Journal of the
PETROTECH Society
PETROTECH 2009 “Energy Independence with global co-operation: Challenges & Solutions” COMMEMORATE ISSUE
Journal of the Petrotech Society
Volume V No. 3
December 2008
Editorial Dear Patrons,
New Year greetings from PETROTECH SOCIETY!
An eventful year 2008 has just gone by! This special issue of inhouse journal coincides with the biennial mega event. Under your continued patronage, several new initiatives have been taken during the year to improve the overall stature of the Society. Some of these initiatives are listed below for your kind appreciation.
Going Global : A small beginning has been made by signing a formal MoU with University of Alberta, Canada and holding preliminary discussions with Sinopec Management Institute China for developing mutual areas of co-operation. Efforts will continue to bring PETROTECH Society in the international arena by building up relationships with many such international bodies in the coming year.
Industry Awareness Programme : As part of our two pronged strategy, many industry experts have visited various institutes/ universities to deliver hands-on type talks to final year students. This has been well received by the institutes and student community.
Besides the above, a 14 member group of Industry experts alongwith Govt of India representative (Mr Lal Chhandama, under Secretary in MoP&NG) visited Canada under the banner of PETROTECH Society, where they were apprised about the advancements made by Canadian Hydrocarbon Industry. This was a good educational tour appreciated by all participants.
Student Chapters : In order to reach out to the student community studying petroleum engineering subjects, the Society has set up chapters at various such institutes to facilitate exchange of information/study material as required by chapter members from time to time.
Besides this, research fellowships have been launched for undertaking research in Industry related subjects.
New Membership : The Society has added 7 more Corporate Members raising the total strength to 30. The efforts are on to enroll more members.
Annual Schools/Seminar in North East : Annual Schools have been formalized and incorporated in the Society Calendar both in upstream and downstream areas in collaboration with ONGC and IOCL. Besides, R&D conclaves have been started to share knowledge and give impetus to R&D advancement. For the first time, a seminar on “Hydrocarbon Industry Growth Prospects & Challenges in North East” was organized at Guwahati for participants from North East
PETROTECH 2009 : Besides Regular events new Initiatives are being taken during the forthcoming biennial event listed below:
•
CEO’s Conclave
•
increase remuneration of Rs 5 lakhs to Life Time Achievement Awardees
•
Special Award and Trophy to Best Presentation amongst Student Chapters
The Society has thus embarked on a long journey of continued excellence which necessitates your valued guidance and kind patronage in the years to come. While the focus for the new year 2009 would remain to be holding of various seminars and schools for the benefit of industry executives, it is proposed to give an added impetus to our efforts towards building up our international stature thereby enabling the Society to get a bigger canvass to perform its dutiful role as enshrined in its articles of association.
Wishing you a very happy and prosperous year 2009!!
J L Raina Secretary General & CEO
Petrotech Society wishes you a happy and prosperous 2009!
JOURNAL OF THE PETROTECH SOCIETY Advisory Board
CONTENTS
Dr Hari Narain Former Director, NGRI
D E C E M B E R 2008
N B Prasad Former Chairman, ONGC
Dr Avinash Chandra Former DGH
Dr S Varadarajan Former DG, CSIR
Dr A K Bharnagar Former Director (R&D), IOC
Energy Independence with Global Cooperation - Challenges and Solutios
6
by R S Sharma
Dr T S R Prasad Rao Former Director, IIP
A Petrotechie's Diary
9
Subir Raha
Dr M O Garg Director, IIP
Dr S Ramanathan
Themes of Petrotech Conferences & Exhibitions
13
Message to promote CDM projects - Secretary MoPNG urgs to oil PSUs
14
Fuel quality and Vehicular Emissions
15
Former Member Personnel ONGC
P K Mukhopadhyay
Arun Balakrishnan
Former Director (R&D) IOC
Dr D M Kale
Integration Strategies: A perspective on ONGC group of companies
Director General ONGC Energy Centre
Dr A K Balyan, A K Deb, Haresh V Karamchandani
Micro-algae: Biofuel Production and CO2 Sequestration Concept, Prospects and Challenges
Editorial Board J L Raina Editor Secretary General & CEO,
19
23
Maya Chakradhar, Manoj Upreti, D K Tuli, R K Malhotra, Anand Kumar
Coal as a supplement for natural gas: Some options examined
30
Ajay Deshpande, M K Joshi
PETROTECH Society
Recession Face-off G Sarpal
35
Naresh Kumar
Secretary
Fuel Cell - prime movers for the hydrogen economy Suman Gupta
37
Ashish Jain
Manager
Carbon neutrality - the way forward to "Sustainable Development"
41
A B Chakraborty, S Dasgupta, Somnath De
The views expressed by the authors are their
Alternate Energy Options in India: Status of Biofuels and Hydrogen
own, and do not neccessarily represent that
Preeti Jain, N K Pal, D K Tuli, R K Malhotra
46
of the Petrotech Society.
Printed and published by Petrotech Society at Core 8, Scope Complex, 3rd Floor, New Delhi - 110 003 India
Corporate Members of Petrotech Society
50
PETROTECH Society Bridging the Academia Industry Gap
51
JOURNAL OF THE PETROTECH SOCIETY
Energy Independence with Global Cooperation- Challenges and Solutions R.S Sharma Chairman & Managing Director, ONGC Chairman, ONGC Group of Companies and Chairman, Petrotech Society
Understanding Energy Independence as a ‘Concept’ Let me begin to deliberate on what really is Energy Independence and where did this notion of energy ‘independence’ come from? The 1973 Arab oil embargo interrupted flow of oil causing severe shortages across the globe and gave the world its first glimpse of what lay in store if they continued depending on imported oil. The phrase ‘Energy Independence’ soon made its debut on matters relating to national energy policy of many resource–dependent countries. However, as ramifications of becoming ‘Energy– Independent’ began to sink–in, the phrase was relegated to the back-waters and bilateral long-term deals become popular. The concept of ‘to-each-hisown’ ensured that resource–rich and resource–deficient nations accepted mutual interdependence as key policy corner-stone and struck deals to introduce a modicum of ‘Energy continuity’ if not ‘Energy independence’. Today, the term has made its reappearance as growth aspirations of developing nations have driven the need for assured energy to fuel this growth to the fore. In addition, concerns on adequacy, reliability, and pricing of energy supplies; environmental implications of use of fossil fuels; and global geopolitics are issues that have brought back ‘Energy Independence’ to centre stage. What exactly is to be inferred from the term ‘Energy Independence’? Does it connote ‘independence’ from dependence on ‘foreign energy’? Or, are we talking about independence from hydrocarbons? Let me dwell on this further. 6 D E C E M B E R 200 8
In the narrowest sense, energy independence does imply complete energy selfsufficiency, that is, to meet all the energy needs through domestically produced resources. However, this is easier said than done. No country on the globe can hope to become fully self sufficient as Mother Nature has balanced the energy basket of each country rather delicately. While a country may be resource-rich in one form of energy, it still needs access to another form of energy for applications that are unique for a particular energy resource. For instance, Saudi Arabia is a net exporter of oil, but is an importer of natural gas for industrial applications and power generation. The same is true for India as well. While we have substantial coal deposits that can be put to use for power generation, we still need to import oil for fuelling the transportation sector. On the other hand, complete freedom from fossil fuels may not be achievable in the near future considering the quantum of assets and infrastructure designed to function specifically for them globally.
Mr R S Sharma is the Chairman & Managing Director of India’s flagship Navratna Public Sector Undertaking, Oil and Natural Gas Corporation. He is a Fellow Member of the Institute of Cost & Works Accountants of India and an Associate Member of the Indian Institute of Bankers. Mr Sharma is also the Chairman of Mangalore Refineries and Petrochemicals Ltd., ONGC Videsh Ltd., and other group companies of ONGC.
diversification would at best be limited only to a few zones and countries, thanks to narrow geo-political compulsions of nations, while diversification of fuel choices entails seeking assured supplies of cheap and clean energy from sources other than conventional hydrocarbon. This ideal equilibrium is unlikely to be achieved in a hurry. Geo-politics and ethnic divides will remain and continue to override plain economic criterion, while alternative energy resources remain in the realm of developmental technology that is yet to reach breakthrough threshold for mass application.
Energy Independence, therefore, does not lie in the narrow confines of self sufficiency and independence from hydrocarbons. Instead, Energy Independence signifies diversity in supplies; as well as fuel choices. In the true sense, Energy Independence implies freedom from political and economic insecurity that comes as baggage along with our dependence on fossil fuels whose supplies are limited and controlled by volatile and unstable regions. Environmentalists compound the equation further by including freedom from environmental insecurity as a parameter in the selection of fossil fuels in the energy basket of a country.
In the absence of viable choices, global cooperation in sharing energy resources remains the best option to pursue. The realization that we do not live in disconnected pools is paramount for achieving freedom from the insecurities of energy supply. This fact has been reemphasized in the current credit crisis. Initially there was a hint of de-coupling of economies when the crisis first hit the US in the summer of 2007. Many thought that Europe and Asia would not be affected because of their own dynamism. Today, after several major economies have slipped into recession, and emerging countries including BRIC countries are experiencing slowdown of appreciable magnitude, the proponents of de-coupling of economies have few takers.
These are onerous issues with no simple ‘off-the-shelf’ formulations. Supply
True, one can reduce ‘foreign’ dependence through demand-side energy
JOURNAL OF THE PETROTECH SOCIETY
management, but this is a step that should be taken – up as a pre-requisite in deference to climate control mitigation by all countries alike irrespective of their energy resource base. Further, as a natural consequence of gradual economic evolution, industrial capacity gets somewhat geographically dispersed. For instance, no refi ning capacity has been added in the US in the last thirty years, while major refining capacity is being generated in Asia (particularly in India) and in the Middle East. Carrying the argument further, ship-building and offshore vessel building capacity has gradually shifted from Japan to South Korea while Services and cutting-edge technology for hydrocarbon exploration and extraction is mostly available through Western and European Companies. In addition, China has emerged as a major supplier of industrial goods for oil – field services. The argument therefore is that no single nation posses the resource base to service the entire value – chain of hydrocarbon production from exploration to production to maintenance to transportation to dispensing units for consumer off-take. Even if economic disparities of countries are set aside as a driver of mutual cooperation, the fact that emerges from this argument is that even resource-rich countries can exploit their natural bounty only through collaboration with other countries. Mutual inter-dependence is therefore a pre-requisite and has essentially migrated from ‘desirable’ to ‘essential’ status.
Similarly, efforts to address environmental concerns would be successful only if the whole world joins forces. Climate change is a text book example of a global problem that needs a global solution. Carbon dioxide emitted anywhere warms the planet everywhere. If the polar ice caps melt, the rising tide would sweep across all the countries along its path, whether rich or poor. A single country becoming carbon neutral, therefore, won’t help. All nations, especially those with large carbon footprints, will have to cooperate and simultaneously start reducing their almost total dependence on fossil fuels. Alternative sources of energy that can fulfil the global need of cheap, plentiful and carbon – neutral energy will require technical and scientific prowess that no single country posses by itself. If knowledge resides in one country, the implementation prowess lies with the other. Clearly, it is yet another case for mutual co-operation. There is yet another, dimension which calls for Global Cooperation. Competitive power politics over oil and gas is at the heart of foreign policy of several countries. It would come as no surprise if energy resources become the defining axis of geopolitics. That would once again take us back to the era of wars, cold wars and blockades. We need to forestall such a scenario from turning into reality. Therefore, we need to move together, ever mindful of the interests and concerns of others, while pursuing
our own interest. Because, as history shows, if we ignore the insecurities of others they eventually become our own. The ideal situation would be when energy would flow across borders like any other commodity independent of geopolitics and function as a global market that works of the natural equilibrium of demand and supply. It appears utopian at the moment, but perseverance and a realisation that mutual dependence is the key to global energy security would gradually nudge nations into moving towards rational energy policies mindful of what it takes to get what one wants.
Challenges and Solutions Having established the context that connotes the term ‘Energy Independence’, one can now examine pertinent challenges and possible solutions. Switching to alternative fuels from hydrocarbons is a gigantic task as the world has built an enormous infrastructure that has made continued use of traditional fossil fuels a preferred and cost effective solution over other sources of energy. Various scholarly analysis of the global energy basket suggests that global dependence on hydrocarbon for the next fifty years is virtually assured, especially for the transportation sector. The near–term challenge is therefore to enhance global hydrocarbon production so that the D E C E M B E R 2 008
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JOURNAL OF THE PETROTECH SOCIETY supply–demand balance does not tip adversely to either seriously impact global economic growth adversely or to result in a bull-run on crude prices that we witnessed in the recent past. Fossil fuels account for more than 80 percent of the current energy demand globally and will remain major source of energy for many years to come. However, although world’s endowment of fossil fuel is large enough, cost of production, and prices required to sustain production at levels to match demand, is highly uncertain. Production enhancement is therefore increasingly becoming a major concern area. True, enhancement can come about by discovering new fields and augmenting production from existing fields. However, the low lying fruits – the so-called ‘easy-oil’, has already been discovered and mostly consumed. New pools are in difficult terrains and in subtle geological plays having multiple complexities. The new emerging locales of these fossil fuels, the Frontier basins, deepwater and ultra deep waters, arctic / polar region are logistically difficult and technologically challenging areas to be conquered. Augmenting production from existing fields is also equally tough as most of them have matured and have entered a declining phase. After a detailed field-by-field analysis of the production trend of 811 oil fields, the World Energy Outlook 2008 reports that the average production weighted observed decline rate worldwide is currently 6.7% (reference scenario) for fields that have passed their production peak. This rate would increase to 8.6% by 2030. The natural decline rate (stripping the effects of investments) is still higher at 9% and would increase to 10.5% by 2030 for these post peak fi elds. This means, new reserves need to be discovered and production somehow needs to rise significantly just to offset this faster decline. This is easier said than done. The reference scenario of the World Energy Outlook 2008 projects that this would require a massive cumulative investment of over $26 trillion (in 2007 dollars) over 2007-30 period to stay afloat ahead of demand. Further, production from these fossil 8 D E C E M B E R 200 8
fuels is projected to level off in few decades and would require massive substitution. Substituting these fossil fuels on large scale and making major alterations, additions, or improvements in the existing energy resources and infrastructure would however, require superlative effort, investment and would certainly not come about any time too soon. Supply can be improved through demand side management. These would include energy conservation and improving energy efficiency. However, there are many barriers to effectively managing demand; technology and investments being the major ones. Renewable and alternatives are great; unfortunately, harnessing the renewable energy resources and delivering them to society in the form of practical, affordable and reliable alternatives is a colossal challenge. Yet we need to overcome these challenges. Brazil may serve as a case study and help unravel the missing links. Brazil has reduced its share of imported oil over the last 30 years. It has largely achieved this goal by increasing domestic oil production and developing the world’s largest clean renewable alternative energy source, the sugarcane ethanol. Brazil recently has made few major discoveries in the deep waters which have the potential of trebling its oil production. Combined with the clean renewable alternative energy source which currently accounts for over half of fuel demand, Brazil has moved in the right direction. However, Brazil’s task is not over yet and it may not be possible for the country to turn into an oil exporter, all by itself. The recent major discoveries of Brazil are in deep waters and are below several hundred meters of thick salt layers. Development of these fields would be very cost, resource and technology intensive. Brazil would have to depend on major players/ countries to tap the potential from these huge fields. The key for Energy Independence that emerges from this illustration is that, we need to make new discoveries and
increase production and simultaneously need to develop alternate source of energy. And global cooperation is essential; for making and developing new discoveries, augmenting production, expanding energy supplies, developing and accessing technologies, finding ways to weaken vulnerability to price volatility, fostering energy efficiency, developing alternate sources of energy and fighting Climate Change. No country individually has the resources or the technology to overcome these challenges. No country on its own can fight the crusade against climate change mitigation. The scale of these problems is such that only global cooperation can find a solution. And these are precisely the ingredients which would lead us to achieving Energy Independence. Real Energy Independence can be achieved by reengineering not just our energy economy but also that of the entire world. It calls for an energy strategy which is not just tailored to our own markets and our own technical capabilities but also to the people on the other side of the boat. Only then can we achieve energy security and free ourselves from the insecurities of fuel supply and environment concerns.
Conclusion We have to attain Energy Independence; an independence that frees us from the insecurity arising out of our almost total dependence on fossil fuels and also from environmental insecurity caused by use of these fossil fuels. To achieve it, we may have to become ‘Energy Globalists’. Each and every nation, each and every group and region would have to sit together and work together to provide for our collective security. We have to address “their” priorities, only then can “our” priority get addressed. No question; we all are in the same boat, and only collectively can we hope to row the boat to safety. I conclude with a quote by James Cash Penny “The keystone of successful business is cooperation. Friction retards progress”.
JOURNAL OF THE PETROTECH SOCIETY
A Petrotechie’s Diary Subir Raha former Chairman, ONGC Group of Companies
Editor’s note: Mr. Subir Raha was Chairman of the Organizing Committees for Petrotech 1999 and 2001, and Chairman of the Steering Committees for Petrotech 2003, 2005 and 2007.
Seven Petrotechs have passed into history. Oil & Gas business in India has changed irrevocably over these fourteen exciting years. The earlier decades were perhaps even more exciting. Recalling the lectures to us Management Trainees in 1970, the first way-point after Independence was the 1948 Value Stock Accounting formula. Next were the Refinery Agreements with Burmah Shell, Stanvac and Caltex, setting up the refineries in Bombay and Vizag. The second Industrial Policy Resolution came in 1956, defining the dominant role of the Public sector. Enter Pandit Keshava Deva Malaviya, junior Minister for Natural Resources, creating Oil & Natural Gas Commission in 1956, Indian Refineries Ltd. in 1958 and Indian Oil Company in 1959. IRL and IOC merged in 1964 to become Indian Oil Corporation Ltd.; it would take 3 more decades for the ‘C’ of ONGC to change from Commission to Corporation. The pioneering leaders of ONGC, IRL and IOC laid the foundation of today’s indigenous Oil & Gas Industry. Young refiners from IRL went to Romania for training, and Russians came to Dehra Dun to train young geoscientists and drillers of ONGC. In 1958, ONGC discovered first oil outside the North-East. Next year, IOC cleared out snakes and scorpions from concrete tanks buried under Antop Hill and unloaded ‘red’ kerosene from MT Uzhgorod. Five refineries were commissioned in quick succession - Noonmati, Barauni and Koyali of IOC and Madras and Cochin in the Joint Sector. ONGC began offshore exploration with Operation Leapfrog in 1960. Noonmati-Barauni Product Exchange Agreement was signed between IOC and the MNCs in
1962, conceding IOC’s access to products throughout the country. The first major cross-country product pipeline linking Noonmati Refinery to Siliguri BG-MG transshipment Terminal was commissioned on the night of the Festival of Lights in 1964, with the rivulet outside catching fire! (For the record, the very fi rst cross-country product pipeline was laid from Digboi Refinery to Tinsukia Terminal by Burmah Oil, and the second one was routed from the Infinity tankage at Budge Budge to Chabua via Silchar to fly ‘the Hump’ during World War II). Gauhati-Barauni crude pipeline, Koyali-Sabarmati product pipeline, Haldia-Barauni-Kanpur product pipeline were commissioned. In an exceptionally far-sighted initiative, ONGC created Hydrocarbons India Ltd. for exploration & production overseas; this is ONGC Videsh today. After the 1965 war, the Government decided to entrust IOC for all supplies. Burmah Shell, Esso and Caltex signed ‘Consent terms’ with IOC in 1969, conceding the lead in retail business. Damle Committee and Shantilal Shah Committee set the framework for Administered Pricing Mechanism. Oil Coordination Committee was formally constituted in 1975 after the Oil Shock of 1973. Simultaneously, Petroleum Conservation Action Group was formed. ONGC set up a chain of facilities for applied R&D, beginning with the KD Malaviya Institute of Petroleum Exploration, and IOC launched their R&D Center, creating the Servo brand of self-reliant technology. In the mean time, ONGC had discovered the supergiant Bombay High field in February 1974, and shipped out the first oil in twenty-seven months, an unmatched feat of professional management. EIL acquired confidence, and SCI came of age with the orders for “World Bank” tankers. Looking back, it seems unbelievable that so much was achieved by our predecessors, including those who served in the Ministry and the Rail-
ways, in those two decades of relentless growth. The MNCs lost the war for control of the Oil Industry in India, and by 1977, the process of negotiated takeovers was completed, without any bloodshed. Then things slowed down. The Industry came under absolute and total
Mr Raha is an Electronics Engineer, who went on to complete his MBA from LEADS University, UK. He has over 36 years experience in the oil & gas sector having started as a trainee in IOCL to become their Director (HR & Business Development), before taking over as CMD of ONGC and chairman of ONGC Group of Companies. During his tenure ONGC he achieved and sustained its numero uno position as the most valuable amongst Indian Companies and the no. 1 global ENP Company. Mr Raha was responsible for the dramatic turn around of Mangalore Refinery & Petrochemicals Ltd from a sick company to one which is today rated as the best refinery in terms of Capacity Utilization & Energy Management. Under his leadership ONGC Videsh declared its first dividend in 40 years and was transformed into the biggest MNC in India with investment of USD 1000 million every year and presence in 14 countries with 23 properties. Mr Raha is a member on the board of various organisations / institutes. He has been featuring in many national / international conferences on energy.
