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Updated: July 8, 2013 21:51 IST

Economic reasoning in energy security

  • N. Balasubramanian
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Energy and Security in South Asia
Energy and Security in South Asia

Energy security is a much discussed topic and is a vital element of energy policy as well as foreign policy. But it has not been defined precisely.

This book starts with a working definition: ‘‘energy security means having access to the requisite volumes of energy at affordable prices”. The supply of energy must be “impervious to disruptions” and sufficient quantity must be available in time from a variety of sources.

The concept is location-specific. Some countries advocate import of fossil fuel, some development of renewable energy and others nuclear power, leading one economist to remark, “If you cannot think of a reasoned rationale for some policy based on standard economic reasoning, and then argue that the policy is necessary to promote energy security”.

The Indian Planning Commission states, “We are energy secure when we can supply lifeline energy to all our citizens irrespective of their ability to pay for it as well as meet their effective demand for safe and convenient energy to satisfy their various needs at competitive prices at all times and with a prescribed confidence level considering shocks and disruptions that can be reasonably expected”.

In South Asia — the region of the study by Charles K. Ebinger of the Brookings Institution — shortfall in energy slows down growth, and not providing electrical power to the poorer sections of the society breeds a “million mutinies”. Compounding the problem, this region is also vulnerable to climate change, water scarcity and the consequent mass migrations.

The majority of the people depend on biomass, fuel wood and waste products for household energy consumption which results in indoor air pollution. A country-wise analysis of commercial energy shows India depends on coal and needs to invest in super-critical boiler technology and carbon capture and sequestration.

Pakistan and Bangladesh have natural gas. Pakistan is probably the world’s largest user of CNG in automobiles. Nepal uses mostly combustible biomass and oil, coal and hydro. Water is to Bhutan what oil is to Saudi Arabia. Nuclear energy is being developed only in India and Pakistan.

India and Pakistan are reported to have “technically recoverable resources” of 96 and 105 trillion cubic feet of wet shale gas, respectively. The uncertainty in estimates and possible change in production rates with time must be kept in mind. The process to release natural gas from underground rocks by horizontal drilling, known as fracking, uses water, sand and chemicals under pressure. There are apprehensions that ground water may become contaminated and earthquakes may occur. Hence, environment-conscious engineers must take on the leadership in developing this technology.

In addition to domestic reforms, bilateral and multilateral cooperation is needed but there is a history of lost opportunities. The Iran-Pakistan-India and Myanmar-Bangladesh-India natural gas pipelines are in limbo due to international politics. India is planning a 1100 km sub-sea pipeline from Oman. The Turkmenistan-Afghanistan-Pakistan-India pipeline will transport 3 billion cubic feet of natural gas per day over 1700 km. Both projects are subject to political and economic uncertainties.

It is not often realised that energy security depends on availability of critical materials. Lithium used in batteries for electric vehicles can become scarce and rare earths used in magnets in wind mills are available mainly in China. Materials used in solar energy such as gallium, arsenic, selenium, indium, and tellurium are getting depleted quickly. Either new sources must be discovered or combinations of alternative materials, which are not in short supply, must be developed.

The book is easy to read and is organised well. The author provides an executive summary in the form of policy prescriptions. The longest coverage is devoted to India, while Pakistan and Bangladesh get a chapter each and Nepal and Bhutan are discussed together in a chapter.

Each chapter has 3 headings: energy history, current energy landscape, and conclusions and recommendations. Energy challenges in the regional context and regional cooperation are outlined next and the book concludes with a chapter on South Asia’s path forward.

The other SAARC countries — Afghanistan, Maldives and Sri Lanka — are not included. There is no coverage of energy critical elements or fracking. The book is free of jargon and 24 pages of notes guide the reader through the maze of organisations and their publications. It will be useful to anyone interested in energy including policy makers, energy professionals and funding agencies.

The author has taken the risk of using a question in the title: cooperation or conflict? But one does not get an answer. Given the high stakes, countries must learn to put the energy agenda ahead of political compulsions in order to lead their teeming millions from darkness to light.

(N. Balasubramanian is advisor at the Center for Study of Science, Technology and Policy)

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