Does Kuwait import oil?

After the first oil shock of 1973, there was much talk of how to achieve energy security in India. That's happening again today, with oil at $60/barrel. But in the 1970s everybody agreed that energy security meant maximising the use of our coal reserves, which were sufficient for 300 years' consumption. Nobody regarded energy security as arranging imports of oil or gas.
That puts in perspective the crazy scene today.We have a coal minister who has little to say on energy security. By contrast, we have an eloquent petroleum minister scouring the world for gas and oil deals in pursuit of what he calls energy security. He has dazzled media and policy makers alike with his vision of "peace pipelines" carrying gas to India through what used to be politically impossible territory (Pakistan, Bangladesh). He seeks to buy stakes in gas and oil fields across the globe. Never before has a petroleum minister displayed such a sweeping vision, where gas pipelines through
Pakistan and Bangladesh become ties that bind us together, not security risks. This is imaginative oil diplomacy.
But is it energy security? The gas pipelines will reduce the cost of delivered gas compared with LNG (liquefied natural gas), but at an increased risk of disruption. The risks are modest, the potential diplomatic gains are huge, and so this is a worthwhile diplomatic gamble. But worthwhile gambles are not security.
India badly needs energy security, but that cannot be based on imported gas and oil. It must be based on maximising the use of coal, and substituting oil and gas with coal wherever feasible. That is not happening, for two reasons. First, we have no overall energy minister, and different energy-related ministries behave like separate fiefdoms. Second, despite our huge coal reserves, we have turned from an exporter to an importer of coal. Hence, nobody even bothers to think of schemes to substitute oil with coal, as happened in the 1970s.
Our proven coal reserves are 92 billion tons and rising. One-third of this can easily be mined. Yet, our annual production at around 400 million tons is grossly inadequate to meet the needs of even existing power stations. In past decades, India used to export coal, mainly to Bangladesh and Nepal. Today, our power plants need to import over 10 million tons to utilise capacity fully. We need to increase the efficiency of thermal power stations, but every one per cent increase requires an additional five million tons of coal.
The power minister has warned that the coal shortage may rise to 50 million tons in three years time, and to 80 million tons by the end of the 11th Plan (2011-12).
Is this not insane? We have among the biggest coal reserves in the world, yet are massive importers. This is like Kuwait importing oil because it cannot produce enough.
The analogy is not exact. High quality imported coal can be cheaper in Tamil Nadu and Gujarat than low-ash Indian coal transported from Orissa. Still, the rising coal shortage is shameful.
The nationalised coal industry suffers from excess labour and huge inefficiencies. The coal nationalisation law of the 1970s made mining a government monopoly, banning private mining (save for captive mines).
If we are at all serious about energy security, we must throw open coal mining to private and foreign investment. Even coal prospecting should be thrown open, to maximise the discovery of high-quality coal (most Indian coal is of low quality). This approach alone will produce the enormous quantities of coal needed to feed existing and future power plants, and to gasify coal to substitute oil and natural gas.
The Coal Ministry favours such reform, and has drafted a bill accordingly. But this has been put on the back-burner because of opposition from trade unions and the Left Front. These outfits would rather import coal than allow private sector or foreign entry.
Here, then, are the real energy threats we face. The main threats are not the possibility of OPEC cutting off oil supplies, or of Pakistan cutting off gas in a future pipeline, or of the ONGC failing to find oil abroad. The biggest threats to our energy security are people like Prakash Karat (of the CPM) and MK Pandhey (of CITU). If they determine policy, then India, despite massive energy reserves, will become an ever-bigger importer of energy, with all the risks that entails. In such circumstances, no amount of globe-trotting by the petroleum minister will give us energy security.
For Marxists to view private and foreign investment as exploitation is not new. When the Sheikh of Kuwait proposed giving additional acreage to foreign oil companies in the 1950s, leftist critics warned him about capitalist exploitation. He replied, "It's better to be exploited and become rich than not be exploited and remain poor." That is equally true of coal in India.