Vol 1, Feb 2024 | Gas puzzler

In February 2023, when GAIL issued an Expression of Interest for LNG supplies and wanted to pick up to 26% equity in exporters, speculation grew again that the Indian government would revive the Trump-era deal with Tellurian.

As the demand for fossil fuels drops in the West, oil-rich countries such as the US are looking to play the energy diplomacy card on developing countries such as India in order to sell as much oil, gas and coal as they can—as seen in India’s encounters with struggling Tellurian. Read more

In February 2023, when GAIL issued an Expression of Interest for LNG supplies and wanted to pick up to 26% equity in exporters, speculation grew again that the Indian government would revive the Trump-era deal with Tellurian.

Geopolitical pressures fuelling India’s gas import deals?

As the demand for fossil fuels drops in the West, oil-rich countries such as the US are looking to play the energy diplomacy card on developing countries such as India in order to sell as much oil, gas and coal as they can—as seen in India’s encounters with struggling Tellurian

As the global energy transition gathers steam, the world is seeing a last-ditch attempt by fossil-fuel-rich countries to sell as much oil, gas and coal as they can—while they can. As they amp up their sales drive, India stands at an especially vulnerable juncture. With dropping demand in the West and China going green, India has become the last big market for global oil and gas majors.

This is a fraught moment for the country and the planet. Imported gas is neither climate-friendly nor, as CarbonCopy reported in 2021, competitive against any of the fuels it seeks to replace. And yet, between geopolitical pressures and the promise of other benefits in return for buying oil and gas, India is yielding. CarbonCopy takes a closer look at one such company, an US Shale gas manufacturer called Tellurian, which has a curious Indian connection. Attempts to forge long-term supply contracts has resulted in an on-again-off-again saga that illustrates why international energy companies see India as a hail Mary. It also shows exactly why gas remains a risky, if not foolish, gamble in India’s long term energy play. 

The India connection

Last December, Tellurian slipped back into the headlines. On December 11, 2023, the US-based LNG exporter fired its co-founder and chairman, Charif Souki. The news came as a limited surprise to industry observers. Tellurian has been struggling for a while. Driftwood, its shale gas export terminal coming up in Louisiana, has missed deadlines. Initial backers have dropped out of the project. The firm’s stock has plummeted.

By November, with cash reserves down to $60 million, matters were grim for the company. Barring a spike in gas prices or a fresh infusion of cash, the firm wouldn’t be a going concern after 12 months. Shortly thereafter, Souki was ousted.

But why should readers in India care about the boom and bust trajectory of an obscure shale gas firm in the United States? They should because Tellurian has a poorly explored connection with India. Over the past five years, overriding objections from state-owned Petronet LNG, the Indian government has kept it in the fray to pick up a 20% stake in Driftwood.

As things stand, India’s connection with Tellurian flags a larger trend. As renewables rise, rival energy producers are scrambling to sign long-term supply deals across the world. Nuclear power producers are pushing small and modular reactors. Middle-eastern countries like Saudi Arabia are trying to hook poor African countries to oil. Australia is pushing coal. The US and Canada are pushing gas. 

Given its large market, India is a large target for such energy diplomacy. Between climate change and accelerating decarbonisation, some of these deals can become white elephants. Tellurian is an instance.

An introduction to Tellurian

Ours is a time with two contradictory impulses playing out. On one hand, global capex into renewables has overtaken investments into hydrocarbons. At the same time, with gas majors pushing gas as a transition fuel, the world is also seeing a massive buildup in natural gas infrastructure.

By the end of 2023, as Global Energy Monitor reported, 436 LNG terminals were under construction worldwide. This includes 199 export terminals, with 109 of them coming up in the US (74), Canada (17) and Russia (18) alone. The rest were import terminals, mostly coming up in Asia-Pacific. These numbers mark an increase from 2019, when 202 LNG terminals were under construction worldwide. Of these, 116 were export terminals.

This buildup is the result of a fundamental shift in gas markets. As recently as 2000, most natural gas was consumed locally. That is changing now. The gas market is getting globally integrated. Driftwood is a part of this buildup. It was also Souki’s comeback into the US shale gas export push. In 1996, he had set up Cheniere Energy, a LNG importing firm he refashioned, after the discovery of large shale gas deposits in the USA, into a major LNG exporter. As such, he is one of the people credited with the creation of the US LNG export market. 

After leaving Cheniere post a falling out with the board, he set up Tellurian. The model he followed had not been tried earlier. Most export terminals, like Cheniere’s Sabine Pass, are standalone entities occupying a single rung in the global gas supply chain.

Illustration: CarbonCopy

But not Driftwood. Souki wanted it to be vertically integrated, extending backwards to its own gas production unit (in the Haynesville Basin), pipelines leading to the liquefaction plant, and thence to Driftwood’s export terminal, which would have an eventual capacity of 27.6 MTPA.

Such a model, the company said, would protect Tellurian’s customers from market volatility. “When you tie in the gas supply to world LNG prices, you are exposed to that volatility,” Tellurian president and CEO Ocatvio Simoes had told Indian reporters last February. “The advantage Tellurian has for just about every partner in India is that if they become equity partners in Driftwood, they can lift LNG at the cost of producing LNG.”

It wasn’t that simple. To build this vertically integrated array, Tellurian departed from the industry norm of project financing through equity investors and debt, instead wanting buyers to step in as equity investors. For a $1.5 billion up-front payment, the firm said in 2018, equity partners would secure access to 1 MTPA for 20 years, which Tellurian would provide “at cost.”

The gains to Tellurian were easy enough to spot. Not only would it avoid interest payments, it would also firm up offtake. The gains for investors were less clear.

Is the price right? 

According to Tellurian, Driftwood LNG would cost around $4.00 FOB (cost at the time of loading onto the ship), and that the delivered price to India would be below $6.00/MMBTU – and, ergo, cheaper than other US LNG projects. 

Three points need to be made here. 

One, to stay cheaper than US peers like Cheniere, Tellurian needed to unlock large savings through vertical integration. In practice, however, the firm overpaid. “In November 2017, Tellurian purchased Haynesville shale natural gas acreage in Louisiana for $85 million,” said an IEEFA report published in 2021. 

