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Our Hydrocarbon Future

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  13 Feb 2016 12:00 AM GMT

On Tuesday, the Centre announced an ambitious plan to double the output of oil and tural gas in the north-eastern region by the year 2030 with an investment of Rs 130,000 crore. The Union Minister of State for Petroleum and tural Gas, Dharmendra Pradhan, released the ‘Hydrocarbon Vision 2030 for Northeast India’ which also envisaged developing the region “as a domint hub at the forefront of India’s energy map by utilizing the hydrocarbon potential.” One of the major problems of India is that our ministers, who often have no idea of what they are talking about, are happy to echo what their bureaucrats write out for them for such occasions. Actually, there is no reason to doubt that the Northeast has tremendous potential for carving out a great future for the region on the strength of its hydrocarbon resources. However, to imagine that the hydrocarbon potential of the North-east alone can work wonders for the development of the region without the support of other engines of development such as electricity, is to exist in a world of make-believe. Take the case of Assam, that has evinced no desire to plan for power or potable water for about four decades. The bureaucrats of the State have given the impression that they expected Assam’s population to remain static for close to half-a-century. And now they find themselves in a situation where they can do very little by way of development activities without the requisite power except blaming their predecessors for not having planned for the future. Other development activities too are difficult without electricity, but doubling oil and gas output are going to be Herculean tasks without adequate power. And what Assam generates at present is something slightly less than 200 MW—chickenfeed even for a city like Guwahati (that is slated to become a smart city) and almost nothing for the entire State. The power situation is not much better in other States of the Northeast either except in Tripura perhaps. Doubling our hydrocarbon base in the next 15 years is a laudable plan, but this will need a lot of electricity. For once, the Centre is beginning to think big in terms of development plans for the Northeast. The gas cracker project at Lepetkata has been commissioned, and this itself can spearhead a great deal of downstream industrial development if our planners and our government do not fall back on their old ways of lotus eating and procrastition.

An investment of Rs 130,000 crore is exceptiol for a region like the Northeast. The phased fincial outlay would be of the order of Rs 8,000 to 10,000 crore every year, with Rs 80,000 crore being earmarked for upstream activities, Rs 20,000 crore for midstream activities and Rs 30,000 crore for downstream activities. How much of this investment remains in the region and how much gets diverted to other regions when development fails to pick up momentum in the region remains to be seen. But the two tasks marked out for the State governments of the region would be to start working on a war footing on skill development geared to the needs of hydrocarbon-based industries and to work for a swift augmenting of our power situation so that Assam’s power generation capacity is raised to 2,000 MW in the next five years. If this cannot be achieved within a time-frame of five years, we shall remain a failed State despite our hydrocarbon resources. What has also to be borne in mind is that exploration for oil and tural gas is going to be far costlier than it has hitherto been. This is not merely because of the inflatiory push that is being experienced across the board, but rather because the cost of having to dig much deeper will escalate costs considerably. The very fact that Oil India Limited’s crude oil production in Assam has declined a bit over the years is a fairly clear indication of having to explore newer oilfields and fresh sources of tural gas and to dig deeper for oil. There has to be very determined initiatives to ensure that complacent attitudes do not defeat what we need to achieve and that no one is allowed to waste our tural gas again. We have an unholy record of decades of gas-flaring that has lost us tural gas worth about Rs 40 lakh on every single day of those black decades.

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