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The ethanol Challenge  

The Cabinet has once again decided that the Petroleum Ministry must ensure
mandatory blending of 5 per cent ethanol with petrol. Deadline after
deadline has passed since 2006 and the ambitious programme is yet to take
off. A complex set of factors involving the sugar industry and the ethanol
market is at play. In recent months, the oil marketing companies have been
unable to contract for even half the quantity of ethanol needed for 5 per
cent doping. And the quantities offered are at rates as high as Rs. 41 a
litre. The oil companies have until now offered Rs. 21.50, although they are
open to paying a little more. One of them has meanwhile planned to invest in
sugar mills to ensure a captive source of ethanol. The cost of petrol is Rs.
23 a litre and the blending of ethanol obtained at a price that is any
higher will be uneconomical. But the sugar industry evidently finds better
price yields and guaranteed demand in the beverage, industrial, and fuel
sectors. There just may not be enough ethanol available in India to meet the
blending requirement unless the acreage under sugarcane goes up
significantly, and sugar mills are given the option to process sugarcane
juice directly into ethanol instead of sugar. Both these moves will have an
impact on sugar production and sugar prices. Given the rising price of sugar
and the insistence by the State governments that the sugar mills meet first
the demands of the beverage industry, finding enough ethanol is going to be

Sugarcane-based ethanol is indeed "the most successful alternative fuel to
date." As an excellent oxygenate and octane booster, it clearly has
technical advantages; but in India, the world's second largest producer of
sugar, almost 90 per cent of ethanol comes from cane molasses, spelling
dependence on a single feedstock. Sugarcane production has historically been
marked by a certain cyclical volatility, with bumper years followed by years
of low production. In order to reduce its dependence on oil imports, rather
than setting much store by ethanol, India should look more aggressively at
other options including hybrid fuels and CNG. Several countries of the
world, notably Brazil - which introduced ethanol-blended petrol as early as
in 1931 - have come a long way here. But India has several limitations
including land availability constraints and food security concerns that may
leave a limited role for the biofuel option for now. It is time the
realities of the situation were factored into ethanol policy.
The Hindu, New Delhi, 10 December 2009

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Clean fuel deadline  

Auto, oil sectors worried as clean fuel deadline looms large

The timing could not have been more paradoxical. As India gears up for the
Copenhagen climate summit beginning Monday, its automobile and oil sectors
are getting ready to face an explosive situation on the clean fuel deadline
that comes into effect from April 1, 2010. This date will see 14 cities
graduate to Bharat Stage IV emission norms (from the present BS III) while
the rest of the country transits to BS III from BS II levels. Simply put, it
means that cars, utility-vehicles and trucks in the top rung cities will,
from April 1, be supplied cleaner BS IV petrol and diesel while other
vehicles will get a leg up with BS III fuel.

The only hitch is that there is practically no hope of BS III auto fuel
being available across the country because the time is just too short for
oil companies to have a supply network in place. This calls for more rail
wagons, space at ports, upgrading refineries etc. The deadline, sources say,
should ideally be put off to October 1, 2010 except that the Centre will
need to seek approval of the Supreme Court.

Auto industry view :: From the automobile industry's point of view, this
situation would be nothing short of a nightmare. "It would be impossible for
us to operate in an environment where BS IV and BS II fuels were to
co-exist," officials said.In the present scenario, BS III-compliant vehicles
can still be supplied BS II fuel without any fear of damage to equipment.
However, the same cannot be said for a BS IV car driving into BS II
territory and using fuel there. "The equipment will just not be able to
handle inferior fuel which will have higher sulphur content," they added.

What is even scarier are the prospects of all three fuels (BS II, III and
IV) being retailed nationwide. There is no way the auto sector can
manufacture different vehicles as this will only push up costs. "It would
also be a futile exercise because BS II vehicles will eventually be shown
the door," an executive said.The automobile industry believes it makes
perfect sense to have the deadline deferred by at least three months so that
there is greater sanity at the ground-level situation. This would, of
course, need greater urgency on the part of the Ministries of Road Transport
and of Petroleum and Natural Gas to get the Supreme Court's nod. "A delay on
this matter could be costly," sources said. Gopalan..........Mumbai, Dec. 6...from the pages of THE
HINDU newspaper.

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Special areas scientific research: advancing the cause in India  

With fresh wind blowing in bringing global competitiveness and
collaboration, attitudes to scientific research will change from that of a
routine job to an adventure in creativity.

