Major General K S Pendse (Retd.)


It is evident that in an increasingly chaotic world of the 21st Century, the present-day comfortable assumptions of international studies may no longer apply. Instead, what may prevail is the harsh logic of survival in an iniquitous global order, wherein 80 percent of the World's wealth is in the hands of 28 percent of its population. This is depicted in a special world map placed opposite, by assigning an area to each country according to its share of the world's wealth (1).

Terrorism, conflicts, small wars and a million mutinies may ensue over issues such as mass migration of poor people and squabbles over scarce resources. The current euphoria over an imminent birth of a border-less world as a result of a technology-driven globalisation of economy may be short-lived, because of a crisis of global proportions that is looming over the time-horizon. And that is the energy crisis of the 21st century.

This paper aims at presenting facts and arguments related to this global energy crisis, with special emphasis on India's energy security. It is divided into the following three parts :-

(a) The Global Energy Scene.

(b) India's Energy Security.

(c) Some Possible Indian Initiatives.


Basic Facts

Human evolution is marked by man's ingenuity in harnessing various energy sources for his well being. All these sources in the ultimate analysis owe their existence to the Sun and allied forces of Nature. Human beings learnt to make fire about 1-1/2 million years ago. Until then, their only sources of energy had been their own strength and direct sunlight. With the heat energy released by burning wood, people warmed themselves, cooked food and hardened pottery. About 3200 B.C. , the Egyptians invented sails and used the wind power to sail boats. Water wheels developed in ancient times harnessed waterpower.

Until the late 1700s, wood was the most important fuel. It continues to be so in many developing countries even today. But as timber became scarce, coal took its place. A growing demand for coal led to better mining methods, which, in turn, led to the invention of steam-engine driven water pumps used in keeping the mines dry. The steam engine became the chief source of power for industry and transportation, which made the Industrial Revolution possible. During the 19th Century came the knowledge about electrical power. And, in 1885, Karl Benz built the first petrol-driven car, powered by an internal combustion engine. The demand for petrol soared as cars came into general use. The science of splitting the atom and harnessing the energy released therein, was used for military purposes by the US against Japan in 1945, to end the Second World War. But expectations about peaceful use of nuclear energy providing an inexhaustible source of power for commercial purposes have remained unfulfilled so far.

Energy Supply

It is the total quantity of usable energy that is available to people. Energy in different forms is used to provide warmth, to do work and to move people and goods from one place to another. Heat energy cooks food on stoves; electrical energy operates various appliances and power tools; cars and trucks are moved by mechanical energy produced by the burning of fuel in their engines and jet aircraft are propelled by aviation fuel burnt in their jet engines. Similarly for ships and water transport that run on their engines. About 88 percent of the world's commercial energy comes from coal, oil and natural gas (Commercial energy is that which is produced by businesses and governments). These fuels are called fossil fuels because they developed from the fossilized remains of pre-historic plants and animals.

The Earth has only a limited supply of fossil fuels. That is why they are called non-renewable sources of energy. Since 1900, the use of energy has almost doubled every twenty years. Its causes include increase in population, increased wealth, growth of the labour force, energy-using inventions, consumer products that take large amount energy for their manufacture and non-fuel uses of fossil fuels. In most industrialised countries, the use of energy has increased much faster than the increase in population, since the Second World War (1939-45). Europe, Japan and the United States consume about 70 percent of the world's energy, though they have about 20 percent of its people ( 2 ).

A person in a developing country uses only about 1/15 th of the energy used by a person in one of the developed countries. But, these poor countries need more factories, farm machinery and transportation facilities, all of which require energy for their operation. Their people also want electrical lighting and other comforts that use energy. Several of these countries rely on wood, charcoal and even animal-dung for heating and cooking, thereby causing deforestation and eventual desertification and famines.

Sources of Energy

The chief sources of energy throughout the world are, in the order of importance; fossil fuels, water- power and nuclear energy. In addition, solar energy, wind power, tidal energy and geothermal energy provide small amounts of power. There are some sources in the experimental stage such as magnetohydrodynamic (MHD) generators, fuel cells, nuclear fusion, solid wastes and hydrogen.

Fossil Fuels. Besides petroleum, coal and natural gas, these include bituminous sands and oil shale. It is easier to get petroleum out of the Earth's crust than coal, and provides about 40% of the commercial energy used in the world, essentially for transportation and for heating millions of homes. Pipelines carry it cheaply over long distances. Its impurities that lead to pollution of the atmosphere can be removed during the refining process to a large extent. Coal provides about 28% of all commercial energy and is used in production of electricity and of steel. It also heats countless homes and provides heat and power to many industries. Gasified coal can serve as a substitute for natural gas, and liquefied coal can be used to make artificial petrol. But both these processes are expensive and need large quantities of coal. Natural gas accounts for about 20% of the commercial energy, and is the cleanest and most convenient fuel, easily fed through pipelines and causing no air-pollution. Bituminous sands may become a major source of oil, but is very expensive to produce at the moment. Similar is the case for oil shale with the additional disadvantage that oil shale mining tears up large areas of the country side and produces huge piles of waste rock.

Water Power . It furnishes about 7% of the world's commercial energy. But that requires a dam and a gradient and an assured flow of water into the lake so formed upstream of the dam. These projects are expensive, and are found on a large scale in countries like New Zealand and Switzerland where hydroelectric power plants contribute more than half the total electricity production.

