Dreaming of energy security, India pumps desert oil


The deserts of Rajasthan may be the showcase for India's solar revolution, but the oil explorer that struck gold beneath the same sands insists that the country needs to pump out more fossil fuels to wean itself off imports. Ahead of this month's climate negotiations in Paris, India sought to deflect criticism by pointing to the solar panels and wind turbines that are sprouting up across the sparsely-populated princely state. Yet deep in the desert, four oil fields which are operated by an offshoot of Scotland-based Cairn Energy are churning out nearly a quarter of all domestic crude. Each day the world's longest heated pipeline funnels 176,000 barrels from the remote region of Barmer near the Pakistan border to the refineries of Reliance Industries, Essar Oil and the Indian Oil Corporation. Exploration continues apace, with less than half of the state's 150,000 square kilometers having been developed so far, thought to contain crude deposits. Millions more barrels of oil are likely still trapped under the rock, and oil magnates echo the same sentiment of Prime Minister Narendra Modi, who insists that the world's third-biggest carbon emitter must keep polluting its way out of poverty. "We would all like solar power and clean energy, but today the reality is that you need all kinds of energy -- you need clean energy, you need fossil fuels," Mayank Ashar, Cairn India CEO, told reporters during a site visit. "A country like India can either make fossil fuels, or it can import them. And, producing their own fossil fuels is much better." With India already importing three-quarters of its oil and a fast-growing economy sucking up more and more fuel, the International Energy Agency (IEA) projects that its energy imports will rise above 90 percent. The few domestic oil fields India has - Barmer and Bombay High off the coast of Mumbai - do little to counter the country's dependence on imports. "When it comes to oil and gas, we have a strategic vulnerability," Ashar said.The discovery of oil in a region so unyielding that it was once considered a punishment to post for civil servants was hard won. The oil giant Shell, which first was first licensed to explore Barmer in 1995, had given up efforts in the region after several wells came up dry. However, the efforts of maverick geologist Mike Watts, who was convinced there were gains to be made, moved to Cairn and kept searching. Cairn drilled 13 wells before hitting an abundant flow of highly paraffinic crude in 2004, the world's biggest discovery of onshore oil that year. Two years later, as engineering was well underway, flash floods rendered the site unusable. Within the decade that followed, Cairn regrouped and reshaped the impoverished city of Barmer, where farmers were once solely at the mercy of sporadic rainfall, making it into a bustling oil town. "This is changing the lives of the people in the desert," Deepak Upreti, principal secretary to the Rajasthan government, told Agence France-Presse (AFP). More than a dozen luxury hotels have sprung up to cater to oil executives. Local businesses set up to serve the industry have generated a market worth 15 billion rupees ($225 million) in procurement. Yet it sits somewhat uneasily with Rajasthan's status as the biggest solar-producing state - seeking to install 25,000 megawatts (MW) of India's ambitious target for 100,000 MW of solar energy capacity by 2022.In Paris, Modi launched a 121-nation alliance committed to dramatically boosting solar power and acknowledged "the energy sources of the industrial age have put our planet in peril". But he argued that rich nations have no right to stop the poor from using fossil fuels such as coal and oil, blamed for warming the planet. Upreti said Rajasthan needed to harness all energy sources and fossil fuels and renewables would "go hand-in-hand". Experts say the potential that there are undiscovered native reserves of oil and gas is limited, while the instability in Middle Eastern supplier countries is also a concern. Cairn's Rajasthan fields are expected to keep producing until about 2050, when India is expected to have become the most populous nation in the world and, projections suggest, the world's third-largest economy.