On April 20, 2005, a 26.7-million cubic foot balloon carrying a 459-kg
scientific payload with 38 kg of liquid neon was flown from the National
Balloon Facility in Hyderabad operated by the Tata Institute of Fundamental
Research (TIFR). The payload collected air samples from different heights
ranging from 20 to 41 km and it was parachuted down safely. The samples were
independently analyzed at the Centre for Cellular and Molecular Biology
(CCMB), Hyderabad, and the Natio nal Centre for Cell Science (NCCS), Pune,
and live micro-organisms were found. Such findings have enormous
implications for astrobiology, besides providing important inputs to go into
the question of how life started on our planet.

Astrobiology deals with life outside the Earth, a question that is
increasingly gaining scientists' attention. For India, it was part of a
pioneering series of experiments. Being interdisciplinary in character,
astrobiology t had the participation of scientists from institutions
specializing in different fields. As the subject grows in scope and
interest, more scientists will come forward to participate with a distinct
need for an Indian institution devoted to astrobiology.

While challenges to research progress in India abound, there are also
several instances of world-class work being done. The upper atmosphere
experiment carried out by biologists and space scientists from Indian
research institutions clearly demonstrates the capabilities of Indian
researchers. The idea was for an objective study of whether the Earth's
atmosphere harbours living systems, especially extra-terrestrial
micro-organisms like bacteria and viruses. This was the first time a serious
attempt was made to analyse the microbial contents of the atmosphere under
strict biological controls. The expertise developed by ISRO in recent years
justified an attempt at sampling air from different heights using the
balloon technology.

In this pioneering effort, the payload consisted of a cryosampler containing
16 evacuated and sterilized stainless steel probes. Thus, the valves
attached to the cylindrical probes could be opened by a remote command from
the ground headquarters and the ambient air pumped in. The expertise
developed by the ISRO technical team was responsible for preparing such a
complex payload.

The first flight in 2001 was successful in collecting air samples from
various heights. After the payload was parachuted down and analyzed by CCMB
and also in Cardiff, U.K., several new bacterial species were identified.
Encouraged by the findings, a second experiment with several improvements
over the first balloon flight was planned and executed in 2005. The
biologists at CCMB and at the NCCS reported finding 12 bacterial and six
fungal colonies, with three strains identified as potential new species.

The question that came up then was: how did such life forms get to the upper
atmosphere? If no workable method can be found to lift the bacteria from the
Earth's surface to a height of 41 km, then based on the empirical evidence
there is strong reason to consider them as being of extra-terrestrial

The impact of this work can be profound if it is conclusively established
that the microorganisms detected in these experiments are indeed
extragalactic. The work has, therefore, generated interest amongst the
international community of exobiologists. For example, if the species found
at the height of 41 km is proved to be extraterrestrial in origin, it will
open up possibilities of a broad vista of life existing all over this vast
universe. It will also strengthen the hypothesis that life on the Earth
itself may have been seeded by such microbial showers, making all of us
extraterrestrial in origin. Needless to add that the realization that we are
not alone in the universe would be of profound significance in the study of
the origin and status, and possibly the future of life, on this planet.

Preferential funding of research programmes is a huge challenge in India,
especially for such interdisciplinary niche areas like astrobiology. While
large initiatives such as satellite and space launch programmes are
well-funded and they enjoy the public spotlight, we must find ways to
encourage and support research in new and emerging areas as well. For
greater impact in niche area research, the Indian science establishment
needs to be endowed with the requisite infrastructural and funding
commitment to conduct end-to-end research. Many of these niche research
areas offer great opportunity for the Indian science establishment to negate
legacy issues and be on an equal footing with the best research output in
the world.

Perhaps the greatest hindrance to planning exciting experiments and
achieving important results is the bureaucratic framework of our research
institutes. The hierarchical structure, especially pay scales of our
research institutes mimic the government's administrative structure.
However, the creativity and efficiency of a scientist vis-À-vis the
administrator evolve differently, with the scientist bringing differential
skill and qualification requirements to the table. Besides, a young
scientist is in the prime of his creative life and an administrator, on the
other hand, gains maturity with age. To base the promotion criteria of a
scientist on the same pattern as for an administrator is to ignore this
fundamental difference. This more often than not leads to frustration among
the younger generation of scientists as they see their bright new ideas
getting ignored or going unappreciated.

While dwelling on the lacuna on one side, it is heartening to see how the
balloon experiment breaks new ground. This inter-institutional
accomplishment illustrates the indigenous capability in successfully
fabricating experimental set-ups of entirely new types. This trend for
originality and creativity augurs well for Indian science. With fresh wind
blowing in bringing global competitiveness and collaboration, attitudes to
scientific research will change from that of a routine job to an adventure
in creativity. It is important for creative young scientists to feel
appreciated for the work done and the credit for such cooperative efforts,
as seen in the recent Nobel Prizes, would justifiably be apportioned in
proportion to the research contributions.

