dna Conversations: A sensible policy framework for energy conservation is urgently needed(Part-1)

DNA: How do you look at the field of energy conservation especially when it comes to hydrocarbons and the environment?

Parasnis: When I look at energy, I think of only two very important things. One is fuel, and the other is coal-based electricity. In the fuel sector, we check trends and do some analysis. I see some very interesting trends in India. While the subsidy [per vehicle] has reduced by more than 15%, the number of vehicles has increased around five-fold. In the city of Chennai it has grown the most. Mumbai ranks fourth.

So while petrol prices keep going up, subsidy is being lowered, the number of vehicles keeps increasing. It shows that people can afford to pay for the fuel and the vehicles. Moreover there are also people who can afford to travel by AC [airconditioned] buses. So if we increase the tariff for public transport, but make is more comfortable, more people could opt for it [thus reducing the demand for cars and hence fuel].

DNA: So more people could opt for mass rapid transport systems if they were made more convenient and comfortable.

Parasnis: Yes. It should be made more comfortable. Like AC buses. Maybe the tariff could be three times more than the normal fare. But there are people who can afford it. So my point is that – in India – even though we say that it is a developing economy, and poor, the data show that many people can afford better modes of transport [which also save the nation fues costs]. We need better mass rapid transport systems.

DNA: Absolutely.

Radhakrishnan: Look at the larger context of energy. Energy demand in India has been going up and it has to go up because we are growing. We have been growing at a decent rate as compared to other developing or developed countries. So when your GDP is doing well, obviously you’ll need more energy to sustain that growth. That is one part.

The other part, interestingly, is that the per capita consumption of energy continues to be low as compared to developed countries. So we have a paradoxical situation. But the aspirations of the public to consume more and more to improve the standards of living cannot be ignored. It cannot be denied. Yet, as a country which has a large population and must import huge quantities of energy inputs, the strain on our foreign exchange also cannot be overlooked. It is in this context that energy conservation has to be emphasized.

DNA: True. Consumption of fuel has direct link to standard of living.

Radhakrishnan: And this will require other sets of policy measures to be brought in.

Jain: There are two aspects to this debate. One is conservation; the second is consumption, right? What has happened with us is that we were late in developing as a country compared to other developed countries. So when we began developing we thought we could be to consume as much energy as we could afford, right?

Gradually, the need to conserve energy began being talked about. However, we still remain one of the lowest energy consuming nations on a per capita basis, and yet when we talk of energy conservation we assume that we are in the maximum energy consumption stage. We believe that, if you conserve energy, even if you consume less electricity, the country will import less, and that you’ll be better off. That’s one dimension to the situation. The second dimension is that fossil fuels are limited and you have to start working on alternate energy sources.

Then there is a third dimension, that when we consider the Indian perspective, we need to ask: what is happening to us. We are talking in terms of policy. For instance, there is a a paper, there is a policy statement, that fuels would be taken completely out of APM [administered pricing mechanism] in 2005, ‘06. Had that happened, it would have been a good thing. But as the economic conditions changed, we went back on these promises and what we did was a 'dieselisation' of the economy.

That also explains why the voices asking for energy conservation have increased. Yet, considering the kind of population we have, our energy consumption will have to go up. We will have to consume more energy. And if the country has to consume more energy Hence we need to put energy conservation on a policy paper implementation plan. It must be viewed in a larger perspective; it has multiple dimensions – both for India and the world.

DNA: True. You have energy used in the form of oil – diesel, petrol, kerosene, or even gas. And you have coal, which is largely used by power plants and steel industries. There could be tremendous challenges and opportunities in both areas when it comes to energy conservation. Any views?

Parasnis: Yeah. As you rightly pointed out there are opportunities and challenges both and now that since we’re growing and our aspirations are increasing, and demand is also increasing. But unfortunately there is a cap to it. Because everything is imported. As it is, we are very fragile, susceptible to any changes that could happen in the global economy or the global scenarios.. We are exposing ourselves to that kind of a vulnerability which is a global vulnerability.

And because of which we at TERI promote sustainable development. It’s not only renewables, it could be also “we can use this fuel, but we have to do it in a sustainable manner”. This way, our growth pattern and whatever resources we have at our disposal can keep pace with each other.

And we should be independent, rather than dependent on some foreign country for oil and coal. So our first objective has to be that we have to maintain our pace. But at the same time we have to remain independent.