“At the end of 2020, Tellurian wrote down the value of its Haynesville assets by $81 million, suggesting that the company had paid about 20 times as much for the acreage as it was worth.” The think-tank flagged similar problems of over-expenditure with Tellurian’s liquefaction plant as well. “Tellurian’s… Phase 1 cost is $12 billion for 11 MTPA output, or $1,090 per tonne of installed capacity,” said its report. In contrast, “Cheniere’s train six expansion now in construction has an announced cost of $2.5 billion for 4.7 MTPA of added capacity, or a cost of $535 per tonne.”

Two. For the longest time, with oil driving much of the global economy, gas played in smaller markets. Most of it was sold—for special uses like heating and industry—through long-term contracts. LNG infrastructure would be built only after demand had been established. Demand, effectively, determined supply. This was changing. As gas majors tried to unload all the gas they could, firms were setting up export terminals even without long-term contracts. “In the US alone, more than 17 million metric tonnes per year of LNG may be sold on spot markets or through short-term contracts, rather than long-term commitments,” wrote IEEFA.

Its report listed some of the capacity entering spot markets. “Shell has no dedicated customers lined up for the 2.4 MPTA of liquefaction capacity it buys from the Elba Island facility in Georgia, so it sells individual cargoes on the global spot market,” it wrote. “The situation will worsen when ExxonMobil and Qatar Petroleum finish the Golden Pass LNG plant in Louisiana in 2024, with 18 MTPA looking for buyers. It will get worse again when Shell and its partners complete the first phase of the LNG Canada project, with 14 MPTA in capacity but less than 4 MTPA in term contracts.”

By 2019, with supply overtaking demand, spot prices were falling. Tellurian ran into this question. Forget shale gas peers, could it be cheaper than spot prices? 

Spot prices, however, are unpredictable. Events like Russia’s invasion of Ukraine have sent costs spiralling upwards—pushing countries like Pakistan into crisis. But here comes the third point. A byproduct of shale oil, US gas is costlier to extract—and becomes competitive only when global gas prices are high. In contrast, gas from countries like Qatar is cheaper. Compounding matters, the kingdom is doubling down on gas as well—it wants to boost capacity from 77 MTPA to 126 MTPA by 2027. This is partly to choke off demand for shale gas producers. “As the low-cost producer, the Qataris… may see a strategic imperative to pre-empt and choke off higher-cost competitors,” noted SPGlobal

In addition, it’s cheaper to ship gas from the Middle East than from the US. “Gas from Qatar takes three days to India, which works out to a travel cost of 30-45 cents,” An employee of Petronet LNG had told The Signal in 2021. He didn’t want to be identified. “But when gas is brought from the USA, that takes 22-25 days and the transport cost becomes $1.5-2.”

1. Is Tellurian cheaper than rival shale gas producers?
2. Will Tellurian be cheaper than spot prices?
3. Will Tellurian be cheaper than rival gas producers like Qatar?
4. Is imported gas cheaper than the fuels it seeks to replace in India? 

These questions around price are central to an understanding of this deal. 

The US has been using gas to shift power generation away from coal plants. Europe, too, has been switching to gas for heating and cooling. In India, however, imported gas is not competitive against any of the fuels it wants to replace. For power generation, coal is cheaper. For industry, rival fuels like naphtha and fuel oil are cheaper. In cooking gas, too, prices have risen so high that families have fallen back on traditional fuels. Only in mobility is gas competitive against petrol and diesel, but faces headwinds from electric vehicles.

As things stand, even GAIL has been compelled to renegotiate its purchase contracts with Cheniere and Dominion Energy. Given spot prices are at record lows, the price agreed on the long-term deals were affecting its ability to re-sell the fuel.

That was in 2017. In 2019, however, something strange happened.

Unwilling company, willing government

Prospecting for investors, Tellurian approached India. Under the deal, for $2.5 billion, Petronet would get rights to 5 MTPA from Driftwood. It would, however, also underwrite $5 billion of Driftwood’s project debt. An aggregate commitment of $7.5 billion.

By this time, however, spot LNG prices stood at $2. And so, in May 2019, Petronet LNG’s board turned down the offer. “Members felt that the company should not go ahead with the deal due to changing global gas market dynamics, where the fuel is available in abundance at rock bottom prices,” reported NDTV Profit. “Locking imports for 40 years together with an equity investment in the liquefied natural gas terminal was not favoured,” said the report, adding Petronet’s promoters, including GAIL, Indian Oil Corporation and Oil and Natural Gas Corporation were all against the deal.

Then came a flip-flop. In September 2019, just before Prime Minister Narendra Modi’s visit to Houston, an MoU was finalised. “Petronet agreed to negotiate the annual purchase of up to 5 million tonnes of LNG, over the lifespan of the project, concurrent with an equity investment in Driftwood,” reported Bloomberg.

A government official privy to the deal negotiations told The Hindu: “The pricing of gas is volatile. What looks like a bad deal now will look brilliant when prices change, and they will, and vice-versa.”

Capital markets, however, were less convinced. Tellurian’s stock rose, while Petronet’s fell.

In subsequent years, the deal waxed and waned. On not being finalised by March 2020, as initially projected, the MoU was extended by three months. It didn’t help. It expired once more. In November that year, Petronet LNG’s director (Finance), Vinod Kumar Mishra, told reporters: “Right now, a lot of cheaper LNG is available with us, without any investment, so why should we at all go for an investment.

By that time, Tellurian’s stock had also fallen after a short-selling attack. In response, the company slashed headcount. Two years later, in September 2022, Shell and Vitol scrapped their deal with Tellurian. The Indian government, however, stayed bullish. In October 2022, Minister for Petroleum and Natural Gas Hardeep Puri met Simoes. “We exchanged notes on the evolving gas markets & opportunities for Indian Oil Marketing Companies to invest in Tellurian’s projects in the US,” he tweeted thereafter. 

In February 2023, when GAIL issued an Expression of Interest for LNG supplies and wanted to pick up to 26% equity in exporters, speculation grew again that the Indian government would revive the Trump-era deal with Tellurian.

This continuing eagerness to invest in Tellurian has not received the attention it deserves.

