Dear Mr Deora

A guest column on a new weekly online magazine focussed on Mumbai

On the kind invitation of the enterprising bloggers behind Hafta Magazine comes this column. It is based on an earlier post here on The Acorn and is still pertinent — both because the Iran-Pakistan-India pipeline is not fully off the table and because Mr Murli Deora, like Hafta’s readership, is connected to Mumbai.

Dear Mr. Deora,

Since your Ministry’s e-mail server unceremoniously returned a previous message sent to your energetic predecessor, I am writing this open letter to you with the hope that you will consider it with some care. [Read the rest at Hafta Magazine]

5 thoughts on “Dear Mr Deora”

  1. Nitin,

    People just think of the gas coming at an affordable price, but are not really considering that with the neck of the buyer in the seller’s hand the price will not stay the same all the time (along with a lot of foriegn and internal policy initiatives).

    Also, its that time of the era when alternate sources are being looked at seriously, and it might be a bit late in the game to be wasting so much time and energy into something that might not be relevant after a century.

    It was a good article and I hope it makes sense to concerned people.

  2. I agree with Sachin…
    1.While the ‘dream pipeline project’ will take time to see the light of the day, how do we as commen people meet the sky rocketting prices?Go the Jetsons or the Flintstone route?
    2.As alternative energy policies seem to be the only way out, isnt it high time that our Coal Industry receives a shot in the arm?[For starters, chuck Soren in the bin]
    3.Spending loads on the dream pipeline to benefit the future or fund research in India to exploit mineral rich states to buffer inflated prices?—How will bear the burden and who will accrue the benefits?The present generation or the future
    4.What shocker will the next budget consist of?
    5.Will private-public partnership in harnessing nuclear energy in India help?

  3. Hello Nitin,

    This is a well written article.

    IIRC the current problems with sea based transport of energy (esp. LNG,CNG) is that there aren’t enough ships to meet our needs. At current rates of ship production – demand for these ships will outstrip supply and we are likely to be at the mercy of the shipping companies. Also the Americans are very keen that we restrict our exploitation of Iranian reserves through their intermediaries. The Americans want to exploit flaring gas South Pars field and sell it to us. I think Excellerate Systems LLC is the leader in this field. I feel the import of ONG over sea lanes leaves us vulnerable to a different kind of transit monopoly. The only true way I can think of to mitigate this is to have a large strategic fuel reserve but here too there are problems. Predicting demand as the economy industrializes could prove difficult – which is why countries tend to push for exclusive relationships with energy producing nations and then setup transit channels to those countries.

    In some way right now – the approach at the ministry is to identify consumers of ONG and put a pipeline to where they need it to be. For example a company wants to set up a large gas fired TPP at Dadri, then the ministry will draw up plans to put a pipeline up to Dadri. There are no current plans to set up pipelines to any city at random in the country – unless there is a specific industrialist (or group) planning to use the ONG there. I feel putting pipelines to cities would lead to an inflation in the demand for LNG. Without putting down an international regime that guarentees security of supply – we will be very vulnerable to fluctuations on the energy market.

    Oddly enough – against this background – Pakistan is the most manageable conflict system we know. I support the idea of a pipe through Pakistan because though the risks are difficult to predict – India’s ability to manage conflicts is at its highest in Pakistan.

  4. Maverick,

    I won’t disagree with when you say that Pakistan is a conflict system we are familiar with. From your comment I gather that you (understandably) suspect that there are way too many unpredictable factors with respect to a free market solution. My own view is that free markets are just what you need when you have way too many unpredictable factors! (like that famous story of the perestroika-era Soviet official who couldn’t believe that there was no one actually in charge of London’s bread supply).

    It is not enough, however, to rely on free markets alone without taking necessary ‘insurance’ policies. In addition to futures markets, the idea of a strategic petroleum reserve makes sense under certain macro-economic & geopolitical conditions. Long-term supply contracts with fuel exporting nations too are useful. Domestic exploration is something a Hafta reader mentioned. These are good ideas. But we need the infrastructure and market first.

    So I don’t think shortage of ships, prediction of demand or price fluctuations are insurmountable problems — if only India opens up.

  5. Hi Nitin,

    The shortage of ships unfortunately cannot be fixed. There are only a few shipyards in the world that can make these ships and they aren’t under our control. Their output capacity is limited and if you try to push them to make more – they are likely to jack up prices and or worse let quality standards drop. I venture that if the current trend keeps up we will have to turn all regular vessels into fuel carriers to ensure that shortages are manageable.

    The risks are unknown both in the case of the sea routes and in the case of a land pipeline over Pakistan. However the risks are most manageable in the case of Pakistan.

    In either supply route – we can hedge against price fluctations and supply disruptions. I am not ruling out either route but I definetely favor the overland route. I think the risks can be made more manageable if we propose an transit for water deal with the Pakistanis. Under such a treaty we will control all the headwaters and they will control the energy route. The Pakistanis will be welcome to set up desalination plants along the southern coast and these plants could operate with electricity produce by ONG travelling along the land pipeline.

    Ofcourse at the present time there is too much instability in Pakistan to conduct meaningful discussions with people. But once this siachen obsession on their side passes, I am optimistic that more can be attempted.

    I agree trust is an issue, but I’d rather put my trust in someone who I know I can screw over the day I feel like doing it.

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