The sound of trumpets–or was it sirens–was heard from Delhi this week as India’s Premier got loud about his country’s future energy needs. It’s not often we are treated to such transparency.
In contrast, China tried to spin its own future call on global energy through the framework of limits this week when it declared it would hold coal consumption to 4.0-4.2 Mt (million tons) by 2015. Clearly, China’s coal consumption juggernaut wants to downplay the fact that these are coal use levels 25%-30% higher than today.
In India, meanwhile, they are willing to put some big raw numbers on the situation:
Premier Manmohan Singh told India’s energy firms on Monday to scour the globe for fuel supplies as he warned the country’s demand for fossil fuels was set to soar 40 percent over the next decade. The country of more than 1.1 billion people already imports nearly 80 percent of its crude oil to fuel an economy that is expected to grow 8.5 percent this year and at least nine percent next year. Demand for hydrocarbons — petroleum, coal, natural gas — “over the next 10 years will increase by over 40 percent,” Singh told an energy conference in New Delhi.
The question is, is it energy that India needs? Or is it food? This is of course roughly the same question. As we look at the chart below, showing the decline of arable land in India from 1961 – 2007, let’s consider that India’s population rose from 444 million to 1.124 billion in the same time period.
Arable land in India has been cut in half over the past 45 years, declining from 0.35 hectares per person to the current 0.14 hectares per person. Cornucopians will protest. They’ll say global productivity of agriculture has soared over the past 50 years, and they would be correct in making such a claim. But the question is, how was that advance actually achieved? Primarily through fossil fuels, of course.
Which gets us back to Premier Singh’s clarion call. With its population having nearly tripled in 50 years, and its arable land cut in half, India is going to have to become much more productive on its remaining land. To do so, it will need to significantly increase its use of fertilizer that either comes straight from the ground, like Potash (NYSE:POT), or through manufacturing–which requires natural gas. This does not even address India’s growing water problem. Or, that like many other Asian and Middle Eastern countries, India too has gone abroad in search of farmland. (See here for both a running tally and newsflow on this global mega-trend.)
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