(Jayant Narlikar is Founder Director & Emeritus Professor, Inter-University
Center for Astronomy and Astrophysics. Prof. Narlikar is a theoretical
physicist widely known for fundamental contributions to astrophysics and
cosmology. Along with Sir Fred Hoyle, Prof. Narlikar proposed an alternative
to the Big Bang theory. He headed an international team which undertook and
found evidence for micro-organisms in the stratosphere. An intriguing
possibility is that the organisms could have arrived from space. Prof.
Narlikar has authored or co-authored a hundred books (professional, science
popularization, fiction). Prof. Narlikar is a member of three Indian
academies of sciences and Fellow of the Third World Academy of Sciences.)
....from the pages of THE HINDU Narlikar

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While the Union Cabinet had pulled up petroleum minister Murli Deora for not
being able to carry through the scheme of blending five percent alcohol with
petrol to fuel cars, it appears that the minister may well end up having the
last laugh on the issue.
According to sources, there is just not enough alcohol in the country to
fill whisky glasses, serve as an input to produce medicines and chemicals
and blend petrol to run cars as well.

According to an Indian Oil Ltd (IOC) official, " It is not for want of
trying that the scheme has not made much headway but the fact that we are
getting very poor response to the tenders that we float for buying alcohol.
The high price of alcohol has also been posing a problem." The government is
keen to push through the alcohol blend as it reduces dependence on imported
crude and cuts pollution from vehicles. With the emphasis on reducing carbon
emissions worldwide and the Copenhagen meeting on climate change coming up,
the government would like to showcase its achievements as well.

A senior official said while IOC, Bharat Petroleum and Hindustan Petroleum
required 65 crore litres of alcohol a year to implement the five percent
blending with petrol they were able to procure only 27 crore litres, which
is a mere 40 percent of the required amount.
S. P. S. Pannu, New Delhi...Mail Today

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Ethanol industry on hard times  

The growing disaster

The ethanol industry, once the darling of corn growers, environmentalists
and the auto industry, has fallen on hard times. Producers spent this year
caught between falling ethanol prices and rising corn costs, causing many to
go bankrupt. In response, they are pushing the US Environmental Protection
Agency to increase the amount of ethanol they can blend into gasoline to 15
per cent, up from the current 10 per cent, Allowing this, however, would
only double down on a discredited environmental policy without solving the
industry's fundamental economic problem.

That problem is simple: Ethanol prices trend higher and lower along with the
price of gasoline, yet the cost of producing ethanol tends to rise with
demand, since higher ethanol production exerts upward pressure on the price
of corn. In a free market, corn prices might be expected to eventually fall
as the market adjusts to increased demand. But because the government
heavily promotes ethanol use, through subsidies and regulation, the market
is continually strained.

The problem is magnified because corn is a water- and fertiliser-intensive
crop that requires considerable investment. Worse, since fertiliser is often
an oil-based product, the cost of growing corn tends to rise at the very
moment ethanol prices, which rise with oil prices, might bring a good

The ethanol industry has less incentive to control its costs and diversify
Us market as long as the federal government guarantees it a place at the
pump. Yet Congress's solution to the plight of ethanol suppliers has been to
mandate more ethanol use in gasoline. The Energy Independence and Security
Act of 2007 mandated that use of renewable transportation fuel rise from
nine billion gallons last year to 36 billion gallons in 2022. Although some
of this mandate must be met by advanced biofuels from switch grass and other
sources, corn-produced ethanol is the only large-scale alternative fuel
currently available to meet Congress's mandate.

The ethanol industry appears to recognise that without government mandates
there can be no sustainable market, hence the push for 15 per cent ethanol
fuel. But we should be wary on several grounds. First, many researchers are
convinced that 15 per cent ethanol in gasoline will cause problems in small
engines in everything from lawnmowers to portable generators and boats. Some
car engines will most likely tolerate the higher blend of ethanol, but
others especially those in older vehicles will require costly repairs, a
hardship likely to be borne by lower-income Americans.

Second, if ethanol use was really helping the environment, it might be worth
putting up with higher costs. But many environmental groups dropped their
support for corn-based ethanol after two studies published by the journal
Science last February concluded that ethanol production actually increases
the amount of carbon dioxide released into the atmosphere. The main culprit
is large-scale conversion of forest and grassland to corn production.
Researchers at Princeton University estimate it would take 167 years of
ethanol use in cars to offset the release of carbon from converting lands to
agricultural production.

