India Will Spend Over $760 Bn On Energy By 2030; USA Won't Back Many Projects.

*** New Delhi Is Calling For An Asian Energy Community Like That Of The EU

*** The Majority Of Indians Are Without Electricity; The Most Common Fuels For The Households Are Among The Worst For Respiratory Health: Animal Dung & Charcoal

*** Now The world's 5th-Largest Consumer Of Energy, India Will Need 1 Billion Tons A Year Of Oil Equivalent By 2030 - Up From 538M T/YOE In 2002 And Less Than 255M T/YOE In 1995

*** India Imports 70% Of Its Oil; New Delhi Says That Figure Will Rise To 85% In 20 Years; Its Demand For Natural Gas Is To Grow Fast, Most Of It Will Be Imported

NICOSIA - India, whose energy consumption in calendar 2005 is to exceed 620m tons per annum of crude oil equivalent, will spend over $760 billion to keep fuelling its socio-economic expansion in the next 25 years. But some of the projects it is promoting, such as huge natural gas pipelines from Iran and Myanmar and nuclear power plants, are geo-politically controversial and most of them are opposed by the Bush administration.

India's quest for energy is reshaping its diplomacy, to the extent that a gas pipeline proposed to be built from Iran to India through Pakistan now is one of the primary reasons for keeping peace talks going between Islamabad and New Delhi. India's Petroleum Minister, Mani Shankar Aiyar, is a seasoned diplomat who on June 5-7 visited Islamabad and made a good impression on the Pakistani leadership.

A joint working group on the gas pipeline project, a "top priority" in Islamabad and New Delhi, will meet regularly to drive progress in that direction. Aiyar is particularly enthusiastic about the Iranian gas project and so is his Pakistani counterpart, Amanullah Khan Jadoon who says the joint working group is a milestone in relations between the two countries.

Both authorised from the very top on either side, Aiyar and Jadoon are also working on two alternative projects: a gas pipeline from Turkmenistan to run through Afghanistan, and a marine line from Qatar - just in case US diplomacy kills the Iranian project.

There is much focus on the energy diplomacy of India, emerging as a second new giant next to China. Fed by a decade-long economic boom, India's ever-growing appetite for energy is quietly reshaping the way it operates in the world, changing relations with its neighbours, extending its reach to oil states as far flung as Sudan and Venezuela, and overcoming Washington's resistance to its nuclear ambitions.

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

India's energy ambitions have led to developments unthinkable just a couple of years ago: a new friendship with the military government in gas-rich Myanmar, formerly Burma; and budding talks with the US to let India buy nuclear technology. Nuclear power is to top the agenda when Prime Minister Manmohan Singh visits Washington to meet with President George W. Bush in July.

While New Delhi seeks new equipment to strengthen its atomic energy programme, the US has prohibited the sale of nuclear technology to India since it tested a nuclear bomb in 1998. On June 6 The New York Times quoted Singh as having told foreign journalists: "International co-operation, international understanding of India's nuclear ambition, can help to ensure our nuclear energy program moves forward at a faster pace".

India's business capital Mumbai, formerly Bombay, was enveloped in darkness in May because of a severe power shortage. These days, the prime minister is engaged in a politically explosive argument with leftist parties after suggesting that the government curtail giving free electricity to farmers.

As the world's fifth-largest consumer of energy, India used the equivalent of 538m tons/year of oil in 2002, the most recent year for which figures were available from the IEA. According to the BP Statistical Review of World Energy of June 2004, India's energy consumption in 1995 was less than 255m tons/year of oil equivalent. That demand is expected to double by 2030. India imports 70% of its oil; by 2025, the Indian government estimates, that figure will rise to 85%.

The NYT on June 6 quoted Aiyar as saying: "Our dependence is rising. I welcome that, because it reflects India moving on". The NYT quoted Ashutosh Varshney, a political scientist at the University of Michigan, as saying: "The foreign policy of India will have a lot to do with energy. That is a new imagination and one likely to stay".

That vision is not without its challenges, however. On the one hand, India seeks to cast itself as the model of democratic pluralism, as in its bid for a permanent seat on the UN Security Council. On the other hand, its hunt for fuel is pushing it to reach out to authoritarian states like Sudan and Myanmar, which the US has sought to isolate. In both countries, China's weight is also keenly felt. But India is quickly making inroads. It has persuaded a wary Bangladesh to agree, at least in principle, to a pipeline which would pump natural gas from Myanmar to India.

Aiyar has shuttled to Saudi Arabia, India's largest oil supplier, to persuade it to invest in Indian petroleum projects, among other things. He seeks to lure foreign investors to explore the Bay of Bengal, off India's eastern coast - which he calls "the North Sea of South Asia".

New Delhi's most ambitious proposal is a $4 billion, 2,600-km pipeline to carry natural gas from Iran across Pakistan to India, though a final deal is nowhere near fruition. The gas is proposed to be sourced from one of the many phases of South Pars, an offshore structure which is an extension of Qatar's North Field. The latter field is to make Qatar by far the world's largest exporter of LNG, with a capacity to exceed 70m tons/year before 2013.