Mon, Jun 06, 2005 - Page 16 News List

India's urge for fuel heats up

To match the rapidly growing demand for energy in the country, the South Asian giant is being forced to reassess many of its old relationships and build new ones with controversial partners

By Somini Sengupta  /  NY TIMES NEWS SERVICE , New Delhi

Fed by a decade-long economic boom, India's ever-growing appetite for energy is quietly reshaping the way it operates in the world, changing relations with its neighbors, extending its reach to oil states as far flung as Sudan and Venezuela, and overcoming Washington's resistance to its nuclear ambitions.

Hovering over India's energy quest is its biggest competitor: China, which is also scouring the globe to line up new energy sources. The combined appetite of the two Asian giants is raising oil prices oil prices and putting greater demands on world oil supplies.

Already India's energy ambitions have led to developments unthinkable just a couple of years ago: a proposed pipeline to ferry natural gas from Iran across Pakistan; a new friendship with the military government in gas-rich Myanmar, formerly Burma; and budding talks with the US to let India buy nuclear technology.

Nuclear power is expected to top the agenda when Prime Minister Manmohan Singh visits Washington to meet with US President George W. Bush in July. While India covets new equipment to strengthen its feeble nuclear energy program, the US has prohibited the sale of nuclear technology to India since it tested a nuclear bomb in 1998.

"International cooperation, international understanding of India's nuclear ambition, can help to ensure our nuclear energy program moves forward at a faster pace," Singh told foreign journalists on Monday.

To understand India's need for energy, consider the fate of its commercial capital, Mumbai, formerly Bombay. It was enveloped in darkness in May because of a severe power shortage.

political powder keg

These days, the prime minister is engaged in a politically explosive argument with left-wing parties after suggesting that the government curtail giving free electricity to farmers. As the world's fifth-largest consumer of energy, India used energy at the equivalent of 538 million tonnes of oil daily in 2002, the most recent year for which figures were available from the International Energy Agency. That demand is expected to nearly double by 2030.

Today, India imports about 70 percent of its oil; in another 20 years, the Indian government estimates, that will rise to 85 percent. India's demand for natural gas is also expected to grow, and most of it would have to be imported.

"Our dependence is rising," Mani Shankar Aiyar, India's petroleum minister, said during a recent interview. "I welcome that, because it reflects India moving on."

Indeed, it is. "Mutual dependencies" is the buzzword of the day, signaling the way oil and gas links among South Asian countries stand to rewrite the enmities of the past.

"The foreign policy of India will have a lot to do with energy," said Ashutosh Varshney, a political scientist at the University of Michigan. "That is a new imagination and one likely to stay."

That vision is not without its challenges. On the one hand, India seeks to cast itself as the model of democratic pluralism, as in its bid for a permanent seat on the UN Security Council.

On the other, its hunt for fuel is pushing it to reach out to authoritarian governments like those of Sudan and Myanmar, which the US has sought to isolate. In both of those countries, China's weight is also keenly felt.

But India is quickly making inroads. It has persuaded a wary Bangladesh to agree, at least in principle, to a pipeline that would ship gas from Myanmar to India.

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