Nuclear Energy . It provides about 5% of the commercial energy. It comes from fission, the splitting of the atoms of certain elements, especially uranium. Fission reactors generate electricity and also power several ships, especially submarines. Fission creates huge amounts of energy from small amounts of fuel, and also produces electricity without causing air pollution. But there is thermal pollution as well as production of tons of radioactive waste every year, for whose safe disposal no simple method has so far been evolved. A breeder reactor could provide immense quantities of energy as it produces more fuel than it uses, which can be used by other nuclear reactors. Eventually, physicists expect to control the power of fusion, the combining of atomic nuclei, which produces the heat and light of the sun and the stars, and the explosive force of the hydrogen bomb. A fusion reactor would use deuterium for fuel, which exists, in the oceans in sufficient quantities to provide all the energy people may ever need. If controlled fusion reactor can be achieved, it would also be safer and less problematic than fission reactor, as the former has little radioactive waste and can create little danger of explosion or radiation hazards.

Solar Energy. It is used to heat buildings and water by heating flat plate collectors exposed to direct sunlight and also to convert sunlight into electricity by using photovoltaic cells. However, the latter takes up a large area, and is interrupted by bad weather and darkness.

Wind Power . It turns windmills and propels sailboats. But using it to produce electricity, is commercially feasible only where strong steady winds are obtained normally.

Tidal Energy . The world's first tidal water power plant began to operate in France in 1966. Tidal energy can be used wherever there are high tides in a bay, that can be closed with a dam. During high tide the bay fills with water and during low tide, as the level of the ocean drops below that of the water stored behind the dam, that stored water is released to drive turbines that generate electricity. But such generation can take place at certain time of the day only, and there are very few suitable sites.

Geothermal Power. It is generated only when water comes in contact with hot rocks below the Earth's surface. So far, it has been tapped in Iceland, Italy, Japan, the Philippines, New Zealand and the USA. The rocks heat the water to give off steam, which in turn runs turbines that generate electricity. This water can also be pumped back to the surface for power generation.

Chemical Energy . This is released during chemical reactions as in dry cells, which get discharged, or in storage batteries which can be recharged again and again, as those used in cars.

Magnetohydrodynamic (MHD) Generators . These convert fuel directly into electricity by burning coal or other fuel at high temperatures to produce hot ionised gas which is passed through a magnetic field, where it produces electric current that is drawn off by electrodes. It may become an efficient power source, if many technical problems are resolved successfully.

Fuel Cells. These are battery like devices in which gas or liquefied fuels combine to produce electricity without burning. US Apollo spacecraft used hydrogen and oxygen in its fuel cells. But these are very expensive at present to make.

Solid Waste. Various cities in the world produce power by burning waste. Another process, called bio-conversion , uses plant and animal wastes to produce methanol, natural gas & oil. Biomass is a term used to describe such plant matter including wood, and also residues from forests, crops, animal waste and organic content of municipal & domestic solid waste. According to one estimate, biomass could contribute substantial energy, equivalent to 3 million barrels of oil, from commercial forests in the US alone, and the potential is large on a worldwide basis. Wood remains a principal source of domestic biomass especially in high population density areas such as Africa and Asia. Deforestation, therefore, has been assuming menacing proportions in many developing countries, like India.

Hydrogen. It has the potential to replace both gas and oil as a fuel. Chilled to liquid form, it can flow through pipelines. It can be used as a substitute for petroleum and also be easily converted through fuel cells to electricity. Being a potential substitute for fossil fuels with the added advantage of very low pollution level, hydrogen is of great significance in the renewable, non conventional energy field. Present methods of obtaining it through electrolysis are costly because of large input of electricity. Water electrolysis through electricity produced by solar cell is a viable alternative, which needs to be established commercially.

Current Status & Future Prospects

From the foregoing, it may appear as if there were any number of energy sources from which human beings could choose the one most appropriate for the desired end use. However, man has depended upon wood, coal, and petroleum, in that sequence, for satisfying his energy needs thus far. In modern times, it is coal, natural gas and petroleum, that have been contributing nearly 88 per cent of the total commercial energy produced worldwide, hydro-electricity and nuclear power adding just 7 and 5 per cent respectively. Figures 2 & 3 placed opposite, show country/region wise share of such energy production(3) and a projection of energy-source-wise contribution during 1973-2000(4). It is evident that fossil fuels will continue to play a dominant role in energy production until their supply runs out. Even in the field of generation of electricity, most countries continue to depend upon fossil fuels to provide the necessary energy-input. Therefore, it would be illuminating to review the current availability and estimated reserves of these fuels viz. coal, natural gas and petroleum as a basis for further study.

Coal. It is a black or brown rock which when burnt gives out heat. This can be used to heat buildings and to produce various products, but is mainly used to produce electricity. Almost half of the electricity in the world is generated by burning coal. It is graded in a descending order of its carbon content, as anthracite, bituminous, sub-bituminous and lignite, the last named having about 30 per cent carbon only.

Bituminous coals are by far the most plentiful, and have a slightly higher heating value than that of anthracites, the latter being the least plentiful and burn too slowly for industrial purposes. Bituminous coals, thus, are the most widely used of the major ranks of coal. Coal though found on every continent and even under water, can be mined by either surface or underground mining. Leading producers of coal in 1991, prior to the breakup of the USSR, were as shown in Figure 4, placed below (5) :-

No reliable estimates exist for the total amount of coal that lies below the Earth's surface. The US has the largest deposits, with 24 per cent of the world's proven reserves, totaling over one trillion metric tonnes. These are expected to last for over 200 years. But, various impurities in coal such as sulphur and other minerals produce gases which cause serious air pollution. Ash produced after burning coal adds to this pollution, if not trapped in smokestacks. The difficulty and high cost of developing safeguards have greatly restricted the use of coal as fuel, which is seen at present as the primary cause of acid rain. Scientists have developed processes for converting coal into oil, but these are too costly for commercial adoption at present.

