Fiscal cliff. These two words have come to symbolize America's fall from grace. The fiscal profligacy of the world's most powerful economy has threatened its position in the pecking order. However, a potential energy resource in abundance could offer it riddance from the fund shortage. The resource goes by the name of shale gas. And as the supplies of oil and natural gas from the Gulf get more expensive, America will increasingly rely on its own resources. At some point of time, shale gas supplies from the US are expected to even meet the energy needs of other economies. Thus shale gas is expected to bring an energy renaissance of sorts to the US .
The International Energy Agency (IEA) believes that yet another energy resource could rival oil by 2017. And if that were to be indeed proven true, even India might find her place under the sun. For the resource being talked about is none other than coal.
Now despite India having one of the largest coal deposits in the world, the mineral has not been mined enough. Corruption, wrongful allocation of mines, environmental concerns and inefficient procedures have been the key stumbling blocks. Monopolistic position of state owned miner Coal India has also ensured that coal output grossly lags the demand for mineral. It was only in 2012 that a potential blackout of the power sector forced the government to hold Coal India more responsible. Even then, private sector power, steel and cement producers are banking on imported coal or captive coal mines. They would rather pay a higher price than rely on Coal India's bumpy track record.
The IEA, however, expects Coal India to share some glory along with the likes of Shenhua Group of China and Peabody Energy of the US in coming years. The significant lead time needed to ramp up coal supplies to catch up with demand will keep the prices of the mineral firm. Coal consumption is expected to grow faster than any other fossil fuel, except gas, upto 2017. Nevertheless, the commodity faces strong head winds. Not just from green policies and competition but also from cheap natural gas. Australia and Indonesian coal supplies will also be the key determinant of the prices of the mineral.
Thus coal can bring to India the kind of energy independence that shale gas promises for the US. However, it is left to industries and policy makers to ensure that we do not lose the opportunity.
The International Energy Agency (IEA) believes that yet another energy resource could rival oil by 2017. And if that were to be indeed proven true, even India might find her place under the sun. For the resource being talked about is none other than coal.
Now despite India having one of the largest coal deposits in the world, the mineral has not been mined enough. Corruption, wrongful allocation of mines, environmental concerns and inefficient procedures have been the key stumbling blocks. Monopolistic position of state owned miner Coal India has also ensured that coal output grossly lags the demand for mineral. It was only in 2012 that a potential blackout of the power sector forced the government to hold Coal India more responsible. Even then, private sector power, steel and cement producers are banking on imported coal or captive coal mines. They would rather pay a higher price than rely on Coal India's bumpy track record.
The IEA, however, expects Coal India to share some glory along with the likes of Shenhua Group of China and Peabody Energy of the US in coming years. The significant lead time needed to ramp up coal supplies to catch up with demand will keep the prices of the mineral firm. Coal consumption is expected to grow faster than any other fossil fuel, except gas, upto 2017. Nevertheless, the commodity faces strong head winds. Not just from green policies and competition but also from cheap natural gas. Australia and Indonesian coal supplies will also be the key determinant of the prices of the mineral.
Thus coal can bring to India the kind of energy independence that shale gas promises for the US. However, it is left to industries and policy makers to ensure that we do not lose the opportunity.
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