Plays in the fossil fuel endgame

Why the US pushed Tellurian is easy enough to understand. 

The US shale industry is a big donor to Democrats and Republicans. Under Obama, the country saw a spike in its shale oil and gas production. On becoming president, Trump tried to make the country the world’s biggest natural gas exporter. Under him, not only did Tellurian co-sponsor Howdy Modi, it also got, said an employee of the US India Strategic Partnership Forum, “senior officials in the US administration to call Petronet and others”.

Harder to understand is India’s enthusiasm. As GAIL has been finding, imported shale gas is not a competitive fuel for India. “If you get gas at a high rate, you cannot create a gas-based economy,” the Petronet employee had said.

What makes this moment murkier is the attractiveness of the Indian market. In the past five years alone, India has seen a bevy of large foreign investments in its downstream oil and gas sector. Rosneft picked up Essar’s refinery. Novatek has tied up with Hiranandani to supply Russian LNG to India. Total has partnered with Adani. It has also teamed up with ONGC to explore deep-water oil and gas blocks off India’s east coast. Saudi Aramco has been variously eyeing BPCL—and Reliance’s Petrochemical plant in Jamnagar. Yet earlier, we have the deals struck by Cheniere and Dominion. As this article was being written, Qatar signed a 20 year gas supply contract with India. 

All of them see India as their last big–and growing–market.

These are dangerous waters. Fossil fuel majors seeing their last burst of growth coming from India will not want the country to decarbonise quickly. Instead, as they enter India through partnerships with local business groups, there is a risk that, between corporate lobbying and diplomatic pressure, India will stay locked longer into fossil fuels. All this, needless to say, at a time when the Earth’s overheating faster and faster. 

At this time, even as countries like Japan scale back the role of gas in their economies, India is pushing ahead. Despite the uncompetitiveness of imported gas, the country has accepted the fossil fuel industry line pitching gas as a transitional fuel, and says it will account for 15% of the country’s energy mix by 2030.

The long-term costs of such purchase contracts have to be understood. Take Tellurian. Over 40 years, it would have given India 200 million tonnes of gas. With one tonne of gas holding 51.7 MMBTU, India would have paid $62 billion (at $6/MMBTU, at current exchange rates)—not to mention the $7.5 billion that had to be invested by Petronet in Driftwood—over the next 40 years.

That works out to almost $70 billion, or ₹560,000 crore, over 40 years. Or take the recently concluded $78 billion LNG deal with Qatar. That is ₹624,000 crore over the next 20 years. All this is money which, instead of creating fresh import dependencies, could be used to double down on renewables. 

A senior bureaucrat familiar with the government’s energy policy feels fossil fuel exporters are extending quid pro quos to keep India on fossil fuels. In the case of Tellurian, he said: “India wants diplomatic support from the USA. We also want special materials for armoured vehicles and planes, and some ordnances. The US had been blocking their exports. Many feel these two—these deals and the supply of fracked gas—are linked.”

Much of this drags Enron’s Indian adventures to mind. There too, bending before pressure and corporate lobbying, India had signed up for an expensive power project. 

One wonders what happens next. In August 2023, Gunvor had dropped out of Tellurian as well. It remains to be seen if the Tellurian deal is firmly off the table now – or if it will be revived if Trump comes back to power. Tellurian, however, is just a battle in a larger war. Can India consume—or resell—all the gas it’s committing to? Given the earth’s atmospheric and oceanic systems are already spinning out of control – and India itself is being hit by aberrant weather every single month – what are the ecological and human costs that follow?

The report said  parts  of Africa, southeast Asia, central America, Europe and Asia are also witnessing a rise in temperatures, with some even undergoing heatwaves much earlier than normal. 

El Nino, Global Warming: South India may be hit by early and intense heatwaves

Early and intense heatwaves may hit the southern part of the county as it falls in the region under combined impact of heightened temperatures exacerbated by global warming and ongoing El Nino conditions in the equatorial Pacific Ocean, the DTE reported. The report said  parts  of Africa, southeast Asia, central America, Europe and Asia are also witnessing a rise in temperatures, with some even undergoing heatwaves much earlier than normal. 

The outlet reported that in southern India maximum temperatures are 4-8 degrees Celsius above normal, the worst affected areas are in western and central Maharashtra, Rayalaseema in Andhra Pradesh and northern Karnataka, according to India Meteorological Department (IMD) data for February 10 and 11, respectively.  While the heat is rising in southern parts of the country, north India continues to experience below-average temperatures and even coldwaves in some areas — a trend that began in January, DTE report said.

As ice melts polar bears face food scarcity, starvation threat: Study

According to a new study some polar bears are facing starvation as melting sea ice is forcing them to live on land, where they are unable to adapt their diets. The iconic Arctic species mostly eat ringed seals that they catch on ice floes offshore. But as the ice disappears in a warming world, many bears are spending greater amounts of time on shore, eating bird’s eggs, berries and grass. However the animals rapidly lose weight on land, increasing the risk of death, reported the BBC. The fall in bear population since the 1980s was mainly due to hunting, the report says adding: “With greater legal protection, polar bear numbers have risen. But increasing global temperatures are now seen as their biggest threat. That’s because the frozen Arctic seas are key to their survival. The animals use the sea ice as a platform to hunt ringed seals, which have high concentrations of fat, mostly in late spring and early summer. But during the warmer months many parts of the Arctic are now increasingly ice-free.

According to the NYT the researchers fitted 20 bears with video-camera collars in Manitoba, Canada, which is below the Arctic Circle at the southern end of the animals’ range, in order to study their hunting behaviour. It says: “Nearly all the bears followed in the new study lost weight, and two individuals were on track to starve before the sea ice returned.”