Natural Gas. One of the most important energy sources, natural gas is burnt to provide heat, to produce energy for running machinery and as an input in chemical industry to make detergents, drugs, fertilisers, plastics, synthetic rubber and synthetic fibers. Natural gas has been forming beneath the earth's surface for millions of years. The natural forces that created gas also created petroleum, and as a result it is found often with or near oil deposits. It is the cleanest and the most convenient fossil fuel, and can be easily transported through pipelines. It causes almost no pollution. When liquefied, it can be carried in suitable cylinders for domestic use, or for driving transport. The growing problem of air pollution has created strong interest in natural gas, as a transportation fuel. Although its supplies may last for many years, the gas industry has been exploring for additional gas fields, as well as methods of manufacturing gas from coal. Figures 5 & 6 placed opposite show some of the leading gas producing countries, (6) as also those with leading reserves of natural gas (7). While Russia appears to lead in both the categories, it is the Persian Gulf countries that have large reserves next to Russia. That is a significant fact for the future energy scenario.

Petroleum. Sometimes called "Black Gold", it comes out of the earth, as a liquid called crude oil, whose different types vary in thickness and colour, ranging from a thin, clear oil to a thick, tar like substance. It is also found in solid form in certain rocks and sands. Fuels made from petroleum provide power for cars, trucks, trains, ships, aeroplanes, factories and farm equipment.

It is also used to generate heat and electricity, and altogether, provides nearly half the energy used in the world. Thousands of other products ranging from paving materials to drip-dry fabrics, and from engine grease to cosmetics are made from petroleum and its derivatives. Like other minerals, petroleum cannot be replaced after it has been used. With people using more and more petroleum every year, the world's supply is running out rapidly, and at present rates of consumption, it may become scarce by mid 21st Century. Figures 7 & 8 placed opposite show world production & consumption of petroleum by countries / regions (8) and some of its leading producers (9) respectively. While the Middle East consumes about a quarter of petroleum that it produces, Europe, the US, Canada and Asia consume much more than what they produce. The Middle East alone has about 67 per cent of the world's oil, including over 650 billion barrels of proven reserves. Most oil from other countries is heavier, while several sophisticated refineries in Iraq and Kuwait specialise in such light products as gasoline, jet fuel and distillate fuel oil so vital for most industrialised economies. Their dependence on oil imported from the Middle East for the well-being of their economy is self evident, more so when GNP per capita seems to grow with increasing energy consumption as shown in Figure 9 below (10). Such dependence has its own ramifications as discussed hereafter.

An Impending Crisis

An ever increasing use of petroleum products especially in the industrialised countries may have helped raise the living standard of many people. But it has also given rise to some serious problems such as energy shortage, rising cost of oil and environmental pollution.

Energy Shortage. As countries around the world develop, world consumption of energy could double by 2030 AD. China's demand for energy may triple by 2010 and it could surpass the US as the largest consumer of energy by 2020 AD. But, new finds of oil have not kept pace with the world demand. Discoveries of oil in Alaska and in the North Sea in the 1960s were offset by the increased imports by the US , Japan and Europe in the 1970s. At the same time, political considerations forced the Arab oil producers to declare an oil embargo against those supporting Israel in the 1973 war. Some countries like Belgium, France and Sweden increased their nuclear power generation in order to reduce oil import, but oil prices fell in the 1980s , and reduced most conservation efforts. However, as brought out by Dr. C J Campbell in his study on behalf of Petroconsultants of Geneva, and his presentation to Britain's House Of Commons All Party Committee on July 7th , 1999, world oil discovery as well as oil production have already peaked ( 11 ), and if new finds add one barrel of oil to the oil reserves, four barrels are being taken out by man, without giving any thought to the effects of such a fast depletion of the world's supply of its most important fuel. Dr. Campbell anticipates imposition of much higher prices by the Middle East countries around 2001 AD if not before. A price of US $30 per barrel may trigger a stock market crash, as Europe, the US and Japan vie for access to Middle East oil. It is worthwhile studying the recent record of oil price fluctuations in order to visualise a future energy scenario and its impact on the behaviour of nations of the world.

The Cost of Oil. In the 1970s the thirteen member countries of OPEC ( Organisation of Petroleum Exporting Countries ) increased their oil prices tremendously. The cost of a barrel of crude oil jumped from about US$2.75 in 1973 to a peak of US$ 34 in 1981. These price increases severely strained the economies of many countries and worsened inflation world wide. Some poor countries had to borrow heavily in order to pay for their petroleum imports. But this increase in oil price also spurred companies in the US, Britain and elsewhere to begin oil production in areas where it had been unprofitable before. Oil prices fell after 1981 because of increased production and reduced consumption, and reached a low of US$ 12.50 per barrel in 1986. Oil consumption rose after this fall in price, and oil producers cut production of oil in order to drive up prices in the late 1980s. Oil prices then began to rise slowly. The IEA ( Inter - national Energy Agency ), Henry Kissinger's brain child, established in 1974 was an instrument of Western oil collaboration, whose real aim was to break the OPEC cartel. However, its European members preferred to meet with the OPEC members on a much less provocative basis ( 12 ). But the management of a depleting oil source, of which there may be just one trillion more barrels left to produce, is allowed to be controlled by a few feudal families in the Islamic Middle East. Obviously, the consuming governments must realise where their interests lie, advises Dr. Campbell ( 13 ).

Environmental Pollution and Its Effects. The production, transportation and use of petroleum have created serious problems of environmental pollution. Tankers, and off shore drilling accidents can cause oil-spills that pollute the water, damage beaches and destroy wild-life. Fuels burnt by vehicles, power-plants and factories are a major source of air pollution. Oil companies have cooperated with car manufacturers to produce unleaded petrol. But domestic use of fuels with high carbon content in many poor countries, and industrial use of coal with high sulphur content in developing economies have further polluted the atmosphere already damaged by the industrialised nations of the world. All this has lead to a 'green house effect ' , in which carbon particles suspended in air as a result of carbondioxide gas emission have increased the mean surface air temperature by 0.5 degree Celsius over the Earth's surface ( 14 ). Not only does it affect the rain pattern over the current bread- bowls such as the American mid west and Ukraine, but it has also raised the sea level by 10 - 20 cms over the last 100 years. A consequence of this heating of the Earth would be a rise in sea level of as much as one metre, leading to submersion of low lying areas such as the deltas of the Nile and the Ganga, displacing large populations. To delay global warming, the scientists had advised at the Toronto Conference in 1988 a reduction in carbondioxide emission by 20 per cent by 2005 AD as well as an intensive effort to increase energy efficiency.

