They're off to India: The Indo-US task force on natural gas could open up India's economy to USA's gas exports

FOSSIL FUELS: India-US bilateral on natural gas, World Bank warning on fuel prices, NTPC’s greener portfolio

India & US sign on joint natural gas task force

India and the US have agreed to set up a joint task force on natural gas under their bilateral Strategic Energy Partnership, with the agreement expected to open up India’s natural gas market to US exports. The partnership will also welcome US investment, exports and technology transfer in coal, oil, nuclear power and renewables.

The task force is part of the Centre’s strategy to push natural gas as a cheaper and cleaner alternative to coal for industrial manufacturers, and its strategy to more than double the fuel’s share in India’s energy mix from about 6% at the moment to 15% by 2030. The government is additionally targeting October 2018 for inaugurating India’s first gas trading hub/exchange (GTH/E), through which the fuel will also be introduced to household and small-scale industrial customers through city gas distribution networks.

World Bank warning on fossil fuel prices may spell trouble for India

The World Bank’s new Commodity Markets Outlook report has warned that oil, gas and coal prices will rise 20% this year over average prices for 2017, with oil alone expected to hover at $65/barrel for 2018 and 2019 (after briefly topping $74/barrel earlier). However, Saudi Arabia – OPEC’s strongest influencer – reportedly wants crude oil to trade at $100/barrel for sustained profits.

Experts fear that this could raise India’s crude oil import bill by a whopping 25% to $88bn for FY2018-19, while oil at even $75/barrel could shave off 0.2% from the country’s economic growth forecast and spike inflation by 30 basis points at $78/barrel.

The current price inflation is driven by strong global demand, restrained production by OPEC and other oil producers, drastic production cuts by Venezuela and geopolitical tension in Iran and Syria.

Adani gasps for Carmichael lifeline, NTPC strides towards greener portfolio

Seemingly desperate to secure an offtaker for coal mined from his beleaguered Carmichael mine in Australia, Gautam Adani will build his group’s largest coal-fired power plant – at 1,600MW – in Jharkhand to export electricity to energy-hungry Bangladesh. However Bangladesh will pay higher tariff to account for cost of shipping the coal all the way from Australia.

Meanwhile NTPC will soon add 2000MW of solar and wind power to its portfolio, 10-20% of which will be bundled with coal-fired power to meet peak energy demands. Its decision may be influenced by the recent spike in imported coal prices, long-term reliance on which may be unsustainable, a situation akin to Adani’s 4.2GW Mundra thermal power plant in Gujarat.

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