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JOURNAL OF THE PETROTECH SOCIETY control of the Union Government, and everything from capital investments in refineries to housekeeping and sanitation at retail outlets was monitored and managed by the Ministry of Petroleum & Natural Gas through the OCC. The economy was defined by the Hindu rate of growth, Licence-Permit Raj outdid the empires of yore and the ‘can do’ spirit was doused by bureaucratic mania for ‘control’. In the Eighties, thanks to induction of FCC and fractionating technologies, and a series of innovations and improvisations in operations and distribution, LPG Cooking Gas sales increased six-fold to more than 2.2 MMTpa, creating a case-study in consumer marketing. ONGC discovered Bassein and Gandhar fields, commissioned their Hazira Plant and opened up the gas business. Haldia, Mathura and Bongaigaon refineries went on stream. GAIL was carved out of ONGC to take up the controversial Hazira-BijaipurJagdishpur gas pipeline linked to a chain of fertilizer plants, all built by the Italians. The well-meaning decision of the Minister, Dr. Triguna Sen, to allot dealerships to unemployed engineering graduates degenerated into a complex bureaucracy of political corruption. Then India went bankrupt, almost. The winds of reform rattled the doors in Shastri Bhavan as well, and in 1993, marketing of all petroleum products except the five major ones was deregulated; that is the only deregulation to survive. Simultaneously, LPG and SKO marketing was opened up to private sector while subsidized pricing under the APM continued, leading to an inevitable, resounding flop. The private sector quickly cashed in on the reform spree, and several discovered and producing fields of ONGC were given away for peanuts; ONGC was lucky to retain Bombay High. A move was initiated to break up IOC into regional companies so that the three profitable segments could be sold away for more peanuts; IOC was also lucky! In the first week of May 1995, trucks stopped on the northern highways because there was no diesel. In panic, cars jammed the petrol pumps in New 10 D E C E M B E R 2008
Delhi. The harvest was stranded. Riots were reported. At the same time, tankers carrying imported diesel were waiting for weeks to get a berth at Kandla. The crisis was foreseen but the Planning Commission and the Public Investment Board had taken more than three years to decide whether IOC’s proposal to build Kandla-Bhatinda product pipeline was justified! That was the year of the first Petrotech, created by Dr. Vijay L Kelkar, Secretary (Petroleum & Natural Gas) and Mr. SK Manglik, Chairman & Managing Director, ONGC Ltd. Thousands of people have come to the Petrotechs – prime ministers and ministers, ambassadors and CEOs, secretaries and veterans, speakers, delegates, awardees, invitees, exhibitors, journalists, artistes, organizers, teachers and students. Like many others, I have been to all the Petrotechs, sometimes on a ring-side seat, often in the ring! I was there when Petrotech Society was formed, and when it was decided to launch this journal. It will take volumes to chronicle Petrotech – perhaps the Society will take on this task; in these pages, let me go down the memory lane. The theme of the first Petrotech was “Competitive Edges in Petroleum Technology”, and the focus was entirely on the upstream business. In January 1995, I was GM (HR) for IOCL Marketing Division in Mumbai, next to take over as ED Northern Region and Regional Coordinator for Industry, in New Delhi. I went as a delegate. All I recall, as an Indian Oilman, is the sense of satisfaction in global projection of the Oil & Gas Industry of India. By the time the next Petrotech came around in 1997 on the theme of “Petroleum and Global Energy Cooperation”, I was on deputation to the Ministry as ED-Head, Oil Coordination Committee. Dr. Kelkar remained Secretary (P&NG) and Chairman, OCC; in ONGC, Mr. BC Bora had taken over as C&MD. ONGC organized this Petrotech as well, on the theme of “Petroleum and Global Energy Cooperation”. Remarkably, the number of exhibitors went up from 43 to 83. Representing the OCC, I was a
member of the Steering Committee, particularly involved in the SIG meetings. When we were drafting the Petrotech Resolution, it was announced that the companies would organize two successive Petrotechs by turn. The next turn was for IOCL. In June 1998, I took over as Director (HR) of IOCL. The Chairman, Mr. MA Pathan, asked me to lead the Organizing Committee. There were just six months to go – 9th January was the set date. The hot seat was scalding! This was the Petrotech on the eve of the new millennium, organized in the year of Y2K! We chose “Oil & Gas Industry: Outlook for the 21st Century: Challenges & Opportunities” as the theme. We got going, with good support from ONGC, and great enthusiasm in IOCL. From the experience of international conferences especially Gastech in Perth, I decided to begin the show on a high note. Brian, Owen and their team from Fountainhead did a fabulous job in producing the inaugural Audio-visual on the concept of Wagner’s theory of Continental Drift. Illusion of tectonic collision provided the ‘bang’ in the darkened, silent auditorium of Vigyan Bhavan. They also organized the Drums of India - different drums from different parts of India played solo and then in unison, rising to a crescendo. Mr. Atal Behari Vajpayee, Prime Minister, inaugurated the conference. As his convoy drove out of Vigyan Bhavan, Mr. Shakti Sinha, his private secretary, called Mr. Pathan to convey the Prime Minister’s compliments on the inaugural show! This more than made up for the chaos when the lady compere had walked out from the dress rehearsal the previous morning and tried to organize a boycott by all the TV anchors in Delhi and the professional conference organizer (PCO) gave up, got drunk and bawled his heart out in the dead of the night! Brian and his team created wonderful presentations for the inaugural and valedictory sessions over the next three Petrotechs till Wizcraft outbid them for the 6th Petrotech. Kaveri stepped in as the compere for the
JOURNAL OF THE PETROTECH SOCIETY entire conference, and managed every plenary meticulously, from that 3rd Petrotech to the 7th. Vinod and his team from Banyan Tree produced fantastic shows every evening. They also continued for the next three Petrotechs till the emcee pronounced the ‘Ltd.’ in ONGCL as el-tee-dee-full stop! I must acknowledge Mr. Singh, the caterer, efficiently serving thousands every evening; nobody went thirsty or hungry! The smiling Mr. Sharma of Vigyan Bhavan was always ready to help, especially when the Special Protection Group came up with their dos and don’ts. To the serious business of Petrotech: for the first time, the Prime Minister agreed to inaugurate the Conference. His speech had been drafted and redrafted several times. On the day before the Conference, at about 1100, Mr. TS Vijayaraghavan, Secretary (P&NG) asked me and Mr. Devi Dayal, Addl. Secretary to go see Mr. NK Singh, Secretary to the PM. Pleasantries exchanged, Mr. Singh straightaway came to the point: the draft speech is rejected, and a new one is to be prepared, incorporating the PM’s vision. He called his stenographer, assigned an adjoining office, told us to get going. There was just one problem. I asked Mr. Singh, what is the PM’s vision? He looked surprised and said, that’s for you to work on. I persisted, how do I anticipate what the Prime Minister of India has in his mind? Mr. Singh sat back and asked, what do you think are the macro issues that the PM should be talking about? That’s the genesis of India Hydrocarbon Vision 2020. From this Petrotech onwards, I worked with my colleagues in IOC and then ONGC on several dimensions to make Petrotech the unmatched “showcase of the Hydrocarbon Industry in India”. Technical sessions were restructured to cover all facets of the Oil & Gas business; the numbers kept increasing till we were running 8 parallel tracks at three places – Vigyan Bhavan, Le Meridiene and Pragati Maidan. Poster sessions required more and more space. Pre-conference sessions were introduced. We decided
to familiarize graduate students and faculty to state-of-the-art technology at the exhibition, and Rakesh from Schlumberger volunteered to sponsor the Industry-Academia Interface. Dealers and Distributors form the interface between the Industry and the customers; my good friend Amit at the FICCI readily agreed to co-host the Retail Track conference and exhibition at FICCI headquarters. To save trees, we stopped printing the conference proceedings, and put a CD containing all the papers in the delegate kit. Senior executives from ONGC and IOC in the Jury on technical papers are the unsung heroes of Petrotech. Every time, they plough through hundreds of papers, select the ones to be presented, categorize between lecture- and poster sessions, and do it all in time without reminders! The exhibition too kept getting bigger and better every time. Whether IOC or ONGC organized Petrotech, Suresh Mathur from Petronet LNG was the prime mover; every time the Steering Committee met, he would happily announce the ‘sold out’ numbers! We added open-air display of heavy equipment, and thousands saw an SRP – a familiar sight in movies and TV, for the first time. The photo exhibition was designed to recap past history; this moved from conference venue to exhibition hall, with competitive sections. Responding to feed-back, we introduced the Exhibitors’ Dinner. To promote business, Buyer-Seller Meets were planned. My good friend Tarun had told me of CII’s capability in organizing exhibitions, and we signed up. But Tarun moved out of executive responsibility after some years, and by the time of the 7th Petrotech, a decision had to be taken to replace CII by agencies selected on global competition; this has really paid off. The Industry was waiting for “Deregulation” since 1997. APM was to be dismantled, OCC was to be disbanded, and the PSEs were to operate as ‘companies’ rather than ‘departments’. The 4th Petrotech in 2001 came a year before this promised new dawn; when that dawn finally came on 1st April 2002, it was a hoax – the Minister declared himself to be the Regulator!
Looking back, it was good that we focussed on Global Warming, with the theme of “Hydrocarbons – Knowledge Partnership for a Green Planet”. Managing the sixty minutes allotted for the inaugural session, especially when the Prime Minister is there, is never easy. To save time, I decided that the Lifetime Achievement Awards would be presented by the PM in the inaugural session, and the Acceptance Speeches were shifted to an evening pre-dinner session. Counting minutes, there was not even time to read the citations in full. So, I decided to create audio-visuals featuring the life and times of each awardee, to be screened when the awards are presented. One of my bright colleagues was given the assignment. The fi rst award was to go to Mr. BS Negi, former Chairman of ONGC for his contribution to the upstream sector. Mr. Negi was not keeping well and could not make the trip from Dehra Dun to Delhi. As Kaveri, the Petrotechie compere, called out his name, the AV came on the screens; for some time, no one realized that that this unassuming man, speaking with disarming simplicity was not there in person. This was a touching moment. Sadly, he passed away in July that year. As the time came for drafting the Petrotech Resolution, ONGC was eager to take Petrotech back home! After serving twice as Chairman of the Organizing Committee, I was equally eagerly looking forward to ONGC taking charge of the next two Petrotechs. The announcement was made, ONGC it was. At that time, I had no idea that I’d succeed Mr. Bora as C&MD. That’s what happened in May 2001, and I was back to Petrotech, this time as Chairman of the Steering Committee and Chairman of Petrotech Society. By now, Petrotech was fairly wellrounded in its coverage, and some of the processes had been institutionalized. Still, managing the biggest professional conference & exhibition in India did not leave any dull moments. The theme for the 5th Petrotech was “Global Cooperation for Hydrocarbon D E C E M B E R 2 008 1 1
JOURNAL OF THE PETROTECH SOCIETY Technology”. There were innovations at each Petrotech. One was to present each delegate with a CD containing the conference proceedings – all the plenary lectures, all the audio-visuals – as the valedictory session ends. According to the overseas delegates, this was a global first! The Jury decided to recognize Mr. Dhirubhai Ambani with the Lifetime Achievement Award for his contribution to downstream sector, building India’s biggest refinery. I met Mukesh and we both went to tell ‘Papa’ Ambani. He was visibly touched. The award was to be presented in the 5th Petrotech in January 2003. Sadly, he passed away in July 2002, and Mukesh was to receive the award in the name of his father. He took off from Mumbai in his corporate jet in the early morning on 9th January. But Delhi airport was closed due to fog. The aircraft was diverted to Jaipur. He took off again, hoping that fog would clear off but this time got diverted to Ahmedabad! At Vigyan Bhavan, the PM was due to arrive and the doors were going to be closed. I spoke to SPG and the officer in-charge agreed to permit only Mukesh to come in. I told the Reliance officials who came back to say that there was no way he could make it to the session. That evening, Mukesh delivered an outstanding acceptance speech on behalf of his late father. “Value from Hydrocarbons – Advances in Science & Technology” was the
12 D E C E M B E R 2008
theme of the 6th Petrotech in 2005. Oil & Gas business in India was rocking! ONGC Videsh was closing deals worth hundreds of millions of dollars across continents. ONGC’s 2.2 billion dollar equity issue was globally subscribed in eleven minutes to be precise. Reliance had discovered the Dhirubhai fi eld. MRPL was de-privatized and in stead of becoming a BIFR case, became a BSE 30 company. The 6th Petrotech surged in all dimensions. Sponsorship categories were innovated to increase revenues. There was a personal moment of dilemma for me. During the inauguration, the Minister delivered a surprise: he asked the PM to present a framed quotation to me, as the Chairman of ONGC. He had himself carried in the bulky packet from the car to the stage, brushed aside SPG check, and opened the wrapping under the table. The quotation, which he read out from the podium, was a homily on exploration. This was a not-too-subtle dig at ONGC’s exploration performance which he and some of his advisers, particularly people whose discoveries came in bottles not barrels, considered to be inadequate. My instant thought was to invite my Director (Exploration) on stage to share the dubious honours! But I realized that everyone, including the PM has been taken unaware, and my first responsibility was to avoid any embarrassment to the Prime Minister of India. So I thanked the PM for the ‘present’, and posed for the ritual
photograph with a beaming Minister. In fact, the photographers were also caught by surprise and the Minister had to wave at them to come up! The touching moment was when the Lifetime Achievement Award for contribution to downstream sector was presented posthumously to Late Chitta Ranjan Dasgupta, former Chairman, IOCL. As the PM said while handing over the award to his son Ashok, late Dasgupta’s name should be written in letters of gold in the economic history of India. He had died unsung, never recognized with any of the Padma awards. The Indian consumer never felt the 1973 Oil Shock, and the key role was played by late Dasgupta, my role model. It was now turn for IOCL or any other company – public or private sector - to take over. At ONGC, I sat back, relaxed, prepared to enjoy the flight. But there were no takers and the ball stayed with ONGC. With a sigh, I initiated the work on the 7th Petrotech, on the theme of “Energy, Economy, Equity, Ecology”, the catchiest line so far. For me this was a special Petrotech – I was a Speaker for the first time, if the welcome addresses and votes of thanks are not counted! There more to tell, but it’s time to close. Petrotech Society will hopefully publish a compilation of highlights of all the past Petrotechs. See you at the next Petrotech.
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Themes of Petrotech Conferences & Exhibitions
Petrotech-2009
Energy Independence with global Co-operation: Challenges & Solutions
Petrotech-2007
Energy, Economy, Equity, Ecology
Petrotech-2005
Value from Hydrocarbons-Advances in Science & Technology
Petrotech-2003
Global Cooperation for Hydrocarbon Technology
Petrotech-2001
Hydrocarbon-Knowledge Partnership for a Green Planet
Petrotech-1999
Oil & Gas Industry outlook in the 21st century: Challenges & Opportunities
Petrotech-1997
Petroleum and Global Energy Cooperation
Petrotech-1995
Competitive edges in Petroleum Technology
D E C E M B E R 2 008 1 3
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Message to Promote CDM Projects – Secretary MoPNG urges to Oil PSUs
Shri R S Pandey, Secretary MoPNG has urged the Oil sector PSUs to promote the message of Clean Development Mechanism (CDM) to the community at large. Inaugurating a two day seminar on CDM processes and opportunities, organized by PETROTECH Society in association with ONGC and IOC, Shri Pandey emphasized on the “ win win situation” associated with the CDM projects. Citing the instances of drought in Cherapunji and unusual heat wave in Europe, Secretary, MoPNG has informed that climate change is a reality and must be addressed for the community at large. In a precise and lucid manner, he correlated global warming with the process of development, which implies increased usage of energy. “ The world has two major challenges: of equity and climate change” said Shri Pandey,” It is the 70/30 syndrome where 30 percent of population 14 D E C E M B E R 2008
enjoys 70 per cent of energy…. India , for example, though consumes 5% of the global energy, only has 30% per capita energy consumption compared to the global average”. This, affirmed Shri Pandey, is the bane of development and has upset the social balance. “Progress without pollution is the key to sustainable development” said Secretary. Shri Pandey expressed his concern for the lack of CDM projects from PSUs and community and urged the delegates to propagate the message of CDM to the community at large to reap three benefits. “It is win-win situation”, said Shri Pandey ”You save energy and hence improve bottom line, you save the environment and you earn Carbon credits”. Shri Hazarika, Director (Onshore), ONGC explained the menace of climate change in his presentation.
“Though the global warming potential of CO2 is much less compared to other Green House Gases, the total CO2 emission accounts for 80 % of the global GHG concentration in the atmosphere”. Shri Hazarika explained using pie and bar charts. He affirmed that sustainable development is the way to counter the global warming and dwelt on the way to attain that. Shri Hazarika also narrated the success story of ONGC in the area and the remarkable achievements in the areas of CDM project development and M2M activity. Shri V C Agrawal, Director (HR), IOCL in his key note address, talked about the reasons of climate change and the ways to mitigate it. Appreciating the Kyoto protocol as a concept, he expressed the hope that more and more CDM projects be developed in India, especially by oil sector PSUs.
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Fuel quality and Vehicular Emissions Arun Balakrishnan CMD, HPCL
Mr Balakrishnan, a Chemical Engineer and an alumni of IIM-Bangalore. He is currently CMD, HPCL, since 1st April 2007. Prior to this he was Director, HR with HPCL. He joined HPCL in 1976 and held various positions in Marketing, Corporate Functions, Oil Coordination Committee, International Operations and was responsible for marketing of Lubricants & Specialties in India and neighbouring countries.
The theme of this article is fundamentally linked to the issues of growth and its ramifications. There is no denying the importance of oil to the modern economic system, based as it is on industrialization, urbanization, globalization and trade. In recent years, India has been one of the fastest growing economies in the world. India’s economic growth has trended upwards over the last three decades, averaging 7% per year since 2000. With increasing incomes, demand for vehicles has also gone up. Total vehicle stock in India quadrupled between 1990 and 2004, rising from 19 million in 1990 to 73 million in 2004 at an average annual rate of 10% per annum. This growth was much faster than the GDP growth of about 6% and per capita GDP growth of 4% during the same period. Excluding two- and three- wheelers, there are currently 13 vehicles per 1000 people in India compared to about 600 vehicles per 1000 people in Japan. Experience shows that vehicle ownership reaches a tipping point and takes-off when per capita GDP expressed in purchasing power parity terms, reaches a level between $3000 and $10,000. India’s per capita GDP crossed $3000 threshold recently and accordingly, it is likely that vehicle growth will accelerate. At
10% growth rate, vehicle stock doubles every seven years. If growth rate were to go higher, increase in number of vehicles will be phenomenal within a short span of time. International Energy Agency projects that vehicle stock in India will reach about 300 million by 2030. Despite this vehicle ownership per 1000 people would still be 15% of that of Japan today.
He has headed the HR functions, as Director (HR), in HPCL since 2002 and introduced numerous Contemporary People Management initiatives for which HPCL was awarded various awards such as the Best Employees Award, Best Work Place practices award, the National Training Award and the Peter Senge award for commitment to building a learning organization.
The transport sector, be it roads, railways, shipping or aviation, relies almost exclusively on oil. In India, transport sector currently consumes 27% of total primary oil demand while 96% of the transport demand is met by oil. Road vehicles account for more than 80% of the transport energy demand. Oil will continue to be a major source of transport fuels in foreseeable future. With increasing vehicles, transport demand for oil is projected to increase to 154 million tonnes from current 35 million tonnes, a five fold increase.
