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The new Indian government has promised to put the economy back on an accelerated growth path with reforms in the energy, financial, and employment sectors. Energy is the backbone of the Indian economy, so the right energy policies will spur growth in all other sectors. With India soon expected to be the world’s third largest energy consumer, there is an urgent need to get these right: current demand for imported coal, oil, and natural gas is significantly outpacing domestic production, and the country is being forced to spend valuable foreign capital to procure additional energy resources. Investing in domestic oil and natural gas exploration is a long-term solution that will help quench India’s growing energy demands, smartly.
To understand India’s energy landscape–and the increasing importance of domestic energy production–consider the following facts:
Coal: From a mere 2% of overall coal consumption in 1990, imports made up 16% of coal consumed in 2012, with the imported resources costing twice as much as those produced domestically.
Natural Gas: Between 2000 and 2012 the consumption of natural gas doubled, and a dependency on imported gas was established, growing from zero to 22% of consumed natural gas.
Oil: In 1990 India imported 37% of oil it consumed while in 2012 it imported a staggering 82% of consumed oil, pushing the import bill to $120 billion and making it the energy source with the highest import dependency.
Furthermore, since oil and natural gas also play a critical role in deciding the inflation rate, the rising prices for these energy commodities have long been a point of contention in Indian politics.
India does not have to remain dependent on foreign energy commodities. An estimated 75% of India’s sedimentary basins have yet to be adequately explored. Of the 26 known sedimentary basins in the country, only seven are currently producing oil and gas.
Since 1950, roughly 69 trillion cubic feet of proven and probable recoverable gas reserves have been discovered in India. However, only 42 trillion cubic feet have been developed and are currently under production. That leaves 18 trillion cubic feet of reserves yet to be produced and 27 trillion cubic feet of reserves yet to be developed. According to an analysis of 12 basins across India, approximately 64 trillion cubic feet of risked recoverable resources are yet to be found. Thus, India holds at least 91 trillion cubic feet of recoverable gas reserves. On top of conventional gas reserves, India also holds an estimated 63 trillion cubic feet of recoverable shale gas. While these reserves are considered to be a secondary energy option, Indian agencies are encouraging exploration, and leading companies, such as ONGC and OIL, have implemented pilot projects to assess the shale opportunity.
India’s energy future remains hidden in unexplored, difficult-to-access basins across the country. Technological advancements make exploration and discovery of these reserves possible; with further incentive from India to take these exploratory risks, there is an incredible opportunity to narrow India’s energy imbalance and reinvest the nearly $330,000,000 spent daily on foreign energy sources. GE is supporting these efforts through a commitment to oil and gas innovation and the introduction of technologies that reduce dependence on foreign energy.
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This article was produced on behalf of GE by the Quartz Marketing team and not by the Quartz editorial staff.