A Future Scenario. Most experts predict that the world's dependence on oil from the Middle East as well as its demand for petroleum products will continue to increase in the years ahead, even though most oil will be depleted at current rates of consumption by mid 21st Century. As Dr. Campbell has forecast , ( 15 ) oil demand will grow at 1.5 per cent per year; prices will soar as the oil market gets manipulated; a price shock around 2001 AD may trigger a stock market crash; demand may become elastic above US$30 a barrel; as the advanced countries fight for access to Middle East oil, more missiles can be expected like in the Gulf war of 1991; agricultural dependent Third World countries will be badly hit; and a plateau of production may unfold around US$30 a barrel. This plateau has to come to an end by around 2008 AD as the Middle East oil producers will be approaching their depletion mid point, seen in Figure 10 placed opposite (16). Production will decline at about 3 per cent per year. With increasing shortages both agriculture and transport will be seriously affected. THE GLOBAL MARKET WILL COME TO AN END BECAUSE OF HIGH TRANSPORT COSTS. India which has very limited proven oil reserves must sit up now and take note of the impact which this global oil crisis is likely to have on its own future.


The Concept

Energy drives economy. And without an economic surplus, no nation can invest meaningfully either in defence or in development. Therefore, ensuring an adequate supply of energy to all the sectors of endeavour in a nation becomes the sine qua non of national security. Interestingly, no nation is self sufficient in its energy needs. India is no exception. India's petroleum requirement cannot be met without heavy import from the Middle East, comprising 80 per cent of its total needs. With rising international prices of oil, it will be paying Rs. 54,000 crores in the year 2000 - 2001 AD as compared to Rs. 24,000 crores in the previous year ( 17 ). Between February and September 1999, the international price of crude oil went up by 119 per cent, from Rs.3210 to Rs. 7020 per metric tonne, thus preempting Dr.Campbell's forecast ( 18 ). Oil import costs which account for about 30 per cent of India's export earnings at present, may mount steeply in the days ahead, causing enormous economic distress in a debt - ridden India.

The Indian economy of the late 20th century has yet to become vibrant enough to produce the required surplus for substantial investment both in defence and development. It mirrors the trisected nature of its society : a largely agricultural people, striving to industrialise their economy, with a small segment moving towards an informational mode of creating wealth. In 1994, agriculture contributed 30.9 per cent of India's GDP, while industry's share was 27.4 per cent, the services sector accounting for the balance 41.7 per cent ( 19 ). The 1991 census showed 74.2 per cent residing in rural areas. However, by mid 21st Century, it is estimated that half of India's 1.36 billion people may be residing in urban areas, since its population continues to grow apace. In the face of such urbanisation and industrialisation, ensuring India's energy security implies catering adequately to the growing demand for energy by all sectors of its economy, in addition to its people's domestic and personal needs as also that of its defence forces in peace and war, now and in the mid as well as long term.

India's Energy Profile

Commercial primary energy derived from coal, oil, hydroelectricity and nuclear power accounts for about 60 per cent of the total primary energy supply in India. Non commercial sources like firewood, agricultural and animal waste provide the balance 40 per cent. However, the share of the latter has declined steadily over the years. The total scene in respect of India's indigenous energy availability exhibits an abundance of coal, meagre oil and natural gas reserves, a large scope for tapping solar energy and for nuclear power generation. But there is a scarcity of funds for implementing power projects.

An estimate of reserves of energy minerals made in 1991 is shown below :-

Mineral Reserves Annual Production R/P Ratio
(mtoe) (mtoe) (years)
Coal 520800 2186 238
Crude Oil 135400 3141 43
Natural Gas 11400 1770 63
Uranium 2.87 mn tonnes 0.05 mn tonnes 57

NOTE :- 'mtoe' stands for million tonnes of oil equivalent, while 'R/P Ratio' stands for Reserve to Production Ratio.

( Source : David Hargreaves et al ' World Index of Resources & Production, 1991'.)

It is obvious that as demand grows with time, supplies of all indigenous energy sources except coal will dwindle by mid or late 21st Century. When this is viewed against the certainty of similar depletion of oil in the Middle East, the criticality of the energy crisis becomes self evident. As there is a limited scope for supply enhancement in India, brief remarks about each of its energy sources are made below in order to highlight the need to restrict their demand without harming balance of trade, defence and development.

Coal. It is bound to be crucial to India's efforts to achieve a degree of self sufficiency in its energy needs in the short and the mid term. But coal is of little use in road and air transport, though rail and water transport will have to revert to its use in a major way, once oil supply becomes unaffordable. In thermal power stations coal may be unpopular because of low thermal efficiency of 30 to 40 per cent. Haulage of coal beyond 800 kilometres makes its use uneconomical. And pollution caused by burning coal is a serious matter in an environmentally conscious world. Therefore, what is required is a major research effort to develop new technologies as would render use of coal for power generation and industrial processes almost harmless, in order to gain maximum advantage out of India's substantial reserves of coal.

Oil. India's dependence on the Middle East countries for import of crude oil is commercially unviable because it exports agricultural produce and sends a labour force to work in those countries, neither of which is indispensable. As followers of Islam, most of those countries have supported Pakistan's policies vis a vis India in the past, and are likely to do so again. Other oil producing countries like Indonesia in South East Asia are oriented towards Japan and the Pacific region, while those in Latin America are located too far away. As the oil reserves fall their exploitation and availability may be dictated by the US policy at that juncture, which may not be influenced easily by India in its own favour. As it is, its dependence on the oil suppliers of the Middle East has compelled India to adopt a supplier-friendly foreign policy thus far. It could not recognise Israel until the PLO had done so, and, it had to remain non aligned during the Gulf War of 1991. India needs to develop non - OPEC sources of oil as would allow it a degreee of freedom in its foreign policy orientation; it needs to augment its oil supply by undertaking joint explorations for new fields at home and abroad; and it needs to build an energy reserve to tide over any crisis.