Mr Balakrishnan has attended a Management Programme in UK and Advanced Management Programme at Cambridge. He has presented papers at various national, international conferences related to Petroleum and Energy. As Chairman HPCL he has been instrumental in forgoing strategic alliances with various national / international organizations for mega projects. He is also Chairman of Several HPCL Joint Ventures and Director Petronet India Limited.
However, this growth has side-effects, most notably environmental consequences. With the accumulation of scientific evidence, there is no longer any doubt that climate change is occurring. The consensus opinion is that carbon dioxide concentrations in
the atmosphere have been rising and continue to do so. Average global temperature has increased by 0.7o C since 1900. If the trends of past half-century continue, the level of CO2 in the atmosphere will reach 550ppm by 2050, D E C E M B E R 2 008 1 5
JOURNAL OF THE PETROTECH SOCIETY around twice the pre-industrial level. The impact of such a rise is difficult to predict given the complex nature of climatic system. IPCC typically predict that temperature rises could be in the range of 1.4 to 5.8˚C over the next century. There may be major shifts in the rainfall distribution, significant rises in sea levels that threaten coastal areas, polar ice reductions, water shortages, loss of eco-systems and intense localized cooling or heating. A large part of the increase in CO2 concentrations is due to burning of fossil fuels followed by clearing of forests. Although India is among the top five emitters of CO2 in the world, its historical share in cumulative emissions over the period 1900 to 2005 was just 2%. The US and EU countries together accounted for just over half of all cumulative emissions over the same period. On per capita basis, India’s CO2 emissions are just 1 ton compared to 11 tons for OECD and just half of the developing countries on average. Two-thirds of India’s emissions come from burning coal mainly in power generation with transport sector accounting of about 8% share in total. By 2030, India’s CO2 emissions are expected to treble, however, on per capita basis they would still be well below OECD level. Coal is projected to remain the single largest source of CO2 emissions with almost a constant share in total while share of transport is projected to rise to about 13%. Discussions on climate change impact have tended to focus on greenhouse gas stabilization levels of 450-550 ppm by 2050. Emissions would need to be reduced to halve the level projected for 2050 on a business as usual “fossil fuel first scenario”. Since energy demand is growing and consequently emissions are bound to increase, carbon intensity of energy sources would also need to be reduced. Tackling the issue of climate change involves a number of dilemmas. Persuading people to change their lifestyles so as to reduce current energy consumption drastically to avoid catastrophe decades away in future is a Herculean task. Then there is the equity issue. Developed nations have been primary beneficiaries of unbridled energy consumption and have been responsible 16 D E C E M B E R 2008
for the most of the emissions in past. Asking developing countries to forego growth and energy consumption that accompanies it seems grossly unfair. Developed nations contend that since most of the future emissions are likely to come from developing nations, they have to be brought on board in any action on climate change. Any international regime that excludes developing nations will simply create incentives to relocate energy intensive activities to these countries undermining any reductions undertaken by developed nations. Climate change is a perfect example of negative public good- nobody can have less of it because somebody else has more. There is no simple solution to these issues and there is unlikely to be a single silver bullet for the problem of climate change. Measures are likely to be mix of adaptation and mitigation. By most accounts application of known technologies could reduce the emissions substantially, although reduction may not be enough to reduce emissions to level required for stabilization objective. Majority of benefits accrue from greater efficiency in energy use. While climate change is still a peripheral issue for a large part of population, the impact of vehicular pollution on ambient air-quality and on health thereof is quite a pressing concern. The automobile is seen as the main culprit in the most visible form of pollution, which is air pollution. The urban populace has to contend with rising smog and exhaust fumes. Much of the damage to human health is attributed to particulate emissions from vehicle exhaust. These concerns have prompted progressively stringent emission standards over the years. We are seeing reduced sulphur and benzene content in auto-fuels and reduced emissions of carbon monoxide, nitrous oxide, volatile organic compounds, and particulates. In India, authorities have decided to follow the European model of vehicular emission standards and the auto fuel quality standards. However, the momentum for stringent specifications has been set by the judiciary in response to PILs on ambient air quality. Speaking of standards, one is amazed at the pace of
change we have seen in the implementation of new and more stringent product specifications. It is to the credit of the refining sector that we have been able to keep up with these improvements so far without a major shakeout in terms of capacity deletion. You must keep in mind that about 10 years ago, our gasoline was still leaded, our diesel permitted a sulphur content of 1% and could accommodate a fairly large amount of heavy streams. Today, our transportation fuels are ahead of several countries of Asia-Pacific in quality, and lag advanced countries of Europe by shorter and shorter time periods in implementing changes. New cars in India must meet emission standards set by the European Union, known as Euro 3, in 11 big cities across the country. Accordingly, sulphur levels in fuels must not exceed 350 parts per million (ppm). Average sulphur emissions in India are about 550ppm. Vehicles across India must comply with Euro 3 standards by 2010 and those 11 big cities must move up to Euro 4 standards, or 50 ppm. In addition to stringent emission norms, there is move for greater use of natural gas as transport fuel. In Delhi, all public
JOURNAL OF THE PETROTECH SOCIETY
transport has been converted to gas due to judicial directive. Other cities are trying to follow suit mainly to combat pollution. Another trend is the requirement of adding ethanol in the gasoline blend. Currently, the requirement is for addition of 5% only and is restricted to some major towns and states. However, Government plans to roll out this blend all over India, and thereafter to increase the ethanol content. The desire to diversify fuel mix flows not only from climate change/pollution concerns but also from oil security perspective. India currently imports more than 70% of its oil requirements and this dependence will rise further with increasing demand. Oil prices had reached unprecedented heights few months back before crashing to current levels of about $55/bbl due to economic turmoil. IEA in its latest World Economic Outlook states and I quote, “The surge in prices in recent years culminating in the price spike of 2008, coupled with much greater short-term price volatility, have highlighted just how sensitive prices are to short-term market imbalances. They have also alerted people to the ultimately finite nature of oil (and
natural gas) resources”. The report states that “While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over.” It warns that oil prices will rebound to more than $100 a barrel as soon as the world economy recovers, and will exceed $200 by 2030. High oil prices coupled with high import dependence is a toxic combination for any economy, thus, efficiency in usage has to be built into the system. Thus, whether you are concerned about meeting increasing demand for fuels, about the impact of carbon dioxide on the climate system, about pollution generated by increasing fleet of vehicles or about reducing your dependence on foreign oil, part of the solution lies in improving efficiency and fuel quality. This is where rubber meets the road. Retrofitting refineries to produce cleaner fuels is a capital intensive process. My company, Hindustan Petroleum, alone has invested about Rs. 3000 crores or about US dollar 600 million each in our two refineries to produce
cleaner gasoline. Another 8000 crore rupees or about 1600 million US dollars are being spent for producing Euro-III/ IV level compatible diesel. Problem is exacerbated by the tight schedules within which the projects have to be completed. The accelerated level of investments coincided with sustained spurt in oil prices, which most of the developing countries including India, found very difficult to pass onto consumers. As a result, downstream oil companies had to take unprecedented level of debt on their balance sheets to finance projects meant to produce clean fuels. With limited ability to price differentially, capacity to produce increasingly stringent quality fuels has been built on borrowed money. Most of the refineries in India are of vintage variety, built for smaller capacity on a small parcel of land. Over years, urban sprawl has brought these refineries, built originally on the outskirts of major urban centers, into the heart of city. Resultant space constraint requires a complex maneuvering to retrofit old units or install new units with consequences for time and cost schedules. D E C E M B E R 2 008 1 7
JOURNAL OF THE PETROTECH SOCIETY type of soil. The production and usage of bio-fuels is still at a nascent stage. Some issues have to be ironed out for a more widespread usage. Commercial success will ultimately depend on technical feasibility, pricing/taxation policy, appropriate fueling infrastructure and customer acceptance. I said in the beginning that fuel quality and vehicle emissions are fundamentally linked to issues of growth and as such form only a part of the complex issue of climate change and urban pollution. Experience shows that rapidly growing vehicle fleet generally overwhelms the improvements wrought through increasing vehicle efficiency and fuel quality. Total vehicle emissions are increasing not only because there are more vehicles but also because each vehicle is driven more. Poor roads and a mix of variable-speed vehicles reduces the average speed in city further increasing emissions as motors are less efficient at lower speeds and also time taken to cover a distance is more. What is required is a multi-pronged integrated approach to transport and urban planning practices, stringent fuel quality standards, implementing maintenance regimes, and infrastructure investment. I spoke of mandatory use of natural gas as transport fuel and ethanol blending of gasoline. As a result of these measures, gasoline demand gets displaced to some extent. In India, gasoline has always been considered a rich man’s fuel and bears a higher taxation burden. In contrast, diesel has always been relatively cheaper. The result is the “dieselization of economy” to quote Dr. Vijay Kelkar, former Secretary, Ministry of Petroleum and Natural Gas. A large number of new cars being sold in the country are diesel powered. Higher ethanol content, greater use of gas and diesel to power vehicles affects the gasoline demand negatively, thereby forcing a re-look at refinery configurations. Stringent fuel qualities and geographically separate norms pose distribution challenges in terms of segregation, new storage facilities etc. Narrower the range, greater the challenge. Fragmented markets can create bottlenecks in fuel supply chain, as seen sometimes 18 D E C E M B E R 2008
in the US with its different state level specifications. There is no denying that biofuels can offer varying degrees of benefit in wellto-wheel carbon dioxide emissions, depending on the agricultural practices and production processes used. They do however carry some clear disadvantages compared with conventional fuels at present. Significant engine modification is needed for biofuels unless used in low concentrations. They have lower energy content than hydrocarbon fuels, and costs of production and distribution are relatively high. After initial euphoria, there has been growing backlash against biofuels on environmental grounds and, more significantly, because they compete with other agricultural activities for land use and water. In India, preferred feedstock for ethanol is sugarcane and Jatropha for Bio-diesel, thereby avoiding the food versus fuel debate. Jatropha does not displace existing food production and thrives on any
Japan has always been synonymous with quality and efficiency. What is remarkable is the long-term approach to any kind of issue be it energy security, next-generation fuels and vehicles effi ciency. As per IEA, Japan had a 24% increase in fuel efficiency (annual improvement rate of 3%) from 1996 to 2004.It would be interesting to understand the approach and options adopted by Japan to achieve this. Japan is also leading in the development of next-generation vehicles and vehicles powered by alternative fuels. Interaction with Japan can benefit India greatly in leapfrogging to next generation of vehicles and fuels. Relatively, low level of motorization in India is a positive in this regard as problem of stranded assets is minimized. Main issue in the introduction of clean fuels and efficient vehicles in developing country like India is the high cost of technology. Greater collaboration in the development of technology and technology transfer helps in wider dissemination.
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Integration Strategies: A perspective on ONGC group of companies
Dr Balyan is a Post Graduate in Chemistry from IIT Delhi and completed his Doctorate from the Erstwhile West Germany, which was awarded for his studies on characterization of special liquid polymers using analytical techniques.
Dr. A.K. Balyan Director(I/c BD&JV)-ONGC,New Delh
A.K.Deb GM, ONGC, New Delhi
Haresh V. Karamchandani SE, ONGC, New Delhi
Diversification and integration in business The fundamental role of diversification is for corporate managers to create value for stockholders in ways stockholders cannot do better for themselves. The additional value is created through synergistic integration of a new business into the existing one thereby increasing its competitive advantage. A company's core competencies – things that one can do better than the competitors – can often be extended to products or markets beyond those in which they were originally developed. Such extensions represent excellent opportunities for diversification While diversification can be related and unrelated, a totally unrelated diversification, that offers little integration by way of at least some of the core competences of a firm, cannot be said to be a form of integration. At a broader level, diversification typically takes one of the three forms1: 1. Vertical Integration – integrating business along value chain, both upstream and downstream, so that one efficiently feeds the other 2. Horizontal Diversification – moving into more than one industry; the new business would generally relate to the existing one utilizing some of the core competencies 3. Geographical Diversification – moving into new geographical area to overcome limited growth opportunities in the local market and/or to gain global leadership positions
Dr Balyan has demonstrated his competence in myriad roles, ranging from heading regional exploration, project management, corporate management, corporate strategies in HR and has also been instrumental in staging ONGC successful exercise in planning and executing the 5th International Energy Conference and 6th Petrotech 2005 on behalf of ONGC and the Government of India.
“Wide diversification is only required when investors do not understand what they are doing.” – Warren Buffett This paper refers all related diversification activities such as geographical diversification or moving into a new but related industry as well as vertical integration activities under the term “integration”.
Integration for ONGC ONGC’s vision:
At present he is Director (HR), ONGC and is steering the implementation of changeinitiatives in ONGC and aligning its HR policies in corporate business strategies.
To be a world class Oil & Gas Company integrated in energy business with dominant Indian leadership and global presence. Keeping this corporate vision of ONGC in mind, all the integration activities of ONGC entail moving into related business of energy domains only and thus are limited to vertical integration or geographical and related diversification under energy basket. All the integration activities of ONGC are aimed at achieving its aforementioned vision
Objectives of integration for ONGC The objective of integrating for creating or sustaining value for shareholder can be achieved by either taking up value
enhancing proposals or creating integration businesses that would provide stability of revenues in case of down cycles of core businesses. While geographical diversification activities are in order to provide intensity to the core E&P business of ONGC, the objective of horizontal diversification activities, primarily for exploring and exploiting the alternative energy sources, is to broaden the revenue base for the shareholders as well as for the purpose of securing energy security for the nation
Table 1: Vertical integration of some large firms
Based on this understanding of diversification, all the above activities, with exclusion of unrelated diversification, are essentially integration activities for a firm that is looking to capture the specified related business domains. D E C E M B E R 2 008 1 9
JOURNAL OF THE PETROTECH SOCIETY when hydrocarbon is getting scarcer. Vertical integration in a high risk-reward hydrocarbon E&P business also provides more stable revenue/margins by way of capturing higher values in HC product chain and provides stability to the firm to tide over down cycle of its core business. Table 1 shows the level of vertical integration achieved by some of the major global hydrocarbon firms. Based on the above understanding of integration, all integration activities can be categorized as follows:
The core business of ONGC is exploration and production (E&P) of mineral oil and natural gas. All the integration activities of ONGC can primarily be classified as follows:
Figure 1: Make or buy continuum2
vertical integration. Figure 1 shows the continuum including some of the intermediate choices.
Degree of integration and associated decision variables The decision to determine which level of integration a firm should seek to achieve depends on the trade-offs associated with integration. There could be numerous strategic decision variables involved such as economics, feasibility of controlling the market, scope for creating a business that could capture a new market, regulatory aspects and government restrictions, providing stability to the business to tide over down-cycles of high-risk core business. For sake of an example we may look at the economics of making a makeor-buy decision. While sourcing from market firms can offer advantages such as economies of scale, greater scope for efficiency and innovation, but can
With the basis of the above classification, we shall aim to further understand the entire gamut of integration activities of ONGC along with the strategic intent and rationale for each integration activity.
Means of vertical integration Means of vertical integration include internal development, acquisitions, strategic alliances, and joint ventures. As each route has its own set of issues, benefits, and limitations, various forms and means of integration can be mixed and matched to create a range of options. Let us consider the case of a backward vertical integration. Suppose a manufacturing company presently sourcing some of the input materials is considering performing the activity itself. The firm is thus faced with a make-or-buy decision. Make and Buy are the two extremes along a continuum of possibilities of this 20 D E C E M B E R 2008
present difficulties like coordination problems, transaction costs, risks of losing control over private information etc. The figure.2 summarizes the variables associated with level of integration best suited for a firm and also shows a possible algorithm for taking such a decision from the point of view of economics. At a higher level, other strategic decision variables, often overlapping, of making such a decision would also come in play and a holistic decision would be called for integrating all such decision variables.
Analysis of ONGC’s integration activities Table-2 summarizes the various major integration activities of ONGC along with their nature of integration and also the means of integration as well as the brief primary objectives of such integration. It may be observed that ONGC has chosen to develop certain integration
Figure 2: Example of a decision algorithm for a make or buy decision2
JOURNAL OF THE PETROTECH SOCIETY Table 2: Analysis of ONGC's integration activities
Activity
Category
Mode
Objective
ONGC Videsh Limited (OVL)
Expansion of geographical scope
WOS
Separate company structure to enable operational agility of a small firm in a competitive international market by avoiding the bureaucratic hierarchy
Deepwater Drilling / Production sharing contracts (PSCs)
Expansion of technological / geographical scope
Inhouse / Alliance
Alliance for the purpose of complementing organizational technological capability
Coalbed Methane (CBM), Underground Coal Gasification (UCG)
Related Horizontal Diversification
Internal
To explore other energy sources for energy security of the nation and to broad base the revenue base for the shareholders through Utilization of the core competence of sub-strata geo-knowledge
Drilling Services, Air/marine logistic services
Backward Integration JV
ONGC TERI Biotech Ltd. (OTBL) - EOR & bioBackward Integration JV remediation OTPC (Power)
Forward Integration
JV
ONGC Petro additions Ltd. (OPaL) aL (Petrochemicals)
Forward Integration
JV
C2C3
Backward integration Internal for OPaL
To create some degree of control over market for reliability of professional services at optimized costs Integrate the competence developed by ONGC and TERI Leverage in respect of oil-field services and leverage the same for in-house as well as to tap the potential outside market Monetization of idle gas assets in Tripura, Leverage ONGC’s presence and socio-political relations JV route to harness power business expertise and also to limit exposure to a new business Extracting value from Naphtha and C2+ components from ONGC units to broad base the revenue base of the shareholders; JV route to harness petchem business expertise and also to limit exposure to a new business Create control over feedstock for OPaL
LNG Sourcing (Petronet Related Horizontal LNG Ltd.) Diversification
JV
To gain foothold in growing LNG business to widen revenue base
Mangalore Refinery and Petrochemicals Ltd. Forward Integration (MRPL) -Refinery
Acquisition
Forward Integration & tapping financial synergy through internal capital market Extracting value from the hydrocarbon (MRPL products ) to broadbase the revenue base of the shareholders;
ONGC Mangaore Petrocemicals Ltd. (OMPL) – Petrochemicals
Forward Integration for MRPL products
JV
Pipeline & marketing (PMHBL & MoU with GAIL)
Forward integration
JV
SEZs
Forward Integration for SEZ ventures like JV OPaL & OMPL
Wind Power
Related Horizontal Diversification
JV route to harness petchem business expertise and also to limit exposure to a new business PMHBL: To facilitate off-take of MRPL petro-products at optimized cost MoU with GAIL: Facilitate early exploitation of discovered gas in KG & Mahanadi basins; Entry into gas marketing Strategic control for the following purposes: Synchronous infrastructure development tailor made to ONGC’s investment as Anchor industry within SEZ Capitalize coastal locations for product export & synergy with ONGC/MRPL installations for feedstock
Internal
To exploit the alternate energy source for energy security of the nation and to broadbase the revenue base of the shareholders within the energy domain
R&D in alternate energy sources (Hydrogen reactor; Geo-bio Related Horizontal reactor for methane Diversification generation from depleted oil/coal fields)
Trust
To explore other energy sources for energy security of the nation and to broadbase the revenue base of the shareholders within the energy domain
R&D –passive exploration of Uranium
Trust
To utilize a potentially lucrative by-product within the energy domain by utilizing external technological know-how
Related Horizontal Diversification
D E C E M B E R 2 008 2 1
JOURNAL OF THE PETROTECH SOCIETY ment housed outside the structure of a firm, would force the setup to be competitive and innovate, which in turn can also enable to tap the outside market as well. ONGC TERI Biotech Ltd. has been created as a JV that would provide services related to enhanced oil recovery and bio-remediation not only to ONGC but would also tap wider domestic as well as the global market for such services. ■ In the case of R&D activities for alternate energy sources, keeping in mind the nature of activities, ONGC has found it prudent to have an independent setup that would foster creativity and innovation along with freedom necessary for such pursuits.
