Energy leaders pledge ties with India, say oil’s surge a wake-up call
Energy producing nations have pledged to collaborate with India in its efforts to move towards the twin goals of energy security and decarbonization, but added that surging oil prices is a wake-up call to ensure the flow of plentiful investments into the sector in coming years.
Policymakers from the United States, Australia and Middle Eastern countries attending the India Energy Forum by CERAWeek said that India’s robust energy growth potential over the coming decades would provide ample opportunities to strike partnerships with private players in the country, as well as work on policy initiatives at a government-to-government level.
“While the world rightly embraces energy transition, we will need oil and gas for many decades to come. The current demand dynamic is therefore a wake-up call to continue to invest across the entire energy sector to avoid a deeper supply crunch,” said Sultan Al Jaber, CEO of Abu Dhabi National Oil Company.
“This is the approach we are taking in the United Arab Emirates. We are investing across our energy supply chain and increasing our oil and gas capacity to ensure we remain a reliable, responsible energy partner to the world and to India in particular,” he added.
Dated Brent prices have more than doubled in the last year, with S&P Global Platts assessing the benchmark at $85.12/b on Oct. 20. OPEC+ members are in the midst of an agreement to increase crude production by 400,000 b/d every month, but key customers, including India, the US and Japan, have complained that the alliance is still withholding too much.
Refined products, petrochemicals
Goldman Sachs had raised its forecast for year-end Brent oil prices by $10/b to $90/b at the end of September to reflect rebounding demand, gas-to-oil switching, and the impact of Hurricane Ida on US supplies.
Jaber added that there were opportunities to collaborate in refined and petrochemical products, in addition to new energy, such as hydrogen, as India expands its renewable energy portfolio.
Angus Taylor, Australia’s minister for Energy and Emissions Reduction, told the India Energy Forum, that Australia has invested billions of dollars in the renewable energy sector since 2017, and therefore was in a strong position to collaborate with India to achieve its new energy dream.
“Our bilateral partnership will focus on solar and hydrogen technologies. These are two of the technologies prioritized under Australia’s technology and investment roadmap, a strategy, to drive investment in new energy technologies and bring their costs down,” he said.
Australia has abundant land and energy resources, including solar and natural gas, large carbon storage reservoirs, and a strong science and research base.
“Indian businesses have also made important investments in Australia’s energy system,” he added.
The time is now
US Energy Secretary Jennifer Granholm told the India Energy Forum that the challenges of current high energy costs and supply shortages as it recovers from the pandemic should not deter it from moving toward cleaner fuels.
“As global energy prices and fuel shortages affect consumers and industries in India and certainly across the world, it’s an important reminder that we have to keep focusing on energy, security, and resiliency, even as we work to take great strides toward decarbonization,” she said.
“Growing energy demand is a positive signal of India’s economic recovery, but this growing demand is outpacing supply particularly for coal and gas, and it’s creating difficult challenges,” she added.
Granholm further said that the private sector would play a critical role in scaling up the ability to rapidly deploy decarbonization solutions. “India’s rising middle class makes its energy transition a momentous opportunity,” she said.
Granholm said that both India and the United States can work together to scale up the development of hydrogen technologies and bring down that cost of deployment, adding that the vision would be to work towards hydrogen cost of $1 per kg within one decade.
“United States and India will also launch a similar public-private task force on biofuels,” she said.
New Delhi in June brought forward its target to achieve 20% ethanol blending with gasoline to 2025 from the previous target year of 2030.
Granholm said both the US and India have had “a year full of climate-charged, super weather disasters” including deadly storms, floods, and heat waves.
“The fact is these disasters are going to grow more common and more destructive until we address unabated carbon emissions,” she said.