Posts Tagged ‘energy’

O frabjous day! Callooh! Callay! On Friday, the long-anticipated event finally arrived. An occasion so dazzling that the streets leading to the swanky Taj Palace venue were decked in banners, the tickets for the 950 participants cost US$1,200 (I had somehow sneaked in free under the auspices of an amiably evil industrial lobby group, who seemed to believe I belonged to an unspecified embassy), and Manmohan Singh himself was turning up for the opening… Yes: the 7th Asia Gas Partnership Summit!!!!!

Over breakfast, I casually eyeballed the programme one final time—and nearly coughed out my dubious masala toast. You’ve guessed it: I managed to miss the Prime Minister’s speech. Sigh. Let’s move swiftly on.

Laughing gas!

Luckily, I knew much backup glamour was in store given the summit’s tubthumping subtitle—’Evolving Dynamics of the Asian Gas Market: Challenges of Sourcing, Integration and Sustainability’. And boy, it didn’t disappoint!

The fifty speakers included some crackers: sweating Brits in loud ties, hilarious moustache styles from Jafar to Stalin, a US State Department man with Bill Gates’ voice, a cynical-eyed International Energy Agency leader in scarlet, an icy Gazprom man who held the podium with a featherlight killer’s grip, and even a Turkmen who deployed Borat syntax and a sinister gothic Powerpoint. The host stressed the need to ‘attract the younger generation’ to gas with a picture of a sexy young lady and a nozzle. Every now and then an American would joke about their continent’s ridiculously low (and charmingly named) Henry Hub gas prices: ‘We wish this winter had been colder!’ and everyone white would laugh. And, amidst the garish chandeliers, the Taj’s food was solidly good—we did some serious gas guzzlin’!

Fracking brilliant!

The overall mood was one of buoyant optimism—’Are we entering a golden age of gas?’—for three main reasons:

  1. Gas is inherently attractive. It’s much cleaner than coal, producing less than half the carbon dioxide and far fewer noxious fumes and particulates—so gas advocates claim it’s the ideal ‘transition fuel’ before the great renewables takeoff, to the extent you’d think it was carbon-neutral ambrosia and not a fossil fuel. Gas plants are also quicker and cheaper to construct than coal plants (although this isn’t true of the refrigerated LNG [liquified natural gas] that everyone is talking about shipping across the world). There’s also a lot of gas about: the world has 250 years of estimated reserves.
  2. The declaration of the new ‘age of gas’ at this point of time—in case you’ve been living under a rock!—is largely down to the American ‘fracking revolution’. Fracking can free natural gas from shale, and has abruptly turned the United States from a gas importer to a potentially large exporter. The price of gas in America has plummeted (to the extent that companies are abandoning it as unprofitable and opting for oil rigs, making the sector in the short term a victim of its own stunning success). Other countries all want a piece of the action.
  3. Brand spanking new 2,200km cross-country pipeline

    In India, gas also promises geopolitical dividends. The prime minister took the opportunity to announce the dedication of a new cross-country pipeline, which he said he hoped would soon be linked to TAPI. This latter ‘peace pipeline’ is planned to run Turkmenistan-Afghanistan-Pakistan-India (anybody spot any problems with this?). A Pakistani dignitary was on hand to claim that pricing would be finalised within a month and gas pumping by 2016 at the latest; the Asian Development Bank promised a huge tranche of money. The project has been under discussion for at least twelve years, but maybe this time… Then sweetness and light between the TAPI countries will follow, and milk and honey will flow throughout the lands.

A load of hot air?

Great! Clean development and reliable power and regional peace, right? Alas, no. In public, 1¾ days of the conference were all sunbeams and puppydogs. Between sessions, state gas officials complained the summit wasn’t addressing their real concerns, and private sector players called it ‘pie in the sky’ and ‘old wine in new bottles’.

In the final session, a variety of influential politicians and technocrats—their power indicated by their extraordinarily bad dress sense—finally had their say. To put it mildly, they pissed on the Bunsen burner parade.

The most crucial problem is price. There is no unified world gas market and enormous Asian demand—not only from a hungry China, but also from traditional exporters like Indonesia, Malaysia, and even UAE and Saudi Arabia, who’ve crippled their domestic sectors with consumer subsidies—means it’s a sellers’ market. So while prices might be astonishingly low in the self-sufficient US, they’re almost seven times higher in India and higher still in Japan (cue the F-word: Fukushima). This means in India coal is still far cheaper and more attractive.

Moreover, to fulfil their development obligations the two biggest sectors, power and fertilisers, both demand gas at far lower rates than in the international marketplace. The giant state-owned firms like event hosts GAIL and sponsors ONGC are forced to sell fuel for fixed prices to these sectors, only partially compensated by the state. A representative of the Planning Commission, the brains behind the central government, emphasised that this isn’t going to change rapidly. Gas might be brought in to cope with gaps between peak demand and supply, and to diversify and secure India’s energy portfolio, but the Age of Gas in India has yet to flare.

Gas fired.

Inspiring token from gas chap who promises to make me 'student cum entrepreneur'

Being the only academic at a titanic corporate networking event is, alas, like being a leper at a children’s party. We were all wearing affiliation tags on dangling navel-level scarlet lanyards, the equivalent of ringing a bell to announce my necrotising hunchbacked presence (though at least the 99% male population stared a little lower than usual). People backed away in horror, crossing themselves; my only hope was to seize a business card from the runts of the herd before they recognised my affliction. At one point I thought I’d finally made a friend, but he turned out to have taken pity only to foist New Age business philosophy upon me (naturally, his other enterprise when he’s not flogging hydrocarbons).

