring desired policy interventions, and, more importantly, monitoring progress would yield long-term socio-economic benefits. Bringing petroleum sector under the ambit of Goods & Services Tax (GST) could really take India closer to ‘one nation-one tax’ system. Positive actions by the Government may reduce complexities in the petroleum ecosystem and spur further demand. India’s strategic target to increase petrochemical production and consumption would support strong demand for crude oil and natural gas. Further, Government’s intention and actions to boost manufacturing could very much serve as the demand driver for crude oil and natural gas. As India is still in a position to drive global oil demand, so all developments in India are closely observed by the oil and gas producers.

DNA India



33 Comments on "India’s Insatiable thirst for oil"

  1. Dredd on Sat, 30th Dec 2017 9:21 am 

    Will they drill in the Arctic (Watching The Arctic Die – 3) ?

  2. dave thompson on Sat, 30th Dec 2017 10:01 am 

    “India’s Insatiable thirst for oil”
    Should read;”World Capitalism’s Insatiable thirst for oil”

  3. onlooker on Sat, 30th Dec 2017 10:57 am 

    The Human Cancer continues, we all know the final outcome for unchecked Cancer. The wrinkle is that we will probably disappear before we do irreparable damage to our host planet

  4. MASTERMIND on Sat, 30th Dec 2017 12:50 pm 

    Too bad India and China showed up to the oil keg’er after the neighbors had already called the cops. The PEAK OIL police will be their shortly…Oh well…Better luck next civilization!

  5. onlooker on Sat, 30th Dec 2017 12:51 pm 

    For any of you caught up with my region is better than yours wake the hell up, the ENTIRE planet is being degraded and depleted of its life supporting properties
    First US:
    USA has lost 831 square miles of forest during the period 2001 – 2005.
    500 years are need for the regeneration of 2.5 cm of topsoil. The US loses topsoil 17 times faster than its being formed again.
    Americans are only 5% of the world population but produce 30% of the waste globally.
    200 000 tonnes of completely edible food is being thrown away each day only in US. Its decomposure significantly emits methane in the soil.
    According to US Fire Administration, in 2001 an estimate of 8100 fires happened, many of which due to natural ignition of landfills because of the heat generated from the emissions. That produces huge amount of gases that further cause air pollution.
    22 barrels of toxic waste was disposed in the Love Canal, US in the late 1970s. Many of the families living nearby the place of disaster later suffered from Leukemia, high red blood cells count. It took about 30 years for the area to become inhabited again.
    Greenpoint oil spill is one of the biggest that has ever occurred in the US. An estimate of 17 and 30 million gallons of oil that was spilled later leaked in the soil causing one of the biggest land pollution disasters in the history of America.
    The Murphy Refinery spill happened because of malfunction of a storage tank due to a massive flood. Over 1700 homes were impacted by the massive spill of about 90 000 barrels of oil – approximately 4 million gallons.
    Brudhoe Bay Spill was observed in 2006 after a 5 days leak of more than 267, 000 US gallons of oil that was spilled across 1 900 acres of land. This is to be considered the largest spill in the area of Alaska’s north slope even until now. The company that was responsible for the disaster payed $25 000 000 civil penalty.
    The average american produces 4.5 (about 2kg) pounds of rubbish a day.
    About 40% of the lakes in the U.S. are so severely polluted that fishing and swimming in them is not allowed. The aquatic life doesn’t exist or is heavily damaged.

  6. onlooker on Sat, 30th Dec 2017 12:53 pm 

    Now China:
    82.8% of the soil in China contains contaminants such as copper, lead, mercury, arsenic etc making China one of the most affected countries by the world pollution.
    One of the leading reasons for China’s soil contamination is the rapid increase of population since 1980.
    100, 000 km² of China’s cultivated land is highly polluted and food cultivation in it is either impossible or extremely dangerous.
    2 million miles of land has been destroyed because of solid waste.
    19 million tonnes of grain is contaminated every year because of heavy metals due to land pollution. That results in $2.6 billion of loses.
    All of the rice crops in Guangzhou were found to be contaminated with cadmium that causes kidney failure and cancer due to heavy soil pollution and treatment with contaminated water.
    Research in the period of 2013-2015 shows that 16% and 19% of the arable land of China soil is contaminated .
    82.8% of the land pollutants in China are not organic.
    China produces 12 million tonnes of grain a year that is contaminated by heavy metals which is worth $3.2 billion.
    Factory pollution in China is so excessive that factories in Beijing have to close when the smog gets too heavy.