Natural Gas. It presents a slightly more encouraging picture than oil because India's own reserves of gas, if used wisely, may last for almost 50 years into the 21st Century. It can be used as transport fuel after developing a safe technology, for heat generation and as feed stock for fertliser and petrochemical industry. But India needs a national gas grid in order to provide flexibility in its utilisation and reduce regional imbalance. That would enable India to exploit its gas reserves in North East India, Rajasthan, Bombay Offshore and in the Krishna-Godavari basins gainfully. The project to connect Oman in the Gulf region with India through a pipeline for import of natural gas has not materialised as yet because of its vulnerability to breaching while it traverses Pakistan's territory. It will have to await a quantum improvement in Indo-Pak relations.

Electrical Power. Though not a primary source, its versatility and freedom from any dangerous collateral waste make electricity an attractive form of energy. According to Indian planners, electrification of every 10 per cent of rural India is expected to save Rs.200 crores worth of imported kerosene oil. Its long term benefits are obvious. But its supply has been lagging behind an ever increasing demand for electrical power in all its forms, be it hydroelectricity, nuclear power or the more common thermal power. The Central Electricity Authority had envisaged a mix of the above varieties for the 7th, 8th and 9th Plan periods, as depicted in the Figure 11 placed opposite. But a comparison of capacity addition targets versus actual achievements for the period 1985-95 as tabulated below, shows how slippage in implementation of power projects, with resultant cost escalation have become endemic in India.

Year Target (MW) Actual (MW) Deficit (MW)
1985-86 4460 4223 -237
1986-87 3396 2625 -771
1987-88 4916 4981 + 65
1988-89 4497 4885 +388
1989-90 4892 4688 -204
1990-91 4212 2777 -1435
1991-92 3811 3027 -784
1992-93 4458 3537 -921
1993-94 4439 4539 +100
1994-95 4819 4599 -220

(Source : Centre for Monitoring Indian Economy, ' India's Energy Sector', July 1995.)

The Advisory Board on Energy had estimated that by the year 2004-2005 the demand for electricity could lie between 510 and 610 kilo watt - hours. That in turn would demand an installed generation capacity of 160,000 to 190,000 mega watts (MW), corresponding to an investment of about Rs.350,000 crores. ( 20 ). The Indian government by itself would not be able to make such a heavy investment. Unless private/corporate investors at home and abroad are attracted to the energy sector, chronic power shortage will continue to plague the Indian economy.

Non Conventional Energy. In India, 40 per cent of its primary energy supply comes from non-commercial energy, chiefly firewood, agricultural and animal waste. The Indian planners have been conscious of the importance of this source in an agricultural society as that of India. Their plan wise projections of power generation from such sources as also estimated requirement of such fuels in 2004-2005 AD are shown in Figure 12 placed opposite. ( 21 ) Actual results achieved so far have been encouraging. But there is now a need to pay very serious attention to this source in view of the certainty of an oil crisis by mid-21st Century.

India's Energy Balance. From the foregoing, it is obvious that there is an imbalance between India's demand for energy and its supply. It is certain that energy will not be available at an affordable price to India once the oil wells of the Middle East dry up by about 2050 AD. India's economy will be near collapse if it does not reorient its policies and plans for its economic resurgence in the face of this impending energy crisis.

Alternatives Before Mankind

India is not alone in facing this oil crisis of the 21st Century. However, the mighty nations who have dominated the oil industry in the Middle East since its very inception, have the will and the capability to control these sources, as seen in the Gulf War of 1991. Besides controlling such known sources, the advanced nations are busy promoting fresh ventures as in Kazakhstan and the Caspian basin, now that Russia lacks the capability to do so. Kazakhstan has a substantial hydrocarbon reserve base. A joint industrial project, therefore, has been launched by sponsors such as Kazakh Oil, Japan National Oil Corporation, Mobil Oil Kazakhstan Inc., Shell Business Development Central Asia, ABN AMRO (Dutch bank ), British Gas, Lub Oil Texaco and the UK Department of Trade and Industry to study the potential for developing oil and gas industry there. The US, Japanese and European interest is obvious.

In fact, some analysts maintain that the US is committed to the development of Caspian oil as its long term energy security, ( 23 ) and it is this policy which has compelled the US to develop a whole host of new client regimes in Central Asia. Russia's current onslaught on Chechnya is also explained by the fact that its oil pipelines from the Caspian to the Black Sea ports run through that state. China, with its booming economy vying with that of the advanced nations, has laid claim to the oil-rich Spratly Isles in the South China sea, as a hedge against the coming oil crisis. The current anarchical world-order is dominated by the P5 / G8 nations who are extending their control over known sources of oil, and whose oil companies enjoy extensive rights over these sources through long- term contracts with the local regimes. India will have to decide whether to be a silent witness to this struggle over control over oil, or to ally itself with some of the mighty nations, so as to gain a share of oil through joint exploration ventures. In all probability, India may be forced to take sides in a future oil war among the leading nations of the world, because of its very proximity to the likely war zones in West and Central Asia. However, some possible alternatives before mankind that faces a common oil crisis are shown in a diagram placed below:-

Demand for oil will continue to grow because of the free-play of market forces in a globalised economy. Prof. J K Galbraith's warning in this respect is relevant. While commenting on this issue in his book 'Economics and the Public Purpose', he writes, 'Left to themselves, economic forces do not work out for the best, except perhaps for the powerful'. The powerful nations are already busy ensuring their individual energy security by all possible means, including use of military force as in the Gulf War of 1991. Options depicted in the above graph such as conservation of energy, a change in life style as would reduce the demand for energy, and substitution of energy sources would help postpone the final collapse of the global market. But the prevalent mind-set which believes conflict to be an integral part of human existence is likely to prevail. That would mean mass starvation due to a near-depletion of chemical fertilisers for agriculture, war over scarce resources including oil, pestilence and all-round deprivation for want of accepting a negotiated common global approach to adjusting to the energy crisis of the 21st Century.