Ocean currents regulating Earth’s climate ‘on course to a tipping point’

The Atlantic Meridional Overturning Circulation (AMOC), a large system of ocean currents that helps keep temperatures in western Europe milder, “may already be on course to a tipping point”, according to a study covered by Independent and many other outlets. The AMOC plays a key role in regulating Earth’s climate by transporting heat from the Equator towards the poles. But as global temperatures rise due to warming, freshwater is pouring into the system from the melting ice from Antarctica, Greenland and other sources, risking disruption to the circulation patterns that drive the AMOC. While current observational records are too short to make a reliable estimation, there are early warning indicators suggesting ‘we are moving in the direction of the tipping point, researchers said. Once the Atlantic Ocean circulation collapses, the resulting climate impacts are nearly irreversible on human timescales, researchers warned. An abrupt shutdown of Atlantic Ocean currents that could put large parts of Europe in a deep freeze and other regions experiencing accelerated warming and altered precipitation patterns. is looking a bit more likely and closer than before as a new complex computer simulation finds a ‘cliff-like’ tipping point looming in the future, AP reported. 

the Atlantic meridional overturning circulation (AMOC), ocean currents key for global climate regulation.  is already on track towards an abrupt shift researches alerted about impending breakdown using computer models and past data They found AMOC is already on track towards an abrupt shift, the Guardian reported.

Snowless December, Jan may lead to extreme heat in March and April in north India? 

Vanishing snow accompanied by rain in western Himalayas in the peak winter (December 2023 and January 2024) will result in  heat waves in March and April and heavy rainfall in the pre-monsoon season over northwest India, experts have told Down To Earth (DTE). As a result Rabi crops will deplete further in the region that is already grappling with low production since the past few years leading to food insecurity.

DTE reported that from January 1 to January 23, six states in northwest India have received no rainfall. Himachal and Uttarakhand received 99% less rain than normal, and the rest have also received next to no rain. Rajasthan has recorded a rainfall deficit of 88% and Uttar Pradesh of 73%, DTE reported. According to the India Meteorological Department (IMD) a lack of active western disturbances have resulted in the extreme lack of precipitation (80% less than normal for December) in the Western Himalayan region.

Himalayan treelines might be climbing higher in response to climate change

Mountain ranges across the world are experiencing a warming climate which is pushing tree lines further north. According to a new study of the Trans-Himalayan region in Nepal and Hengduan Mountains in China, the former is experiencing rapid shifts in treeline, with younger trees growing further up the mountains, reported Mongabay adding that  changes in treeline elevation may disrupt the delicate balance of the hydrological cycle, affecting water availability downstream as snow and ice melt patterns change, the researchers said.

Mongabay quoted studies showing that in the Himalayan region, temperatures are rising more than the global average, with fewer cold days and more warm days, making ecosystems there vulnerable to climate change. These mountain environments, characterised by low temperatures at higher elevations, create limitations on tree growth. However, the intricate interplay between temperature and water availability, driven by precipitation gradients, means that predicting treeline shifts based solely on temperature changes is overly simplistic and may not fully reflect the complex reality.

Above normal temperatures forecast for India’s wheat areas

India’s major wheat-growing areas in the north, as well as other parts of the country, could experience above normal temperatures in February which may reduce yield , the India Meteorological Department (IMD) warned. This may force India to import wheat to keep the prices stable which so far the government has resisted as it would irk farmers ahead of a general election, expected by April, Reuters reported.

Monthly maximum temperatures for February are likely to be above normal over most parts of northwestern India, IMD office said adding that temperatures are also likely to be above normal over western central India and some parts of eastern central India, he said.

No consensus over timeline of release of influential climate science reports at IPCC talks

During IPCC talks in January in Istanbul, countries were divided over when to all the UN to release their highly anticipated and influential scientific reports assessing the state of climate change by the United Nations’ Intergovernmental Panel on Climate Change (IPCC).  Saudi Arabia, India and China were opposed to the proposed dates when the scientific body would provide its assessment for the next global stocktake, the UN’s scorecard of collective climate action, due in 2028, according to sources reported by Climate Home News which added that the developing countries argued the accelerated programme would force to complete the scientific process “in a hurry” and would not leave enough time for developing countries to review the output.

The IPCC met in mid january to decide the work programme for its seventh assessment cycle, which officially started in July 2023 with the election of its new chair Jim Skea.

Ahead of the talks, the UNFCCC officially requested that the scientific body align its activities with the timeline of the next global stocktake. But sticking to a 2028 deadline would mean either fast-tracking its work or shortening the IPCC’s entire cycle from seven years down to five years. Small island nations, least developed countries and some rich countries favoured this option, Climate Home reported.

‘DR Congo floods leave more than 2 million in need of aid’

The United Nations International Children’s Emergency Fund said over 2 million people, 60 percent of them children, need humanitarian aid due to the floods in the last two months in the Democratic Republic of the Congo. People are at risk of the worst cholera outbreak in years, the UN said.

The Congo River, the world’s third largest by water discharge volume, has reached levels unseen in more than 60 years due to exceptionally intense rains in 18 of the 26 provinces of the country, the largest in sub-Saharan Africa. Rainfall has caused floods that have destroyed or damaged almost 100,000 homes, 1,325 schools and 267 health centers, the fund said in a statement.

The report said crops have failed in waterlogged fields, raising the prospect of food shortages in some places. Forecasters have warned of more rain, raising the possibility that cholera, which spreads in flooded areas, could spread from areas where it is endemic across the Congo River to the northern city of Kisangani and then to Kinshasa. Congolese capital.

WIldfires: Colombia declares a disaster, calls for international help

As forest fires spread across Colombia, the country has declared a disaster. Experts say the wildfires are the result of “hot and dry conditions linked to the El Niño weather phenomenon”, Colombian president Gustavo Petro has called for international assistance for what he has described as “climate crisis”. Colombia has put out 204 fires in January and over a dozen continue to burn. Reuters reported that, in a study earlier this week,“climate change has been blamed for driving a record drought that has hit all nine countries in the Amazon basin – including Colombia”. 

Poor implementation highlighted the lack of political will to address issues related to the rights of forest dwellers, the research stated.

Study finds India’s implementation of Forest Rights Act to be poor

Almost two decades after it was first introduced, researchers found the implementation of the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2000, also known as FRA, to be poor. Poor implementation highlighted the lack of political will to address issues related to the rights of forest dwellers, the research stated. Increasing policy favourable to forest commercialisation is undermining the constitutional rights provided by the FRA, the study noted. 