  7. onlooker on Sat, 30th Dec 2017 12:55 pm 

    Now the planet:
    https://rubbishplease.co.uk/blog/land-pollution-facts-statistics/
    400 million tons of hazardous waste is produced annually around the globe. This is one of the biggest acts of human pollution.
    Conserving energy helps for reducing the amounts of acid rains. Power plants produce energy based on how much is being used by the household. The lower that quantity is, the fewer acid rains we’ll see.
    3.6 million hectares were destroyed by soil erosion in 2011.
    Energy production and food waste are the reason for about 80% of the land pollution.
    80% of the items on the landfills are recyclable.
    The planet loses 24 billion tonnes of topsoil each year because of land pollution.
    The rubbish we globally generate is enough to fill 63 000 waste removal trucks. Much of this refuse causes land pollution after being disposed.
    1 ton of oil is spilled for every 1 million tonnes of oil being transported.
    Agricultural activities are the reason for a significant percent of the land pollution. That would be anything related to fertilizing, using pesticides, irrigation and improper disposal of animal waste.
    About 22% of the coral reefs have been destroyed because of land pollution causing further pollution types.
    The access to over 20 000 beaches was fully limited in 2009 because of the causes of pollution .
    80% of the world’s forest has been destroyed already. In South Africa 90% of the tropical forest cover is demolished.
    Persistent organic pollutants like the pesticides DDT and Aldrin are able to increase their harmful potential by up to 70 000 times. The reason for that is that they are able to remain in the atmosphere for several years.
    For 10 year between 1997 and 2007 the waste produced per person in Australia has increased by about 80% – from 1200 kg per year to 2 100 kg.
    The contaminants in the soil are being swiped by current which spreads the contamination and increases the natural pollution.
    Trees are able to fully absorb toxins that are later passed onto other forms of life.1 million seabirds and more than 100 million mammals die each year because of overall pollution.

  8. onlooker on Sat, 30th Dec 2017 12:56 pm 

    More planet:
    Land Pollution Facts And Statistics That Influence The Health of Humans
    Half of the population is drinking water that is unsafe that has been contaminated by environmental pollution of the land.
    A kid dies every 8 seconds because of polluted water that’s been intoxicated because of land pollution mostly in Africa.
    Causes cancer of most types, including Leukemia.
    Water contaminated with lead causes severe brain damage. Children are the most exposed to this threat.
    Cyclodienes causes liver toxicity and mercury significantly reduces the risk of kidney disease

  9. MASTERMIND on Sat, 30th Dec 2017 1:07 pm 

    Onlooker

    Shut the hell up nobody cares about your save the whales clap trap..Go virtue signal somewhere else and quit spamming the blog.

  10. dave thompson on Sat, 30th Dec 2017 1:29 pm 

    I do not see any spamming going on, from onlooker. Spamming would be providing links to diet pills or some such nonsense.

  11. onlooker on Sat, 30th Dec 2017 1:30 pm 

    So here you are MM, telling us how it will all go down and that we cannot handle the truth. So can you handle the truth? It matters not a flying fuck, what awaits to get us all, so don’t attack the messengers just cause you can’t handle the message

  12. MASTERMIND on Sat, 30th Dec 2017 2:47 pm 

    Onlooker nobody cares about your save the earth nonsense..The earth will save itself after the collapse. The eco system will naturally restore itself.

  13. Don Zenga on Sat, 30th Dec 2017 3:18 pm 

    First India should replace Kerosene stoves with Methanol stoves and this is much more easier than transport. Then start blending Methanol with Petrol/Diesel to be used in transport.

  14. Makati1 on Sat, 30th Dec 2017 5:06 pm 

    Don, and then what do they eat? The US has starving people but still burns millions of acres of corn in their SUVs. Better look in the mirror, Don. Better adjust to a hotter world. It’s coming.

  15. Makati1 on Sat, 30th Dec 2017 5:11 pm 

    Oops! (M)ethanol… Missed the M. Need more coffee. But the problem is the same. Burn a derivative of natural gas or burn the plant waste that needs to go back in the ground to keep soil fertile. Either Meth or Eth is a negative for food production and both are still air polluters.

