India is the fourth largest energy consumer in the world, says EIA report.
Bureau Report
WASHINGTON, DC: India and China will account for the biggest share of Asian energy demand growth through 2035, according to the US Energy Information Administration (EIA).
In 2011, India was the fourth largest energy consumer in the world after the United States, China, and Russia. India’s economy grew at an annual rate of approximately 7 percent since 2000 and proved relatively resilient to the 2008 global financial crisis, says a new report by the EIA.
India was the 10th largest economy in the world in 2011, as measured by nominal gross domestic product (GDP). In the International Energy Outlook 2011, EIA projects India and China to account for the biggest share of Asian energy demand growth through 2035. Risks to economic growth in India include high debt levels, infrastructure deficiencies, and political polarization between the country’s two largest political parties, says EIA.
India’s energy policy above all focuses on securing energy sources to meet the needs of its growing economy. Primary energy consumption has more than doubled between 1990 and 2011. At the same time, India’s per capita energy consumption remains lower than that of developed countries, according to the International Energy Agency (IEA). Given that the service industry accounts for more than half of India’s output, further economic growth could remain relatively non-energy intense.
The government may not be able to deliver secure supplies to meet demand because of fuel subsidies, increasing import dependency, and inconsistent energy sector reform. Some parts of the energy sector, such as coal production, remain relatively closed to private and foreign investment. Despite having large coal reserves and a healthy growth in natural gas production over the past two decades, India remains very dependent on imported crude oil, says EIA.
In early 2013, India’s petroleum minister Veerappa Moily announced that the ministry would work on an action plan to make India energy independent by 2030 through increased hydrocarbon production, unconventional resources such as coalbed methane and shale, foreign acquisitions by domestic Indian companies, and reduced subsidies on motor fuels. These actions either increase India’s energy supply or lower demand.
India’s largest energy source is coal, followed by petroleum and traditional biomass (e.g., burning firewood and waste). Since the beginning of the New Economic Policy in 1991, India’s population increasingly has moved to cities, and urban households have shifted away from traditional biomass to other energy sources. The industrial sector is the largest energy consumer, representing over 40 percent of India’s total primary energy demand in 2009, and is mostly fueled by traditional biomass, according to the International Energy Agency (IEA). The power sector is the fastest growing area of energy demand, increasing from 23 percent to 38 percent of total energy consumption between 1990 and 2009.
A 2012 report by the IEA estimated that nearly 25 percent of the population lacks basic access to electricity, while electrified areas suffer from rolling electricity blackouts. The government seeks to balance the need for electricity with environmental concerns from the use of coal and other energy sources used to produce that electricity.
India had 5.5 billion barrels of proved oil reserves at the end of 2012, mostly in the western part of the country. Domestic production has stagnated in recent years, and Indian national oil companies increasingly purchase equity stakes in overseas oil fields, says EIA.
According to the Oil & Gas Journal, India had 5.5 billion barrels of proved oil reserves at the end of 2012. About 53 percent of reserves are from onshore resources, while 47 percent are offshore reserves. Most reserves are found in the western part of India, particularly western offshore, Gujarat, and Rajasthan. The Assam-Arakan basin in the northeast part of the country is also an important oil-producing region and contains more than 10 percent of the country’s reserves.