Summary activities like Coalbed Methane or C2C3 hydrocarbon extraction project in-house, for which, ONGC has had adequate wherewithals or felt it would be prudent to have it in-house after taking into various trade-offs of decision variable associated, it has chosen modalities other than in-house integration for several of its activities. There are various considerations for ONGC for going ahead for an integration activity through a Joint venture, an alliance or a similar structure like through setting up an independent trust rather than developing the activity in-house. Some of the considerations are explained below: ■ Inadequate knowledge regarding a different industry whether it is related diversification or vertical integration. For example, power industry is a highly regulated industry and has demands specialised competencies for thorough understanding of regulatory aspects that an E&P company would not be quite familiar with. Similarly, success in operating petrochemical industry would require, apart from technical know-how, high level of marketing competencies, which are unique and quite apart from the existing core competencies of an E&P firm operating in the country. ■ Further, the JV route also provides a firm an opportunity to develop familiarity with requisite competencies for 22 D E C E M B E R 2008
■
■
■
■
the new business and can enable the firm to subsequently enable the firm to subsequently shift it in-house. In such cases, the JV route can be an intermediate stage for the firm in its make-or-buy decision while it starts moving away from “buy” to its destination of “make”. Governmental guidelines: The government, being the largest and controlling shareholder can direct the strategic orientation ONGC should have at any point of time. The government presently stipulates that ONGC should focus primarily on its core E&P business though it does not debar it from taking up integration activities. JVs and strategic alliances for its integration activities enable ONGC to keep its investment and managerial focus on its core business. Investment restrictions: The present investment limitation of Rs. 1000 crore (under Board’s Power of a Navaratna PSU) for any off-balance sheet project would necessitate that ONGC must look for a partner who, apart from offering strategic competencies, would also complement the financing aspects of a project. A JV route is often selected to create a private sector setup that would offer several flexibilities in its functioning and expeditious decision making that a governmental / PSU set up would not be in a position to have. A JV structure or a similar arrange-
ONGC has systematically identified opportunities to create or sustain shareholder value and provide stability to the business to tide over down-cycles of high-risk core business in line with the practice of several global E&P majors. It has in turn entered various integration activities, that include vertical integration and related diversification – geographical and horizontal, like Coalbed Methane, overseas search of hydrocarbon through OVL, refinery, power, petrochemicals, LNG, transportation, R&D in alternate energy sources etc. Regarding the level / mode of integration and structure of the organization for integration thereof, ONGC has adopted suitable approach for each activity having its own unique trade-offs associated with various decision variables, and decided whether the activity would be in-house or through and alliance of a separate entity such as a subsidiary, JV or a Trust. The decision variables for the purpose include consideration of economics, feasibility of controlling the market, scope for creating a business that could capture a new market, regulatory aspects and government restrictions.
Bibliography 1.
2.
Vadim Koltelnikov, Founder, Ten3 BUSINESS e-COACH, 1000 ventures.com Besanko D., Dravone D., Shanley M., Schaffer S., Economics of Strategy, John Wiley & Sons (Asia) Pvt. Ltd., 2004
JOURNAL OF THE PETROTECH SOCIETY
Micro-algae: Biofuel Production and CO2 Sequestration Concept, Prospects and Challenges Maya Chakradhar, Manoj Upreti , D. K. Tuli , R.K.Malhotra and Anand Kumar Indian Oil Corporation Ltd., Research and Development Centre, Sector-13, Faridabad-121007 Hayrana-India. E-mail: tulidk@iocrd.co.in
Introduction The use of fossil fuels as energy is now widely accepted as unsustainable due todepleting resources and the accumulation of greenhouse gases in the environment that have already exceeded the “dangerously high” threshold of 450 ppm CO2. The daunting challenge of present society is to find out sufficient supplies of clean energy for the future, which intimately linked with global stability, economic prosperity, and quality of life. To achieve environmental and economic sustainability, fuel production rocesses are required that are not only renewable, but also capable of sequestering atmospheric CO2. The process should also be water-efficient, near carbon-neutral with avorable net energy balance (NEB) and should require less arable land. Biodiesel is currently produced from oil synthesized by conventional fuel crops like soybean, oil palm, non-edible oil that harvest the sun’s energy and store it as chemical energy. This presents a
route for renewable and carbon-neutral fuel production, however they produce oils in the amounts that are miniscule (e.g. less than 5% of total biomass basis) compared with micro-algae (up to 80%). According to an estimate nearly 61% of agricultural cropping land in the United States is required to meet the current annual need of nearly 0.53 billion m3 of biodiesel. Growing oil palm at this scale is unrealistic because insufficient land would be left for producing food, fodder and other crops. In contrast, producing biodiesel from algae is widely regarded as one of the most efficient ways of generating biofuels and also appears to represent the only current renewable source of oil that could meet the global demand for transport fuels. So microalgae is widely regarded as one of the most efficient ways of generating biofuels and also appears to represent the only current renewable source of oil that could meet the global demand for transport fuels. No other potential sources of biodiesel come close to microalgae in being realistic production vehicles for
Figure 1: Conceptual system for micro-algae cultivation and biofuels production
Mr Anand Kumar is a Chemical Engineer and after a brief stint of teaching, joined India Oil in 1974. He has undergone specialized training in Petroleum Refining Engineering from IIP and Refinery Planning and Economics from Oxford Petroleum School, besides having attended management development programmes at MDI and IIM-A and business school in Europe and USA. He has a rich experience of 30 years, in various areas of oil refining viz Process Engineering, Projects, Supply Chain Management and Human Potential Management and has served at all major refineries of Indian Oil including Port Harcourt Refinery of NNPC, Nigeria, where he left behind a distinct mark in commissioning and operating the refinery and setting up related system training and improving of Refinery profitability. An Environmentalist to the core, he developed one of the country’s best ECO-PARK at Barauni, which became an important bird spot and he is also credited with the first experimentation of biodegradation of menacing oily sludge process. Currently he is Director (R&D), IndianOil Corporation Ltd. He is an active member of many forums, associations and professional bodies and has presented papers at various national and international forums on various management and refinery issues.
D E C E M B E R 2 008 2 3
JOURNAL OF THE PETROTECH SOCIETY Figure 2: Microscopic structure of few micro-algae
biodiesel. Another important advantage of microalgae is that, unlike other oil crops, they grow extremely rapidly and commonly double their biomass within 24 h. The micro-algal system offers such a renewable system for production of alternate fuel. It has been found that many microalgaes, such as Dunaliella primolecta, Monallanthus salina, Chlorella vulgaris, Botryococcus braunii, Navicula pelliculosa, Scenedsmus acutus, Crypthecodinium cohnii, Neochloris oleoabundans can accumulate oils/lipids by sequestrating the CO2 which can further be transformed to
Dr. D.K. Tuli hold Ph.D. in Synthetic Chemistry with over two decades of rich and varied experience in research and development in the hydrocarbon industry with a special interest in synthetics and biotics. Dr. Tuli has to his credit, 12 U.S.patents, two European patents and over 20 Indian patents. He has published over 50 research papers in professional journals. He has guided students from various Indian Universities for their Ph.D. thesis. Dr. Tuli was also a SERC post-doctoral fellow at the University of Liverpool, Robort Robinson Laboratories, England during 1979-81 and 1987-89 and carried out advance research in the areas of new synthetic and analytical methods. Since July 2003, Dr. Tuli is the Chief Executive Officer of IndianOil Technologies Limited, a subsidiary of Indian Oil Corporation. He is responsible for marketing of technologies & technical services of IOC(R&D).
24 D E C E M B E R 2008
different types of renewable biofuels. There are several ways to convert microalgae biomass to biofuels, which can be classified into biochemical conversion, chemical reaction, direct combustion, and thermochemical conversion (Figure.1). More specifi cally, example processes belonging to biochemical conversion include anaerobic digestion for methane production and fermentation for ethanol production, an example chemical conversion process involves extraction of lipids accumulated in microalgae cells and conversion of the extracted lipid to biodiesel via a simple transesterification reaction and some example thermochemical conversion processes include pyrolysis gasification and liquefaction. The potential of micro-algae for biofuel applications have recently been elegantly reviewed by Schenk et al. 2008, Hu et al. 2008, Wijffels 2007 and Chisti 2008.
Micro-algae: Small cell factories Micro-algae are a diverse group of most primitive, and the most simply organized plant like organisms (Figure 2). Like plants most of the algae use the energy of sunlight to make their own food by a process called photosynthesis. Micro-algae covert sunlight, water and CO2 to algal biomass. Algae vary greatly in size and grow in many diverse habitats; algae tolerate a wide range of temperatures and can be found growing in hot springs, river banks and also within polar ice. Microalgae, as their name implies, are very small, typically about one one thousandth of an inch in size. Their size varies widely, however; singlecelled species larger than 1/4 inch can be found, as can species which are as small as some of the bacteria, less than one ten thousandths of an inch. While the biochemical mechanism of photosynthesis in algae is similar to that found in all plants, algae can be
particularly efficient converters of solar energy to biomass by virtue of their simple structure. Algae have no need to generate elaborate support and reproductive structures, the micro-algae can devote the majority of the energy they trap to biomass growth. In addition, algal cell suspended in an aqueous environment can directly acquire the water, carbon dioxide, and nutrients they require for growth. Potential of micro-algae: Micro - algae as “oil well” and “coal mine” of 21 century Micro-algae are sunlight-driven cell factories that convert carbon dioxide to potential biofuels, foods, feeds and high-value bioactives. The idea of using microalgae as a source of fuel is not new but it is now being taken seriously because of the escalating price of petroleum and, more significantly, the emerging concern about global warming that is associated with burning fossil fuels. The energetic efficiency of the micro-algae, along with their ability to produce large portions of their total biomass in the form of oils, has caused them to be regarded as one of the most promising crops for liquid fuels production from plant biomass. Algae store photosynthetic energy in the form of oils that can be processed into fuels. Micro-algae have many advantages over using land crops for the production of biofuel. Some of these are: ■ Microalgae are the fastest growing photosynthesizing organisms and can complete entire growing cycle in few days. Rapid growth rates, High per-care yield make it possible to satisfy the massive demand on biofuels using limited land resource without causing potential biomass deficit and “ fuel” food” and “fodder”conflict. Table 1 shows the comparison of crop dependent biodiesel source with algal source. ■ Micro-alage cultivation consumes less water than land crops ■ The tolerance of micro-alage to high CO2 content in gas stream allows high efficiency CO2 mitigation. ■ Microalgae can uniquely attributes towards nutrient recycling and fertilizer production by exploiting underutilized water, land and nutrient resources. Higher productivities of microalgae can also be achieved without much impact on environ-
JOURNAL OF THE PETROTECH SOCIETY Figure 3: Raceway pond for mass cultivation of micro-alage
Oil productivity depends on the algal growth rate and the oil content of the biomass. Microalgae with high oil productivities are desired for producing biodiesel. Algae synthesize fatty acids as building blocks for the formation of various types of lipids.
Source: http://www.ieagreen.org.uk/newsletter 2007)
ment.
■ Tolerate marginal lands (e.g. desert, arid- and semi-arid lands) that are not suitable for conventional agriculture, ■ Utilize growth nutrients such as nitrogen and phosphorus from a variety of wastewater sources providing the additional benefit of wastewater bioremediation.
Content and fatty acid composition of micro-algae Micro-algae grow extremely rapidly and may are exceedingly rich in oil. The oil
genus specific.
content in micro-algae can exceed 80% by weight of dry biomass. Oil levels of 20-50% are quite common (Table 2). The oleaginous green algae show an average total lipid content of 25.5% dry cell weight basis. Lipid content increases considerably when cells are subjected to unfavorable culture conditions such as photo-oxidative stress or nutrient starvation. On average an increase in total lipids to 45.7% is found in green algae grown under stress conditions. The intrinsic ability to produce large quantities of lipid and oil is species/strain specific rather than
Table 1: Comparison of crop-dependent biodiesel production efficiencies from plant oils (From Chisti 2007 & 2008 and Schenk et. al., 2008)
Depending on species, micro-algae produce may different lipids, hydrocarbons, and other complex oils. The fatty acid composition of algae can vary both quantitatively and qualitatively with their physiological status and culture conditions. Not all algal oils are satisfactory for making biodiesel but suitable oils occur commonly.
Microalgal mass cultivation systems Two basic steps are involved in producing fuels from microalgae: feedstock production and fuel processing. Microalgae require light, carbon dioxide, water and inorganic salts for their growth. Temperature must remain generally within 20 to 30 °C. Growth media are generally inexpensive and contain inorganic elements that constitute the algal cell like nitrogen (N), phosphorus (P), iron and in some cases silicon. Sea water supplemented with commercial nitrate and phosphate fertilizers and a few othermicronutrients is commonly used for growing marine microalgae. Microalgal biomass contains approximately 50% carbon by dry weight. All of this carbon is typically derived from carbon dioxide. The optimization of strain-specific cultivation conditions is of confronting complexity, with many interrelated factors that can each be limiting. These include temperature, mixing, namics and hydrodynamic stress, gas bubble size and distribution, mass transfer, light cycle and intensity, water quality, pH, salinity, cell density and growth inhibition. Currently, open ponds and tubular photobioreactors are usually adopted for large-scale cultivation of micro-algae (Borowitzka 1999).
Open pond cultivation a
: If algal ponds and bioreactors are situated on non-arable land; Jatropha is mainly grown on marginal land.
The vast bulk of microalgae cultivated today are grown in open ponds. Open D E C E M B E R 2 008 2 5
JOURNAL OF THE PETROTECH SOCIETY Figure 4 a: Biocoil (A), tubular (B), Flat panel airlift (C), flat panel (D) photobioreactor for mass cultivation of micro-algae
Fig 4b: Different closed photo-bioreactor designs commonly employed for algal bioamss: a plate reactor, the classical approach, b tubular reactor, biggest closed photobioreactor is made in this design, c annular reactor, d plate airlift reactor (adopted from Schenk et.al. 2008)
ponds can be built and operated very economically and hence offer many advantages as long as the species for cultivation can be maintained. Open ponds have a variety of shapes and sizes but the most commonly used design is the raceway pond. They usually operate at water depths of 15–20 cm, as at these depths biomass concentrations of 1 g dry weight per litre and productivities of 60–100 mg/L/ day (i.e. 10–25 g/ m2/ day) are possible. However, such productivities are not the rule and cannot be maintained on an annual average. The main disadvantage of open systems is that by being open to the atmosphere, they loose water by evaporation at a rate similar to land crops and are also susceptible to contamination by unwanted species. A new open pond is typically inoculated with the desired algal culture with the aim of initiating growth and dominating the pond flora. However, over time undesired species will inevitably be introduced and can severely reduce yields and even out compete the inoculated species. Once a significant competitor has taken residence in a pond it is extremely difficult to eradicate.
Photobioreactor Microalgal bioreactors are often designed differently from bioreactors 26 D E C E M B E R 2008
used to grow other microorganisms. This is because most microalgae are photoautotrophs and depend on light as energy source. Supply, distribution and utilization of light in microalgal cultures are therefore central aspects, which receive particular attention in the design of bioreactors and hence, called photobioreactors. Photobioreactors are recommended for scaling up of autotrophic microalgaes since this kind of bioreactor could save water, energy, Table 2: Oil content of some micro- algae
and chemicals compared to some other open cultivation systems. Most closed photobioreactors are designed as tubular reactors, plate reactors, or bubble column reactors. A tubular photobioreactor is usually equipped with fencelike solar collectors. Microalgae broth is continuously pumped through the solar array, where sunlight is absorbed. Fresh culture medium is fed continuously to the degassing column during daylight, and an equal quantity of the broth is
JOURNAL OF THE PETROTECH SOCIETY harvested at the same time. The degassing column is continuously aerated to remove the oxygen accumulated during photosynthesis, and the oxygen-rich exhaust gas is expelled from the degassing column. Typical photobioreactor are shown in Fig. 4 a & b. Photobioreactors have been successfully used for producing large quantities of micro-algal biomass (Carvalho et al., 2006). Photobioreactors require cooling during daylight hours. Furthermore, temperature control at night is also useful.
Hybrid Systems Open ponds are a very efficient and cost-effective method of cultivating algae, but they become contaminated with unwanted species very quickly. Photobioreactors are excellent for maintaining axenic cultures but setup costs are generally ten times higher than for open ponds. A combination of both systems is probably the most logical choice for cost-effective cultivation of high yielding strains for biofuels. Inoculation has always been a part of algal aquaculture. Therefore to minimize contamination issues, cleaning or flushing the ponds should be part of Table 3: CO2 tolerance of various species.
the aquaculture routine, and as such, open ponds can be considered batch cultures. Selecting a suitable microalgal biomass production method for making biodiesel/biofuels requires a comparison of capabilities of raceways and photobioreactors. Generally speaking, raceway ponds are perceived to be less expensive than photobioreactors while closed photobioreactors provide a controlled environment that can be tailored to attain a consistently good annual yield of oils (Gouveia et al. 2008).
Micro-algae for CO2 sequestration Microalgae can fix carbon dioxide from different sources like the atmosphere, industrial exhaust gases (e.g., flue gas and flaring gas), and form of soluble carbonate. Table 3 summarizes a few microalgal strains that have been studied for CO2 biomitigation. Some of these strains can tolerate high temperature and high CO2 in the gas stream.
Microalgal farming using waste water and sea water Combination of wastewater treatment and microalgal CO2 fixation provides additional economic incentives due to the savings from chemicals (the nu-
trients) and the environment benefits. It provides a pathway for removing nitrogen, phosphorus, and metal from wastewater, and producing algal biomass, which can further be exploited for biofuel production, without using freshwater. The potential of CO2 fixation combined with wastewater treatment by microalgae have been investigated by a few researchers with several microalgal strains tested for this purpose. Freshwater is another natural resource besides variable land that may cap biofuel production. This concern is particular evident for populous countries such as China, India and dry coastal regions such as the Middle East. It is a novel idea to employ marine microalgae for CO2 mitigation and biofuel production. Extensive studies have been carried out for the cultivation of different marine microalgae using a variety of cultivation systems including both open ponds and various types of closed photobioreactors.
Downstream Processing of algal biomass: harvesting, drying and transesterification Algae typically have a high water content and downstream harvesting and processing requires its removal. In existing algal aquaculture the most common harvesting processes are flocculation, microscreening and centrifugation. Most importantly, cost-effective and energy-efficient harvesting methods are required to make the whole biofuels production process economical. In this regard, strain selection is an important consideration since certain species are much easier to harvest than others. Currently, centrifugation is considered to be too cost- and energy intensive for the primary harvesting of microalgae. The algal biomass may be dried by simple solar device or any other suitable cost effective drying system.
Economic feasibility of microalgal biodiesel A number of studies have attempted to calculate the cost of algal oil production from large scale farms. A comprehensive analysis and a good road map for building such systems estimated the cost of algal oil would equate to $52– D E C E M B E R 2 008 2 7
JOURNAL OF THE PETROTECH SOCIETY $91 US/bbl in 2008. This estimate was based on 400 hectares of open ponds, using either pure CO2 or flue gas from a coal-fired power station and productivity assumptions of 30–60 g m−2 day−1 with 50% algal lipid yield. Such high yields are theoretically possible but to date have not been demonstrated. A more recent analysis estimated algae oil production costs to be $84 US/bbl. Companies commercially producing algae have not been as optimistic in the production costs. One such company that is close to achieving these values is Seambiotic Ltd. (Israel). Elimination of dependence on petroleum diesel and environmental sustainability require reducing the cost of production of algal oil from about $2.80/L to $0.48/ L. This is a strategic objective. These desired levels of cost reduction are substantial, but attainable. Cost of producing microalgal biodiesel can be reduced substantially by using a biorefinery based production strategy, improving capabilities of microalgae through genetic engineering and advances in
engineering of photobioreactors.
Challenges The commercial culture of micro-algae is not new or novel, micro-algae is now over 40 years old with present use in foods and health foods, as aquaculture feeds, and for production of pigments, polyunsaturated fatty acids and other fine chemicals. The main algal species grown being Chlorella and Spirulina for health food, Dunaliela salina for betacarotened, Haematococcus pluvialis for astaxanthin in industrial scale. However, micro-algae has recently receive much attention as potential source of biodiesel owing to their high production of lipids. To date commercial application of micro-algae has concentrated on compounds that have very high value per kilo. To be a feasible source of biodiesel, the current price of the micro-algal production needs to be reduced by several orders of magnitudes. In addition, the scale of the production of lipids from microalgae would need to be three orders of magnitudes greater than the scale currently possible for high –value compounds. The biomass productivity, lipid cell content, and overall lipid productivity are some of the key parameters
affecting the economic feasibility of algal oil for biodiesel production. While the overall lipid productivity determines the costs of the cultivation process, biomass concentration and lipid cell content affect significantly the downstream processing costs. Therefore, an ideal process should be able to produce lipid at the highest productivity with the highest lipid cell content (Patil et al. 2008). Unfortunately, this is not always achievable because high lipid cell contents are usually produced by cells under stress, typically nutrient limitation, which is often associated with low biomass productivity and, therefore, low overall lipid productivity. By knocking out or modifying enzymes responsible for the synthesis of polyunsaturated lipids in the cell, it should be possible to dramatically increase the proportion of monounsaturated lipids. The lipid profile of an algal species will remain consistent provided it is grown under the same conditions. However every algal species will have its own lipid profile and it is therefore important to utilize species that have a suitable lipid profile for biodiesel production. Further research efforts should also be focused on the reduction of costs and energy consumption associated with the downstream processing of algal biomass, including developing more efficient processes for harvesting and dewatering. Lipid extraction from algal biomass represents another major task that will also require either modified or new approaches as processing algal biomass for oil introduces challenges that have not been previously encountered with oil seeds. The most of the work in algal biofuels is in still in lab or pilot demonstration scale. NREL, USA is managing a project to produce biodiesel from micro-algae for United State Department of Energy (DOE). In India, Department of Biotechnology, Govt. of India is organizing a network research program for algal biofuels research and up scaling. Beside this, few research institutions and industries are also working this area.
