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India needs $2.1 trillion investment for energy: IEA

Dec. 4, 2013 at 2:09 PM   |   Comments

NEW DELHI, Dec. 4 (UPI) -- India's energy demand will double by 2035 on back of economic growth and increased population, the head of the International Energy Agency predicted.

"When we look at India, we see that in 2035, India will be the largest importer of coal, will be the second [largest] importer of oil after China and will be No. 4 in importing gas after [the] European Union, China and Japan," IEA Executive Director Maria van der Hoeven told reporters Wednesday on the sidelines of the Eighth Asia Gas Partnership Summit in New Delhi Wednesday, Press Trust of India reported.

Although India's energy demand will double, its per capita consumption will still be a fourth of the OECD average, she said.

Van der Hoeven said India would need $2.1 trillion investment in its energy sector by 2035.

Speaking Tuesday at the opening of the summit, Indian Prime Minister Manmohan Singh encouraged domestic and foreign companies to explore its onshore and offshore resources.

"I take this opportunity to assure investors of our government's commitment to providing a stable and enabling policy environment for exploration of new sources of energy," he said.

Van der Hoeven said unconventional gas -- coal bed methane and shale gas -- would come into production in India in about 10 years.

The U.S. Energy Information Administration estimates India's shale gas recoverables at 96 trillion cubic feet.

Yet van der Hoeven on Wednesday said challenges remain for India to realize its shale gas potential, including the lack of infrastructure to transport gas, sufficient water supply for hydraulic fracturing -- or fracking -- and acceptance by the Indian public of shale gas production, The Hindu reported.

Furthermore, she said, the gas price in India now is too low to make shale production viable. But she expressed optimism the government's plans for a new formula for gas pricing, to become effective April 1, would improve the outlook for Indian shale.

India's Oil and Natural Gas Corp. Ltd. inaugurated the country's first shale gas well in Ankleshwar in the northwestern state of Gujarat Tuesday, Livemint reports. The company said it would explore 30 more shale gas wells in India on the next two years.

Shale gas exploration would be a major step for India in achieving "economic freedom," the Livemint report quoted Indian Oil minister M. Veerappa Moily as saying. "It took six years for the United States to become a net exporter from being a net importer of energy with the use of shale gas and oil. Canada was the next country to do so. I want India to do the same," Moily said.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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