VIEW FROM THE TOP: The end of Oil
Anand Mahindra
[ Sunday, February 26, 2006 12:10:15 amTIMES NEWS NETWORK ]
Visualise this: Five years from now, Iran becomes a renegade state and is preparing for a nuclear standoff. It shuts off oil supplies to the rest of the world. Nigeria collapses into civil war.
Oil production plummets by over two million barrels per day, and the price leaps to $150.
India is now a hungry tiger, consuming oil insatiably to sustain the expectations of its impatient population and at this cost of energy, the economy threatens to stall...
The opposition is making a lot of noise and people take to the streets. Sounds like a scenario from a Tom Clancy novel?
But even if there is a miniscule chan-ce of some part of this scenario coming true, there would be no need for further argument on the need to develop alternative technologies.
I do not subscribe to the doomsday scenario. A great deal of effort is going into oil exploration and into new technologies.
I believe in 10 years, India will be much closer to energy self-sufficiency. But she will never be totally self-sufficient.
In any event, oil is a growing source of vulnerability. Its price volatility affects growth, its emissions affect the environment, and dependence on it constrains political options.
If energy security is to be our cornerstone of growth, it's a 'no-brainer' that we must look for avenues for lessening our dependence on oil.
It's gratifying how much scope there is for reducing oil dependence by developing alternative technologies. Until 1975, the US was profligate, almost wanton in its use of oil.
It was literally cheaper than bottled water, and used accordingly. But the oil shock forced them to look for alternatives — energy-efficient vehicles.
As fuel economy rose, oil consumption fell by 17 per cent in spite of a GDP increase of 27 per cent. Even today, inspite of a slackening of focus, America wrings twice as much work from each barrel of oil as it did in 1975.
Thanks to society's capacity for self-adjustment, relatively small changes in technology can result in huge changes in consumption patterns.
In fact, the threat of alternate technologies puts pressure on those with a vested interest in conventional hydrocarbons to become more efficient.
There is an ongoing, countrapuntal sawaal-jawaab between conventional and alternative energies with alternative technology throwing down a gauntlet that conventional energy is compelled to pick up.
In India, we are energy-deficient on all fronts. Our strategy must be to align our alternate energy quest with our physical resources.
So the pursuit of CNG that we possess in abundance is an obvious direction for us. We must also look for alternative technologies that have a multiplier effect on other sectors.
Bio-diesel extracted from agricultural sources can create a new income opportunity for farmers. Our mountains of garbage could turn out to be a bonanza, with biomass-to-liquid technology. In our company, we are tackling the development of alternatives with missionary zeal.
Finally, there is the irresistible challenge of innovati-on. India has so much need for alternative energy that it opens up the field for a whole new generation of innovators and entrepreneurs.
It's a challenge that is uniquely congruent with our competitive advantage. Our competitive advantage does not lie in low costs.
It lies in our uni-que capacity to come up with solutions to life's daily problems at the lowest cost per unit of innovation.
India is destined to become an innovation leader and the quest for alternate energy is challenging us to live up to that destiny, consumption patterns and much greater energy security.
The author is vice-chairman and MD, Mahindra & Mahindra.
Originally published on timesofindia.com
[ Sunday, February 26, 2006 12:10:15 amTIMES NEWS NETWORK ]
Visualise this: Five years from now, Iran becomes a renegade state and is preparing for a nuclear standoff. It shuts off oil supplies to the rest of the world. Nigeria collapses into civil war.
Oil production plummets by over two million barrels per day, and the price leaps to $150.
India is now a hungry tiger, consuming oil insatiably to sustain the expectations of its impatient population and at this cost of energy, the economy threatens to stall...
The opposition is making a lot of noise and people take to the streets. Sounds like a scenario from a Tom Clancy novel?
But even if there is a miniscule chan-ce of some part of this scenario coming true, there would be no need for further argument on the need to develop alternative technologies.
I do not subscribe to the doomsday scenario. A great deal of effort is going into oil exploration and into new technologies.
I believe in 10 years, India will be much closer to energy self-sufficiency. But she will never be totally self-sufficient.
In any event, oil is a growing source of vulnerability. Its price volatility affects growth, its emissions affect the environment, and dependence on it constrains political options.
If energy security is to be our cornerstone of growth, it's a 'no-brainer' that we must look for avenues for lessening our dependence on oil.
It's gratifying how much scope there is for reducing oil dependence by developing alternative technologies. Until 1975, the US was profligate, almost wanton in its use of oil.
It was literally cheaper than bottled water, and used accordingly. But the oil shock forced them to look for alternatives — energy-efficient vehicles.
As fuel economy rose, oil consumption fell by 17 per cent in spite of a GDP increase of 27 per cent. Even today, inspite of a slackening of focus, America wrings twice as much work from each barrel of oil as it did in 1975.
Thanks to society's capacity for self-adjustment, relatively small changes in technology can result in huge changes in consumption patterns.
In fact, the threat of alternate technologies puts pressure on those with a vested interest in conventional hydrocarbons to become more efficient.
There is an ongoing, countrapuntal sawaal-jawaab between conventional and alternative energies with alternative technology throwing down a gauntlet that conventional energy is compelled to pick up.
In India, we are energy-deficient on all fronts. Our strategy must be to align our alternate energy quest with our physical resources.
So the pursuit of CNG that we possess in abundance is an obvious direction for us. We must also look for alternative technologies that have a multiplier effect on other sectors.
Bio-diesel extracted from agricultural sources can create a new income opportunity for farmers. Our mountains of garbage could turn out to be a bonanza, with biomass-to-liquid technology. In our company, we are tackling the development of alternatives with missionary zeal.
Finally, there is the irresistible challenge of innovati-on. India has so much need for alternative energy that it opens up the field for a whole new generation of innovators and entrepreneurs.
It's a challenge that is uniquely congruent with our competitive advantage. Our competitive advantage does not lie in low costs.
It lies in our uni-que capacity to come up with solutions to life's daily problems at the lowest cost per unit of innovation.
India is destined to become an innovation leader and the quest for alternate energy is challenging us to live up to that destiny, consumption patterns and much greater energy security.
The author is vice-chairman and MD, Mahindra & Mahindra.
Originally published on timesofindia.com
posted by Oil Shock at 2/25/2006 06:36:00 PM
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