Algal Work at IOC (R&D) The research programs at Biotechnology Department of IOC (R&D) is targeted to28 D E C E M B E R 2008
JOURNAL OF THE PETROTECH SOCIETY
wards selection of potential algal strain having capability to grow in high cell density and accumulate high lipid content and tolerance to concentration of CO2, other gaseous contaminants like NOx and Sox and wastewater contaminants. In this endeavor several algal strains has isolated from diverse sources and screened. Some of the potential strains are able to grow in high density (3-4 g/l) in presence of up to 40% CO2 and accumulate oil/lipid up to 25%. Some of the strains have ability to grow in wastewater contaminated with hydrocarbons (100150 ppm). The fatty acid composition of the algal oil shows its suitability as feedstock for biodiesel production. Currently, efforts are being concentrated to optimize the growth conditions and find out biochemical/environmental trigger for improved cells growth and lipid accumulation. Efforts are also aimed for strain improved by mutagenesis and up scale the potential strains by developing indigenous photobioreactor. We have also initiated for research work for utilization of algal residue after oil extraction for different application like its fermentation to other biofuels like biohydrogen, biomethane etc.
Concluding remarks Micro-algae represent a sustainable solution to offset the increasing cost and dwindling supply of crude oil. It is possible to produce adequate microalgal biofuels to satisfy the fast growing energy demand within the restraints of land and water resources. Microalgal
farming can be coupled with flue gas CO2 mitigation and wastewater treatment. It can also be carried out with seawater as the medium, given that marine microalgal species are adopted, providing a feasible alternative for biofuels production to populous and dry coastal regions. Technological developments, including advances in photobioreactor design, microalgal biomass harvesting, drying, and other downstream processing technologies are important areas that may lead to enhanced cost-effectiveness and therefore, effective commercial implementation of the biofuels from microalgae strategy. With these concerted efforts, full potential of algal biofuels may be realized in coming years and the “algal bloom” may be transformed to “oil bloom”.
References 1. Borowitzka, M.A. 1999. Commercial production of microalgae: tanks, tubes and fermentrs. J. Biotechnol., 70: 313-321. 2. Schenk, P.M., Thomas-Hall, S.R., Stephens, E., Marx, U.C., Mussgnug, J.H., Posten, C., Kruse, O. and Hankamer, B. 2008. Second generation biofuels: high efficiency microalgae for biodiesel production. Bioenerg. Res., 1: 30-43. 3. Carvalho A.P., Meireles , L.A. and Malcata, F.X. 2006. Microalgal reactors: a review of enclosed system designs and performances. Biotechnol Prog. 22(6):
1490-1506 4. Chisti, Y. 2007. Biodiesel from microalgae. Biotechnol. Advances, 25: 294-306. 5. Chisti Y. 2008. Biodiesel from microalgae beats bioethanol. Trends Biotechnol., 26(3):126-31. 6. Gouveia L. and Oliveira A. C. 2008. Microalgae as a raw material for biofuels production. J. Indust. Microbiol. Biotechnol. 1367-5435. DOI: 10.1007/ s10295-008-0495-6 7. Grobbelaar, J.U. 2008. Upper limits of photosynthetic productivity and problems of scaling. J Appl Phycol., DOI 10.1007/s10811008-9372-y 8. Hu Q., Milton Sommerfeld1, Eric Jarvis2, Maria Ghirardi, Matthew Posewitz, Michael Seibert and Al Darzins (2008) Microalgal triacylglycerols as feedstocks for biofuels production: perspectives and advances. The Plant Journal 54, 621–639. 9. Patil, V., Tran, K.Q. and. Giselrod, H.R. 2008. Towards Sustainable Production of Biofuels from Microalgae. Int. J. Mol. Sci., 9: 1188-1195. 10. Spolaore, P., Joannis-Cassan C., Duran E. and Isambert A.2006. Commercial applications of microalgae. J. Biosci Bioeng., 101(2):87-96. 11. Wijffeles, R.H. 2007. Potential of sponges and micro-algae for marine biotechnology. Trends in Biotechnology 26 (1): 26-31 D E C E M B E R 2 008 2 9
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Coal as a supplement for natural gas : Some options examined Ajay Deshpande Deputy General Manager (Process Design and Development)
M.K.Joshi Director (Technical), Engineers India Limited
addition to what is already being done) to bridge the demand supply gap is therefore very much in order. ■ Intensification of domestic E&P activities ■ Exploitation of unconventional sources like Coal Bed Methane and Gas Hydrates ■ Underground Coal Gasification ■ Transnational gas Pipelines It is apparent that Coal, which is expected to continue its dominant position as the primary energy source over the next three decades and beyond, is also being considered as an alternative to augment natural gas supply. This is in keeping with the current thrust on clean coal technologies to provide energy security and to supply energy of a quality that does not adversely impact the environment. Coal can be used for some of the applications that are conventionally based on natural gas and also to produce Substitute Natural Gas. Some possibilities in these areas are discussed in the following sections.
Why Coal? The environmental establishment may
Abstract: The emerging energy scenario indicates that fossil fuels will continue to play a major role in meeting global energy requirements beyond the next two decades. Coal will continue to occupy a predominant position in the scheme of things, and given its higher availability, more equitable distribution and the potential for application in fields other than power generation is expected to play a major role as a supplement to Crude oil and Natural Gas. Technologies for the utilization of coal for the production of liquid fuels, chemicals and even substitute natural gas are available. Most of the technology components have in fact attained a significant maturity and require the knowledge and experience to integrate them into a single, efficiently performing entity. Some options for the utilization of coal for poly generation are discussed Keywords Coal, Gasification, Coal to liquids, Coal to chemicals, Substitute Natural Gas 30 D E C E M B E R 2008
Introduction With exploration and development efforts made under the New Exploration and Licensing policy, the , expected production of natural gas is expected to double from the current level of 90MMSCMD by the end of the 11th Five Year Plan. Notwithstanding the significant discoveries in the Krishna Godavari Basin, the supply demand position of Natural Gas is likely to remain unfavourable. The government is trying to supplement natural gas availability through the import of LNG and the pursuit of Translational Gas pipeline projects, which are expected to make significant quantities of Natural Gas available to the country. It is however not clear as to the cost at which this supplemental gas will be available. Recent reports appear to indicate that the formation of a ‘Gas OPEC” may not be far off and the era of cheap gas could well be nearing its end. The strategy, which envisages a thrust to concentrate on the following long term options (in
Mr Joshi, graduated in Chemical Engineering from IIT, Kanpur in 1972 and joined the Process Design & Development Division of EIL and is currently their Director Technical. He has been involved in a number of Refining Projects and has been directly responsible for the design of process units that were set up for the first time in India using in-house expertise. He is actively associated in activities like concepualisation of projects and preparation of feasibility Reports for Grass root and revamp projects, technology evaluation for licensed processes, process design for open art facilities and residual process design, trouble shooting and energy/conservation studies. Has given faculty support in various national /international seminars.
JOURNAL OF THE PETROTECH SOCIETY have reservations about the increasing application of coal, but there are a number of factors that drive the thrust towards the use of coal as a prime source of energy. These include: ■ Abundant availability worldwide, USA, Russia, China, Australia and India have major reserves. The USA is claimed to have over 250 years supply and Illinois is reported to have more BTU’s of coal than BTU’s of oil in Saudi Arabia and Kuwait combined. Greater geographical availability can help to reduce dependence on specifi c sources of oil/gas, more particularly on regions that could be subject to political instability. ■ Lower costs than natural gas : $0.51.5/MM Btu versus $6.00-8.00/MM Btu for Natural Gas ■ Availability of technology options to
Figure 1: Recoverable products
convert it into forms that are more easily transportable and offer more efficient utilization than combustion. ■ Versatility-coal has the potential to provide almost every product that can be produced from oil
■ Greater possibility of Carbon capture as compared to competing alternatives like LNG, GTL The reported coal based projects in China and the expansion of the coal fired sector in the USA lend credence
Figure 2: CTL flow scheme
D E C E M B E R 2 008 3 1
JOURNAL OF THE PETROTECH SOCIETY to the potential of coal, not only for power generation but also as a source of chemicals and liquid fuels. A March 2006 report by the National Coal Council has indicated that the United States could produce close to 2.6 million barrels per day of liquid fuels from coal by 2025. A number of states have private and/or public interest in CTL project development. Countries like China, India, Australia, Germany and South Africa among others are in the process of setting up or planning major projects on these lines.
Versatility Coal offers a number of potential Poly Generation applications in which it can also be used in conjunction with feeds like Petroleum coke and Lignite. Figure 1 shows the range of products that can be recovered. The availability and suitability of coal for various value addition applications provides significant opportunities for the use of coal as a means to replace crude oil for the production of value added transportation fuels and chemicals. The option to produce substitute natural gas alongside power and fuels/ chemicals can provide a degree of independence from oil imports. It would also allow for the development of new industries and provide incentives for increased coal production. The production of liquid fuels from coal has been practiced for a very long time using the Fischer Tropsch synthesis route. Direct liquefaction via Hydrogen addition is also being examined widely, but no commercial sized facility is presently in operation, though it is expected that a large facility will go on stream in Shenhua in China in the near future. Currently the gasification option appears to be favoured on account of its greater commercial track record, lower cost flexibility in coal feed and high quality of the end products. A 10000 BPSD CTL plant using the indirect route could produce ultra clean diesel at an investment of about $95000/Barrel. Costs for a facility producing an equivalent amount of substitute Natural gas (74 MMSCFD) from Coal are expected to be similar on a cost/bbl basis. 32 D E C E M B E R 2008
Coal to Liquids Much has been written about GTL projects in the recent past and coal to liquids (CTL) offers an alternative option that can be considered at loca-
tions that are deficient in gas but have proven coal reserves. A brief illustration of the CTL flow scheme is given in Figure 2. The application of coal to liquids has
JOURNAL OF THE PETROTECH SOCIETY been in commercial application for a long time, with Sasol in South Africa being the prime example. Today India is also looking at the possibility of setting up Coal to Liquids facilities. This will require the Indian coals to be evaluated in detail for suitability for Gasification and also. The application of coal to liquids has been in commercial application for a long time, with Sasol in South Africa being a prime example. Today India is also looking at the possibility of setting up of coal to liquids facilities. This will require the Indian coals to be evaluated in detail for suitability and estimation of plant performance as well as selection of appropriate gasifier design, in view of the characteristics of the coal The nature of the coal poses challenges in terms of overall process economics and design/engineering issues. A detailed feasibility study is therefore highly desirable before embarking on the project. This would be in line with the practice that is being followed elsewhere. Kentucky University carried out a study on the utilization of coal for the production of liquid fuels as well as substitute natural gas. The findings have been presented in HB 299 report on CTL and SNG technologies. The options for CTL application envisage a flow scheme on the lines depicted in the foregoing Block Flow diagram and are based on the use of Kentucky coal to produce 10000 BPSD of liquid fuels. The total capital requirement for the facility examined in the study is estimated to be about $ 986 MM, comprising $ 760 MM towards capital equipment costs and $ 236 MM towards other costs. The net operating costs are about $117 MM per year and the configuration has a net overall efficiency of about 50% (MM Btu per day in products *100 / MM Btu per day in Coal).Assuming a return on equity of 15%, the required selling price of liquids works out to about $52 per daily barrel, considering a coal price of $30-35/ton. The economics appears to be quite attractive if one looks at a scenario in which oil prices are expected to stabilize at levels of around $80/BBL in future. However there are a number of issues (touched upon in subsequent sections) that will need
Table 1: SNG production with carbon capture
Coal feed Tons/day
4850
Oxygen feed tons/day
4280
Net power sales, MW
8
Sulphur Tons/day
38
CO2 capture/release, Tons/day
8220/160
Feed Heating value MM Btu/day
121900
Product heating Value MMBtu/day Overall efficiency %
71740 58.9
Investment $MM
920
SNG selling Price $/MM Btu
9.47
(Source: HB 299 Report on SNG and CTL technologies, University of Kentucky)
to be taken into consideration at the time of taking a decision to invest in a project.
Coal to Chemicals Coal can be used as an alternative to Natural Gas for the production of Chemicals. A site, which does not have ready access to liquid feeds or Natural Gas, but is favourably located with respect to Coal fields, becomes a potential location for the manufacturing of coal based chemicals. The Gasification of coal produces Synthesis Gas, which can be used in production of chemicals such as Ammonia or Methanol. When Syngas is used for Ammonia production, the cost of ammonia plant itself reduces by approximately 30% (as compared to the plants based on natural gas) and the energy requirement per ton of ammonia reduces by approx. 25%. Ammonia is a basic building block for fertilizer while Methanol has a much varied application from manufacture of automotive fuels (DME, MTBE etc) to chemicals (Propylene, Cumene, Phenol, Acetone, Polypropylene as final products). Currently the product having fastest market growth is Polypropylene and a project profile for the same is presented below. Based on the production of Syngas in the Coal gasification unit, it would be possible to build a chain of chemical producing units based on the Methanol unit. Currently in
China where coal prices and availability are favourable, coal as a source of petrochemicals like Propylene is fast developing. Technology for conversion of Syngas to Methanol and Propylene is available. Methanol production is by the shift reaction of Syngas while propylene production is by the catalytic dehydration of Methanol. Polypropylene, the fastest growing thermoplastic globally and is produced by the polymerization of Propylene (homopolymer) or by co-polymerization of Propylene and Ethylene (Random / Impact copolymers) using the Ziegler-Natta catalyst system. The by-products from the above units are LPG and Gasoline both of which can be directly used. To meet the feed stock requirements of a 300,000 TPA Polypropylene unit based on 7.7 MMSCMD of syngas from coal gasification, the coal requirement is estimated to be 5200 TPD. Brief requirements of the Methanol / Propylene / Polypropylene project are as follows: Feedstock requirement :( Coal) 5200 Tons/day (to produce 7.7.MMSCMD of Syn gas) Utility requirements: Power 25 MW and Cooling Water 900 Cu M/hr) Polypropylene production: 300000TPA with 30000 TPA of LPG and 80000 TPA of Gasoline Component as by products Investment Rs.2400 crores D E C E M B E R 2 008 3 3
JOURNAL OF THE PETROTECH SOCIETY
Coal to Substitute Natural gas The conversion of Coal to Substitute natural gas offers an attractive option of transporting the energy content of coal via pipeline as compared to rail and road.SNG is in fact being regarded as a major component in the Fuel mix in the USA to meet requirements of Fertilizers, petrochemicals and power as a steady and fixed price substitute for shortfalls in imported LNG. The flow scheme for SN production from Coal is very similar to that shown for the Coal to Liquids facility, except that a Methanation stage is included in the scheme after the sulphur polishing step. The SNG route has a number of enablers that contribute towards product development. These include the following; ■ The technology components are well established. Gasification is now a mature technology and CO2 removal from Syn Gas is well proven in fertilizer/petrochemical units. ■ Methanation is a standard component of standard hydrogen plants. However for SNG production, factors that need to be suitably addressed are higher concentrations of CO and CO2 in the feed gas, heat of reaction, high catalyst activity over a wide temperature range and optimal heat recovery. Appropriate technological solutions to these issues are currently available. The SNG produced by this route meets pipeline specifications and the required selling price of SNG is comparable with current LNG prices. Another advantage of the process is that it offers options for Carbon capture and sequestration. In fact there are commercial instances of the captured CO2 being compressed and injected into depleted oil reservoirs for enhanced oil recovery. The incremental oil recovery is an additional positive feature. Typical performance of the SNG route is given in Table 1. The facility of the Dakota Gasification Company, in operation for over two decades, is an excellent example of coal being used for the production of SNG and Chemicals as well as providing CO2 for EOR applications Other variants of the SNG production 34 D E C E M B E R 2008
route have been developed, e.g. Catalytic Gasification (Great Point Energy) and demonstration/commercial projects envisaging their application are being actively examined. The SNG production option with carbon capture has a lower carbon footprint than the production of LNG. About 65% of the carbon in the feed can be potentially captured and used for EOR applications, while the balance goes into the SNG product. The process economics. Is quite sensitive to the cost of coal and the investment. Both CTL and Coal to SNG processes would require the availability of infrastructure such as ■ Location-preferably close to the mine mouth ■ Convenience of product disposalSNG can be routed to an existing gas pipeline, CO2 can be routed to a pipeline for EOR applications, and Hydrogen (if co produced) can be piped to refineries in the vicinity while power can be sent to captive consumers or to the grid. In addition, Governmental or regulatory support would be desirable to ensure success of the project.
ics are significantly impacted by raw material as well as feed (coal) prices. Some element of financial and technological risk is therefore present. The risk can be mitigated somewhat through price supports, product off take agreements, tax incentives, etc. On the technical front, critical attention needs to be given to technology and hardware selection and the selection of consultants/EPC contractors having a sound knowledge of the processes involved and the experience to integrate them into a whole at optimum cost. Coal presents an option to meet the requirements not only of energy security, but also to control GHG emissions. The technology options to achieve these ends are available and a will is required to enable their fructification with the joining of hands by the policy makers, technology suppliers, project promoters and consultants/contractors not only to create an awareness among end users on all the issues but also through appropriate incentives.
References 1.
Conclusion 2. CTL and SN technologies offer the prospect of supplementing natural gas as well as crude oil. The technology components involved are well proven and require a multi party involvement for successful application. However, the options are still quite investment intensive and the econom-
3. 4.
HB 299 report on CTL and SNG Technologies,2007-University of Kentucky Conoco Phillips-E-Gas Technology for gasifi cation (presentation) Peabody (presentation) Miritek Technical Report, Dec 2004 on Polygeneration of SNG, Hydrogen, Power and carbon dioxide from Texas Lignite. ( Report prepared for NETL, DOE)
JOURNAL OF THE PETROTECH SOCIETY
Recession Face-off Naresh Kumar Managing Director, Jindal Drilling and Industries Limited
“Worst Crisis Since '30s, With No End Yet in Sight” Wall Street Journal “World gripped by largest financial crisis in 100 years” Alan Greenspan Us Financial Crisis-'The World As We Know It Is Going Down' Spiegel Online This is what would have confronted any reader when going through the news in recent times. The mandate is out – the world is facing one of the biggest financial crises of all times. Spill over impact of this financial crisis and the looming recession is slowing down the growth rate of even such countries which were hitherto exhibiting high growth rates, like China & India. Fear is evident from Wall Street to Dalal Street. The Hydrocarbon Industry is not an exception. The meltdown has also affected the growth of this Sector. Lower demand and decreasing crude prices are impacting upstream industry in obvious manner. Determining crude prices is always a difficult proposition. Nobody could have anticipated that it Figure 1
would climb up to US$ 147 a barrel and then abruptly fall below US$ 50 level in just three months. The overall drilling market has not yet shown any sign of weakness as it is influenced by demand and supply position of rigs. For the past several years, riding on the high price of oil, the industry has witnessed acute shortage of offshore drilling rigs, particularly of deepwater fl oaters. The market for deepwater rigs is still very strong. Utilization is almost 100% and there is still a substantial gap between demand and supply. But, if low oil price scenario persists, this could dampen investment climate of deepwater exploration. Although many orders for new built deepwater rigs are lined up on the back of the high oil price regime
Mr. Naresh Kumar, is Managing Director, Jindal Drilling & Industries Limited, a company engaged in the business of offshore drilling for Oil & Gas with its corporate office in New Delhi, India. Various sister companies of JDIL are also involved in diversified high technology oil field services. During his business career spanning for over 30 years he has set up and led businesses to new horizons. Under his dynamic leadership the group successfully ventured into offshore Oil & Gas and in project exports. Mr. Kumar is DirectorInternational Association of Drilling Contractors (IADC) U.S,A. has also served as the first Vice Chairman of South Central Asia Chapter of IADC. He is the founder member of Petrotech & President, Petrotech Society. He also served as Chairman- Oil & Gas Services Division and on National Council of CII. He was bestowed upon with ‘Industrial Excellence Award’ for his remarkable contribution to Oil & Gas sector. He was also awarded International Award for The Best Trade Name in Madrid, Spain by Spanish Minister of Energy. He has also contributed as speaker in various seminars/conferences pertaining to Oil & Gas Sector.