India’s 2024-25 interim budget a green signal for climate investments

India’s interim budget for 2024-25 has some hits and a few misses as far as the country’s green future is concerned. While it keeps India largely aligned with its goal to become a $5 trillion economy in the next three years, the plan may have missed a chance to streamline measures needed to promote clean energy technologies such as solar PVs and electric vehicles, experts said. 

The government announced plans to provide rooftop solarisation to one crore households. This will give each household access to obtain up to 300 units free electricity every month, and an opportunity to sell the surplus to DISCOMs. The government also announced plans to provide viability gap funding for offshore wind energy potential for an initial capacity of 1GW. The budget also has provisions to set up a coal gasification and liquefaction capacity of 100 MT by 2030.

India launches framework to promote voluntary carbon market

India launched the framework to promote a voluntary carbon market in the agricultural sector. The government said it introduced the framework, titled ‘Framework for Voluntary Carbon Market in Agriculture Sector and Accreditation Protocol of Agroforestry Nurseries’,  for small and medium farmers to benefit from carbon credits and encourage environment-friendly practices. Details, however, of how the market will be introduced are yet to be revealed. 

John Podesta to replace Kerry as Biden’s top climate adviser

John Podesta, White House senior advisor, will replace John Kerry as US President Joe Biden’s top climate advisor in spring. While he will add international climate policy to his list of responsibilities, he will not get the title special climate envoy, which Kerry held. Kerry announced in January that he will now focus on Biden’s re-election campaign. Podesta has worked on climate policy in past Democratic administrations. He joined the White House last year to work on an ambitious climate programme. 

Since Jan 2023, at least 65 countries witnessed farmer protests demanding better prices and policies

Since 2023 at least 65 countries have reported farmer protests demanding better prices for their produce. DTE reported that around 21 per cent of countries in the Asian region saw protests by farmers. In India at least nine states/Union territories reported farmer protests in 2023. Farmers gathered in Delhi on February 13, 2024 demanding guaranteed crop prices, doubling of farmers’ income and the loan waivers.  Farmers in Nepal demanded fair prices for vegetables that were being imported from India. Protests in Malaysia and Nepal were driven by low prices for rice and sugarcane, respectively. In New Zealand protests took place over farm regulations. Farmers in Australia protested against the proposed high-voltage overhead power lines that would pass through their land. 

Farmers protested in 67% of countries in South America demanding better export exchange rates and reduced taxes. Argentina’s devastating drought severely damaged agricultural output. Brazilian farmers demonstrated against genetically modified maize-induced unfair competition in the agricultural markets. Farmers in Venezuela requested access to diesel that was subsidised. Colombian rice growers sought higher pricing.

Around 47% of countries in Europe saw protests over low crop prices, rising costs, low-cost imports and environmental rules imposed by the European Union. French farmers protested low-cost imports, a lack of subsidies and higher production costs. Farmers protested in 35 per cent of North and Central American countries. Farmers in Mexico want better prices for their corn and wheat production, while those in Costa Rica called for further government help. Around 22 per cent countries across Africa witnessed protests by the farmers. The key reasons behind these protests included — poor pricing of the crops amid high costs of production.

The new law also dropped jail terms for most violations and replaced it with a fine in the range of ₹10,000 to ₹15 lakh.

Bill to amend Water Act to decriminalise small offences cleared

The Water (Prevention and Control of Pollution) Amendment Bill, 2024, which decriminalises almost all penal provisions in the earlier 1974 law, was passed in Parliament, reported HT. 

Now all penal provisions have been replaced only with penalty, except section 25 and 26. For section 41 to 45A, there is provision for imposing financial penalty instead of prosecution in court, environment minister Bhupender Yadav said. Section 25 makes it mandatory to take consent from state pollution boards to operate and section 26 applies to discharge of sewage or trade effluents. The government earlier decriminalised several provisions related to air pollution under the Jan Vishwas (Amendment of Provisions) Act, 2023.

According to DTE, the Bill specifies that the Centre, in consultation with the Central Pollution Control Board, may exempt certain categories of industrial plants from obtaining consent from state pollution control boards to establish industries. This was mandatory in the earlier Act.  

The new law also dropped jail terms for most violations and replaced it with a fine in the range of ₹10,000 to ₹15 lakh. DTE added that the Bill allows the Centre to appoint adjudication officers to determine penalties. The original Act vested this power with the state governments.

Environment Minister: No study on air pollution’s impact on cognitive decline

Environment minister Bhupendra Yadav informed the House that there has been no specific study on whether high air pollution damages brain and motor functions among children. He stated that there are studies on the impact of air pollution, which is one of the many factors affecting respiratory ailments and associated diseases, “There is no specific study conducted in regard to the impact of air pollution on cognitive and motor impairment of children,” HT reported. 

An average Indian citizen is losing around 5.3 years of life expectancy according to the annual Air Quality Life Index report of the Energy Policy Institute at the University of Chicago released last year. Delhi recorded an average air quality index of 204 in 2023 compared to 209 in 2022— both in the “poor” category as per Central Pollution Control Board.

The State of Global Air 2020 report said India has the highest burden of infant deaths due to air pollution. The newspaper report pointed out that there are global studies that indicate the noxious air impacts pregnant women and may impair the early neurological development of children, adding that a paper published in Springer Nature’s Journal of Environmental Health in January last year found that higher exposure to air pollutants during pregnancy was inversely associated with motor, cognitive and language scores of two-year-old children. “These results indicate that prenatal ambient air pollution may negatively impact neurodevelopment in early life,” found the study led by the department of integrative physiology at the Colorado University in Boulder.

Another study led by the department of environmental and occupational health sciences at the Washington University found that children whose mothers experienced higher nitrogen dioxide and particulate pollution exposure during pregnancy were more likely to have behavioural problems. Higher exposures to PM 2.5 pollution when children were 2 to 4 years old was associated with poorer child behavioural functioning and cognitive performance.

Clean water crisis: Nitrogen pollution to triple scarcity in river sub-basins worldwide, India, Africa to be biggest polluters

Nitrogen pollution in rivers may persist until 2050 contaminating water quality in numerous regions, says a new study adding that the situation is expected to worsen in the years to come. An additional 40 million sqkm of river basin area and three billion more people may face water scarcity in 2050 than previously estimated. The study introduces the term “clean-water scarcity” and provides a comprehensive assessment considering both water quantity and quality. 

