4 May 2020, NIICE Commentary 4478
Dr. Shamim Ahmad Wagay
It is truly evident since time immemorial that socio-economic expansion and modernism with regard to the human well-being of a country, bank upon the verve and vitality of energy resources further focusing on sustainable development. Energy security has the essential implication of ensuring instantaneous supplies of energy resources in order to promulgate economic and commercial transactions for smooth and stable growth of the economy. The same notion has umpteen times reverberated in the India’s senior political leadership system. In the backdrop of the state of affairs, the Government of India, in February 2000, in its publication: The Hydrocarbon Vision 2025, expressed in unequivocal terms, the concerns of posers and predicaments of India’s energy security. The report published by the government envisioned that the country would maintain itself on the subject of energy security by achieving self reliance through increased indigenous production and investment in equity of oil abroad. Since then, the energy security has arrested pivotal magnitude to focus at the pinnacle of national agenda.
According to BP Statistical Review of World Energy, in its 67th edition, released in June 2018, India has been consistent in outshining Japan to turn out to be the world’s third largest energy consumer. India’s annual oil consumption is anticipated to go up to 245 million tons by 2020; and, by 2050, the country is expected to be the world’s single largest importer of oil. Pertaining to the share of gas in the total energy amalgamation, India is bordering on to augment to 20 percent in 2025. Attuning to its sustainable development, India’s energy nexus with West Asia in general is a precursor of its development to keep harbouring its energy progression whilst remaining within an ace of Saudi Arab in particular for importation of gas and oil.
Owing to the increase in demand, the competition for energy resources is becoming more and more extreme. This rigid contest is the apprehension and origin of ‘energy security’ of the nations as their economic independence depends on it. India sails in the same boat and is facing a serious challenge of energy security as the meagre presence of domestic energy resources could not cater considering the need of the hour. To meet the aspirations of 1.36 billion people of its population, she needs to recognize the challenges facing the energy sector and frame policies to speed up the improvement of the sector. Therefore, India has to explore the ways and means in order to achieve the end of Sustainable Development. Saudi Arabia bears a significant position for India as it is well versed with energy resources and may prove a premier harbour for India’s energy requirements.
As one of the quicker growing economies, India’s energy demands continue to grow radically and exponentially, particularly in the transport segment. India owns various energy resources however; its inadequate domestic mineral deposits could not fulfil the intensity of the growing needs as well as sustainment of economic growth. India is facing a critical challenge of fostering swiftly mounting demands for energy. To meet the aspirations of such a huge populace India needs to make certain access to uninterrupted and inexpensive energy supplies. India’s energy challenge can be best guarded from the fact some 600 million Indians live without electricity and over 700 million still use biomass as the primary fuel for the most basic human needs namely cooking. It is striking that India’s growing demand for commercial energy will mount to 21 percent of world’s incremental supply of commercial energy. The yawning gap between the demand and supply will put national economy at jeopardy. India is rated enormously low in human development index due to lack of an appropriate and expedient availability of energy for the masses. Certainly, India needs to maintain steadiness in its GDP growth rate so as to bring massive changes in the social and economic conditions of the people and must aim to have an 8 percent of GDP growth over next twenty five years to wipe out poverty and to meet its developmental objectives. India currently imports 70 percent of its oil requirements and this is expected to increase to around 90 percent by 2025, by which time India’s oil demands would be around 325 million tonnes.
The Kingdom of Saudi Arabia is India’s solo chief source of oil as of 2019. Saudi Arabia exported 800,000 barrels per day to India from January to August 2019, which marks an increase of around 4.6 percent over the same period in 2017. The regime in Riyadh has declared its support to New Delhi and proposed complete backing to the country’s swelling energy requirements. Saudi Arabia on the other hand is the world’s largest oil producer, with also the second largest proven reserves (USD 268.38 billion barrels), all of which are located in easily accessible wells, hence more cost-efficient than other such reserves in any other country. The geographical distance is also not less for India (by contrast with three of the top five countries i.e. Venezuela, Russia, Canada), which brings down transportation costs considerably. These make the Gulf Kingdom a premier and natural choice for India’s energy security concerns.
