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India'sRiseTo3rdPlaceInOilDemandForbes

India'sRiseTo3rdPlaceInOilDemandForbes

OpinionsexpressedbyForbesContributorsaretheirown.
IndiasrealGDPhasbeengrowingby510%peryear,up$110billionin2014.NewPrimeMinister
ModisbusinessreformscouldexpandtheIndianeconomyby8%thisyear,beatingChinaforthefirst
timeindecades.At23%oftotalenergysupply,PetroleumisIndiassecondlargestsource,halfthe
marketshareofcoal.Boostedbyfallencrudeprices,IndiaisexpectedtoovertakeJapantobecome
theworlds3rdlargestoilconsumer,atabout4.1millionb/d.IndiaisnowwhereChinawasadecade
ago,andoilconsumptionisstronglylinkedtoeconomicgrowth.Petroleumhasnolargescale
substitute,soascountriesdevelopandinstallmoreextensivetransportationsystems,oildemand
increases.Since2005,Indiahasbeenresponsiblefor20%ofincrementalglobaloildemand
increase,versus55%forChina.
Comparedtolastyear,Indiasoildemandhasrisen300,000b/d,puttingthecountryontrackto
surpassChinainincrementalgrowthfor2015.Becauseoilisaglobalcommoditysoldonan
internationalmarket(whyseekingenergysecurityisfarbetterthanenergyindependence)alloil
consumingnationsmustcontinuallymonitorIndiasarrival.Indiaimportsthegreatbulkofitsoil,and
65%ofcrudeimportscomefromtheriskyMiddleEast,whichproducesathirdoftheoilandhashalf
ofprovenreserves.If/whenWesternsanctionsareliftedonIran,Indiahasalreadyacknowledged
thatitwantsmoreimports.AfterChina,IndiaisIranslargestoilcustomer.Indiaisnowimporting
about285,000b/dofcrudefromIran,upnearly40%fromlastyear.
Indeed,theRepublicanpartyandpresidentialcandidatesshouldloudlybesoundingthealarmabout
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agrowingU.S.energyinsecurity.AugmentedbyanewpipelinethatwilldeliverIraniannatural
gastoIndia,IndiaandIranhaveagrowingoilandgasalliance,andChinaandRussiahavea
growingoilandgasalliance,whileweinexplicablycontinuetoblockcrucialoilandgaslinkstoally,
neighbor,andenergypowerhouseCanada.Ourleadersmustknowthatoilandgaswillstillconstitute
atleasthalfofourenergyfordecadestocome,eveninthebestcaseforrenewableenergy.
IndiaWillBecomethe3rdLargestOilConsumerThisYear

Sources:EIAJTC
AlthoughIndiansmakelessthan5%ofwhatAmericansmake,Indiasstrongeconomicgrowthis
tricklingdowntorisingpersonalincomes,up40%since2008.Theworldspoorwantanddeservethe
samepersonalmobilityWesternershaveenjoyedforacentury.IndiasMiddleClasscouldreach45%
ofthepopulationby2030,upfrom22%todayand4%in2000.With1,270millionpeople,thelatent
demandforoilinIndiaisstaggering.Indiahasjust40carsperevery1,000people,comparedto525
inWesternEurope.Bolsteredbycheapercars,lowerfuelprices,andsolidfinancingoptions,Indias
passengervehiclesalesareupnearly20%thisyear.Andformoreeconomicgrowth,IndiasPrime
MinisterModiwantstoendgovernmentcontrolsonfuelpricing,helpingstaterunrefinersmeetrising
demand.
Gasolineuseisup20%thisyear,butstillonlyaccountsfor10%ofIndiasoildemand,versus20%in
Chinaand47%intheU.S.Fourthglobally,behindtheU.S.,China,andRussia,Indianowhasa
refiningcapacityof4.5millionb/d,doublethecapacityof2006.Thisismorethananycountryinthe
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MiddleEast(SaudiArabialeadsat2.9millionb/d),andpotentiallyreaching6.3millionb/dby2020.
Withinafewyears,Indiacouldbecometheworldslargestmarketfordieselcars,nowstandingat
over50%ofthefleet.Germanyisthegloballeaderbutwantsmoreenvironmentalpoliciestorestrict
sales.DieselinIndiahastakenahitbecausefuelpriceshavebeenderegulated,butthe
introductionofsmalldieselenginesandaproliferationofpopularcompactSUVsinstallanupward
trend.
RecommendedbyForbes

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Atnearly12millionpeopleayear,Indiasurbanizationwillalsobecriticaltooilusebecauseurbanites
havebetteraccessandmoremoneytoconsumeenergy.Thishistorictransformation,however,also
givesIndianofficialsachancetobufferexpandingconsumption.Indiaisanemergingmarketwhere
oilisntasentrenchedinthedemandstructureasitisintheWest.Moreefficientvehicles,afocuson
oilasadesignedtransportfuel(transportisonly40%ofIndiasoildemandversus75%intheU.S.),
andimproved/moreexpansivepublictransportationsystemsarethreekeystrategies.Superhighways
arebeingbuiltandinitiativestoreducecongestionareworking,butnumerousprojectsare
runningyearsbehindschedule.
IndiasVehicleSales

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Source:JTC
ToomanyWesternerswithalltheenergytheyneedareunawarethatitsthosehumansthatDONT
haveaccesstomodernfuelssuchaspetroleumthatmakelessmoneyandlivelesshealthy,shorter
lives.IndiaiseasilythemostenergydeprivednationonEarth,whereastaggering960million
peopleliveonlessthan$2aday,700millionlackaccesstomodernenergysystemslikeoil,and
310millionhavenoaccesstoelectricity,thefoundationofmodernsociety.
ThisunacceptablecalamityiswhytheclaimthatIndiamustfirstbecomemoreenergyefficientisso
utterlybackwards.Indiasimmediateneedsareclear:animmenseenergygrowthstrategytogive
citizensalegitimateshotatabetterlife.Illustratingtheurgency,Indiahas650millionpeopleunder
theageof25,meaningthatIndiahasmorepeopleunder25thantheentirepopulationsoftheU.S.,
Brazil,andJapancombined.
ThecaseofIndiaexemplifiesthatthetrueworldsgreatestproblemisaninsidiousWesternpush
thatsmakingworseningglobalpovertyanafterthoughttocomputermodeledpredications.Thereal
moralchallengeofourtimeisthattheworlddoesnthavenearlyenoughenergy,notthefalse
Westernbasedassertionthattheworldisusingtoomuchenergy.Morereliable,cheaper,and
readilyavailableoil,coal,andgashavebeentheenablingenergysupplyforourownincredibly
higherstandardsofliving.
Anyhypocrisytolimittheseessentialenergyoptionsforthedevelopingworldshouldberejectedby
theenvironmentalmovement:itdrasticallyerodeshumanprogressandourcreditability.Theworlds
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poorsurelyscoffed,forinstance,whenU.S.SecretaryofStateKerrysflighttoIndiatorailabout
fossilfuelusedevoured20,000gallonsofoilbasedjetfuelasmuchoilproductas185,000Indians
useinanentireday.
RecommendedbyForbes

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