Third, a 2008 report prepared for the World Bank concluded that "the most
important factor" in rising global food prices "was the large increase in
biofuels production in the US and the EU", High food prices may be a
hardship for American consumers, but ? they are downright deadly in poor
African nations.

Last, Washington already protects American companies with a 54 cent per
gallon tariff on sugar cane ethanol from Brazil and other countries that
produce it at much lower costs than American farmers can. This tariff not
only hits United States motorists in the pocketbook, it also leads to other
mischief. An entire industry designed to evade the protectionist tax has
cropped up in Trinidad and 23 other Caribbean countries that are exempt from
the tariff. Trinidadian companies import sugar cane ethanol from Brazil,
dehydrate it to comply with the American tariff exemption on products
"substantially transformed" in the Caribbean Basin, and then sell it in

Allowing a higher percentage of ethanol' in gasoline will not make us less
dependent on such foreign energy sources. It will not help the environment.
It will not lower consumer prices. And it will result in' the poor of the
world having less to eat. Instead of raising federal mandates on ethanol,
Congress and the Obama administration should end them entirely.

Russell Harding New Delhi: 01 December 2009, Financial Chronicle, P-4

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India, Iran in fresh round of energy talks  

India and Iran have started a new round of energy talks after a lapse of
almost two years.

At a meeting between the Managing Director of National Iranian Oil Company
(NIOC), Mr Seifollah Jashnsaz, and the chiefs of Indian energy sector
companies and senior Government officials here on Monday, issues such as
supply of liquefied natural gas (LNG) from Iran, import of crude oil,
opportunities for ONGC Videsh Ltd, and the proposed multi-million dollar
Iran-Pakistan-India gas pipeline project were discussed.

After meeting with the Minister for Petroleum and Natural Gas, Mr Murli
Deora, Mr Jashnsaz told newspersons, "Today Iran is in a special position to
provide energy to friendly countries like India."

On if the 5-mtpa LNG deal inked in 2005 has been cancelled, the NIOC
Managing Director said, "The deal that you are referring to was never
cancelled. There needed to be some amendments. We hope to touch upon that
contract in these meetings during our trip, and hopefully we will find a

A sale purchase agreement was signed in June 2005 in Tehran for five mtpa of
LNG supply for 25 years between National Iranian Gas Export Company (NIGEC)
and the Indian consortium of GAIL (India), Indian Oil Corporation and Bharat
Petroleum Corporation. The contract was to begin from the last quarter of

The parties had also signed a letter in June 2005, according to which NIGEC
would obtain approval of its parent company - NIOC - for the sale purchase
agreement to become effective. NIGEC has not conveyed NIOC's board approval
to India.

Discussions on the ONGC Videsh Ltd (OVL)-led consortium OVL, Indian Oil
Corporation and Oil India - be given rights to develop the gas field it
discovered in the offshore Farsi block were also held. India is also seeking
a 20-25 per cent stake for OVL in phase-12 of the gigantic South Pars gas
field in the Gulf.
New Delhi: 01 December 2009, Business Line

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IndianOil, Adani in Gas distribution JV  

IndianOil and Adani Energy Ltd are forming a new joint venture company for
setting up city gas distribution (CGD) projects in various cities, including
Chandigarh, Allahabad and Ghaziabad.

The joint venture company will supply compressed natural gas (CNG) as a fuel
to automobiles and piped natural gas to households and industrial consumers.

The equity capital of this JV will be Rs. 440 crore and the two companies
will infuse Rs. 220 crore each in line with their equity contribution of 50
per cent each.

Confirming the move, a senior IndianOil official said, "We are seeking our
board approval on Monday for subscribing Rs. 220 crore as our equity share
in this JV Company."

The company will initially develop the CGD networks in three cities where
the consortium of IndianOil and Adani Energy has been successful.

The JV Company will also take over the ongoing city gas distribution
projects being developed by Adani Energy at Faridabad, Noida, and Khurja.
The company will also bid for future CGD projects.

IndanOil already has a JV company with GAIL India - Green Gas Ltd for
setting up CGD projects in Lucknow and Agra. Adani Energy has secured rights
from various state governments to set up city gas distribution networks at
Vadodara and Ahmedabad in Gujarat and in some cities in Uttar Pradesh,
Haryana and Rajasthan.

Adani Energy has completed the Faridabad city gas project in Haryana and is
also developing a similar project at Khurja in Bulandshahr in Uttar Pradesh.
Adani Energy's city gas project in Noida is under review by the Supreme

By Anupama Airy, Hindustan Times, New Delhi, 30 November 2009

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