A New Map for the End of Oil Age

Context:  Daniel Yergin’s latest book "The New Map: Energy, Climate and the Clash of Nations" has thrown up some questions and policy measures for an import-dependent country like India

The New Map

• It does not provide a clear direction but instead suggests that the energy transition will unfold in different ways in different countries and over different time periods.
• It will be influenced not just by economics and technology, but also by politics and public activism.
• Six broad themes that define The New Map

1. 1. US shale revolution: transformed the US from a major importer of oil & gas to significant exporter
   2. Leveraging by Russia of its gas exports: to compel former members of the Soviet Union to stay within its sphere of influence and to embrace China into an energy partnership
   3. China’s assertion of its rights over the South China Seas: A critical maritime route for its energy imports and the Belt and Road initiative
   4. Sectarian strife (Sunni/Shia) in the Middle East:
   5. Paris climate summit and its impact: on public sentiment, investment decisions, corporate governance and regulatory norms
   6. Consequential impact of advancement in clean energy technologies

Suggested Policy Initiatives by the “new maps” to be taken by India for navigating future energy transitions

• On the fossil fuel axis:
  • Government should leverage its buyer strength (“monopsonistic”): To secure “most favoured” terms of trade for crude supplies
    • For this, India should take advantage of the onset of “peak oil demand”.
    • However there is no consensus on the timing of peak demand. E.g. International Energy Agency (IEA) projects it will peak by 2028 while Saudi Arabia holds that demand will not peak until at least 2050.
• On the renewable axis:
  • Develop its own world-scale and competitive manufacturing systems:  Like for photovoltaics (PVs) and battery storage,
    • This will help India reduce its dependence on China and helps to provide affordable solar units.
    • Currently, China manufactures 75% of the world’s lithium batteries; 70% of solar cells; 95% of solar wafers and it controls 60$ of the production of poly silica.
  • Prepare a clean energy technology strategy: Technology is the answer to the energy transition and it will bring the system to the tipping point of radical change.
    • China had already realised this fact and has placed clean energy R&D at the forefront of its “Plan 2025”
    • India should identify relevant “breakthrough technologies” and establish the funding mechanisms and create the ecosystem for partnerships (domestic and international)

Conclusion: India should resort to the above policy initiatives set along the twin axes of fossil fuel and renewables for navigating future energy transitions.