India sees new opportunities in Trump’s energy policy

Donald Trump's move to deregulate oil, gas and coal sectors comes as good news to India. "Thirty per cent of all increase in world’s energy demand from now to 2040 will be from India, and energy cooperation will be an increasingly key component of Indo-U.S. bilateral relations," Petroleum Minister Dharmendra Pradhan has said.  

United States President Donald Trump and Republican lawmakers have already set in motion a series of measures that will deregulate American oil, gas and coal sectors and India sees an opportunity to enhance bilateral cooperation in these areas in the coming years. Thirty per cent of all increase in world’s energy demand from now to 2040 will be from India, and energy cooperation will be an increasingly key component of bilateral relations, Petroleum Minister Dharmendra Pradhan has said after a meeting with U.S. Energy Secretary Rick Perry.

This was the first ministerial-level interaction between India and the U.S. under the new administration. India will start importing Liquefied Natural Gas (LNG) from the U.S. in 2018 under contracts signed during the previous Obama administration. Right pricing will enable India to ramp up imports from the U.S., Mr. Pradhan has said.

For a boom in oil & gas market

The Trump administration’s focus is on making American oil and gas sector competitive in the world market and it does not want environmental concerns holding back the sector. By deregulating oil and gas, and rolling back incentives available to non-conventional energy industry, the Trump administration is hoping to create a boom in the U.S oil and gas market. Three Indian public sector companies, GAIL, Oil India and IOC and Reliance have invested in U.S. shale gas production.

The Obama administration’s focus was on pushing renewable energy cooperation with India, but Trump administration’s focus is different, said an Indian official. Mr. Pradhan has said Prime Minister Narendra Modi’s commitment to increase the share of nonconventional sources in India’s energy mix is independent of what the American administration thinks or does. “The PM is clear that India will go ahead with its COP 21 commitments,” the Minister said.

Mr. Pradhan said Mr. Perry has asked him to request Mr. Modi to visit his home state of Texas, which is the centre of American petroleum industry. Mr. Modi is expected to visit the U.S. in the next two months.

Ramifications unclear

While it appears certain that Mr. Trump will disrupt the U.S energy sector, its implications for the global market is unclear. Mr. Pradhan said India and U.S could cooperate in clean coal technology, and in converting coal to synthetic gas. “American technology and investment could be of great help in coal sector. U.S technology will also be helpful in building smart grids and reducing transmission losses,” Mr. Pradhan said.

Mr. Pradhan attended the CERA Week in Houston, an annual conference of energy executives and policy makers, where he unveiled India’s new Hydrocarbon Exploration and Licensing Policy (HELP). The Minister said investors and executives were upbeat about India’s prospects. “All of them consider India as the greatest energy market for the next 25 years,” Mr. Pradhan said, adding that the Mr. Modi’s “decisive measures on GST and demonetisation” were seen positively by the industry.

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Printable version | Jan 18, 2021 7:13:40 PM |

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