The Hindu Business Line : Govt for competitive, market oriented hydrocarbon sector: Pranab

Energy security: The Minister of External Affairs, Mr Pranab Mukherjee, and the Minister of Petroleum and Natural Gas, Mr Murli Deora, at the inaugural session of ”Petrotech-2009”, 8th International Oil and Gas Conference and Exhibition in the Capital on Monday.

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New Delhi, Jan 12 The Government favours a competitive and market oriented hydrocarbon sector with increasing private sector and foreign investment in all the important segments of the industry, the External Affairs Minister, Mr Pranab Mukherjee, said.

Inaugurating PetroTech 2009 here on Monday, Mr Mukherjee said that the main challenge is to ensure the “continuous availability of safe, clean and accessible energy at commercially competitive prices”. The Minister added that energy security concerns were central to the country’s national interest and an important aspect of the economic diplomacy.

“The energy deficit that we face poses one of the most important challenges to our economic development. Unless we are able to overcome this, we will have to re-evaluate our development expectations,” he said.

Terming the recent terror attacks in Mumbai as a “direct strike” at the country’s economic development, the External Affairs Minister said that the attack underscored the risk all countries face from economic sabotage.

“The global hydrocarbons sector would increasingly be even more vulnerable to such threats. Protecting these assets would not simply be a law and order problem for an individual country, whether an energy exporter or consumer. Stability of energy supplies, security of energy transportation and creation of new energy infrastructure and its protection have to be a common goal requiring coordination and cooperation of all countries,” the Minister said.

Later speaking at the session on ‘Energy independence with global cooperation: challenges and solutions’, the Petroleum Minister, Mr Murli Deora, said, “We can work towards energy dependence only through interdependence – cooperation between producers and consumers to assure a bright energy future for the betterment of mankind.”

Experience has taught that very low prices and very high prices are not sustainable, the Minister said, adding that “during periods of low oil prices, capital tends to move out of energy to sectors offering higher returns. The result is under investment in new capacity across the spectrum of industry – including production, transportation, refining, distribution and marketing.”

The Minister said, at the same time, ‘low-priced’ energy consumption encourages greater consumption. “By reducing investment and increasing demand, periods of low prices set the stage for an inevitable corrective rise in prices," he added.

“It is no doubt that we will need more energy in the decades ahead. That means there will be room for greater contributions from coal, nuclear, solar, wind power, natural gas, and other alternatives. Again this hints to the same theory that the challenges ahead of us are not the challenges of resources or what I call ‘availability’ but it is the challenge of ‘deliverability’,” he said.

Elaborating he said, deliverability is a measure of the industry’s ability to boost the production capacity, transportation and refining, and delivery of energy to end consumers for their daily lives.

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