Thursday, September 23, 2010

India - The Quiet Energy Elephant

When people think of the world's great energy consuming nations, Japan, the United States and China come to mind. One nation that seems to slip through the cracks is India.

India has 15 percent of the world's population with an estimated total of 1.1789 billion people by March 2011 according to India's National Commission on Population. According to the Energy Information Administration (EIA) of the United States Department of Energy, in 2009, India was the fourth largest consumer of energy in the world. India has insufficient domestic supplies of energy and is forced to import a great deal of its energy needs.

According to 2007 statistics, a breakdown of India's energy consumption by method finds coal and peat as the source for 40.8% of energy consumed, combustible renewables and waste at 27.2%, oil at 23.7% and natural gas at 5.6% . Nuclear (0.7%) and hydro-electric (1.8%) fall far behind the other sources although it is anticipated that India is in the process of ramping up its nuclear power program. In case you weren't aware, manure is a much-used source of energy in India and not only through the utilization of manure-to-methane biogas. Manure is also compressed with human hands into patties about the size of a large dinner plate and burned for heat after drying in the sun. During a visit to India in December, I often noticed a pall of rather acrid smelling, manure-generated smoke over some cities during the cold morning hours.

Electricity infrastructure in India varies greatly with location. Approximately 400 million people have no access to electricity in any form; urban residents have 93% access and rural residents have 50% access on average.

For the purpose of this posting, I'm going to examine India's oil production capability. India's oil exploration and production business is dominated by state-owned companies including Oil and Natural Gas Corporation Limited (ONGC), India's largest oil company and Oil India Limited (OIL) although since 2000, moves have been made to attract foreign investment and expertise.

According to the BP Statistical Review of World Energy 2010, at the end of 2009, India's oil reserves totalled 5.8 billion barrels, the second largest in the Asia Pacific region after China at 14.8 billion barrels. India's share of the total world oil reserves is 0.4% compared to its 15% share of the world's population. India's oil reserves are found in both offshore and onshore fields with most of its crude reserves being light and sweet ranging from 32 to 38 degrees API. In 2009, India produced 754,000 BOPD, a decline of 1.8% from 2008. India's oil production has ranged from 726,000 to 773,000 BOPD since 1999 suggesting that despite massive exploration efforts, especially in the Rajasthan area, production has likely peaked. India's oil reserves are primarily found in its offshore fields, the largest being Mumbai High located 160 kilometres west of Mumbai. This field produced half of India's domestic daily oil production in 2009, however, production fell 5.3 percent to 347,197 BOPD in November 2009.

India's oil consumption in 2009 was 3.183 million BOPD, a 3.7% increase from 3.071 millon BOPD in 2008. India's oil consumption has increased nearly every year since 1999 when consumption was 2.134 million BOPD. In the past decade, daily oil consumption has increased by 1.049 million BOPD or 49.2 percent. As it stood in 2009, the oil production/consumption shortfall requiring imported oil was 2.429 million BOPD an increase of 126,000 BOPD over the 2.303 million BOPD imported in 2008 (a 5.5% year over year increase in imported oil volume). In 2009, India was the world's sixth largest importer of oil; 76% of the country's oil needs were filled using imported oil. The EIA expects that by 2025, India will be the fourth largest importer of oil in the world behind the United States, China and Japan. Here is a chart from the EIA showing the production shortfall (net imports):


Now, let's compare India's oil consumption to that of China as posted here. China's population is estimated to be 1.3386 billion in July 2010 (source: CIA World Factbook) and, in 2009, they consumed 8.625 million barrels of oil or 3.148 billion barrels of oil per 365 day year. On a per capita basis, that works out to 2.352 barrels of oil per person per 365 day year. India, on the other hand, consumes 3.183 million barrels of oil per day or 1.1618 billion barrels of oil per 365 day year. On a per capita basis, that works out to 0.985 barrels of oil per person per 365 day year. One can readily see that on a per capita basis, India consumes 42 percent of the oil consumed by China.

Let's add the United States into the fray. With a population of 307 million people and oil consumption of 18.686 million BOPD or 6.82 billion barrels of oil per 365 day year, they are the world's largest single oil consuming nation.

Country Population Daily Oil Used Per Capita Annual
(e6) (e6 BOPD) Oil (bbls)

India 1,178.9 3.183 0.985
China 1.338.6 8.625 2.352
U.S. 307 18.686 22.22

You can quite quickly see that India's per capita annual oil consumption is, once again, 42% of that consumed by China and 4.4% of that consumed by the United States. Should India's consumption rise to the per capita level of China, they will consume 7.597 million BOPD requiring imports of roughly 6.8 million BOPD, an increase of 4.4414 million BOPD. This increase is roughly 5.6 percent of the world's current daily oil production.