D E C E M B E R 2 008 3 5
JOURNAL OF THE PETROTECH SOCIETY Figure 2: Newbuild floaters
witnessed till recently and buoyant demand, it is yet to be seen how many of them eventually see the light of the day as many of them are already facing financial difficulties due to the changed market scenario. The Jackup rig market is going strong, but day rates have started to soften as new built rigs have started to come into the main stream. 40 new-built Jack up rigs would be joining the industry in year 2009 itself. 13 of these Rigs have already been contracted and, by the time the rest are ready to leave the shipyard, most of them would already have contracts to start with. For service providers, the direction of oil prices should not have a direct Figure 2: Newbuild jack ups
present, but out of these new built firstly how many are really going to make it out of shipyard & secondly in scheduled time, are also major factors in determining rig availability in future. For example, out of the first 12 deep drilling rigs awarded by Petrobras back in May 2008; several of them are still struggling with financing. Around 38% of the new-builts are being built by speculators. The drying up of credit availability and more restrictive financing terms have already started hampering business financing, resulting in delays, defaults and closure of projects.
impact on day-to-day operations, specially companies with long term contracts. However, capex cutbacks by oil majors, coupled with the negative effects of the global economic slowdown and credit crunch, could adversely impact new entrants & speculators in their operations in terms of new work orders and margins. Petrobras recently postponed their plan to float the tender for 28 Deep water rigs which was second and final part of their plan to hire 40 ultra-deepwater rigs through 2017. Few more operators have also indicated similar signs of delaying their projects. This contemporary slowdown coupled with planned induction of many new built rigs might ease the situation at
Another noticeable fact is that a large number of offshore rigs working at present are more than 25 years old. Tighter quality and safety measures might result in cold stacking of such ageing fleet, specially those which were perhaps not well maintained or upgraded. Such a scenario would, of course, maintain the current demand momentum and auger well for some drilling companies. In this era of financial turmoil, earnings growth would be affected particularly for new entrants and for those service companies having less experience of operations. To steer through the present slowdown in the industry, nostrum for the service providers would be cost effectiveness and high operational efficiency. Only companies with strong experience and technologically upgraded fleet would emerge as the winners in these trying times. Now when the search for hydrocarbon is shifting more into deeper and difficult terrains, it is in the best interest of Operators to choose experienced drilling partners having the latest technology and upgraded equipment to avoid downtime and extra cost. Let us all pray that the industry would be able to whither these difficult times.
36 D E C E M B E R 2008
JOURNAL OF THE PETROTECH SOCIETY
Fuel Cell – prime movers for the hydrogen economy Ashish Jain Superintending Engineer (Electrical), ONGC, Energy Centre
amount of energy resources than what it is consuming now. Energy is a vital part of every aspect of life in modern India. The Government today is facing the two major challenges:
Abstract India has been witnessing electrical power shortages, which is affecting all users like domestic, industry as well as agriculture. Further, the grid supply is often unreliable and erratic. With regulations getting stringent, search is also on for cleaner solutions. Several industries and commercial establishments such as call centers, hotels, hospitals and restaurants are already using captive power. These are as such the potential consumers for fuel cell power plants. Yet another potential candidate is the Indian auto rickshaw. It has recently shifted to the eco-friendly Compressed Natural Gas (CNG) but it’s now ready for the generation-next fuel-hydrogen. In India, it is felt that in the size range of 1-10 kW fuel cells will mostly be used for standby power whereas 10 kW and above would be mainly for base load, standby power. Hydrogen availability initially does not seem to be a major issue as it is available in the market as a by-product of
chloro-alkali industry. There are about 39 chloro-alkali manufacturers in India having almost 258,722 Nm3/day of excess hydrogen available. The Indian energy companies are gearing up to face the challenges of the hydrogen economy. The paper aims to cover the prospects and potential for fuel cells in India along-with the possible road map.
Introduction The world economic growth is now increasingly driven by the emerging Asian economies such as China and India (or BRICS countries i.e. Brazil, Russia, India and China). The average income of the 5.5 billion people living in the emerging economies has been growing at a cracking pace of 5 % per annum. commercial energy demand would grow at an average annual growth rate of 5.2 % to 6.1 % by 2031-32 (Source: Kirit Parikh committee on Integrated Energy Policy report - August 2006). If India has to sustain its high growth momentum, it would require far more
Delivering secure, clean energy at affordable prices, as we become increasingly dependant on imports for our energy needs and tackling the climate change as the nation continues to grow. Comprehensive programs of developing alternative energy sources need to be initiated to mitigate the consequences of climatic changes and oil price volatility. The Indian economy needs to get on a path to being significantly less carbon-intensive. The starting point for reducing carbon emissions would be to save energy and enhancing energy efficiency. Further, we need to make the energy we use cleaner. ‘Distributed energy generation’ is a step forward in this direction. There are many opportunities offered by the distributed energy technologies today. Transport sector in India alone consumes about 40 % of liquid fuels. Thus, developing alternate fuels is the key challenge for the transport sector. A strategy to bring forward cleaner technologies particularly for hybrid vehicles and fuel cell vehicles is needed for a real shift away from oil. D E C E M B E R 2 008 3 7
JOURNAL OF THE PETROTECH SOCIETY Hydrogen thus holds a promise as the energy carrier in the sustainable energy system.
Fuel Cell Market in India Both developed and developing countries are conducting Research and Development in the area of hydrogen production, storage, transportation, safety, generating standards and application. There is a large virgin market for fuel cells in India with a considerable interest in this technology. The Indian fuel cell technology is in most of the cases at an early stage. However, there are plenty of incentives for developers. The power outages are frequent, thereby stimulating the demand for back-up power systems. Further, an estimated 80,000 villages still lack access to electricity. These are ideal market for fuel cells. On the transport side, fuel cells are actively been considered as an option. With major pollution problems, a growing population propelling an exponential growth of vehicles fuel cells could help solve country’s major pollution problems. As per Society of Indian Automobile Manufacturers (SIAM), sales of passenger cars grew by 17.7% in the year ended March 31, 2005 to 8,19,918 units. The corresponding figures conservatively estimated for two and threewheelers is 31,55,163 and 5,94,631 units respectively. Manufacturers Association for Information Technology’s (MAIT) Industry Performance Review for the financial year 2004-05 has reported that the desktop PC market grossed sales of 3.63 million units, registering a growth of 20 percent over the last fiscal. Generators in the range of 0.5 kW to 4 kW are popular back up power for residential and commercial sector with a USD 50 Million yearly market registering a 10 % growth. Further, inverters account for 70 - 80 % of residential back up. There are about 73 million Liquefied Petroleum Gas (LPG) users in the 38 D E C E M B E R 2008
country. Owing to such heavy market penetration which includes both rural as well as urban households, this sector can be tapped for using LPG reformers to generate hydrogen. The generated hydrogen can then be further used in fuel cells for home electricity and the reject heat can be utilized further for hot water requirements or in a hot case. Fuel cells could supplement the existing efforts in improving generation capacity addition programs in India. However, it is envisaged that initial penetration will be for distributed/decentralized generation.
Indian organizations investigating Fuel Cells technology Research and development work began in the early 1980s, and the number of organizations interested in the technology continues to grow. India’s National Hydrogen Energy Program has been given a major push with the formation of National Hydrogen Energy Board (NHEB), the highest level apex body set up by the Government of India. Apart from all aspects of hydrogen technology, NHEB is also focusing on the application of fuel cell for power generation and automobile application. Table 1 gives details on Indian organizations focusing on various facets of fuel cells.
Oil & Natural Gas Corporation (ONGC) Experience ONGC, country’s one of the largest exploration and production enterprise operates a number of oil and gas production installations, both offshore and onshore. The upstream operations being highly energy intensive calls for a huge requirement of electricity both from State Electricity Boards (SEBs) as well as captive sources. Today many corporations in the country are looking at such ‘green field projects’ as a potential business opportunity. Keeping in line with the corporation’s objectives of conserving and protecting the environment, ONGC has embarked on a mission to create a state-of-the art Energy Centre focused on conducting cutting edge research on marketable renewable energy solutions. The Centre is operating on the motto “Mind to the Market” while the vision of the Centre is “Harness science and technology to meet national energy needs of tomorrow in a clean and sustainable manner…………” Against this backdrop, hydrogen and fuel cells are being looked at potential technologies to be taken up by the Centre.
Table 1: Indian organizations focusing on various facets of fuel cells
Organization
Type of Fuel Cell
Centre for Fuel Cell Technology, Chennai
PEM
Defense Research and Development Organization, Ambernath
PEM, PAFC
National Chemical Laboratory, Pune
PEM
SPIC Science Foundation, Tuticorn
PEM
Bhabha Atomic Research Centre, Mumbai
SOFC
Central Glass and Ceramic Research Institute, Kolkata
SOFC
Indian Institute of Technology, Delhi
DAFC, SOFC
Indian Institute of Technology, Chennai
PEM
Indian Institute of Technology, Mumbai
DMFC
Indian Institute of Science, Bangalore
PEM, DMFC
The Energy Resource Institute, Delhi
SOFC
Bharat Heavy Electricals Limited, Hyderabad
PAFC, SOFC
Reva Electric Car Company, Chennai
PEM
Scooters India Ltd, Pune
PEM
JOURNAL OF THE PETROTECH SOCIETY Table 2: Installed capacities, hydrogen production, and excess hydrogen available
Manufacturers name
Installed Capacity (TPA)
H2 (Nm3 /Day)
Excess H2 (Nm3 /Day)
Century Rayon, Maharashtra
33000
11000
11000
Hukumchand Jute Industries Limited, Madhya Pradesh
47520
23100
11100
Indian Rayon Industries Limited, Gujarat
33000
29400
1147
The Andhra sugars Limited, Andhra Pradesh
33000
28000
4000
DCW Limited, Tamil Nadu
60000
48160
16800
69300
68800
0
20000
15692
0
33000
28089
842
130000
120000
50000
33000
32704
6519
152000
112000
16000
Tata Chemicals Limited, Gujarat
33000
29500
4720
Punjab Alkalies & Chemicals Limited, Punjab
99000
84000
11866
Total
775820
630445
133994
Sree Rayalaseem Alkalines & Allied, Maharashtra Hindustan Organic Chemicals Limited, Maharashtra NRC Limited, Maharashtra Indian Petrochemcials Corporation Limited, Gujarat Bihar Caustic & Chemicals Limited, Bihar Grasim Industries Limited, Madhya Pradesh
Hydrogen Availability Large numbers of steel plants, fertilizer and petrochemical plants in the country already have experience in the production, storage and handling of hydrogen. The large number of Vanaspati (fat hardening) industries in the country also use hydrogen. Hydrogen is produced in various industrial processes, and as a by-product in caustic and petrochemical industries. In the chemical industries, the chlor-alkali industry is one of the main producers of hydrogen.
tonnes per annum. The annual excess availability of hydrogen from these plants is almost 258,722 Nm3/day.
Key Application Areas Fuel Cells have wide application in automotive and power generation. Several such applications for PEM fuel cells have been estimated and are shown in Table 3.
This assessment has been made based upon our findings from a interaction with the prospective users, industry groups, researchers in this field. The experience gained through these discussions reveal that short term usage is for 1-5 kW application areas, while in the medium term the applications would be for 1-10 kW stacks. Only in the long run, would there be a market for high power stacks. Further, to begin with PEM fuel cells look most promising in the short to medium term.
Fuel Cells for stationary generation The growth of the economy calls for a matching rate of growth in infrastructure facilities. However, the growth rate of demand for power in the country has been higher than the Gross Domestic Product (GDP). To support the rate of growth of GDP of around 7 % per annum, the rate of growth of power supply needs to be over 10 % annually. India, as such is facing electric power shortages, which is affecting all user sections such as domestic, industry and agriculture. There is much resentment towards unreliable grid and black-outs. Many establishments such as call centers, hotels, hospitals, group housing colonies, dairy plants and restaurants are already dependant to a large extent on the back-up captive power. Owing
Table3: Key application areas
Table 2 indicates the excess hydrogen availability is 133,994 Nm3 /day from an installed capacity of 775.82 thousands TPA. The excess available is about 21.25 % of the total hydrogen produced as by-product. The hydrogen available per day from the remaining plants has been assessed at 124,728 Nm3/day. There are about 39 chlor-alkali manufacturers in India with total installed capacity of almost 2267 thousand D E C E M B E R 2 008 3 9
JOURNAL OF THE PETROTECH SOCIETY to serious environmental issues with diesel based captive power on which these users are dependant, these become the potential candidates for fuel cell power plants. Further, the country has a vibrant Information Technology and Telecommunication industry. Sophisticated equipment being used in this sector requires uninterrupted and quality power. The Indian telecommunication network is 12th largest in the world and 3rd in the developing countries. Already about 0.1 million kilometers of optical fiber system has been laid down, and this growth rate will require not only increasing but reliable energy as well. The present electricity requirement is met by grid supply, captive generation and standby diesel generator sets and battery banks. The standby power source and the battery banks account for heavy expenditure. Fuel cell power plants offer an ideal solution for this sector. Moreover, there is a good availability of the fuels like piped natural gas, liquefied petroleum gas in the households and by-product hydrogen gas. In view of these, there are huge potential consumers who would opt for the fuel cell system to meet reliable and uninterrupted electricity supply as well as the heat demand.
Fuel Cells for mobile applications Over the past few years the concepts of powering automobiles with fuel cells and of a hydrogen economy have often been discussed. The optimism for hydrogen typically centers about the fact that hydrogen burns cleanly, yielding water and no carbon dioxide. India has large population and serious air quality problems. The bus population in India is over 0.5 million with 0.115 million from state undertakings alone. (Source : Automobile Association of India). Most of these buses are powered by diesel fuel. On account of these, there is a growing increase in urban air pollution. 40 D E C E M B E R 2008
Given the commitment of the Government for securing the environment, fuel cells would obtain early commercialization for the automotive applications. The Indian auto rickshaw seems to be one of the most promising potential candidates. It has recently shifted to the eco-friendly CNG but it’s now ready for the generation-next fuel-hydrogen. 100 cc motorcycles, comprising a chunk of automobiles on the Indian roads is another contender. Already, a three wheeler and motorcycle have been demonstrated to run on hydrogen using the hydride technology. A recharge takes about six minutes. The fuel box for motorcycle weighed about 17 kg, or twice that of a tank with 10 liters of petrol. This lasted for 70-80 km before a recharge. During tests, the three-wheeler clocked a range of 50-60 km. However, these demonstrations were done using the modified IC-engines. Work is on for using fuel cells to power these applications.
Opportunities for Developed Economies Fuel cells, the “microchip of the hydrogen age”, are the key to abundant energy from secure, renewable energy. Fuel cells could supplement the existing efforts in improving generation capacity addition programs in India. However, it is envisaged that initial penetration will be for distributed/decentralized generation with high quality assured power supply in the most environment friendly manner. As the potential is not yet tapped, the sector offers significant business opportunities in the country. There is a large virgin market for fuel cells in the country and as “early bird” entrant, distinct commercial advantages would accrue. Further, there is immense possibility of developing cultural and geographical specific applications as well.
developing economy like India. Positive steps in terms of technology development and assistance for fuel cell projects and establishment of proper institutional framework have been initiated by the Government for harnessing the potential of fuel cells in India. Decentralized power generation being one of the fastest growing sectors in the country, many opportunities exist for developers to venture into this promising area. A stand-alone renewable energy system for power is an ideal market for fuel cells in the1-10 kW range. Similar systems could also be used to power irrigation, a large consumer of electricity in rural areas. Fuel could be derived from ethanol or hydrogen from biomass. On the transport side, fuel cells could help country’s major pollution problems. Owing to poor air quality in Delhi, there is already a legislation in favor of clean technologies i.e. to convert diesel powered buses to CNG. Further, India is also a potential market for smaller fuel cell vehicles such as two and three wheelers. In the short to medium term, there appears to be a good prospect for PEM fuel cells.
Acknowledgements The author would like to express his sincere thanks to DG-ONGC Energy Centre for his support and guidance. The author would also like to express his gratitude to ONGC for permitting him to present this paper in the conference. The views expressed are that of the author and do not reflect those of the Corporation.
References 1. 2.
Conclusions
3.
In conclusion, fuel cells wind offers a great potential for local pollution prevention, sustainable development and enhancing energy security for a
4. 5.
Kirit Parikh Integrated Energy Policy Report 2006 Proceedings of National Seminar on Challenges in Fuel Cell Technology, IIT Delhi 2006 F u e l l i n g I n d i a ’s G r o w t h Past Trends and Scenarios 2011-12-Petrofed Publication www.fuelcelltoday.com www.mnes.nic.in
JOURNAL OF THE PETROTECH SOCIETY
Carbon neutrality—the way forward to “Sustainable Development”
and be prepared for future national or regional climate policies. Carbon neutrality is a quest for achieving the ultimate target of Sustainable Development in the light of the impending climate change.
A B Chakraborty, S Dasgupta, Somnath De
2.0 Introduction
ONGC
Abstract: The article is a treatise on the Carbon neutrality, its significance in today’s context and the way to attain that. Global warming has forced international community to take stock of the Green House Gas (GHG) emission and frame international, regional and national frameworks to mitigate it. The ultimate goal by any company is to attain carbon neutrality where the net GHG emission by its activities is nil. This necessitates a detailed GHG accounting of the activities, an elaborate action plan to reduce the same to the extent possible and finally to offset the balance emission by introducing low carbon technology and alternate source of energy. Carbon neutrality helps a company achieve energy and operational efficiency besides helping it face the post Kyoto scenario. The
A B Chakraborty, Group General Manager, is heading ‘Carbon Mgt. Group’ in ONGC (State owned National oil Company). He is responsible for CDM Projects development, Climate Change mitigation & has 34 yrs industry exp., in HSE, CDM, Sustainable development and has presented many papers internationally. He was successful in developing & registration of 4 CDM Projects by UNFCCC, brought out Policy on Climate Change & Sustainable Development, undertaken collaborations, formed ‘Carbon Mgt Group’ and , a role setting for Indian PSU’s . Academics include: BE (Mech), M.Tech (Prodn Engg), MBA, MSc (Envtl Sc), PG Diplomas; Envtl Mgt., Envtl Economics & P G Dip (Safety Mgt.) London. He is ‘Fellow Institute of Engrs’, Chartered Engr, Member SPE & life member NIPM.
article is a detailed account of all these aspects which leads to the company’s ‘Sustainable Development’.
1.0 Background Climate change, arising due to the global warming, has come to the fore as a key sustainable development issue after it has assumed an alarming dimension. According to the 4th assessment report of the Intergovernmental Panel on Climate Change (IPCC) the world has just eight years to act in a constructive manner. Otherwise it may be too late to stop the unprecedented catastrophe that will affect the world by 2050. Global warming is attributed to the release of anthropogenic green house gases (GHGs). This has necessitated a concerted effort to arrest and mitigate GHG emission which is manifested through various global protocols, national policies and regulations. Companies and industries in turn, are following the suit. In today’s scenario, companies must be able to understand and manage their GHG risks if they are to ensure long-term success in a competitive business environment,
Shantanu Dasgupta, Chief Chemist, ONGC works with the Carbon Management Group. Shantanu has 19 years professional experience in ONGC in different areas: drilling, production and processing, R&D on processing, training institute, and carbon management. A gold medalist from Ranchi University and a KS Krishnan DAE research scholar, Shantanu has also done his PG Diploma on Ecology& Environment and Masters in Business Administration. He has published several papers in national and international journals.
If an organisation intends to become carbon neutral, it is essential to define carbon neutrality, enumerate its relevance and associated benefits towards sustainability in the organisational context, and broadly outline the pathway to Carbon Neutrality. It is , however, pertinent to mention that Carbon Neutrality for an organisation needs to be a part of its overarching portfolio of carbon management strategies.
