Saturday, March 25, 2023

Petrol, diesel, gas and electricity to fuel the Naga economy

M A Niphi

Of late, with the construction of 4-lane highways and widening of rural roads, improved connectivity has been ensured across Nagaland. Likewise, the number of vehicles plying on the roads also seems to be doubling by the day. A significant portion of Nagas now own a 4-wheeler (if not more).Today, vehicles have become the lifeline because commuting from point to point (whether for official or personal jobs) is becoming almost impossible without one. A rough mental count on the total number of vehicles in Nagaland can be gauged by the number of traffic jammed in long vehicular queues around Dimapur and Kohima. One can also make out the percentage of Naga population on the roads at any time, every day. Further, our fuel consumption pattern vis-à-vis the number of vehicles (both new and used) will make interesting statistics.
As a result, dependence on essential fuel and electricity has become the prime mover for Naga society. What concerns us is that Nagaland still does not have a single refinery or a self-sufficient power grid to generate sufficient electricity for our own consumption. We are fully dependent on our next-door neighbour State Assam which is a risky proposition we are living on. In case of any eventuality due to unforeseen reasons; the ugly truth is that all energy driven and related activities in Nagaland will come to a standstill. Our vehicles will not move. Motors and engine will not work. In such a scenario, do we have any alternative in place? What if another lockdown is declared and our neighbours shut their supply doors? Therefore, a point for everyone to ponder upon is whether the present supply system of essential fuel or even electricity is sufficient to meet our energy needs?
The scenario becomes more uncertain in a time when world nations are shifting towards investing and developing alternate sources of energy. While the Central Government has made an ambitious target to make India a 100% Electric Vehicle (EV) nation by 2030, we are still caught up in the geopolitical dynamics over who owns the land and its minerals in the sub-surface. To reiterate, can we sustain the demand and supply for fuel and electricity in its present form alongside a fast-growing population with high rate of unemployment? This is the moot point we all need to ponder upon.
The concern stems out from the fact that the Naga economy is still evolving and in a nascent stage. There is an urgent need to leverage the state’s potential in terms of building our very own hydrocarbon (oil and natural gas) industry before it may be too late for oil exploration in Nagaland. In the past, Nagas were made to believe that there is abundance of oil and gas reserves in our land. While this may or may not be true, what we were not told is about the business of oil and gas – a subject grossly misunderstood to be as easy as digging a water well or sinking a tube well. For the benefit of everyone and in very simple terms, the oil and gas business is divided into 3 verticals viz UPSTREAM, MIDSTREAM and DOWNSTREAM.
‘Upstream’ is about extracting crude oil and natural gas from beneath the ground. ‘Midstream’ is about safely storing and transporting them to safe storages while ‘Downstream’ Sector is about converting crude oil and natural gas into thousands of finished products we depend on every day. In a way, what is discovered in the upstream segment becomes input to feed the downstream segment. Some of the more obvious products are petrol, diesel, kerosene, jet fuels, LPG, etc. Almost all plastic and synthetic products have some connection to oil and natural gas. Crude oil will first have to be extracted (upstream) and then fed to refineries (downstream) before finished products like petrol, diesel and LPG are made available for public consumption. As mere consumers of the oil downstream industry; our contribution towards the value chain of the oil and gas business is rather negligible.
Together, these 3 sectors of the oil and natural gas industry ensure and sustain the steady flow of fuel and material products that make our lives better, comfortable and safer.
While all 3 segments are vertically independent in terms of activities; the business can be horizontally merged in the sense that an oil Company can be a fully integrated E&P Company meaning the Company has all 3 verticals. Unfortunately, till date, none of the 3 verticals have a presence in Nagaland though there is high potential. We must appreciate the fact that the State of Assam commands the position it enjoys today in the E&P Business (upstream to downstream) and is poised to become a major energy supply hub in the region for the nation in the near future.
Leaving aside our fuel dependency on Assam, interestingly, there is no record of any systematic oil exploration activity being carried out in Nagaland till date. Our land covers huge tracks of area that is geologically complex, environmentally sensitive and logistically challenging, which is precisely why oil and gas exploration will not be as easy as we perceive. Let us not forget that it generally takes about 5-10 years to bring an oil well into production.
In conclusion and having sufficiently written on the subject earlier; yours truly is of the opinion that the message of urgency is loud and clear. This is an opportune time for all right thinking Nagas, student bodies, tribal Hohos, NGOs and all public organizations to come together and make an all-out concerted effort to push our Government for early industrial economic development. Pending peace talks or on-going Court cases should not stall or be a hindrance to economic development of Nagaland.
Without bringing in tribalism or factionalism, all of us need to come and stand united on this issue. Together we need to engage, lobby and demand for developing core sectors that will trigger economic activities to generate gainful productive employment and income. With the gift of natural resources that we Nagas are endowed with, oil exploration and production can be a vital link to usher in economic independence, growth and prosperity for the present as well as future generation.
The writer is the Deputy General Manager (Admin-Frontier Basin) of Oil India Limited Contact no- 9435392418