According to Brouillette, the meeting that convened between the United States and India reflected both countries’ resolve to place energy development at the center of their relationship, as both nations seek to quickly emerge from the pandemic crisis to a position of strength.
Strategic Energy Partnership
The U.S.–Indian partnership was born when President Donald Trump met with Indian Prime Minister Narendra Modi at a summit in June, 2017, where the leaders recognized the importance of energy to the progress of both nations. At the direction of the two leaders, India’s Department of Energy and the Ministry of Petroleum and Natural Gas set up the SEP in 2018. This cooperation was also instrumental in forming the overarching U.S.–India Comprehensive Global Strategic Partnership in February.Brouillette said that the United States and India are exploring opportunities for cooperation in oil and gas development and trade. Led by industry, the U.S.–India Gas Task Force is working on expanding India’s gas sector, which will benefit exporters of American liquefied natural gas (LNG).
While India is working on expanding its gas pipeline infrastructure, it is also investigating the possible use of a “virtual” gas pipeline system “that will distribute natural gas via truck, rail, or ship to areas unserved by traditional gas pipeline infrastructure.”
Shale oil and gas resources should also be developed, according to the SEP, while Brouillette and Pradhan also signed a memorandum of understanding on developing a strategic petroleum reserve for India—part of which could involve India using U.S. Strategic Petroleum Reserve storage capacity to buffer crude oil.
Meanwhile, India’s power grid is in need of modernization, with the SEP focusing on secure and efficient power distribution systems. As India currently produces most of its energy from coal, the SEP will also facilitate making power generation at existing plants more flexible, more efficient, and cleaner. Improving the energy efficiency of buildings will also be a priority, while the SEP will assist in the deployment of affordable renewable energy.
India’s Energy Situation
According to the International Energy Agency (IEA), India’s population of 1.36 billion and its rapid economic growth in recent years have fueled a corresponding increase in demand for energy. Trends such as urbanization and a growing manufacturing sector are driving demand for fuel and electricity, with up to three quarters of India’s electrical power produced from coal. The IEA says that coal is also set to remain India’s main source of energy.US–India Energy Trade
The U.S. energy secretary said in a statement that he was excited about increasing energy trade between the two nations.“U.S. crude oil exports to India jumped from 26,000 barrels per day in 2017 to an average of 256,000 barrels per day in 2019—a nearly tenfold increase,” Brouillette said. “Through May of this year, India received 68 shipments of U.S. natural gas as LNG, totaling 234.7 billion cubic feet. And India is now the world’s single largest importer of U.S. coal.”