‘Reducing Crude Oil Imports By 10 Per Cent By 2022, Shift Towards A Gas-Based Economy A Pathway For Energy Transition’: Petroleum And Natural Gas Minister Dharmendra Pradhan

Union Minister for Petroleum, Natural Gas, Oil, and Steel, Dharmendra Pradhan laid out his vision for the oil and gas sector today as he addressed a virtual gathering under Swarajya's ‘Road To Atmanirbhar Bharat’ webinar series organised in association with Vedanta Resources Limited.

Speaking at the event, the minister talked about the economic challenges posed by the Covid-19 pandemic, the Narendra Modi government’s response to these challenges, its Atmanirbhar Bharat vision, what the oil and gas sector is doing to achieve the aim of a self-reliant India and his vision for the sector.

Atmanirbhar Bharat

Pradhan said that economic activity is resuming and gathering pace across the country and the prime minister’s call for an Atmanirbhar Bharat is helping in the resurgence of the Indian economy.

The five pillars of Atmanirbhar Bharat, the Minister stated, focus on economy, infrastructure, systems, vibrant demography and demand.

Explaining what Atmanirbhar Bharat means for the Modi government, Pradhan said it aimed at “transforming India from a passive market to an active manufacturing hub and the heart of the global value chain”.

The minister added that the Atmanirbhar Bharat vision aims to make India a self-reliant yet globally integrated economy which can act as a driver of growth for the global economy.

The minister stated that the Atmanirbhar Bharat vision faces many challenges, which are compounded by global competitiveness. But, he said, India can manage to deal with these challenges, giving the example of the success in quickly scaling up the capacity to manufacture PPE kits, masks and ventilators amid the Covid-19 pandemic not only for the domestic market but also for export to the world.

India’s Energy Sector

Talking about the energy sector, Pradhan said India is currently using only 6 per cent of the world’s primary energy and the country’s per-capita consumption of energy is still one-third of the global average. But the situation, he said, is quickly changing.

“India’s energy consumption is projected to grow at 3 per cent per annum up to 2040, faster than all major economies. India’s share of total global primary energy demand is said to roughly double to about 11 per cent by 2040 driven by strong economic development,” the Minister of Petroleum and Natural Gas said.

“Globally, India is the third largest consumer of energy resources, next only to the US and China. We are also the third largest crude oil importer and the fourth largest liquified natural gas importer in the world,” he added.

Prime Minister Modi’s Roadmap For Energy Sector

The minister said that Prime Minister Modi’s roadmap for energy justice rests on five key enablers: energy availability and accessibility to all, energy affordability to the poorest of the poor, energy efficiency, energy sustainability and energy security.

He also highlighted the five key drivers of India’s energy strategy mentioned by Prime Minister Modi at the India Energy Forum last month:

1.  Accelerating our efforts to move towards a gas-based economy.

2.  Cleaner use of fossil fuels particularly petroleum and coal.

3.  Greater reliance on domestic sources to drive bio-fuels.

4.  Achieving the renewables target of 450 GW by 2030.

5. Increasing the contribution of electricity to de-carbonise mobility.

6. Moving into the emerging fuels including hydrogen.

7.  Digital innovation across all the energy systems.

Shift Towards A Gas-Based Economy

Talking about a shift to a gas-based economy, Pradhan said it is a vital low carbon pathway enabling the energy transition and added that the infrastructure required to achieve this is already being put in place across the country.

“We have already laid over 16,800 km long gas pipeline network, while an additional 14,700-km gas pipelines are under different stages of construction. Largest ever roll-out of city gas distribution networks across India has been undertaken to enable inclusive growth. Plans have been chalked out to provide CNG and PNG infrastructure in most parts of the country,” the Minister said.

“The CNG and PNG infrastructure will be provided in 407 districts. PNG connection for households has increased from 25 lakh in 2014 to 63 lakh now and is being further provided to 40 million and similarly CNG connection has increased from 938 in 2014 to 2350 now and is being further put up to 10,000 CNG stations,” he added.

The expansion of these facilities will bring clean energy to 70 per cent of the population, Pradhan stated, adding that the government is making natural gas easily available at doorsteps for users through mobile dispensing.

“Recently, we have laid the foundation stone for the first 50 LNG fuelling stations across the golden quadrilateral and major National Highways. Our goal is to set up 1,000 LNG stations within 3 years. An estimated investment of 66 billion US dollars is lined,” the minister said that the event today.

National Biofuel Policy, 2018

The minister said that the National Biofuel Policy has set the target of achieving 20 per cent ethanol blending in petrol and 5 per cent of bio-diesel by 2030.

He also stated that 12 2G ethanol bio-refineries in 11 States are being set up with an overall capacity of 1100 kilo litre per day. He said that government is also working towards conversion of used cooking oil to biodiesel in select cities.

Sustainable Alternative Towards Affordable Transportation

Under SATAT, the minister said the government is planning to set up 5,000 compressed biogas plants with a target of 15 MMT per year with an investment potential for US $ 20 billion. He also stated that the SATAT initiative is in line with the goals of Atmanirbhar Bharat, Swachh Bharat Mission and boosting MSME sector.

Reducing India's Crude Oil Imports

Pradhan said that the government has come up with a road map for reducing India's crude oil imports by 10 per cent by the year 2022.

We are in the process of developing new strategies and initiatives to achieve this target. Enhancing indigenous oil and gas production is our utmost priority, the minister said while addressing the event.

He also stated that oil and gas companies in India, including oil PSUs, are investing in developing renewable energy projects by focusing more on green energy investments such as renewables, biofuels and hydrogen.

Policy Reforms To Revitalize E&P Ecosystem

“Since 2014 onward, government has been progressively moving towards marketing and pricing freedom regime of natural gas. We have allowed complete pricing and marketing freedom for domestic gas discoveries done after February 2019 and Premium Price for Gas from difficult area (Deep water, Ultra deep and HP-HT) area,” the minister said, talking about reforms in the sector.

He talked about the the Discovered Small Field Policy, HELP, OALP, Setting up of National Data Repository, Policy to Promote and Incentivise Enhanced Recovery Methods for Oil and Gas, policy framework for exploration and exploitation of unconventional hydrocarbons, saying that the government is committed to improve the ease of doing business for private players in this sector.

Pradhan said that the Modi government sees space for start-ups not only in the existing domain of oil and gas but also in upcoming areas like fuel cells, solar energy, hydrogen, alternative sources of energy, electric vehicles and others.

Revealing how the government is helping start-ups, Pradhan said that around 175 start ups are at various stages of incubation under Oil and Gas PSUs.

A fund of Rs 200 crore has been allocated to selected start-ups, which is over 62 per cent of the fund pledged during Start Up Sangam. Oil and Gas PSUs have further committed around Rs 300 crore for next three years period, the minister added.