3.0 Definition The Carbon Neutral Protocol defines being Carbon Neutral as: The net greenhouse gas emissions associated with an organizational unit, product, service or process is zero, through a combination of direct (internal) emission reducing actions and indirect (external) offsetting actions. A company that is carbon neutral has reduced its absolute emissions and/or offset its emissions to the extent that it has no net emissions. Mathematically; Carbon Neutrality: is a State of affair where
Somnath De, Chief Engineer (Electrical)ONGC is working with the Carbon Management Group. Somnath has 24 years of experience in different fields of upstream oil and gas industry including maintenance engineer at offshore oil and gas platforms, onshore drilling rigs, technical services, Health Safety and Environment and carbon management. He has an Honours degree with distinction in Electrical Engineering from Regional Engineering College Tiruchirapalli.
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Net zero carbon emissions = Carbon émissions – (absolute reductions) – (offset carbon)
■
4.0 Relevance and benefits
■
Attaining Carbon neutrality requires a holistic approach by a company towards progressively reducing usage of carbon intensive fuels across all its activities. As will be elaborated subsequently, the process involves setting in place the systems for ongoing carbon accounting, planning, executing & monitoring of de -carbonization projects within a feedback loop. The approach to Carbon neutrality has the inherent scope of improvements in operational processes in terms of energy efficiency and assimilation of better technology leading to better economics. Besides, working towards carbon neutrality is relevant in the changing global business environment for the following reasons: ■ It leads to good corporate governance ■ It is necessary for the long term sustainability of any energy intensive company ■ Carbon neutrality can help a com-
■
42 D E C E M B E R 2008
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pany position itself strongly in international forums. This will help a company prepare itself for future post Kyoto situation It makes a company energy efficient It leads to accountability of GHG emission, and opens up the possibility of introducing low carbon technology. Make it prepared for any voluntary/ mandatory commitment and /or regulatory requirement, should there be any such situation.
5.0 Organizational approach Increasing number of forward thinking organizations around the world are making pledges to reduce their carbon footprint and go carbon neutral. In every case, regardless of the country of origin, size or sector, these organizations are committing to take three basic steps: ■ Accounting of GHG emissions and developing Carbon footprint ■ Devising plans for carbon mitigation, carbon sequestration and carbon offsetting as applicable and feasible. ■ Certification and Communication
All the three processes are briefly described below.
5.1 Accounting of GHG emission A true and fair inventory of GHG’s in terms of CO2 equivalent arising out of all the operations of the company across its activity chain is to be accounted for. This, not only creates a benchmark for measuring future performance but also highlights which operations are the most energy and CO2 intensive. Emissions are categorised into direct and indirect emissions. In the context of GHG accounting, the direct emissions are emissions from sources that are owned or controlled by the company. In the oil and gas sector, these are principally the result of the following types of activities: ■ Stationary combustion-Process heaters, engines, turbines, flares, incinerators, production of electricity, heat or steam ■ Process emissions involved in production of oil and gas -process vents, equipment vents, maintenance / turnaround activities, emissions
JOURNAL OF THE PETROTECH SOCIETY during physical or chemical processing for manufacture of value added products. ■ Mobile combustion-Transportation of materials, products and employees in company owned/controlled vehicles ■ Fugitive emissions – leaks from pressurized equipment, pipelines etc For an oil and gas upstream company, activities in exploration, drilling, production, processing as per the above categorisation, will fall under direct emissions. Indirect emissions are emissions that are consequences of the activities of the company but occur at sources owned or controlled by another company. Thus, all emissions arising due to the usage of utilities produced/generated/supplied by other companies/ entities fall under this category. This includes all emissions that result from the use or purchase of a product. Indirect emissions are broken down into two categories called Scope 2 (electricity consumption) and Scope 3 (other indirect sources). These delineations referred to in the GHG Protocol were developed in order to avoid future double counting. (Direct emissions are referred to as Scope 1 emissions. Scope 2 emissions are through the consumption of purchased electricity to light and power offices and operations, while Scope 3 emissions include those from all the other activities that move an organization’s products or services to market or the community. GHG accounting is carried out through the use of standardised approaches and protocols; globally, the most recognized standard for corporate accounting and reporting is The GHG Protocol of World Resources Institute (WRI) and the World Business Council for Sustainable Development.
5.2. Devising plans for carbon mitigation, sequestration and offsetting – Key step towards carbon neutrality Once GHG accounting is conducted, a detailed plan of GHG mitigation/ sequestration/offsetting is drawn to work
towards the goal of zero net emissions. As an approach, this is carried out through energy use reduction (absolute carbon reduction) or investing in renewable power (energy balancing), and by utilising carbon offset mechanisms (if applicable). Carbon offsetting schemes can be divided into two groups: those that are regulated and therefore acceptable within emissions trading schemes and those that are voluntary. However, for Indian organizations, the offsetting, as such, through either of the ways is not applicable. 5.2.1 Need for sector / industry specific approach for mitigation, sequestration and/ or offsetting:A survey of the Financial Times Stock Exchange (FTSE-All share) companies reveals that only about 3% of the companies stated directly that they were dealing with, or planning to deal with emissions by implementing schemes aimed at carbon neutrality. These companies
were from 14 different subsectors. The only sector where a trend is discernable is banks, which of course have very low emissions relative to output. Only, two organisations belonged to sectors with high Carbon Intensity. This infers that companies in high intensity sectors will find it difficult to make use of offsetting schemes to achieve carbon neutrality due to the sheer scale of emissions in comparison with low intensity sectors. For most companies, absolute reductions would be the first course of action. Furthermore, carbon neutrality without absolute reductions in emissions will not, on its own, stabilise atmospheric concentrations of CO2. In general, there are two ways for companies to reduce the absolute carbon intensity of their operations: carbon efficiency and energy efficiency. A three pronged approach is recommended, viz, short term, mid term and long term. It is pertinent to mention that all the three approaches must be planned at the beginning itself. (A) Short term approach generally yields results after 1-2 years and D E C E M B E R 2 008 4 3
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(B)
(C)
the approach essentially comprises energy saving measures. This typically includes efficient usage of fuel and electricity in daily operations, reduction in usage of vehicles, rationalising travel, reduction of power consumption in offices etc. These are easy to achieve measures and can account for nearly 15 % of the GHG reduction, if applied rigorously. Once achieved, proper monitoring and vigilance can sustain the desired level of GHG mitigation. Mid term approach generally spans from 3-6 years and is extremely crucial. The approach generally is to adopt corporate policies with regard to the reduction in GHG emission through energy efficiency, arresting of fugitive emission, fuel substitution etc. The mid term approach can reduce the GHG emission up to 40% of the total GHG emission by an energy intensive company. However, both short term and mid term approaches have certain limitations. They cannot completely nullify the GHG emissions and tend to reach the limiting point beyond which further reduction in GHG mitigation (energy consumption) cannot be possible. This necessitates the adoption of long term approach. Long term approach spans for a longer period, typically over 7 years and extending upto 20 years. The approach is generally to offset the balance GHG emission through alternative energy, renewables, investing in low carbon technology and CO2 capture and sequestration. These are cost and time intensive projects where significant result can be expected only on a long term basis. Operation specific planning is necessary to select appropriate approach/approaches which will synergise with the operations and other imperatives of a company.
One example of a company in high Carbon sector from the FTSE survey, working on carbon neutrality is BHP Billiton, which is employing a mix of energy efficiency, processing effi44 D E C E M B E R 2008
trading in energy certificates(being planned)will be allowed. Such measures are likely to percolate down to other industries in due course. It is therefore prudent to be proactive. c i e n c y, methane capture, fuel switching, Carbon Capture & Sequestration(CCS) as well as participating in the EU ETS (European Union Emissions Trading Scheme)and the (Certifi ed Emission Reduction)CER markets. One project BHP is currently working on is its contribution to Australia’s fi rst CO2 injection and storage pilot project which is led by the Cooperative Research Centre for Greenhouse Gas Technologies (CRC CO2). One benefit in being involved in such a project is an increased understanding of how new technology can potentially form new business ventures.
7.0 ONGC’s Expereince In the Indian context, ONGC is a trailblazing organization with respect to vision, policies and actions required for sustainable development. ONGC started the process of identifying and developing Clean Development Mechanism projects from 2005 and on date has four registered CDM projects and the first Central PSU to have achieved this feat.Working on a proactive vision,ONGC established a dedicated Carbon Management Group with a policy on “ Climate Change and Sustainable Development” to work on the entire gamut of issues leading to “Sustainable Development”.
5.3 Certification and communication Once the detailed plan is developed and adopted, the company needs to look for a certification agency/protocol. There are many such global agencies and protocols. However, the standards used by different agencies/protocols tend to be different, based, as mentioned above, on the rigour the agency/protocol likes to adopt with regard to the measurement of emissions. Generally, both direct and indirect emissions which can be controlled and monitored by a company are considered pragmatic.
We have established international working relationships with organizations such as US Environmental Protection Agency (USEPA) to work on Methane2Markets(M2M) for capturing fugitive emissions from our operations, embarked on Green House Gas Accounting and exploring project on Carbon Capture & Sequestration. As an organization, we are committed to staying on the path of “Sustainable Development” through tecnology based, policy driven work programmes.
6.0 Emerging trends
8.0 Conclusions
This is a new activity which can lead to a “noble” execrcise of ultimately attaining the carbon neutrality. Further, the emerging trend in India is towards energy efficiency and emission reduction. Government has identified nine energy intensive industries where energy efficiency benchmarks will be made mandatory and
Policy and business leaders are constantly engaged in the pursuit of insights for transition to a low carbon economy. As responsible players in the hyderocarbon sector, it is for each one of us to fuel the objective of “Sustainable Development” in the larger interest and pursuit of climate change mitigation.
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Alternate Energy Options in India: Status of Biofuels & Hydrogen Preeti Jain, N.K. Pal, D.K. Tuli, R. K. Malhotra IndianOil R&D Centre, Faridabad – 121007
The expansion in the alternate energy infrastructure over last decade is a resultant of galloping crude prices, stumbling energy supply, concern for energy security and climatic change. These crucial factors have surged an environment for alternate fuels and especially biofuels through various government directives and programs. The other significant reason for rapid action towards alternative fuels is that they can be used to some extent in existing engine technologies where as freedom fuel like hydrogen holds great potential for efficient use in upcoming technologies such as fuel cells in the foreseeable future. The world energy demand is [1] expected to grow from 11,730 MTOE (2006) to 17,010 MTOE (2030) and this will be fuelling a massive new opportunity for energy companies. The potential of these new energy markets and their advantages is well established and we have excellent examples of Brazil, US & Germany, with fastest growing alternate fuels markets in the world. In US, Department of Energy has encouraged the use of agri-based fuels for transportation; however the consistent growth of the biofuels and their long-term market potential is largely dependent on their supply. Ethanol is blended into gasoline up to 10% by volume in USA and automobiles have been specifically designed to run on ethanol- gasoline up to 85%. As per projections [1], in US ethanol is projected to account for 4.3% percent of the total gasoline pool in 2007, 7.5% in 2012 and 7.6% by 2030 which will be produced from different feedstocks. Similarly, Canada’s Federal Ethanol Expansion Plan advocates for at least 35% of Canadian consumption of fuel to be met using 10% ethanol blend in 2010, which is likely to raise Canada’s production [2] of ethanol from 63 million gallons to 370 million gallons. World’s largest ethanol producer, Brazil [3] has massive Biofuels programs using sugarcane as the main feedstock for ethanol production 46 D E C E M B E R 2008
which is expected to increase to 37.5 % by 2015-16. On the other side, biodiesel is a dominant biofuel in EU with a target of increasing biofuel's share to 5.75% by 2010 & 10% by 2020. The U.S. has drawn up plans to include upto 3.1% of biodiesel by 2030 [4] in the transport fuels. Though for developed world inclination for Biofuels may be stimulated due to climate change issues, but for developing countries like India they offer an attractive option for boosting rural economy, provide employment generation and to protect environment. In India, production of alcohol and its use in admixture with motor gasoline, first started as early as in 1938, in Mysore state. Investigations were also conducted in 1940s to operate vehicles with rectified spirit. Dual fuel operations in diesel engine was experimented in 1950s in Indian Institute of Science. However, pioneering research and field trials were initiated by Indian Oil in 1980 on two wheelers, cars and defense vehicles using 10-20% ethanol gasoline blends. Later, in 2000 when Indian distilleries started reporting surplus ethanol availability, a renewed interest emerged for ethanol blending. IOC R&D conducted detailed R&D studies on a fleet of vehicles using 5% and 10% of ethanol in petrol. The studies showed blending of ethanol in gasoline helped to reduce carbon oxide & oxide of nitrogen and unburnt hydrocarbon in exhaust emission. However, aldehydes emission has been found to increase to some extent which could be controlled by use of three-way catalyst in automobiles. Based on these studies, Oil marketing companies carried out pilot studies in three locations – Miraj/ Hazarwadi, Manmad / Pnewadi in Maharashtra and Bareilly/ Aanola in Uttar Pradesh to establish the feasibility of use of ethanol gasoline blends. During the program some problems were encountered relating to compatibility
Dr. Malhotra did his Mechanical Engineering from IT, BHU and Ph.D. from IIT, Delhi. He has 30 years of experience in the application and testing of Fuels and lubricants, engine / vehicle testing, vehicular emissions and alternative fuels. He has published more than 50 research papers on fuels, alternate fuels, lubricants and emissions and has 4 international patents to his credit. He has been member of several national committees for formulation of fuel quality and emission norms in India and is closely associated with the Expert Committee on Auto Fuel Policy headed by Dr.R.A.Mashelkar. Dr. Malhotra is Secretary in the ISAS India Board and Chairman of ISAS India Northern Section. Presently he is Executive Director (R&D) of IndianOil Corporation Ltd.
of needle valve and float of carburetor and carburetor overflow which however were addressed using suitable corrosion inhibitors and metal deactivators. Subsequently, the pilot projects went on smoothly and vehicle manufacturers did not express any reservation for use of 5% blend. Based on the success of these pilot projects, the Government of India mandated commercial use of 5% blends of ethanol-gasoline initially in 9 states and 4 Union Territories from Jan 2003. IndianOil R&D extended field trails and emission studies ethanol blended in diesel using suitable stabilizers, cetane improvers and additive packages. The
JOURNAL OF THE PETROTECH SOCIETY ethanol blending program initiated in 2003 foresaw 320-350 million litres of ethanol supply to meet the demand; however this supply subsequently declined sharply resulting in disruption of the program. In 2006-07 after a stride in ethanol and molasses production, the programme was again started by the Government and presently, 5% blending of ethanol in gasoline is implemented in most designated states and Union Territories. Government has further plans to implement 10% ethanol blending and an expert panel has framed the BIS specification for 10% ethanol gasoline blends. Keeping in view the reservations expressed by Auto industry members, extensive field trials studies have been planned in the country which will be helpful to implement this program. Presently, for meeting ethanol demand in country nearly 120 distilleries (out of 300 with a capacity of 3.2 billion litres) have plans to produce 1.2 billion litres of ethanol/year [5]. According to the estimates, for meeting ethanol requirement in the current year, nearly 741 million litres of ethanol will be required. For the sustainable supply of the ethanol in the coming years with mounting vehicular growth and Government’s plans to implement 10% ethanol, production infrastructure needs to be expanded. To meet this demand, we need to look for alternate production routes of ethanol especially from cellulosic biomass. The 2nd generation biofuels from biochemical and thermochemical routes [6,7] using a variety of biomass sources offer an excellent
solution and are not competitive with food crops, environmentally safe and compatible with existing technology. In biochemical route additional processing step of Lignocellulosic feedstock pretreatment is involved to breakdown the hemi-cellulose and thus enabling the cellulosic part for saccharification followed by enzymatic fermentation to produce ethanol. At Indian Oil R&D, we are in the planning to set up a pilot plant for ethanol production from cellulosic feedstock with National Renewable Energy Laboratory (NREL), USA, one of the leading renewable energy research lab. Presently, producing ethanol fuels in an efficient and cost effective manner from available technology is a real challenge for the researchers, so as to make it commercially viable. The supportive government framework and business environment in India has been a key factor for ethanol commercialization, which will certainly help reducing dependence on imported oil. But, for India where diesel plays a major role of our transportation fuel requirement, biodiesel can offer a better solution for energy security. Biodiesel is produced by transesterification of vegetable oil derived from variety of feed stocks like soybean, rapeseed, sunflower, cottonseed, Palm, linseed oils etc. However, production of biodiesel is largely dependent on availability and cost economics of feedstocks. Unlike in other countries, where the feedstock for biodiesel production is edible oil, India needs different options as we are the largest importer of edible oils. After thorough studies, non edible oil seeds
like Jatropha & Karanjia are being developed as the feedstock for producing biodiesel in India. Since the crops are suitable for arid/ semiarid lands and require minimal agriculture inputs, these are considered the viable options for Indian Biodiesel programme. To oversee the biodiesel programme, Planning Commission had set up “National Mission on Bio-diesel”, which envisage investment worth 1500 Crore for Jatropha plantation on 400,000 hectares in Phase I, where as Phase II has been planned with an objective of producing sufficient biodiesel to achieve 20% blending of diesel by 2030. For implementation of Biodiesel program in India, IOC R&D has taken a lead role and worked on every possible component of biodiesel value chain covering transesterification process optimization, setting up of biodiesel production pilot plant and it’s licensing, plantation in collaboration with Indian Railways on railways land in Gujarat and extensive emissions & performance evaluation studies on different vehicle using 5-20% biodiesel blends on different vehicles. The studies helped to establish that biodiesel improves the blended fuel characteristics being a cetane and lubricity improver. Further, studies confirmed substantial decrease in hydrocarbon, carbon monoxide and particulate matter reduction. Besides, in-house studies, we had also undertaken field trials of biodiesel blends in collaboration with Tata Motors, Escorts, Mahindra & Mahindra, Gujrat, Haryana Roadways including successful trials of Shatabadi and Jan- shatabadi trains.
Sarthak Behuria elected as President of World LPGas Association Mr. Sarthak Behuria, Chairman, IndianOil, has been elected as the President of the World LPGas Association (WLPGA). This rare honour came to Mr. Behuria when the Board of Directors of WLPGA met in Seoul in South Korea today on the eve of the 2008 World LPGas Forum. Mr. Behuria’s election as the President is indeed an achievement
that comes close on the heels of the end of his term as the First Vice President of WLPGA representing the voice of the LPG industry in Asia. Speaking on the occasion, Mr. Behuria said, “As President of this apex body representing the global LPGas industry, I shall strive assiduously to steer the WLPGA further on the progressive path”. World LPGas Association is a global
forum established in 1987 to represent the global LPGas industry in the formulation of policies and supporting innovations in the LPGas market besides facilitating information exchange and communication among all LPGas stakeholders. Besides the President and Managing Director, the Board of WLPGA comprises four VicePresidents representing Asia, Europe, America and also France, where the Association is headquartered.
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JOURNAL OF THE PETROTECH SOCIETY Biodiesel has additional benefits of in built oxygen content, which enables complete combustion, has almost no Sulphur and aromatics and complete CO2 cycle. We have recently conducted the biodiesel life cycle analysis (LCA) study along with NREL, US. The LCA concludes that use of biodiesel in petroleum reduced the GHG emissions significantly. For promotion of biodiesel under National mission, Ministry of Petroleum and Natural Gas (MoP&NG) under Government of India announced Biodiesel Purchase policy in October 2005 which resulted in setting up of 20 Purchase Centers for biodiesel meeting defined specification by Oil PSUs and assured market to Farmers & Entrepreneurs. A number of agencies including Ministry of New and Renewable Energy, Ministry of Rural Development, Petroleum Conservation and Research Association, State Governments, private entrepreneurs etc. are now working for biodiesel promotion through plantation, setting up of biodiesel production plants, development of
high yield variety, constituting bio-diesel credit bank etc. At IOC R&D for continuous production of bio-diesel, we are setting up a continuous pilot plant (10-15 Kg capacity), which can be used for any oil feedstock to produce biodiesel meeting the fuel grade specification. Among various State Governments, Chattisgarh has taken prominent role in propagating plantation of nearly 80 million Jatropha & Karanjia saplings and setting up small biodiesel production plants. Similarly, Andhra Pradesh and Tamilnadu government are promoting Jatropha plantation on under utilized land through various schemes. Some of the State Governments have also set up a road map to seek association of leading Oil companies of India to make the program a success. Though presently, biodiesel is not available in sufficient quantity that it can be commercially made available for transport, yet the massive plantation and associated activities are likely to result in biodiesel production in near future to kick off the program. The promotion of
biodiesel as an alternative fuel can help to meet national goals to reduce pollution, provide energy security as well as strengthen rural economy. Though, biofuels offers advantage of sustainable development while conserving natural resources, their sustained supply needs to be looked into. It is expected that by 2030, even the U.S. will only be able to meet 40% of the biofuel mandate. Thus, in view of present scenario of biodiesel availability, we seriously need to look for alternate production routes, which can fully exploit the biomass potential through Biomass to liquid (BTL) pathways using gasification and pyrolysis processes [8,9]. These 2nd generation biofuels, are unfortunately cost prohibitive at present, but the R&D efforts world over may develop cost effective technologies in near future. The concern for cleaner air in recent years, along with stricter environmental regulation and the desire to reduce the dependency on fossil fuels have rekindled the interest in hydrogen as a vehicular fuel. Hydrogen offers the world
India’s clean biz projects cross 1,000-mark The green business to earn greenbacks is getting to be cool, thanks to global warming from greenhouse gas emissions. The government has approved 15 new Clean Development Projects (CDM), taking the number of such projects in India to 1,013. The projects can help Indian firms rake in money from trading carbon credits.