As I noted in my posting on China's oil needs, world daily oil production has not changed markedly since 2004 and hovers around 79 to 80 million BOPD. More importantly, the world's reserve life index or reserves to production ratio has not increased since 1985 for the past 25 years has ranged between 40 and 45 years at current production levels despite massive exploration efforts in ultra-deep water and other non-conventional targets. Here's a chart from the BP Statistical Review showing the reserves to production ratio data:


In my posting on China, I noted that should China's per capita level of energy consumption approach that of the United States, their potential consumption of 35.87 million BOPD would require 45% of the world's current daily oil production. The issues with rising demand in India complicate the supply/consumption issue even further.

According to statistics for energy consumed from all sources from the International Energy Agency (IEA), in 2007 (the latest year that data is posted online), India consumed 594.9 million metric tonnes of oil equivalent, China consumed 1,955.8 million metric tonnes and the United States consumed 2,339.9 million metric tonnes. Should India's energy consumption reach that of the United States, they would increase their total energy needs by 393 percent and to reach China's level, their needs would increase by 329 percent.

It is becoming apparent that the politics of energy will shape the world for the coming decades. With China and India having nearly one-third of the world's total population, rapidly expanding economies and movement of tens of millions of their residents into the middle class, competition for finite supplies of coal, oil and uranium will likely become increasingly hostile as nations jostle to ensure their own energy security.

7 comments:

  1. wow.. thats a lot of number crunching...

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  2. That's a lot of number crunching with no real purpose. Clearly, the whole world is on an absurd path of energy consumption. US and Europe are driving this absurd thought process, in their own consumption, and in essentially blackmailing everyone else to follow that absurd course so that US and European companies can mint money for just a short while -- of course, in collaboration with a few companies in other countries who are the prime local culprits. Humans are ultimate stupid species, ever!!

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  3. First USA,China,Europe,Japan,Russia,Canada,Australia have consumed so much petroleum,coal,natural gas that the man made environment destruction(permanent) is evident since 1950 and India also has contributed its share but lesser than the above Industrialised,Developed Nations and Man's materialistic greed has destroyed Forests,Animals,Arctic Ice,Glaciers,Reduction of
    Ozone and yet billions of people worldwide since 60 yrs have lived with less food,water with more pesticide and a few elite say a billion people enjoyed the benefits destroying Nature not created by Man,but inhumanly exploited and posing danger to billions more.Madness in name of GDP growth,Income levels etc has extracted a cruel price on Nature and Man will still continue to exploit for his Greed(whatever name given)Damage
    was done ,is going on and will do so in the future till all the weak,vulnerable ,poor will die a slow but certain death.

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  4. where are all the wealthy environmentally sensitive investors who should be supporting alternatives such as solar powered cars as opposed to the unimaginative approaches of car manufacturers and their electric cars. How long has it taken?

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  5. The quickly approaching Peak Oil reality is troubling on many levels, given the global dependance that humanity has on oil (not just transportation, but agriculture and power production). This will be a very troubling century for humanity.

    The sad irony is that if we were more responsible, and able to control our drive to multiply, humanity could live comfortably on mother earth in a sustainable fashion for millions of years. Unfortunately, the short "sugar rush" of cheap plentiful oil (that is now ending) has allowed our population growth to greatly overshoot a sustainable level.

    The days of plentiful cheap oil are ending, and there will be a challenging century ahead...

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  6. Strange .. I thought that the entire Persian gulf stretching to the Indian ocean shelf was prime oil exploration area. Having said that I'd opine that we haven't seen enough of India's consuming tendencies as yet.

    Meanwhile, as we speak, Reliance sublets its oil/ natural gas concessions out to entrenched global players ( read B.P., kicked out of n'orleans and more importantly, Siberia)in order to use the money to increase its reach in the hinterland. They know, of course, that they'll be able to offload B.P. through governmental intervention when the serious profits are to be made.

    Which doesn't bode well for the energy sector all that well i suppose. But then, in these climes you are only as good as your profits, or so they would make us think.

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  7. I was wondering if you ever considered changing the layout of your blog? Its very well written; I love what you've got to say. But maybe you could a little more in the way of content so people could connect with it better.
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