GD capsule II

Theme: Energy security, reforms
News item: India imports coal (To put it other way, Kuwait imports oil!)
Background:
Our proven coal reserves are 92 billion tons and rising. One-third of this can easily be mined. Yet, our annual production at around 400 million tons is grossly inadequate to meet the needs of even existing power stations. In past decades, India used to export coal, mainly to Bangladesh and Nepal. Today, our power plants need to import over 10 million tons to utilize capacity fully.
How it relates to ….
Energy security

Discussions on energy tend to focus on the price of international crude. I have two points to make on this.

• There is precious little that India can do to affect prices, whether they stay at their current levels or even if they rise above the US $70 mark.


• Please remember that oil accounts for just about 30 per cent of India's energy needs, less than a third of the total. So what makes up the rest? In a word: coal. Well over half of India's energy requirement is met by coal.

Reforms
Privatizing mining would pump in resources and create jobs, but apparently everyone who objects to this sees nothing wrong in buying privately-mined coal from abroad. And of course lack of domestic coal also leads to greater dependence on imported petroleum, the costlier option.
And how do we import coal? Not through an open market system where everyone tries to get the sanest price, but through the Government of India deciding that a single nodal agency will do the job for everyone. (MMTC [Mineral & Metals Trading Corporation of India] is most likely to get the job.)

Courtesy:  ET, rediff.com