Future clean-water scarcity hotspots were identified in China, India, Europe, North America, and potentially Central Africa in the worst-case scenario. Nitrogen losses in rivers can stem from various sources, including human waste, agricultural practices and fertiliser applications. In the worst-case scenario, sewage is projected to become the dominant source of nitrogen pollution in rivers due to rapid urbanisation and inadequate wastewater treatment infrastructure.

India experiences nitrogen pollution primarily from agriculture, but sewage is projected to surpass agriculture as the main source in the worst-case scenario, DTE reported.

Mahagenco issued notices over failing to instal pollution-cutting tech at Koradi units

The Maharashtra State Power Generation Company (Mahagenco) filed an affidavit in a case that accused the state power firm of failing to install pollution-cutting equipment at its Koradi power plants, TOI reported. The petitioners said Mahagenco had received environmental clearance for its Koradi units in 2010 subject to installation of flue gas desulfurizers (FGDs) on all the units to reduce pollution. It failed to comply with those conditions for almost 14 years leading to widespread pollution in Koradi and adjoining areas.

Mahagenco stated it has submitted a detailed schedule, including procurement (ordering, manufacturing and delivery) of mechanical and electrical equipment, control systems and instruments. The schedule regarding construction, civil and fabrication works, installation and testing of mechanical systems, electrical equipment, control systems and instruments also forms part of the agreement. The company said a letter of award was given to Shapoorji Pallonji on November 16, 2023, after which its team visited the site for survey and to draw a layout plan. Accordingly, the Mumbai firm finalised the location of main equipment such as booster fans, absorber unit, oxidation blowers, and chimneys and also started a detailed engineering process.

Canada: Pollution from bitumen extraction from tar sands underestimated by 6,300%?

Employing a limited technique of measuring air pollution grossly underestimated the toxic emissions from extraction of the Canadian tar sands, according to new research. The research said air pollution from the vast Athabasca oil sands in Canada exceeded industry-reported emissions by a staggering 1,900% to over 6,300%. The Guardian reported that Canadian tar sands, also called oil sands, are a massive site of oil extraction in Alberta, an area larger than England. The type of oil in the tar sands is called “bitumen”. It is extremely heavy and difficult to extract as it requires massive amounts of water—what a small city may use on a daily basis.

Using aircraft to measure pollutants, researchers found that there are many organic compounds being released during the process that are missed by traditional ways of measuring air pollutants—with devastating health consequences. The report said for decades Indigenous communities in the region have complained about the health impact of toxic air caused by the oil sands operations.

The ‘PM Surya Ghar: Muft Bijli Yojana’ aims to light up one crore households by providing up to 300 units of free electricity every month.

‘Rushed announcement’: Centre launches ₹75,000 crore rooftop solar scheme ahead of polls

The Centre launched a $9 billion “rooftop solar push” to power 10 million homes as elections loom, Bloomberg reported. The ₹75,000 crore investment will be made to bolster the transition to solar energy through subsidies and cheaper loans for rooftop solar.  The scheme would reduce power bills for the “poor and middle class”. The ‘PM Surya Ghar: Muft Bijli Yojana’ aims to light up one crore households by providing up to 300 units of free electricity every month, the Indian Express reported.  Mercom reported that the programme information was still under discussion and pending consultation with industry stakeholders and that the industry is concerned “at what appears to be a rushed announcement” and its portal “does not include details of the new programme design.”

According to the PV Magazine the scheme offers a subsidy of ₹30,000/kW up to 2 kW, and ₹18,000/kW for additional capacity up to 3 kW. The total subsidy for systems larger than 3 kW has been capped at ₹78,000.

Over 73 gigawatts (GW) of solar power had been installed in India as of December 2023, but rooftop solar capacity has seen sluggish uptake and is only around 11.08 GW, the report said, noting that officials have said money would be deposited in bank accounts of people who install solar panels and they would be able to sell surplus electricity back to the grid.

India talks with IEA for full membership

According to PTI, ministers from the International Energy Agency’s (IEA) 31 member countries “have begun talks with India on its application to become a full member” in “recognition of the country’s strategic importance in tackling global energy and climate challenges”. PTI quoted Prime Minister Narendra Modi, who said: “I am sure that the IEA will benefit when India plays a bigger role in it…Inclusivity boosts the credibility and capability of any institution.” The PM said India was “firmly committed to combating climate change”, noting: “In one decade, we went from the 11th largest economy to the fifth largest. In the same period, our solar energy capacity grew twenty sixfold. Our renewable energy capacity also doubled. We exceeded our Paris commitments in this regard, ahead of timelines.” The agency said India sent a formal request for full membership in October 2023.

Punjab floats tender for 31 MW rooftop solar projects

The Punjab State Power Corporation invited bids to set up 31.37 MW rooftop solar power projects at various office buildings, 66 kV grid substations, hydel projects, and thermal projects of PSPCL at different locations. The tender includes the essential components of a grid-connected rooftop solar system but are not restricted to the Approved List of Models and Manufacturers regulation-compliant mono-crystalline or bifacial solar modules in the required quantity, inverters/PCU and module mounting structures with a minimum ground clearance of 300 mm at the lowest point from the roof surface.

The e-tendering process for rooftop solar project installation, within the 100 kW to 500 kW capacity range, revealed a discovered rate of ₹50,072 (~$603.04)/kW, inclusive of GST.

Govt puts plans to reimpose approved list of models and manufacturers from April 1 on hold

The Centre kept on hold its recent order to reimpose the Approved List of Models and Manufacturers (ALMM) regulation from April 1, 2024. On February 9, 2024, the government had confirmed the reimposition of ALMM with exemptions for projects set up under open access solar and those in advanced stages of construction and rooftop solar projects with no subsidy.

The environment ministry specified that the ALMM regulation will be relaxed for solar projects in advanced stages of construction that have placed module orders before March 31, 2024. Many stakeholders questioned  the ambiguity around the definition of ‘advanced stages of construction’, Mercom reported. Earlier the government announced that The ALMM would apply to all government-subsidised projects, projects set up for consumption by the government and its agencies or distribution companies.