An ambivalent conclusion, then. But there’s hope for India, and for me. I’ve heard the solar hippies are much more friendly. And I imagine the wee coal chaps whistle a lot and respond very well to lone damsels in their midst.

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EPILOGUE

This morning, I casually put on the business motivation CD as the gas bloke keeps trying to call, and idly googled the company, BWW. After a couple of brief detours—Google at first helpfully translated BWW into ‘BBW’, the slightly alarming obsession with big beautiful women—I found it.

Crikey Moses. BWW turns out to be an international scam/cult affiliated with creepy multinational Amway. It’s a classic pyramid scheme (dare I say the word Ponzi?), in which the top tier accumulates vast wealth from the efforts and hopes of a constantly rotating lower membership. Like a twisted version of Avon, the bottom stratum must desperately try to sell overpriced health food and cosmetics to their friends and family—and are encouraged to buy a big chunk themselves. The CD is an example of the company’s indoctrination material, which it also flogs in vast quantities to its wide-eyed membership. The message contains a healthy dose of greedy materialism, mixed with a dollop of evangelical Christian rhetoric, mockery of poor people, and emphasis on married couples as the ideal business unit (the women should stay at home, of course). Yum.

Do I look like a cult member?! Clearly I really need to work on my networking style…

Power politics

Posted: March 5, 2012 in electric geekery
Tags: , , ,

For many courageous young academics roaming India on fieldwork, their research is an easy sell to civilians (as we call those outside the ruggedly militant terrain of academia). I’ve met people working on prostitute castes, Indian nukes, love and marriage in Hyderabad, ‘criminal tribes’ in Rajasthan, political fixers in Mathura, caste discrimination in the UK, and a whole host of other sexy topics.

At the overpriced conferences where these people meet to chortle over the latest titular pun they thought up on gender, I’m part of a misunderstood and shunned group—a pariah, if you will. When I tell people what I work on, they begin edging away, eyes glazed with dull horror. The worst example came the one and only time I met Amartya Sen. The Warden had carefully groomed us both for the encounter, and a pleasant evening of Caerphilly and the capability approach beckoned. The diminutive lothario said gummily, ‘And what do you do?’ I panicked, and only managed to mutter: ‘I study pylons.’ He tapped a hasty retreat, and was seized by a septuagenarian lawyer with an ear-trumpet.

My friendly neighbourhood pylon, Vasant Kunj

Why electricity?, people ask plaintively, when I’ve physically managed to corner them and cut off all means of escape. Why? WHY?

Actually, Indians don’t ask this at all, because it’s so blindingly obvious.

Come closer, children. Let me set the scene:

  • An estimated 400 million Indians still lack electricity.
  • During the summer, the shimmering IT metropolis of Bangalore—in the US, a byword for the theft of American jobs—suffers from three to four hours of planned blackouts.
  • In 2007, business consumers cited lack of reliable electricity as the biggest hurdle they faced in India, ahead of corruption or taxation. (Indian industrialists also pay some of the highest electricity tariffs in the world to cross-subsidise farmers and residential users.)
  • Pylons overloaded with illegal wires blow out: around 40%—and 60% in some areas—of electricity produced is “lost” through a combination of technical losses, mispricing, and theft; in the US, the figure is a mere 6.5%.
  • Energy sources and power projects have become notorious vehicles for corruption.
  • Policymakers are panicking because they earlier overestimated India’s vital coal reserves by as much as eight times.

Something is clearly rotten in the state of Denmark. In this setting, newspapers cover the sector avidly, citizens complain about it endlessly, corporations resort to circumventing it entirely. And even Arundhati Roy got involved, with typical understatement.

If the power sector is characterised by failure, it’s a very political one. Since at least 1980, electricity subsidies have been used as a political sop to buy off important rural constituencies—elections are won and lost on the issue, as the World Bank has raged for the last twenty years. But this has come at a crippling price. By 2000, the rural power subsidy came to 1.4% of India’s entire GDP. Some states were recovering less than half the cost of the electricity they produced, the single greatest contributor to their near-bankruptcy and grovelling to the central government. It is therefore no surprise that the World Bank immediately targeted the power sector for deregulation and privatisation after India was forced to go to the IMF in 1991, and the shiny new Age of Liberalisation dawned.

The World Bank’s demands [cue Imperial Death March] fell on ripe soil in the central government. The power liberalisation experiment has largely been a disappointment: more on this in later Electric Geekery posts, perhaps. (Delhi may be the only electric liberalisation poster boy still standing, after humiliations in Orissa and Andhra Pradesh, but even here middle-class activists continually lobby against the private companies’ rocketing power tariffs.) The chicken of improved and increased power supply requires the egg of consumer willingness to pay more and stop stealing. But power subsidies are the opiate of too many states, and an exasperated central government seems to have abandoned efforts in favour of a two-tier system.

If you made it this far, Dear Reader, I hope this is enough to persuade you that the power sector has all the ingredients of a classic tragicomedy (happy ending pending). I’ll write more another day—unless the wacky power supply blows up my laptop, of course.