India's Energy Security

It is evident that India enjoys little energy security at present. Such security which is the very basis of economic activity is but a sub-system of any nation's complex national security system. As Jay Forrester has put it ( 25 ), in any complex system, attack on a single element or symptom generally leads to a deterioration of the system as a whole. Therefore, the energy problem cannot be considered in isolation. In fact, it is linked with major global security concerns such as development in the Third World countries, while attempting to minimise air pollution and global warming caused by extensive use of available hydrocarbon fuels of which coal is the most abundant in those countries. The basic problem is that of converting a military -oriented global economy used to coercive style in order to retain a comparative advantage over other competitors into an economy that exhibits a sharing and caring attitude, based on true global interdependence without losing national independence.

India's effort to ensure its energy security is, no doubt, a part of the overall global effort in that direction. But a deep-seated aggressive strain in the human psyche impels the mighty nations and competing trans-national corporations of the world to live by Henry Kissinger's precept,` The foundation of a stable world order is the relative security, and, therefore, the relative insecurity of its members'. In the absence of a global mind-change that would prefer cooperation over confrontation, insecure nations like India are forced to follow suit in their own manner, and be prepared to face a worst case scenario. India will have to enhance its energy security by adopting a mix of suitable policies that best serve its national interest.

India's share of the world trade is less than one per cent at present. Its current efforts to globalise its economy, though belated, are essential for its resurgence in the short and mid term. But its policies must also help it survive the energy crisis and the resultant collapse of the global market by mid 21st Century. In a non technical paper such as this one, it is only possible to outline some initiatives that India can take for furtherance of its energy security.


As mankind steps into the 21st Century, it faces many threats to its survival on earth. Nuclear extinction and ecological suicide are two such major threats. The looming energy crisis is at par with these two. Instead of letting the P5/G8 nations dictate the global agenda, India must attempt to influence the coming events for the benefit of all mankind and for its own benefit, as outlined in succeeding paragraphs.

A Global Initiative

Mankind has yet to create structures of global governance capable of taking a long term view of issues threatening human survival and acting on it. Ideally, the grim prospect of global warming due to green house effect of an industrialising world's over-use of hydrocarbon fuels should have motivated the world leaders to set up a UN Environmental Security Council during the Earth Summit of 1992. But they did not do so. India should, therefore, promote the setting up of such a body by the UN and entrusting to it an ' Alternative Energy World Project' , since oil is bound to run out within a few decades from now. India should also table before the UN a resolution proposing a Global Hydrocarbon Protocol which would give effect to the Toronto Conference recommendations made in 1988 to reduce emission of carbon di oxide by 20 per cent by the year 2005. The Protocol must also include a mandatory transfer of appropriate technology from the advanced nations to the developing world as would help the latter to industrialise rapidly without causing global warming. Such an Indian initiative would be morally of a piece with its espousal of global de-nuclearisation and of a New International Economic Order, without being dismissed as too visionary. This would be so because the energy crisis which affects all nations of the world is going to puncture that culture of contentment prevalent now among the affluent nations of the world.

Population Control

A major contributing factor in the energy crisis is the very scale of human activity implicit in a global population of six billions. India is on the way to become the most populous country by the mid 21st Century, just when the oil wells may run dry. A populist approach such as free electrical power to the farmers and selected small scale industries has promoted unethical ways of energy use including theft of power on a massive scale. Also, more people means more energy use in all its forms - from firewood and electricity to petrol, diesel and kerosene at subsidised prices. Loss of forest cover due a to rising demand for firewood in the rural areas and resultant denudation of topsoil and desertification has led to mega-starvation deaths in Africa already. India's current smugness over the success of its "Green Revolution' may prove its nemesis because that depends on easy availability of chemical fertilisers derived from fossil fuels as also water and mankind is fast running out of such fuels.

Secondly, industrialisation and urbanisation go hand in hand. As per current projections, 50 per cent out of a population of 1.36 billion Indians may be urban dwellers by mid 21st Century. They will demand from the state water, electricity and cheap public transport among other urban facilities. Failure by the state to provide these because of shortage of energy would ultimately lead to urban insurgency on an unimaginable scale.

Providing employment to the young ablebodied educated youth has become a formidable task already. With every passing year their number is growing. But, though unemployed or semi - employed, they are energy consumers. The coming oil crisis will turn into a catastrophe if it is wished away now. Chaos will follow such a catastrophic event, and sweep away an impractical welfare-statism that has marked India's post independence governance. It will also sweep away the Indian state.

Failure to check India's population explosion since 1947 has nullified its economic growth, and has made it ungovernable. Any further delay in tackling this issue for the sake of short term political gain, will prove to be India's undoing. Population control, therefore, has become a top priority task for India and other Third World countries facing a similar predicament.

Change of Lifestyle

Environmentalists have been advocating an eco-friendly and sustainable life style for long. The Club of Rome's warning about limits to growth because of the finite nature of many of the Earth's resources like oil also suggested a voluntary reduction in the total economic endeavour of mankind. Only then would the rights of the unborn be protected so as to enjoy some of the bounty of nature that is being exhausted rapidly by consumerism of unparalleled proportions. With the certainty of an oil crisis a few decades from now, mankind has little option but to act on this advice.