The announcement was taken off the website following concerns raised by stakeholders.

Last month, the MNRE expanded the ALMM by adding 64 MW of new solar module capacity, bringing the cumulative module manufacturing capacity to 22,191 MW. The list now has 72 module manufacturers.

Domestic solar manufacturing: Majority PLI winners list Chinese vendors for setting up solar equipment manufacturing

The flagship production-linked incentive (PLI) scheme for solar equipment manufacturing, aimed at reducing import dependence, is likely to see significant Chinese presence in supply chain partnerships and related services., reported the Business Standard, adding that of the 12 winners of the PLI scheme for high-efficiency solar photovoltaic modules, 11 have listed supply chain partners and service providers from China, with some mentioning more than 20 Chinese vendors.  

According to the report, sector leaders Reliance New Energy Solar, Tata Power, ReNew Solar, Waaree Energies, Avaada Electro have listed vendors from China as major suppliers.

US solar boom opens $2 billion India door to banned products from China

According to a Bloomberg report, solar companies are successfully overturning the US ban on Chinese solar panels. A Bloomberg News examination of Indian and US import records says 

India’s largest solar producer, Waaree Energies Ltd., sent millions of panels to the US with components from a Chinese company whose products were repeatedly denied entry to the US market over concerns about forced labour. Those components, solar cells produced by China’s Longi Green Energy Technology Co. at plants in Malaysia and Vietnam, are used in Waaree panels blanketing solar farms in Texas and other states even as the US Customs and Border Protection officials are enforcing a ban on products tied to forced labour of Uyghur people in China’s Xinjiang region. The agency has detained thousands of shipments of solar panels made by Chinese-owned companies since it began enforcing the ban in June 2022 — interventions that companies can overturn by providing evidence their supply chains don’t involve Xinjiang sources. 

Following the US ban, Indian solar producers, which exported almost $2 billion worth of panels to the US in the first 11 months of last year, saw a fivefold increase over all of 2022, according to data compiled by BloombergNEF.

India targets to build 5 million metric tonnes of annual green hydrogen production capacity by 2030.

Indian oil producer unveils alkaline electrolyzer

Oil producing company Bharat Petroleum Corp. Ltd. (BPCL) developed an alkaline electrolyzer in collaboration with India’s Bhabha Atomic Research Centre (BARC), which was unveiled as India’s first domestically produced alkaline electrolyzer this week at the India Energy Week (IEW) 2024 in Goa. 

In alkaline water electrolysis, hydrogen is produced from alkaline water via electrolysis. In line with India’s target to build 5 million metric tonnes of annual green hydrogen production capacity by 2030, BPCL plans to build a 5 MW green hydrogen plant at the Bina Refinery, the outlet reported adding that it has plans to set up a 500 kW integrated hydrogen refuelling station at the Cochin International Airport. BPCL aims to highlight its progress in green hydrogen production

New payment security mechanism in 2024 budget to boost e-buses in states

According to India Ratings and Research, the new payment security mechanism (PSM) in the 2024 interim budget will significantly enhance competition in the electric bus concession market, leading to a reduction in the per kilometre fee, which is a crucial bid parameter, reported the ET.

The outlet added that this move aims to improve the risk profile of project developers, enabling state transport undertakings to modernise and expand their services at competitive prices, despite their aggregate loss-making status. The proposed PSMs are expected to address counterparty risks effectively, thereby improving the bankability of e-bus concession contracts. This improvement is anticipated to attract new developers and investors to the e-bus market, which could lead to further reductions in the prices contracted under gross cost contracts, the report said.

Centre’s pilot project uses green hydrogen to run trucks and buses between cities

The government launched pilot projects till 2025-26 with an outlay of ₹4.96 billion to use green hydrogen in the long-haul transportation sector under the National Green Hydrogen Mission, Mercom reported. It added that the plan is to back the deployment of green hydrogen through fuel cell electric vehicles (FCEVs) and hydrogen internal combustion engine (ICE) based trucks and buses in a phased manner. It will also explore blending green hydrogen-based ethanol, methanol, and other synthetic fuels to run automobiles.

The programme eventually envisions setting up “Hydrogen Highways” for heavy-duty and long-haul vehicles with distribution networks and refuelling stations.

The report said financial assistance initially will be provided to FCEVs and hydrogen ICE vehicles to close the funding gap, considering their higher cost. Expenses to produce green hydrogen or land will not be funded. Central financial assistance will be disbursed in three stages: Issue of letter of award (20%), milestone-based disbursement (70%), and completion (10%).

LG launches new residential storage solution

South Korean group LG unveiled a new PV storage system for residential users. The enblock E system is available in two versions, with usable energy capacities of 12.4 kWh and 15.5 kW. The system features lithium iron phosphate battery (LFP) cells. It is also compatible with inverters from major producers such as Fronius, Kostal, GoodWe and SMA, PV Magazine reported. 

According to the company, owners of a PV system can integrate enblock E on the DC side with a new solar system or retrofit an existing solar system on the AC side. “If the originally installed storage capacity is not sufficient, enblock E allows an additional storage module to be retrofitted up to two years after commissioning,” the LG statement said. 

The agreement called for Qatar to provide 7.5 million metric tonnes of LNG annually to Petronet LNG on a delivered ex-ship basis (DES) between 2028 and 2048.

India’s Petronet signs biggest LNG deal till date with QatarEnergy

In a bid to increase usage of LNG fuel in India to reduce emissions, India’s top gas importer, Petronet LNG has signed the largest single contract for LNG supply with QatarEnergy, Reuters reported. According to a Petronet LNG statement, the agreement called for Qatar to provide 7.5 million metric tonnes of LNG annually to Petronet LNG on a delivered ex-ship basis (DES) between 2028 and 2048. Qatar, the world’s second largest LNG exporter, is pushing to play a larger role in Asia and Europe as competition from top supplier U.S. increases.By 2027, it intends to increase its annual liquefaction capacity from 77 million tonnes to 126 million tonnes. Petronet LNG provides gas to Indian energy firms for end-user sale, mostly through long-term procurement agreements with Australia and Qatar.  

