Atoms for peace

Democracy in India has taken firm roots, and earlier misgivings about coalition governments at the Centre have proved largely unjustified, as recent experience has shown. However, in one respect, Indian democracy, with and without coalition politics, has not served the interests of Indian society adequately. In mature democracies, even when there are deep divisions on crucial issues of national interest, opposing parties drop their differences to coalesce around what is perceived as common national interest. One wonders when Indian politics would reach such a stage of maturity. An important sector in which national interest has to override partisanship is in the field of strategic decisions and directions in the energy sector. This is particularly important today, because India is faced with escalating scarcity of energy resources. Strategic choices, therefore, have to be made with a vision extending at least half a century into the future, uncertain as that might appear. It was in view of projected fuel scarcity that the former Iranian deputy foreign minister, Ali Shams Ardekani, and I proposed the Iran-Pakistan-India pipeline in 1989. This was undoubtedly a complex proposition, particularly in view of the tensions between Pakistan and India. However, considerable analysis was carried out identifying means by which anxieties could be addressed and uncertainties minimised. Yet, adequate political consensus for taking the plunge on this important project proved elusive. While this project is being pursued seriously at present, the pricing outlook has changed radically in the intervening period and the cost for setting up the pipeline has almost doubled. During the mid ’90s, and till about three years ago, it would have been possible for India to get an agreement from Iran for gas at very low cost far into the future. However, that outlook, and other political dimensions of the deal, have now changed substantially, and based on recent negotiations the price of gas would come close to the equivalent price of imported coal with further uncertainties likely to stall the finalisation of a three-way contract. While this possibility and, more importantly, the US-India nuclear deal are currently stuck, the prospects of supply and availability of all forms of energy sources in this country appear grim. The Integrated Energy Policy document projects coal demand in 2031 of around 1000 metric tonnes of oil equivalent (MTOE) and oil demand of almost 500 MTOE in the coal dominant scenario. These quantities appear totally beyond reach. TERI’s projections from a much more energy efficient scenario would bring down coal demand in 2031 to a little over 750 MTOE, with oil demand close to 500 MTOE. With oil prices currently in excess of $130 per barrel and the prospect of further increases in the future, India must restructure its transport sector, which is the major consumer of petroleum products. In the case of coal the major demand for this fuel comes from the power sector. Here again India would have to expand its import of coal substantially, with likely constraints on indigenous production and transportation. Soft options in the pricing of energy and distortionary subsidies would only lead to rapidly increasing demand. Energy pricing must reflect international realities, which the government and the opposition parties must accept if we want to create an energy future that is sustainable and secure. It is against the outlook of growing problems in the supply of both coal and oil that nuclear energy acquires great relevance in this country. The nuclear option certainly carries problems and even significant risks, but given the limited choices that India has, and the example of countries that have managed their nuclear programmes efficiently and safely, the nuclear option will prove to be an extremely important element of India’s energy policy. In this context, it is sad that even those parties in the opposition that philosophically support the Indo-US nuclear deal are not prepared to join hands with the government in pushing through this extremely important initiative that can help secure the supply of nuclear fuel and advanced technology. Even as the door is closing on the possible finalisation of the Indo-US nuclear accord, there is an urgent need for all political parties to suppress their short-term political interests in favour of India’s long-term national interest. Not to do so could in the long run lead to very severe constraints in fuel supply options, which would act as a drag on the growth of the Indian economy. And with escalating fossil fuel prices, nuclear power becomes economically more attractive. Against this grim scenario it is also essential to push the Indian economy and the structure on which it is built towards much greater efficiency in the use of energy. This would happen only if we promote, for instance, much more public transport in place of the usage of private cars, more energy efficient buildings and commercial complexes and some shifts in lifestyles. Distortions in pricing are clearly a major hurdle in attaining energy efficiency. For instance, with oil at $130 per barrel, the implied subsidy on kerosene consumed in the country would be in excess of Rs 60,000 crore annually. Kerosene is regarded as the poor man’s lighting fuel in rural areas. For half the value of this subsidy, every one of the 80 million rural homes in this country that have no electricity today could be provided with solar lanterns that would provide clean, sustainable lighting. It is for this reason that we have launched the programme of “Lighting a Billion Lives”, which is based on the provision of solar lanterns to a large part of the 1.6 billion people in this world who do not have access to electricity. But nuclear power is needed urgently to fill the fuel gap for large-scale power generation in India. Hence, to ward off the impending energy crisis, there is an urgent need for all politicians to support what would help India gain access to relevant technology and fuel resources.