  16. onlooker on Sat, 30th Dec 2017 5:14 pm 

    You would think people on this site would comprehend how we depend on the Earth for our survival. Ecology 101. Guess not

  17. onlooker on Sat, 30th Dec 2017 5:20 pm 

    MM, humans and our close descendants lived on Earth for thousands of years without FF, but we cannot live with a planet changed to the degree whereby it is no longer hospitable to life

  18. Davy on Sat, 30th Dec 2017 5:21 pm 

    “US has starving people”
    Where is your references mad kat?

    The starving people will be in Asia. They are now only food insecure including the P’s. Once the real decline sets in then the starvation will see 4.5BIL reduced by the will of nature. It will visit the west too just differently.

  19. Daniel Reich on Sat, 30th Dec 2017 5:58 pm 

    Onlooker, I have long been aware of the situation. Exponential human population growth and a desire to live the consumer lifestyle is unraveling the web of life. Unfortunately for all of us this is an unsustainable situation. Limitless growth cannot be realized. I’m pretty sure the ecosystem crash has already begun and the economic growth we are seeing in emerging markets will bottom out soon after. It all depends on how much longer the food chain holds on.

  20. MASTERMIND on Sat, 30th Dec 2017 6:14 pm 

    Onlooker

    Sorry dude..Evolution doesn’t go backwards…

  21. onlooker on Sat, 30th Dec 2017 6:16 pm 

    Thanks Daniel.I know this is a peak oil site but I would think most of us here see PO as just one dimension of our having overshot the carrying capacity of this planet because of our huge population primarily but also because of how we chose to live

  22. MASTERMIND on Sat, 30th Dec 2017 6:25 pm 

    Onlooker

    Nobody cares about your save the rain forest virtue signalling. If you want to save the whales from carbon pollution. Then you should give up using fossil fuels yourself. Go live in the woods and become a hunter gather again. do what the Vegans do who don’t believe in killing animals they stop eating meat..If not then shut the hell up. People have enough to worry about without your pathetic guilt trips. If we could give up using fossil fuels everybody would. But we cant because there are no alternatives.

  23. onlooker on Sat, 30th Dec 2017 6:42 pm 

    Your buddies Davy, Greg and Makati know they’re are alternatives just not for everybody on this planet.I get you now MM, you are a relatively young person who has not made any preparations for living off Grid and you are pissed that your fellow humans have allowed our entire species to reach this point. You have a right to be pissed. But guess what pointing out our interconnection with Nature is about all we have left . Because after the Collapse any chance the survivors may have will be because we left the planet sufficiently capable of sustaining higher life forms like us. Or maybe you don’t give a rats ass about the human race

  24. antaris on Sat, 30th Dec 2017 6:50 pm 

    He only cares about eating bullets.

  25. MASTERMIND on Sat, 30th Dec 2017 8:07 pm 

    Antaris

    Just wait till the collapse hits..Goons will turn your sister/wife…Into their personal fuck toys! lol And you will be robbed/beaten/eaten! Without the rule of law and a prosperous society in place..Things will get ugly quick!

  26. Sissyfuss on Sat, 30th Dec 2017 8:51 pm 

    Higher life forms like us, Onlooker? How is a cancer a higher life form.

  27. antaris on Sat, 30th Dec 2017 9:15 pm 

    MM you need to expand your fiction reading. I would suggest T.J. Reader, and his series A Long Lonely Road. All the Assholes get perforated from a distance and the sister/wife are some of the best to get the job done.

  28. MASTERMIND on Sat, 30th Dec 2017 10:04 pm 

    The MSM has done an excellent job calming the cattle before they are slaughtered

    https://imgur.com/a/PPaX6

  29. antaris on Sat, 30th Dec 2017 10:42 pm 

    Avoiding

  30. antaris on Sat, 30th Dec 2017 11:22 pm 

    MM avoiding

  31. Outcast_Searcher on Sun, 31st Dec 2017 11:25 am 

    Just another example of why the ETPers are wrong when they keep claiming the recent crude glut (now receding due to ongoing global demand increases) is NOT due to a demand dearth.

  32. Davy on Sun, 31st Dec 2017 11:30 am 

    “demand dearth”….Ahh, take away things like quantitative easing and ZIRP like polices the world over and tell me how much demand there would be. Bashing ETPers for what is a forest of reasons for a crude glut is intellectually shallow.

  33. ____________________________________________ on Sun, 31st Dec 2017 12:01 pm 

    Not to give a flying fuck is the best kind of fuck not to give.

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