Growing demand: Coal India to add new mines, expand existing ones 

State-owned Coal India plans to start operations at five new mines and expand capacity of at least 16 existing ones to meet growing demand its chairman told Reuters. The newswire added that to address record power demand in recent months, the rise in coal-fired power output exceeded renewable energy growth for the first time since at least 2019.

A record output by Coal India—the world’s largest coal miner whose profits and share price have surged since early 2023—is set to boost inventories at power plants running on domestic coal by 16.1% year-over-year to 40 million metric tons by end-March, Coal India Chairman P.M. Prasad said in written response to questions. The company is on track to exceed its production target for the second straight year during the fiscal year ending March, Prasad said.

Oil India on look out for foreign tech partner for first offshore foray

With the goal of attracting international partners, Oil India Limited is set to undertake roadshows in Abu Dhabi in order to explore and produce off the Andaman and Nicobar Islands. Global corporations like Baker Hughes, Equinor, and ExxonMobil are being considered for the alliance.

The national oil corporation has set aside more than ₹1,500 crore for its offshore exploration endeavours, with the first phase of exploration scheduled to start in September 2024. One of the two state-owned oil corporations involved in production and exploration is Oil India Limited. ONGC is the other one. The corporation has four offshore blocks in the Konkan-Kerala, Krishna-Godavari, and Andaman Islands, totaling 13,230 sqkm.

India to lead global oil demand growth, surpassing China by 2027: IEA report 

India’s oil demand is predicted to rise by 1.2 million barrels per day (mb/d) between 2023 and 2030, accounting for more than one-third of the projected 3.2 mb/d growth in world demand, according to the IEA’s “India Oil Market Outlook to 2023.” By 2027, India is expected to surpass China in the increase of its oil demand and take the lead in driving up oil demand worldwide. In contrast to other major economies, India’s demand growth will be more uneven across product categories, with only 18% going towards the use of petrochemical feedstocks. 

This stands in stark contrast to global trends, where over 90% of net gains—and nearly all of them in China—are allocated to the production of chemicals. The report also noted significant increases in demand for aviation turbine fuel, naphtha, and diesel through 2030, with jet fuel demand growing at 6.9%, and naphtha and diesel at 5.9% and 4.5%, respectively. This demand surge is attributed to rapid progress in manufacturing, commerce, transport, and agriculture, boosting diesel usage notably.

India’s core sector growth hits 14-month low of 3.8% in Dec 

Based on a high base and a slowdown in the growth of six component sectors, India’s core sector output growth in December reached a 14-month low of 3.8% year-over-year, according to figures from the Ministry of Commerce and Industry. This represented a significant decrease from the 7.9% recorded in the preceding month. The core sector, which consists of eight important infrastructure businesses, grew by 8.3% as of December 2022. Based on the data, the only industries where output increased in December compared to the previous month were cement (1.3%) and fertilisers (5.8%). 

In December, there was a sequential slowdown in the growth of coal (10.6%), natural gas (6.6%), refinery products (2.6%), steel (5.9%), and electricity (0.6%). On the other hand, crude oil production contracted (-1 per cent) for the second consecutive month in December.  Experts said that the coal sector did well due to higher mining in preparation for greater power demand due to winter. The electricity sector, however, slowed down reflecting partly lower industrial activity. And higher demand for capital goods and automobiles kept production growth up. 

Policy reversal: Saudi Arabia orders Aramco to lower oil capacity target

The national oil company Aramco in Saudi Arabia was given an order on Tuesday by the government to stop expanding its oil output and to aim for a maximum sustained production capacity of 12 million barrels per day (bpd), which is 1 million barrels per day less than the objective set in 2020. Roughly 10% of the 100 million barrels of oil that the world uses each day come from Saudi Aramco. The corporation stood apart from much of the industry, where spending on oil production is often declining due to concerns about climate targets and future demand, thanks to its multibillion-dollar investment strategy. 

A person with knowledge of the situation claims that the ministry of energy made the decision, which was unrelated to any operational or technical problems at the business, which is still prepared to resume the investment programme upon request. However, in an effort by Opec to maintain prices in the face of slower-than-expected demand growth and rising supply from the US and other producers, Saudi Arabia has reduced output on multiple occasions over the last eighteen months. 

Shell’s LNG outlook: After demand in Europe post Ukraine war, demand surge in Asia

Demand for liquefied natural gas (LNG) grew after Russia stopped its pipeline to Europe following Ukraine war, but the production of the fossil fuel is likely to continue to grow until at least 2040, according to Shell’s LNG Outlook for 2024, which may cost the world its climate targets, reported the Daily Telegraph. 

The Times’ coverage of the outlook said Shell predicted LNG demand will rise by 50% by 2040, before peaking in that decade, due to big Asian economies offsetting declines in the US and Europe. The oil major is predicting an increase to between 625m tonnes to 685m tonnes a year in 2040, from 404m tonnes last year; however, this is below 2023’s prediction of 700m tonnes, the article notes. 

Govt approves forest clearances and mining permits in various sensitive zones

In its most recent meeting, the environment ministry’s Forest Advisory Committee (FAC) gave its “in-principle” clearance for the opening and expansion of several mines in Chhattisgarh, Odisha, and Meghalaya as well as for exploratory drilling in Assam’s wildlife-rich Doyang protected forest. Oil & Natural Gas Corporation Ltd. has been given permission by the FAC to conduct exploratory drilling in order to reroute 1.781 hectares of forest land in the Doyang Reserved forest. There are many elephants and one-horned rhinoceroses in the region, and there are also a lot of human-wildlife conflicts. The FAC in Meghalaya has given its approval to divert 11.09 hectares of considered forest for the East Jaintia Hills Opencast Limestone Mine. The FAC in Meghalaya has given its approval to divert 11.09 hectares of considered forest for the East Jaintia Hills Opencast Limestone Mine. The location is close to the Hoolock gibbon’s habitat in the Narpuh Wildlife Sanctuary’s eco-sensitive zone. The committee suggested “in-principle” approval for the extra diversion of 94.293 hectares of forest in Chhattisgarh in order to expand the Gevra mine.