USA had been embroiled in numerous bloody conflicts within West Asia (Middle East) for several decades. Paid protests, support to terrorist groups, regime changes, you name it and the USA had done it. Starting mid 2010s, there has been a sudden drop in active US involvement in the region. What changed?
Shale gas, an alternative to natural gas started to be produced within the USA at the turn of the century. By 2015, it had put the country in a position to be sufficiently independent of reliance on the countries in West Asia. And thus, there has been a marked reduction in conflicts. So much so that, staunch rivals like UAE, Saudi Arabia, Iran and Israel are all talking to each other about sustaining peace for the long term. US, Israel and UAE signed the Abraham Accords in 2020 which has been a milestone in the road to peace.
What’s the lesson from this for India?
India imports a staggering 82-86% of its oil and gas needs from several countries around the world, accounting for an expenditure of around ₹15 lakh crore/ year. To put this in context, India spends ₹25 lakh crore on its overall defense!
For a country which ranks third around the globe in oil consumption, being overly reliant on imports is not just a pinch on the wallet but adds a huge uncertainity factor and is also dangerous from a global relations point of view.
There is also a huge opportunity cost. Were India self sufficient in providing for its own energy, it would have rescued that amount from going out of the country and be able to direct it to fields like education and health.
Not to mention that all of the oil and gas imports are fossil fuel based and hazardous to the environment.
Overall, fossil fuels account for 60% of India’s energy with the rest coming from hydro, solar, wind and other renewable sources. India has promised the world to take this number down to 50% by 2030 and reach a net zero carbon state by 2070. Internally, the country aims to be self reliant in energy by 2047.
All of this to say, the lesson is to become self-reliant and go renewable if you want to avoid geo political stress and an unsizable hole to the pocket.
India as net exporter of Hydrogen based energy
Can India be the H(e)-Man for the world?
In his independence day speech in 2021, the PM announced ‘Mission Hydrogen’, providing for a 40-50% cut in hydrogen fuel production costs. This is a whole new frontier of renewable energy, produced by using electricity from renewable energy sources, such as solar or wind power, to split water into two hydrogen atoms and one oxygen atom through a process called electrolysis [1]. The benefit with hydrogen as a fuel is that it produces water on being burnt and not carbon dioxide, like other fossil fuels.
Hydrogen as an alternative fuel has been generated in the past globally, however the electrolysis has been powered by fossil fuels. With all year sunshine and multiple sea frontiers acting as hydrogen farms, India is at an advantage to produce clean hydrogen using renewable means.
Several companies including private giants like Reliance and Adani as well as PSUs are setting up clean hydrogen fuel plants across the country, which will start coming online by 2024.
The country aims to produce 5 mn tonnes of clean hydrogen by 2030 compared to about 0.08 mn tonnes that is produced by the entire world today! This would mean a significant reduction in oil imports and prove to be a brand new avenue for Indian export.
What is helpful to this effort is the fact that India is almost energy deficiency free now; meaning that every unit of energy demanded is being fulfilled. This is an indicator that the demand supply equilibrium has been reached and the time for optimizing the supply portfolio is ripe.
With addition of clean hydrogen to its energy portfolio, India aims to supplement efforts around electric vehicles and hydro/ solar/ wind production to be fully self reliant in energy.