DNA: Where do the opportunities lie?

Parasnis: And I feel that, we were always very sustainable, So somewhere, you know, we have lost touch with our roots, our own traditions, which are very sustainable. And if we start following it then I think that half of the problem would be solved. That is my very honest opinion.

I think when we look at society at large, in includes several components, including industry we can’t isolate industry from society.

But at the same time see if you compare the domestic sector and we talk about urbanization that is where the problem lies I feel.

DNA: Okay.

Parasnis: If we empower rural areas and make them more prominent in terms of facilities and everything else, then there will be less pressure on urbanization. If we don’t focus on it then of course there will be urbanization.

So we have to think about various aspects. And okay, industry is definitely a need, It’s required. But I think that there is a lot of wastage also.

But every industry should also looked at as a resource rather than you know it’s just a production house. So we have to really think about all these aspects in depth and it can’t just be thought about superficially. And we need to also think about all the sectors together only then we can think of holistic growth or a sustainable development. So development can’t be unidirectional.

Radhakrishnan: We in the oil industry, or for that matter energy industry, keep telling the public that it is not as if the government does not want the public to consume energy. We know that consuming energy would mean growth -- growth and all of those related activities. What we have been telling is, “consume energy responsibly”. And I think that this statement has a profound meaning.

DNA: It’s a good phrase.

Radhakrishnan: Now typically if you take our oil and gas industry, the major consumer is the transport sector, which consumes as much as about 45%. Almost all of this is diesel. If I add petrol, it’s another 10% so it comes to about 55%. So out of every 100 liters of petroleum products, 55 get consumed by the transportation sector. Here we have both individual driven vehicles as well as the vehicles which are used for mass transportation like buses or carrier goods. Now our experience as well as the experience of PCRA [Petroleum Conservation Research Association] has been that it is definitely possible to save fuel to the extent of at least about 10% on an average by doing some very basic things.

DNA : In other words responsible usage itself brings about conservation

Radhakrishnan: Yes. Now the numbers which we get indicate that a 3% saving across all the sectors would mean saving a Rs.15,000 crores of saving a year. That’s huge money.

So I think opportunities there are a plenty. But sustainable development is something which each individual should try and understand – what is the full meaning of the word sustainability and how does it impact the individual and the nation as a whole.

I think, whether it is industry or vehicle usage or – for that matter – the household gas-cylinder, benchmarking should become a norm in the country. Then I can, on reaching that benchmark, measure development as well. In summary I would say that there are huge opportunities without really having to curtail growth forcefully.

As for challenges, we face them every day – managing both the supply side and the demand side. Supply side yes, now that the delta between domestic consumption of petroleum products and production again has been widening; the gap has been widening. For this, we may have to introduce some intensive steps and grow the supply side. issues.

DNA: Why are we not considering other energy sources which could be harnessed beautifully at zero import cost

Jain: Let me touch on another aspect. One issue that was spoken about was urbanisation. Some believe that urbanization is a big problem. And one can be very sustainable in villages; and even now we are very sustainable in villages. But the fact is that if you look back into history – about how people will move ahead, or will be be doing whatever we have been doing in the past – we are moving the same way.

I mean, urbanization has a natural correlationship with development. It will happen; you can’t stop it. People will migrate. So, yes, we were very sustainable in our village model and even today, even though 60% of the population still doesn’t have access to electricity. So 60% of the population don’t know what we are talking, because to them “What is energy?”

And then you’re burning that fuel that you have in a village – maybe from cow dung. But beyond that they do not know what is energy? So it’s basically when we talk of coal and fuel we are actually dealing with the problem of urbanisation.

Coming to innovation, it can happen in a society which is developed. You start talking of innovation not when you are poor, not when you are hungry. Then, the only thing that comes in your mind is “how will I fill up my stomach?” But when your stomach is filled up then you start talking many other things.

Take water. They say that the next war will be about water, right? Yet, we are destroying water, since it is freely available in our taps. How many of us are aware about it. Are we not educated? Are we not aware about it? Don’t we read about it? So knowing about it or making people aware about it and actually doing what you want are two different things.

We are talking about achieving conservation. To discuss conservation is important. But how do you make people realize that it is important? We go through education, communication, media and this is what all of us are doing, each in his own way. But what is the larger picture?

To Read part 2