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April 17, 2020

Hello hydrocarbons: energy security and environmental risks in India

As India looks to deliver long-term energy security, the government has announced a reclassification of hydrocarbon exploration laws that will see offshore oil and gas projects exempt from social challenges and environmental restrictions. JP Casey explores how, while this could help secure India’s energy future, it could come at a great social and environmental cost.

By JP Casey

India’s rapidly growing economy has brought with it a rapidly expanding energy need. The world’s second-most populous country has invested heavily in domestic energy production over the last decade, with installed electricity generation capacity climbing from 174,639MW in 2009 to 399,000MW in 2018 according to government figures, giving energy infrastructure a compound annual growth rate of 8.61% over the period.

Much of this growth has been in the fossil fuel sector, with data from the US Office of Public Affairs noting that fossil fuels account for 71% of India’s energy output, compared to 49.2% in Europe. With Europe also outpacing India in nuclear, water and renewable power as percentages of its total energy production, at least the present, and perhaps the future, of Indian energy is firmly in traditional fuel sources.

With this in mind, the government has announced plans to make onshore and offshore hydrocarbon exploratory projects exempt from the environmental impact assessments and public consultations typically required for projects that can cause such environmental damage, a move that looks to secure the country’s energy future, but at the cost of local environments and established regulatory processes.

The growth of hydrocarbons

Hydrocarbons have been a major element of the Indian energy picture for years, and despite energy sources like oil drying up, hydrocarbons look set to remain relevant in India. Government figures note that while the share of Indian energy supply to come from crude oil is set to decline, from 35% in the years 1997-98 to a predicted 25% by the years 2024-25, Indian energy from natural gas sources, including hydrocarbons, is expected to increase from 7% to 20% over this period.

With other energy sources – such as coal, predicted to shift only marginally from 55% to 50% — remaining relatively static over this period, offshore operations could deliver the most dynamic changes to India’s energy landscape.

This growth is in keeping with the country’s 2025 “Hydrocarbon Vision”, a programme that aims to dramatically increase exploration for and development of new offshore projects to deliver long-term energy security for India. The plan aims to see 100% of the Indian sedimentary basins explored by 2025, compared to just 25% in 2005, and sets out to “aggressively pursue extensive exploration” to this end.

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Innovating to improve energy security

The programme also aims to “keep pace with technological advancement” and take advantage of innovations to better improve the country’s energy security. Last year, the government announced that it would expect the area it can offer to hydrocarbon exploration to double to 300,000 square kilometres due to the availability of new seismic data enabling exploration work to take place in previously inaccessible regions. It hopes this shift will encourage greater foreign investment in Indian hydrocarbons, and deliver on some of the lofty expectations the government has set for its hydrocarbons sector.

India has tried to deliver on these expectations by making hydrocarbon exploration exempt from a number of environmental and social checks, through a reclassification of oil and gas operations. The country’s 2006 environmental assessment law noted that “category A” activities, which included offshore exploration and drilling work, would be subject to public approval and environmental impact assessments.

While this law remains in place, exploration projects are now considered “category B2” activities, those considered to have a smaller impact on human and environmental health, and so require less compliance with health and safety regulations.

Social and environmental risks

While this reclassification has obvious advantages for India’s energy security, a lack of risk assessment could lead to significant environmental threats. India’s carbon dioxide emissions have ballooned in recent years, reaching 3.5 million tonnes of carbon dioxide equivalent in 2015, a three-fold increase since 1970. In addition, the country’s pledges to improve its environmental performance are somewhat lacking, with Carbon Brief reporting that due to the wording of India’s Paris climate targets, it could meet its 2050 pledges despite a 90% increase in emissions between 2014 and 2030.

These are not simply long-term dangers either, with many regions across India already suffering from the damage of widespread pollution. In 2015, The Guardian reported that the number of polluted rivers in the country had more than doubled over the last five years, and last year, air pollution in national capital Delhi reached levels 20 times greater than the World Health Organisation’s safe limit.

Since last October, there has been a spike of up to 30% in the number of people in Delhi suffering from respiratory diseases; the government’s aggressive pursuit of energy independence is already triggering a similarly dramatic increase in public health risks.

There is also a social element to this controversy, with the reclassification of offshore exploration projects preventing local people from having a way to challenge new offshore projects as part of the permitting process.

State governments, not federal agencies or local people, will now have the power to authorise new exploration work, and there is concern that India’s long-term project to deliver energy security will be considered above all else in this regard; local people could be disadvantaged both in relation to physical health and political power by these moves, and the reclassification will do nothing to calm fears of the environmental impacts of the offshore sector.

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