For an industrialising India, checking mass migration of its people from rural to urban areas has become as urgent as population control. This can be done if the village/group of villages is adopted as a unit of economic growth and development by putting modern technology at its disposal. To start with, a computer simulation of the impact of the coming energy crisis and the resultant collapse of the global market on the people of India, if their urbanisation continues without change, can help in assessing the contours of that disaster.

Energy-wise, depletion of oil will affect current life style in two major ways : paucity of transport fuel and shortage of electricity. An input-output analysis for energy expended in all activities in agricultural, industrial and service sectors, under conditions of such scarcity would help identify areas worst affected by this crisis and suggest steps that could be taken to reduce their impact on the Indian state and society. It is evident that the global impact of the coming energy crisis will force all nations eventually to adopt a simple lifestyle, by generally learning to do without oil. To help the people of all nations adjust to such a change as painlessly as possible, a constant effort to educate them to sacrifice their today's comfort to ensure a better tomorrow for the generations as yet unborn, will be required. Greater awareness of the tradeoff between environment and growth, between development and an equitable world order must inform all decisions in order to secure the future of coming generations. To do so, wealth will have to be shared, and whole lifestyles and patterns of consumption in all countries will have to be transformed immediately. Cancellation of outstanding debts from many of the poorer countries by Canada, the US and Britain in the recent past shows a voluntary acceptance of the fact that the global problem of deprivation requires a global strategy to combat it. If this spirit is carried into tackling the energy crisis, it should prove to be a boon. Besides these initiatives that have a global connotation, there are some India-specific measures that have been mentioned broadly in the succeeding paragraphs.

Energy Conservation

Often called the most effective response to the impending energy crisis, this measure entails both, reduction in demand for energy, especially oil, and, increasing the efficiency of energy-use so as to derive maximum benefit out of it. According to an ONGC estimate ( 26 ), if developing countries were to make a serious commitment to conservation, their consumption of energy may get reduced by 30 to 40 per cent. Main effort is required in following areas :-

(a) Improved house-keeping including improved cooking practices, adjustment of lighting and efficient burners.

(b) Recovery of waste heat and co-generation of steam and electricity.

(c) Technological innovation requiring design changes and considerable investment in order to develop energy efficient technologies for long term advantage. For instance, using a windmill instead of an electrical or engine driven pump to draw water; drawing a farm tractor with a pair of bullocks instead of using a diesel engined tractor, or, again, changing over to an advanced steel-making process that makes steel at half the energy input as compared to an existing process would make better energy-sense.

(d) A holistic approach to planning for the future is overdue in India. It is difficult to understand the basis for a five-fold increase in motor- transport projected by the Indian planners in the face of a certainty of an oil crunch a few decades away. There has to be a greater awareness all round about such an event that will force people all over the world to take to some form of an affordable public transport, or even bicycles, instead of petrol/diesel driven private vehicles.

However, effective conservation does not happen automatically. It requires an organisational response at all levels. An energy audit has to be carried out continuously and energy use monitored constantly, so that conservation becomes a part of the work culture. After the oil shock of 1973, the US and Japan succeeded in reducing their oil consumption through conservation to an appreciable extent. It appears to be a measure that deserves the greatest emphasis in India in the immediate and mid term, since it costs nothing and is the least disruptive of on-going processes.

Energy Augmentation and Substitution

There is a thin dividing line between these two ways of boosting energy supply. Non-conventional sources of energy can both augment as well as substitute traditional ones. However, since these are already in vogue as independent sources in many countries, their mention under augmentation may be accepted.


It is easier said than done because as far as oil is concerned, discovery of new fields is on the wane already. But India has to scour its own territory including underwater sources of oil within its economic zone, as well as bid for exploration abroad. In the latter case, it should try and secure a right to purchase a share of such oil, as also bid for refining it under contract, so as to maximise its investment in 14 ongoing and 7 projected oil refineries all over India.

Developing technology for utilising India's large coal reserves while decreasing pollution caused by such use, in-situ gasification, conversion of coal to producer gas, and liquefaction of coal to obtain diesel, petrol and LPG can become economically viable once the international price of crude becomes exorbitant. Similarly, a national grid for extensive use of India's natural gas reserves as transport fuel, as feedstock/fuel for industry, and for domestic use, can augment a dwindling oil supply effectively. India must launch a serious research effort to capitalise on these natural assets enjoyed by it, without diluting standards of safety in their end use.

According to the National Hydropower Corporation, India has utilised just about 18 per cent of its hydro-potential, estimated at 600 trillion watt hours ( 27 ). Hydroelctrical power projects are capital intensive, and their reservoirs are subject to silting if due care is not taken. These have been plagued, in the past, by time and cost overruns due to various reasons. With intelligent project management, India should be able to make a success of such projects, including those in collaboration with Nepal, assuming that it will be able to raise the required capital for such ventures. However, that should not stop India from undertaking mini hydropower projects that are within its financial reach, because they have the potential to augment power supply in their immediate vicinity.

Among the non-conventional sources, it is solar, wind and bio gas sources that can contribute to a large extent in meeting the energy needs of rural India. Lighting and cooking are the two obvious areas; with intensive research and development to enable storing of electricity converted from solar and wind energy, it should also be possible to drive water pumps needed for irrigation.


Transport fuel and electricity are the two major areas of concern in which an energy deficit will have a damaging impact. In the limited time available, India should concentrate on developing such substitutes and methods on which some work has been done already. Only then can India produce results before its economy is hit badly by energy starvation. Two such areas are indicated below.

Hydrogen as Transport Fuel. As outlined already, hydrogen has a great potential as transport fuel ( 28). The Russians tested a hydrogen-fuel run jet air craft in 1988, the Americans a Mercedes car with such a fuel in 1989, and the Japanese demonstrated a Mazda car run on it 1992. Considering that India will continue to need ammonia for its fertiliser industry, hydrogen which is required for synthesis with nitrogen in that industry can also be produced on a mass scale for transport purposes. But it needs to be stored in a solid state as a hydride which can be carried safely and easily as transport fuel. This line of research can provide a breakthrough and reduce India's vulnerability to the oil crisis.

