Dr. R.K. Malhotra,
Director (R&D),
IndianOil
FUEL: What do you think are our greatest energy challenges?
Malhotra: The major challenge is to improve the energy efficiency or reduce the carbon footprint while meeting the energy needs of transport sector and electricity generation. Meeting the energy demand of India and China with exponential economic growth during the past few years has not only put pressure on global energy supply chain but has also led to sharp increases in oil and gas prices. It is expected that the same trend may continue during the next 15 to 20 years with more countries joining the league of growing economies. Therefore, meeting the developmental aspirations of the emerging economies in terms of energy supply at affordable prices will be the greatest challenge.
FUEL: What do you believe are the challenges and opportunities that lie ahead in achieving energy democratization? Will everyone around the world have access to affordable energy in our lifetime?
Malhotra: Achieving energy democratization will be extremely difficult if we continue to rely upon the existing fossil sources that are concentrated in the limited pockets of the globe. Diversifying the energy basket and development of non-conventional sources at an accelerated pace is the major challenge. Tapping of sources, like bio-sources, solar and wind energy, which are more uniformly distributed all over the globe, hold potential not only for the supply of energy in different places but will also help resolve issues related to climate change. Energy players, therefore, have several opportunities for development and deployment of energy systems based on such sources. For example, integrating existing refinery operations with biomass through use of pyrolysis oil or even vegetable oil as co-feed with refinery streams or gasification can [allow for] biorefinery integration to enhance fuel supplies from existing refineries. Solar energy cannot only produce electricity but can also be used through bio-catalytic or photo-catalytic processes for hydrogen production from water. The other locally available energy sources like shale gas, tar sands and geothermal can also offer opportunities to cover the demand and supply gaps. I personally feel that these developments, will happen, but it will still take time for fair distribution of energy all over the globe in a democratic manner. The technological limitations at present and the existing socio-political global system will not permit the availability of affordable energy all over the world during our lifetime, though we need to work toward that.
FUEL: What is your company specifically doing to respond to the future energy needs of emerging countries and economies? (Planning, investments, etc.) What does the industry need to do as a whole and is it already moving in that direction?
Malhotra: Our company will expand its refining and marketing infrastructure for meeting the projected demand in the country by forward (petrochemicals) and backward (oil exploration) integration for enhancing the profitability of the company while ensuring the supply of transport fuels and other petroleum or petrochemical products. Further, efforts will be made in transforming the oil company into an energy company by expanding business in power and renewable energy areas. We have already initiated activities related to biofuels for which a subsidiary company has been formed. A few projects have been initialed to understand the issues related to production, storage, distribution and utilization of hydrogen as an alternative fuel. Further, we are examining the possibilities of supplying hydrogen to fuel cell-based telecommunication towers and vehicles. We have already set up a few power generating units based on wind and solar energy. Further, research in the areas of second generation biofuels, such as algae, lignocellulosic biomass-conversion-toethanol and gasification of biomass and petcoke have been initiated. A plan for taking up solar energy research is also in place. We may also get into merchant power business and are particularly looking at utilizing petroleum coke either as a replacement for coal in conventional power plants or through gasification route, which may also provide us an opportunity for production of gaseous and liquid fuels besides chemicals and electrical power.
FUEL: What is one thing you would change in the global energy industry today? In the future?
Malhotra: The global energy industry need to focus on and earmark a certain percentage of its turnover for the development of clean energy options. The time is running out with respect to climate change, and it is important that we step up research and development (R&D) efforts for the development of alternative clean energy sources at an early date. I think we have to take affirmative steps today and cannot postpone decisions for the future.
FUEL: While we watch the Japan tragedy unfold and see how it's highlighting our society's energy weaknesses, how does that affect your company's direction /response to the energy challenges ahead? (Near term and long term.)
Malhotra: Whatever happened in Japan has been really a setback to the nuclear energy program globally, and India is not an exception. There have been protests on sites earmarked for nuclear power plants, and public resistance will be difficult to overcome. My company has decided to partner with a nuclear power corporation for the construction of future power plants. We now have to educate the masses about the safety systems and need to make them fool proof. In due course, we will be able to bring a nuclear power program back on track, although some delays are not ruled out.
FUEL: In your opinion, how does a national energy policy assist a country's efforts to provide an effective framework to address energy development and security?
Malhotra: An advisory body for the Indian Central Government Planning Commission has already drafted the report on "Integrated Energy Policy," with a framework to address energy development and security with projections up to 2031-32 with 11 different scenarios. This policy describes some of the attributes such as relative prices, consistent tax structure, level playing field, uniform treatment for externalities/infrastructure, long gestation lags, R&D and transition strategy, consistent regulation, national priorities, regionally balanced development and energy for the poor.
