M1L4: Oil and Gas Sector in India

In the earlier chapter, we discussed how coal is vital for our country. We also saw how can we reduce carbon footprint through coal by using efficient technologies like AUSC and Clean Coal Technologies.

Now we turn ourselves to the next topic, which is oil and gas.

If you look closely, I have used the word ‘and’. Had I used ‘or’, it would have meant another way. But when I use the word oil and gas, I mean to say, that in most of the cases they are explored together. Why is this the case, that when oil is explored, it mostly comes out with natural gas?

When organic matter decomposes, it releases methane gas. This is almost common in each and every case. Be it when coal was getting formed, or when some other sedimentary rock is getting turned to petroleum or you can also find the same thing happening when we allow plane organic matter (biomass) to rot. In all the three cases, you will find methane gas adjoined with this fossil fuel. In case of coal mine, it is called coal bed methane or coal seam gas, in case of crude oil reserve, it is called as natural gas or in case when solid waste is rotting in a landfill site or an enclosed chamber, the resulting biogas is also methane. This explains, why we frequently use the word, oil ‘and’ gas and avoid oil ‘or’ gas.

PETROLEUM is also known as Black Gold or Rock oil or Crude oil. Through the process of fractional distillation, we separate it into constituents like petrol, diesel, kerosene, naphtha etc. One another component that is frequently encountered while studying these components is Oil gas. It is the product of fractional distillation of kerosene oil and not petroleum itself.

Crude oil is obtained mostly from these regions

USA (Eastwards towards the Gulf of Mexico)

West Asia and North Africa

North Sea

All of them have their own standards to determine the quality of oil. However, in layman language, from UPSC point of view, we will divide it into the following two types

Sour oil vs Sweet oil

Heavy oil vs Light oil

1 barrel of crude oil is equal to 42 US gallon or 159 liters

The heavier the oil, the higher the temperature needed to distill that part of the barrel. Heavy oil also needs extensive and more expensive refining to yield lighter products.

If you look closely, you will realize that India procures medium sour oil from West Asia. This is because of two factors

(1) Indian automobiles use BSIII engine configuration. A little amount of Sulphur is necessary in BSIII engines as it acts like a lubricant.

(2) Due to geographical factors, it is easy to get oil from West Asia than circumventing the entire African continent and get oil from Atlantic or North Sea.

Now why this is important for us? The reason being is, recently, the Supreme Court of India ordered the government to make BSVI compulsory in automobiles. Before we go ahead with this, let us understand the context of it. Every year, more than 1lac people die premature deaths in India alone due to respiratory problems caused by pollution. These costs are reflected in out of pocket expenditures by an individual or his family are referred to as hidden cost of fossil fuels. As per the global burden of disease report by WHO, these numbers are even higher.

Now if you can recall Article 47, it says that

“it is the duty of the State to raise the level of nutrition and the standard of living and to improve public health The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavor to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health”

On the same lines, Article 21 says that

“No person shall be deprived of his life or personal liberty except according to a procedure established by law.”

These two articles were used as a reference in the following cases

Sunil Batra v/s Delhi Administration

The Honorable Supreme Court of India said

“The “right to life” includes the right to lead a healthy life so as to enjoy all faculties of the human body in their prime conditions. It would even include the right to protection of a person’s tradition, culture, heritage and all that gives meaning to a man’s life. It includes the right to live in peace, to sleep in peace and the right to repose and health.”

Maneka Gandhi v/s Union of India

The Honorable Supreme Court of India

“The right to live includes the right to live with human dignity and all that goes along with it, viz., the bare necessities of life such as adequate nutrition, clothing and shelter over the head and facilities for reading writing and expressing oneself in diverse forms, freely moving about and mixing and mingling with fellow human beings and must include the right to basic necessities and also the right to carry on functions and activities as constitute the bare minimum expression of human self.”

Since the constitution of India guarantees a life, that a person can live with dignity and honor, it is vital for the government at all the three tiers to provide facilities vital for the same. One of that responsibility is providing clean air.

So, what can the government do to reduce air pollution? For that purpose, I am drawing a flow chart that will help us remember this problem easily

Once you go through this chart, you will find that it’s easy to tweak the process and continue with the existing structure rather than come out with a completely new technology. This is due to the fact that every new technology, requires its own set of linkages with other sectors that are essential for its smooth functioning.