What is CDM?
1,133
■ CDM projects are part of the “offset” mechanism in worldwide efforts to curb climate change. They promote environmentally friendly investments from governments and businesses of industrialized countries ■ Those who emit gases which need to be controlled pay money to those who emit less in a trading mechanism for Cer tified Emission Reduction (CER) in order to help countries meet their respective targets. ■ By paying for emission-reducing activities, individuals and organisations can use resulting credits to offset their own emissions.
Where are they? ■ CDM projects are in the sectors of energy efficiency, renewables
48 D E C E M B E R 2008
Number of CDM Executive Board Approved Projects 355 248 143 including biomass based cogeneration projects, industrial processes, fuel switching, municipal solid wastes and forestry. Total India China Brazil
Good, clean money ■ All the approved projects, if registered by the CDM Executive Board, will have the potential to generate 50.6 CER units. ■ At a conservative price of $10 per CER, this means an overall inflow of about $5 billion into India by 2012.
■ India has the highest number of board-approved projects
■ The National clean Development Mechanism (CDM) Authority is headed by the Secretary, Ministry of Environment and Forests.
JOURNAL OF THE PETROTECH SOCIETY a stable and sustainable future. The future uses will be enhanced with the success of the hydrogen fuel cell and the hydrogen car. Hydrogen powered cars will increase the demand for hydrogen production and allow the economics of hydrogen power to utilize the mass market efficiencies. Hydrogen holds the potential to provide a clean, reliable affordable supply of energy for meeting the growing energy needs for India’s economy while protecting the environment and ensuring sustained energy supply. Hydrogen can be used in a wide range of applications including power generation, transport and heating applications. However, transition to the Hydrogen economy from the present fossil fuel based economy will require many challenges, specifi cally in the areas of production, storage, delivery, applications and expanding infrastructure technology, economics and large scale public awareness.
presently are being tested at the pilot level. However, it is always certain that if hydrogen finds extensive use as fuel, the present method of its productions by reforming of hydrocarbons would need to be replaced. There are still some critical issues involved and which need to be sorted out before hydrogen finds wide application in transport applications. These include sustainable production methods, methods of storage, transportation, distribution and more over the safety issues. Government of India felt the need of initiating the programme on hydrogen energy and accordingly the Planning Commission had set up four subgroups to focus on different aspects of hydrogen energy for hydrogen production, hydrogen storage & distribution; hydrogen applications; safety standards, security and related policy issues.
portation fuel will consists of Biofuels. Biodiesel, although is an appropriate blending component for diesel it’s availability at such large scale is being questioned as it may compete with the food crops. Similarly, there is limit on the availability of ethanol from sources like corn or molasses. These factors have accelerated the R&D efforts to find alternate and sustainable feedstock for ethanol and Biodiesel. Lignocellulosic ethanol and Biodiesel from algae are promising future technologies. Hydrogen has all the virtues of a clean energy source. However, presently almost all hydrogen is being produced from reforming of natural gas or other hydrocarbons and hence not sustainable. Development of technologies for sustainable production of hydrogen e.g. bio or thermal splitting of water have potential to make available sustainable hydrogen at lower cost and shall be the research focus.
References Hydrogen is an energy carrier, not an energy source — it stores and delivers energy in a usable form, but it must be produced from compounds that contain it. Hydrogen can be produced using diverse, domestic resources including fossil fuels, such as coal (with carbon sequestration) and natural gas; nuclear; and biomass and other renewable energy technologies, such as wind, solar, geothermal, and hydroelectric power. Great potential for diversity of supply is an important reason why hydrogen is such a promising energy carrier. Hydrogen can be produced at large central plants as far as several hundred miles from the point of end-use; semicentrally, 25 to 100 miles from the point of end-use; or in small distributed units located at or very near the point of end-use, such as at refueling stations or stationary power sites. Researchers world over are developing a wide range of technologies to produce hydrogen economically from a variety of resources in environmentally friendly ways.
Subsequently, it was decided by MoP&NG to create a corpus fund of Rs. 100 Crores for hydrogen research activities within Oil & Gas Sector in India with contribution from all Oil & Gas PSUs. The Government of India had also setup A National Hydrogen Energy Board (NHEB) under Ministry of Non-Conventional Energy Sources (MNES) with the involvement of industry leaders like TATA, Mahindra & Mahindra and IndianOil along with academia and research institutions in India. NHEB has prepared a hydrogen road map for 2020, which has been approved by the Board. As per this road map, one million vehicles running on Hydrogen are targeted to be plying on road by 2020. For this rather ambitious program, a huge and matching Hydrogen production and fueling Infrastructure may have to be created by IndianOil and other energy companies at an estimated cost of around Rs 60,000 Crores.
TO CONCLUDE Some of the futuristic technologies for production of sustainable hydrogen include bio-splitting or thermal splitting of water. Both these technologies have sound proof of concept and
Biofuels are currently being used to certain extent as a blending component for transportation fuels, however, in very near future a significant portion of trans-
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http://www.economywatch.com/ alternative-energy/top-companies.html Ethanol Policies, Programs and Production in Canada, Department of Economics, University of Lethbridge, Alberta 2006 The Brazil Ethanol Experience, Rick Sellers, Conference on Climate Change in Transport Sector, 2006 Annual Energy Outlook 2007: with Projections to 2030, U.S. DOE, Energy Information Administration, DOE/EIA-0383, February 2007 All India Distiller’s Association, www.aidaindia.org IFP and Sustainable development, http://www.ifp.fr/IFP/en/ ifp/ab04.html Biofuels Production, http://www. biofuelstp.eu/fuelproduction. html National Renewable Energy Laboratory (NREL), http://www.nrel. gov Biorefinery: The Bridge between Agriculture and Chemistry, J. Sanders, E. Scott and H. Mooibroek, Wageningen Univ. & Research Centre, The Netherlands, 2006 D E C E M B E R 2 008 4 9
Corporate Members of PETROTECH Society •
Aban Loyd Chiles Offshore Ltd
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Bharat Petroleum Corporation Ltd
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British Gas India Pvt Ltd
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Cairn India Ltd
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Chennai Petroleum Corporation Ltd
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Dewanchand Ramsaran Industries (P) Ltd
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Engineers India Ltd
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GAIL (India) Ltd
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Gujarat State Petroleum Corporation Ltd
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Hindustan Petroleum Corporation Ltd
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Indian Oil Corporation Ltd
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Indian Oiltanking Ltd
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Jagson International Ltd
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Jindal Drilling & Industries Ltd
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Jubilant Oil & Gas Pvt Ltd
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Kochi Refineries Ltd
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Larsen & Toubro Ltd
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Lubrizol India Ltd
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Mangalore Refineries & Petrochemicals Ltd
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Numaligarh Refinery Ltd
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Oil and Natural Gas Corporation Ltd
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Oil India Ltd
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Petronet LNG
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Reliance Industries Ltd
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Shell India Pvt Ltd
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Shipping Corporation of India
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Shiv-Vani Oil & Gas Exploration Services Ltd
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Tata Petrodyne Ltd
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The Great Eastern Shipping Co. Ltd
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UOP India Pvt Ltd
JOURNAL OF THE PETROTECH SOCIETY
PETROTECH Society Bridging the Academia Industry Gap! Seminars organized: PETROTECH Society has so far organized 13 seminars on Academia Industry Interface covering Refining & Petrochemicals, Exploration and Research & Development. Nearly 750 faculty / students from 60 institutes / universities and Industry Executives has attended these programmes.
PETROTECH e-library launched. PETROTECH Society launched its e-Library covering various articles published in various PETROTECH Conferences. It was formally inaugurated by Dr C.R. Prasad, C&MD, Everest Power Pvt. Ltd. and Mr S K Manglik, former CMD, ONGC at PETROTECH Office on 26th October 2007. This contains about 1200 articles on various aspects of Hydrocarbon Industry and is proving useful quite a lot. So far Four Hundred requests have been received for articles.
PETROTECH Chapters organized In order to strengthen the objective, PETROTECH, opened ‘PETROTECH Chapters’ at following universities/institutes wherein faculty/students will get a good forum to organize regular events/ meets for better learning and advanced research in the field of Petroleum Engineering:
the MoU, the signatories will exchange academic information, conduct academic programs and synergize respective strengths to promote closer business and professional exchanges between the two bodies. Among other areas, specialized programs on Drilling as well as Clean Coal Technology have been identified. A 14 member group of Industry experts along with Govt of India representative visited University of Alberta Canada under the banner of PETROTECH Society, where they were appraised of advancements made in Hydrocarbon Industry. Forum organized by SINOPEC, China: Secretary General, Petrotech alongwith ED (HR), IOCL and DGM ONGC represented India at the 1st international Forum organized by Sinopec Management Institute on 7th November 2008 at Beijing China on the theme “Talent, Training, Trend in the Context of Globalization”. The forum was attended by experts from University of Alberta, Ashridge Business School and other faculty representing Shanghai Industry business schools participated in the forum. Presentations were made by India Group showcasing our expertise in talent development Institute
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Understanding with International Bodies / Institutions Initiated Petrotech Society has signed a Memorandum of Understanding with University of Alberta on 5th December 2007. Under
PETROTECH Society has initiated steps to bring industry awareness amongst the present day students community and faculty as it is generally observed that there is lack of practical hands on type knowledge / exposure amongst the upcoming students about the industry. A series of expert lectures have been organized in different institutes as listed in the table. Assistance: PETROTECH Society has been continuosuly orgaising seminars for bridging the gap of Academia and Industry and has provided financial assistance of nearly one crores by way of providing help to the participating faculty / students towards free boarding / lodging expenses. In addition PETROTECH Society has also launched Research Fellowship grants. The Society is also operating one PETROTECH Chair at IIT Delhi with an initial grant of Rs. 60 lakhs. It is proposed to increase fellowship in due course of time.
Theme
Date
Refining & Secondary Processes UPES Dehradun
■ Indian School of Mines Dhanbad ■ Maharashtra Institute of Technology Pune Osmania University, Hyderabad University of Petroleum & Energy Studies, Dehradun Rajiv Gandhi Institute of Petroleum Technology, Rae Bareily Institute of Petroleum Technology, Gandhinagar
Industry Awareness Year observed:
Safety Practices in Hydrocarbon Industry
28/4/2008 Mr S Ravi, Mgr (S), CPCL Mr C K Soman Dy GM (Maint.), BPCL
Maintenance Practices in Hydrocarbon Industry UPES Rajamundary
Speaker Mr Kanan, SM (PE), CPCL
28/4/2008 Safety Practices in Hydrocarbon Industry
ISM Dhanbad
Safety Practices in Hydrocarbon Industry
NIT Jalandhar
Maintenance Practices in Hydrocarbon Industry Safety Practices in Hydrocarbon Industry
20/10/2008
UPES Dehradun
Cathodic Protection
8/12/2008
06/09/2008
Mr Samuel Babu DGM (Fire & Safety), BPCL Mr V Shankar, CM (Maint.), CPCL Mr C S Chakrabarty, DGM BPCL Mr T S Charvethia DGM (fire & safety) BPCL Mr. Ayush Gupta Sr. Manager, GAIL (India) Ltd D E C E M B E R 2 008 5 1
JOURNAL OF THE PETROTECH SOCIETY
Snapshots...
Below: Mr. D K Pande, Director (Exploration), ONGC Inaugurating the 4th Proficiency Course on “Modern Practices in Petroleum Exploration” held on September 22-27, 2008 at KDMIPE, ONGC Dehradun
Below: Mr R S Pandey, Secretary, Ministry of Petroleum & Natural Gas delivering the Inaugural Address during Seminar on CDM Process & Opportunities “Carbon Credit” held from 16th & 17th October 2008
Below: Signing of MoU between PETROTECH Society & University of Alberta, Canada
52 D E C E M B E R 2008
JOURNAL OF THE PETROTECH SOCIETY
Right: Participants of Seminar on “Hydrocarbon Industry Growth Prospects & Challenges in North East” held on April 24-25, 2008 at Indian Oil, Guwahati Refinery
Below: Participants of Industry Educational Tour to University of Alberta, Canada
Below: 1st international Forum organized by SINOPEC Management Institute on 7th November 2008 at Beijing China
Below: Participants of 3rd Summer School “Petroleum Refining & Petrochemicals” held from 23rd-28th June 2008 at IIPM Gurgaon
D E C E M B E R 2 008 5 3
JOURNAL OF THE PETROTECH SOCIETY In continuation of our previous issue a focal write up on University imparting Petroleum Engineering
Indian School of Mines University Dhanbad -826 004, India Prof. T Kumar Director
Endowed with the highest quality of teaching and learning, the graduates and post-graduates of Indian School of Mines University (ISMU) are always ready to take their place as dedicated professional in various industries in India and abroad. ISMU was established by the Government of India in 1926 on the pattern of Royal School of Mines, London to teach Mining Engineering and Applied Geology and thus provide manpower to the Indian minerals industry and the concerned departments of the Government. Subsequently in 1957, Petroleum Engineering and Applied Geophysics were also taken up. In due recognition of its vital role in the service of the petroleum, mineral exploration and mining sectors of the national economy, the School was granted autonomy by the Government of India in 1967; and since then, it has been functioning as a Deemed to be University under the University Grants Commission Act, 1956. Today ISMU has adopted the path of academic diversification. New branches of academic programs have been and are 54 D E C E M B E R 2008
being added to its traditional courses and new departments have been and are being established to cater other industries in addition to mineral industry. What started as an institution to impart mining education has graduated into a full-fledged technical institution of international acclaim offering a host of programmes like B. Tech., M. Tech., M. Sc. Tech., and MBA. In addition, the University offers M. Phil. and full as well as part time Ph. D. programmes, while also awarding D.Sc. as the highest degree of academic achievement. The University is situated at a distance of about 3 km to the north of Dhanbad Railway Station on the Grand Chord of Eastern Railway. The fully residential serene campus covers an area of about 88 hectares, comprising academic buildings, student hostels and faculty and staff quarters as also other infrastructural facilities for a cosmopolitan community. The locational advantage of ISMU at Dhanbad is that it is situated at the core of the industrial base of the region covering various minerals
including coal. The Institute has links with other reputed universities and institutes across the globe and has an alumni base all over the world. The University today is making foray into the newer areas of academic endeavours in tune with the changing times.
Admission to Academic Programmes Admission to B.Tech./Dual Degree/ 5-year Int. M.Sc./M.Sc. Tech Programmes (After 10+2) is on all India basis through a common IIT-Joint Entrance Examination; M.Sc. & M.Sc. Tech. admission are through an AllIndia Entrance Exam Conducted by ISMU; MBA admission is through CAT followed by group discussion and interview conducted by ISMU; and admission to M.Tech & M.Phill programmes is through GATE /NET/ Sponsorship followed by ISMU interview . R & D WORK: The synthesis of teach-
JOURNAL OF THE PETROTECH SOCIETY Academic Programmes
ing and research is fundamental to Indian School of Mines University. All facultY members engage in scholarly research, most often in association with postgraduate students or advanced undergraduates. Research works are being carried out in the different fields of Petroleum engineering, Mineral and Mining Engineering along with other disciplines sponsored by various industries and Government funding agencies.
Placement scenario
Job Placement: The training and placement section maintains active association and excellent contacts with the industry and corporate sector. The students are properly trained and assisted in securing jobs through D E C E M B E R 2 008 5 5
JOURNAL OF THE PETROTECH SOCIETY NAME FACULTY Prof. T Kumar, PhD Prof. S. Laik , PhD Prof. R L Malhotra (ONGC Chair Professor)
Prof. V P Sharma, PhD
Dr. A K Pathak, PhD Dr. A Mandal, PhD
Dr. Keka Ojha, PhD
Dr. V Mahto, PhD
SPECIALIZATION Petroleum Reservoir Engg, Production Engg, Petroleum Economics and Formation damage. Production Engg., & Pipe Line Engg., Offshore Drilling & Production Practices, EOR. Work Over and Stimulation, Production Engg. Formation Evaluation, Drilling Fluids & Cements, Environment in Petroleum Operations. Oil & Gas well Drilling Technology, Chemical Engineering Thermodynamics and Offshore Structures & Design. Natural Gas Engineering, Thermodynamics of Res. Fluids, EOR Techniques, Transport phenomena. Reservoir Engineering & Simulation, Thermal EOR, Chemical Reaction Engineering, Petroleum Refining & Petrochemicals. Computer Aided Process and Equipment Design, Chemical Process Modeling and Simulation, Petroleum drilling and production operations, Petroleum Refining and Petrochemicals.
in-campus and off-campus interviews. Comparative statement of the selected students upto 10th December, 2008 is shown in the following figure.
Department of Petroleum Engineering The Department of Petroleum Engineering was established under Colombo Plan of Govt. of India in the year 1957 with the objectives to facilitate the Oil & Gas sectors with the technical and trained manpower, and is the first one of its kinds in the country. Since then, it has produced more than 1000 undergraduate (B.Tech) students and about 250 postgraduate students which include both M.Tech and Ph.D. The Department has made its mark in the oil and
gas industry in the country and abroad. Many of the ex-students are presently working in the senior positions in different countries like USA, UK, Canada, UAE, Australia, and in many Middle East countries. The unique feature of these courses is that the theory classes are supplemented by a compulsory practical training in the oil fields in the summer, every year. Thus the products coming out from the Department are tailor-made to suit the requirement of the industry. The faculty members of the Department are engaged on various R & D projects in the area of Reservoir Engineering, Enhanced Oil Recovery, Formation Damage, Hydraulic Fracturing, Application of Polymers, Environmental Impact
Assessment of Oil Industry, Drilling fluids and Gas Hydrates. Department has celebrated its Golden Jubilee in the year of 2007 and lecture series was conducted where a number of stalwarts of Petroleum industry delivered their lectures. The celebration was ended with an international conference, PEGJP-07.
Departmental facility The Department provides the bestequipped experimental facilities spread out in the following laboratories as follows: Long Core Apparatus Laboratory, EOR Laboratory, Reservoir Engineering Laboratory, Drilling Fluid and Cementing Laboratory, Research Laboratory, Production and Product Testing Laboratory, Process Engineering Laboratory. Apart from the facilities provided in the laboratories, various oilfield equipments like Sucker rod Pumping Unit, Well Tester, well head assembly, X-mass tree, packer, mandrel, drilling bits, tubing centralizers, wall scrapers and sub surface pressure valves are also available in the museum gallery of the department. The Department is rich in softwares of various fields of Petroleum Engineering donated by various software vendors like Schlumberger, IHS Enegry, M/s Weatherford, Fekete Inc. and Petroleum Experts Ltd. After 52 years of its service to the nation, the Department with a sense of pride can claim to be one of the leading Petroleum Engineering institutions in the world whose products are now at the helm of the affairs of oil & gas business.
best wishes for 2009!
56 D E C E M B E R 2008
PETROTECH
Society
The Petrotech Society
Core 8, Scope Complex, 3rd floor, 7 Institutional Area Lodhi Road, New Delhi - 110003 Phones +91 11 2436 0872, 2436 1866 Telefax +91 11 2436 0872 Email info@petrotechsociety.org, petrotechsociety@vsnl.net web www.petrotechsociety.org