FUEL: What do you anticipate will be the timeline and magnitude of capital investments required to allow for future energy solutions and related/needed technologies in this century?
Malhotra: The growing economies in the developing world will surely need huge investments for meeting the requirements related to electricity and transportation fuels. It is very difficult to estimate the timeline and the magnitude of the capital investments primarily because of large uncertainties with respect of oil and gas prices, which do not follow any predictable trend and have witnessed high volatility on account of various political uncertainties. The future environmental targets related to carbon dioxide emission control and the pace of developments related to alternatives will decide the magnitude of capital investments in various energy sectors in future.
FUEL: How much of the funding necessary for energy investment can be realized by private investors attracted by market-based returns? How much will need to be funded by public and governmental support?
Malhotra: I expect that there will be a large-scale penetration of private players in the energy sector in India which will need investments in the range of US$120 to $150 billion in the next five years. We expect the funding from both private and public sectors (government), and it is difficult to assess the exact quantum of investment that will be made by each of them. The private investors are mostly attracted by market-based returns, and the future policies will have to ensure fair returns to increase private sector investments. The capitalistic economy has driven the industrialization in the U.S., Germany, France and Japan. A socialistic economy prevailed during the last century in China and, to an extent, in India. But there is a transition toward a capitalistic economy with the large scale participation of the private sectors in energy and manufacturing sectors. A leading entrepreneur of Indian origin, L.N. Mittal, who is ruling the steel business in the world, is now setting up an oil refinery in India. We have the Reliance Group led by Ambanis, which built one of the world's biggest refineries (1 million b/d capacity) in India, which accounts for one-third of the refining capacity in the country. The Reliance Group is a success story with the discovery of large gas reservoirs. Further, private players are now active in all sectors of energy business. I foresee an increased role for the private sector in the energy market of India going forward.
FUEL: Regarding energy solutions - how much does your company invest in research and development? In what areas and why? Do you expect your research goals will change moving forward, and if so, how and why?
Malhotra: We are spending around 2,500 million rupees (US$60 million) on R&D every year and plan to more than double our R&D expenditures in the next four to five years. Our major thrust has been on development of refinery process technologies, catalysts, fuel additives, lubricant formulations and technical support to our operational divisions, i.e., refineries, marketing and pipelines. We have now made research plans in the area of petrochemicals and polymers. Further, we have plans for the development of alternative energy sources and have taken up major research initiatives in this regard. We are in the process of setting up a Centre of Excellence for Bio Energy research. We are also setting up nanotechnology research facilities that will not only help us in improving our products, i.e. catalysts and additives but also provide opportunities for hydrogen storage. The nanotechnology research facility may also find applications for development of solar energy devices. We view the gasification of biomass and petcoke as major areas of research in the near future. Accordingly, I foresee a major change in our R&D efforts from traditional business related to the development of alternative energy options.
FUEL: Do you believe it's time for more collaboration among companies in order to share technology and solutions? If so, how is your company collaborating?
Malhotra: We strongly believe in collaboration and have 42 memorandums of undertaking and memorandums of collaboration with various organizations in India and abroad. We believe that no one alone can develop total systems for providing final solutions without cooperation with suitable agencies. We have also developed strong links with some of the academic institutes who are our partners in the well defined industry-academia programs.
About R.K. Malhotra Dr. R.K.Malhotra is director of R&D of IndianOil. A mechanical engineer from Institute of Technology, Banaras Hindu University and a Ph.D. (Energy Studies) from IIT, Delhi, he has more than 33 years of research experience in the application of fuels and lubricants in downstream petroleum sector. He is leading research at the R&D Centre of IndianOil in refining & lubricant technologies, alternative energy, bio-technology and nanotechnology. He is member of several national committees responsible for formulation of fuel quality and emission standards in India including review of Auto Fuel Policy, environmental regulations etc. He is on the Advisory Boards of the FITT of IIT-Delhi, International Centre for Automotive Technology (l-CAT), Research Advisory & Monitoring Committee of CPCB and CII Committee on Biofuels amongst others.
He has published more than 120 research papers and holds or has applied for 30 patents. He is also the Non-Executive Chairman of Indocat Pvt. Limited, a JV of IndianOil and Intercat, USA for manufacturing refinery catalysts in India. He is also Board Member of Lubrizol India, a JV Company of IndianOil and Lubrizol USA.