Returning back to the core question, how can we reduce the problem of air pollution, this can be done in automobiles using either of the two techniques i.e. tweaking the process to achieve the desired results or by replacing the entire technology. In the former case, shifting from BSVI to BSVI is an option while e-vehicles fall into the latter case.

What are BS norms?

Bharat Stage emission standards, introduced in 2000, are emission standards that have been set up the Central government to regulate the output of air pollutants from internal combustion engine equipment, including motor vehicles. The Bharat Stage norms are based on European regulations. This means BSVI resembles Euro 6 and BSIV resembles Euro4 quality of fuel.

The improvement in quality will be visible in the levels of major gases that come out of exhaust pipe. You must have witnessed these numbers when you undergo a PUC (Pollution Under Control) certification test for your vehicle.

So how can we control the emissions below the levels that are needed in Euro6? To understand this, we need to understand how these emissions are produced at the first place. This requires a revision of some basic facts about the process of combustion.

Combustion is a process, in which fuel combines with oxygen in the presence of high temperature. Incomplete combustion releases more particulate matter and complete combustion seldom produces black smoke. Now, for a complete combustion to take place, that can help to reduce these emissions and the particulate matter, we need an optimum combination and mixing of the following three elements

In the entire process that I shall explain now, I will try to show you that this process is not a rocket science. It’s a simple plain thing based on the fact that if we want to reduce emissions, we need to make the process of combustion complete. And this process of combustion happens within the engine.

So how can we improvise this process of combustion inside the engine.

These technologies push the process of combustion to be as complete as possible and they are accommodated towards the engine side. This makes the bonnet lengthy and heavy. After this process of combustion in engine is over, the by-products are released into the atmosphere from the tailpipe. They are CO, NOx, unburnt hydrocarbons and Particulate Matter. The instruments required to flush them out are therefore fitted on the tail pipe. (This makes the trunk of the vehicle lengthy)

Challenges

(1) Realistically speaking, the transition is not from BS4 to BS6, its actually BS3 to BS6 since more than 99.99% of all the Oil & Gas companies sell BS3 fuel only. The BS4 fuel is available only in 13 cities at pan-India level.

(2) As we discussed earlier, these technologies increase the overall length of the car (and therefore the cost of it), it becomes hard to achieve the standards of emissions in compact cars. By virtue of this, the automobile manufacturers believe that they will lose a significant market share, if the cost rises beyond the affordable limits of the middle-class consumer market. 

(3) The Bharat Stage norms are based on European regulations. As assumed by the government, since Euro-6 is used in Europe, the engine technology for the same already exists in Europe & it can be directly retrofitted in India. However, this is actually not the case. The driving conditions & habits in India & Europe don’t even come close & therefore, the automobile manufacturers demand time to customize that technology as per Indian market conditions. Additionally, oil, used in Europe is Brent oil which is sweet while we procure oil from West Asia that is medium sour.

(4) Refineries are highly capital-intensive projects & have higher gestation period. Due to inimical financial conditions existing in the market, they are unable to borrow money in such a short period of time, to completely shift from BS3 to BS6. The refineries require at least 40,000 to 60,000 crore Indian Rupee to make this happen.

(5) Since, the major investment is supposed to be done in diesel vehicles, it will make the diesel vehicles more expensive. Logistics operators oppose the same as this inflation will be reflected in the prices of their end products & shall be passed on to final consumers, putting them out of competition from imported goods. Secondly, even after the rollout of BS4, government couldn’t spread the infrastructure beyond 13 cities. Hence, they are skeptical if the government can make this transition happen at pan India level in such a short time.

So, what is the solution to this problem? One thing is clear that this transition won’t happen overnight, and therefore the government should keep some other options on the table as a back-up till this happens. This includes Hybrid engine technology, emphasize use of CNG, strengthen public transport, subsidize e-vehicles etc.

In the next lecture, we will uncover them and compare if they hold any comparative advantage against BVI or not. Till then, as a homework, think and pen down, if the sanctions on Iran will have any impact on our clean energy targets?