The Thorium Route for Electricity. India has a limited supply of uranium of about 78000 tons as against 518,000 tons of thorium. Hence it is necessary to develop technology for production of electrical power in nuclear reactors using thorium ( 29 ). For experimental purposes, thorium is already being loaded in existing power reactors, and a new research reactor "Kamini" has been built using U 233 and thorium. So far, there has been a general acceptance that India, which has seven times larger deposits of thorium than of uranium, should take the thorium route, as it has some other advantages over the latter as well. But because of withdrawal of funding , there has been a slippage in power generation that was to have been of the order of 10,000 MW by 2000 AD. However, the Bhabha Atomic Research Centre has designed an advanced heavy water reactor, using ordinary water and a large amount of thorium in its fuel, which will help India reach a target of 20,000 MW by 2020 AD, if progressed at all levels without a second thought (30 ).

Strategic Implications

Non-OPEC Sources. India's heavy reliance on import of oil from the Middle East, which may once again be embroiled in an oil war, and whose Islamic members may cut off such a vital source of oil should another Indo-Pak conflict arise, is fraught with strategic implications for India. There is a distinct need to pursue policies which would help India develop non-OPEC sources of oil which would be free from such a danger.

Blue Water Navy ? This would involve protection of trade routes on the seas over which India's oil supply from non-OPEC sources would ply. And for this purpose, India will have to develop necessary naval strength, with all its techno-economic nuances. Balancing this strategic need vis a vis a prolonged preoccupation with an existing overland threat to India's security may demand a fundamental reorientation of India's strategic thinking.

Strategic Oil Reserve. Creation of an oil reserve as would meet the needs of a national emergency for a period of, say, four months is a mammoth task. India has a number of oil refineries, fourteen on stream and seven more in the pipeline, which need feed-stock. India's strategic oil reserve worth, say, 120 days of war wastage cum national need, can be held partially in these refineries, after satisfying all technical and logistic parameters.

Industry's Needs. Industries such as fertiliser, plastics, pharmaceuticals and others which use petroleum as raw material also need their reserves of oil which need to be estimated jointly with industry and held as a part of the above strategic reserve.

'Sauve Qui Peut' Syndrome

All these suggestions require massive finance for their implementation. Even then, a strategic oil reserve as suggested above would serve India's need for a limited period of time only. The world at large is currently displaying an attitude of 'each one for himself and may the Devil take the hindmost', in the face of this impending energy crisis. India faces an unequal competition with the advanced and mighty nations of the world in this as in other spheres. Its scientists have to work a miracle to find substitutes for transport fuel and perfect its fast breeder reactors in the few decades available to the nation before the energy crisis strikes the world.


Exhaustion of earth's finite oil resource is just a matter of time, and not a matter of opinion any more. Ultimately, man has to learn to do without oil, and reorganise his life accordingly. But, the current policy formulations of the mighty nations indicate a traditional approach of one-upmanship in land-grabbing , Wild West style, with a sheriff's posse out to discipline the opposition. Human evolution seems to have reached a plateau and seems incapable of progressing beyond the dictates of a struggle for existence in which only the fittest can survive. For order to emerge out of this chaos, a special effort has to be made to turn nations and trans-national corporations away from war and towards a cooperative approach to find a workable solution to the energy crisis by peaceful means. In sum, Indian statesmen have to rise to the occasion and take a global initiative in restoring sanity in international affairs, while its scientists do the challenging task of developing substitute sources of energy to save the situation.

  1. Atlas of the World, Reader's Digest Association Inc. 1987, Page 59.
  2. The World Book Encyclopedia 1992, Vol 6, Page 250.
  3. Ibid.
  4. World Energy Conference Proceedings, 1986.
  5. Serial 2 above, Vol 4, Page 131.
  6. Ibid, Vol 8, Page 54.
  7. Ibid.
  8. Ibid, Vol 15, Page 338.
  9. Ibid, Vol 15, Page 351.
  10. Statistics of International Trade 1993, Page 49 .
  11. 'The Imminent Peak of World Oil Production', a presentation to a House of Commons All-Party Committee, UK, on July 7th 1999 by Dr. C J Campbell.
  12. Sampson, Anthony,` The Seven Sisters ` , Hodder & Stoughton, UK, 1975, Page 289.
  13. Serial 11 above.
  14. King, Alexander & Schneider, Bertrand, ' The First Global Revolution', Orient Longman ltd, Hyderabad, 1993, Page 36.
  15. Serial 11 above.
  16. The Hubbert Peak For World Oil, 1956, on website http:// of the Internet.
  17. News item, Times of India, October 24th , 1999.
  18. - do -
  19. The Reserve Bank of India Bulletin, Vol XLIX, Oct-Nov 1995, Nos. 10 & 11.
  20. PTI Economic Service, Nov 15, 1994, Page 13.
  21. ONGC Energy Review, 1987, Page 25.
  22. Serial 16 above.
  23. Srinivasan K. ' Star Spangled Manner', Times of India, August 21, 1999.
  24. MacDonald & Wimbush,` India's Energy Security', Strategic Analysis, August 1999, Page 835. The authors argue that it is in the US interest to strengthen its relationship with India for protection of energy flows.
  25. Serial 14 above, Page 89.
  26. Serial 21 above , Page 26.
  27. Ibid, Page 18.
  28. Technorama, March 1993,` Hydrogen Energy', Pp 10-21.*
  29. Ibid, ` Nuclear Energy', Pp23-24.*
  30. Business India, 6-19 September 1999, Pp 60 - 62.

  31. NOTE:- Technorama is a supplement to the Journal of the Institution of Engineers (India).