Vested interest has a say in India's policy making: Shell

The energy giant says such interests are a force in one direction

India is a growing economy, but vested interests have a play in India’s policy making, says the Netherlands-based energy giant Royal Dutch Shell Plc Jeremy B Bentham, vice-president, global business environment, Shell, said such interests were “a force in one direction”.

Citing Paul Krugman’s three 'I’s—ignorance, interests and ideology — that do not let things happen when they should rationally be happening, Bentham said he had added two more to these —institutional inadequacy and inertia. According to him, all five factors were present in India

Bentham’s comments come at a time when India’s energy sector is mired in controversies around pricing and contractual and allocation issues.

“As a business, we cannot do with an energy ministry. We have issues fragmented across different departments, each of which has its different agenda, which is not very well joined up here,” he told Business Standard in an interview.

The presence of such elements brings up the question whether “transitional changes are trapped and is there a room to maneuver”. Bentham later presented to an industry audience the ‘New Shell Scenarios’, which looks at the trends in the economy, politics and energy as far ahead as 2100.

The first scenario, labelled “mountains”, sees a strong role for the government and introduction of firm and far-reaching policy measures. These help develop more compact cities and transform the global transport network. New policies unlock plentiful natural gas resources, making it the largest global energy source by the 2030s, and accelerate carbon capture and storage technology supporting a cleaner energy system.

The other scenario is of “oceans”, a more prosperous and volatile world. Energy demand surges due to strong economic growth. Power is more widely distributed and governments take longer to agree to major decisions. Market forces, rather than policies, shaped the energy system: oil and coal remain part of the energy mix but renewable energy also grows. By the 2070s, solar becomes the world’s largest energy source.

Bentham said India was developing more "ocean-centric" and was growing economically. He said India needed to look more into developing of infrastructure to deal with the supply and demand issues in the energy sector.

“On supply, India is already a significant component in the global energy consumption and is going to be 10-15 per cent of global energy in the decades ahead. For that, you need to have infrastructure.”

That not only enables “supply investments”, but also ports and the railways participating in global economy. On the demand side also infrastructure questions are there. Important here is to develop cities in a planned way.

He indicated the country should look more into how it could participate in the energy scenario of South Asia and Asia Pacific. “It has to look into how to take advantage of the developments in global shale gas? Not only necessarily in encouraging production here, but also opening up opportunities globally,” he added.

Yasmine Hilton, chairman of Shell India, said:  “India is predicted to be one of the world’s largest economies, but the road ahead is fraught with challenges — where 80 per cent of our energy is imported and many people still do not have access to electricity.”