+ Climate Change Initiatives Undertaken by the North East Oil Industry - CII Blog

In the history book of the oil & gas sector in India, the North-east region shall always occupy the first chapter. It started with the discovery of oil in Digboi, Assam in an era when fossil fuels and climate change were as far apart as chalk and cheese. However, a century later, the much vilified petroleum sector in terms of polluting the environment is turning out to be one of India’s most potent agencies against climate change.

Last month, Prime Minister Narendra Modi followed up India’s widely-appreciated performance against its COP21 goals with even more ambitious climate change commitments at COP26 in Glasgow. India pledged to increase its non-fossil energy capacity to 500 GW by 2030, meet 50% of its energy requirements from renewable energy by 2030, reduce total projected carbon emissions by 1 billion tonnes from now till 2030, reduce the carbon intensity of its economy by less than 45 percent by 2030 and achieve ‘Net Zero’ by 2070.

India’s confidence in leading the developing world for achieving ‘greening’ of their energy growth comes from the giant strides our country has taken in the past few years. India has outstripped its fast-growing energy consumption, which at 3% per annum will continue to grow at 3 times the global average, by the growth of its non-fossil fuel power generation – which has increased more than 25% in 7 years. India has rapidly moved up the ranks to the 4th largest renewable energy producer in the world, crossing the 100 GW milestone earlier this year. Our solar energy generation has increased by 489% in just 5 years, from 6.8 GW in 2016 to 40.1 GW in 2021.

One can see a live example of India’s balanced energy development in its North-east region, which is simultaneously one of India’s most ecologically rich and energy-scarce regions. Under the North-east Region vision 2020, which envisages unprecedented socio-economic development in the region, Government of India has set a target of increasing oil production from North-east by 67%, from 4.11 MMT in 2020-21 to 6.85 MMT, in the next 4 years, and gas production from 5.05 BCM in 2020-21 to 10.87 BCM in the next 4 years. 

As one of the anchor organizations of the Oil & Gas sector in North-east India, Numaligarh Refinery Limited (NRL) and its parent organization, Oil India Limited, have been at the forefront of this endeavour to concurrently increase domestic production of petroleum products whilst reducing emissions. This year has been a historic one for NRL, with the organization recording its highest ever sales turnover (Rs. 18,543 crores), profits (Rs. 3,036 crores) and net-worth (Rs. 5,596 crores) in 2020-21.

NRL is undergoing massive capacity upgradation and diversification with Rs. 2,896 crores invested since 2016-17 in projects such as refinery expansion and development, Indo-Bangladesh friendship pipeline and a crude oil import terminal at Paradip port with pipeline to Numaligarh.  

At the same time, NRL has also been leading climate change efforts in the North-east. NRL has been able to continuously improve its Energy Intensity Index (EII), a measure developed by Solomon Associates which compares the consumption of primary energy sources at a refinery with a benchmark refinery of similar complexity for measuring its energy performance,  from 116 in 2010 to 85 in 2018, at a rate four times the world average, resulting in annual fuel saving of around 100 TMT. 

NRL was at the forefront of the fast-track BSVI roll-out in India, undertaking expeditious refinery upgrades for ensuring the supply of the less-polluting fuels in the North-east region. With the National Biofuel Policy 2018 opening up generation of biofuel from non-food feedstocks like cellulosic and lignocellulosic materials, NRL has taken the lead for production of bio-ethanol from bamboo, which is widely cultivated in the North-eastern States.

NRL is the majority stakeholder in Assam Bio Refinery Private Limited (ABRPL), an Indo-Finnish ‘start-up’, building one of the world’s first bamboo-powered 2nd generation Bio-refinery which apart from producing bio-ethanol, will also produce ascetic acid (an important chemical reagent and industrial chemical), furfural (a promising platform chemical that can be used as a starting chemical to produce other high-value products), and 20 MW of green power from bio-coal. Notably, ABRPL is sourcing bamboo directly from nearby farmers with facilitation of financial assistance for supporting the Prime Minister’s vision of increasing farmer’s income.

With the launch of National Hydrogen Mission, India has the framework for production of Green Hydrogen through electrolysis instead of the present natural gas based methane reformation technology on a ‘212 model’, i.e. green hydrogen generation cost of less than 2 $/ kg, green hydrogen storage + distribution + refuelling cost of less than 1 $/ kg and replacement of incumbent end-use technology with green hydrogen technology with ROI of less than 2 years. NRL has already started work on production of green hydrogen by sourcing renewable power from the grid, and will repurpose its existing grey hydrogen production facility (steam reformer) for production of methanol and formic acid which will further add to margins.

In the coming decades, as India undergoes a mass-rollout of cleaner automotive fuel, NRL is taking steps for diversification into production of petrochemicals such as the repurposing its Hydro Cracker Unit to support the production of more poly-propylene. In 2019-20, NRL recorded an impressive Gross Refinery Margin (GRM), a measure of profitability of refinery, among PSUs in India and the highest among North-east refineries, of 7.99 ($/bbl). The profitability of petroleum-sector PSUs such as NRL provide a key impetus to the development of innovative new clean energy technologies.  

India’s North-east region, just as it had been at the birth of the oil & gas sector in India, will be one of the nodal points of our nation’s clean energy revolution. NRL, as it has always been, will be a key stakeholder and partner of the Government of India in this nation-building and world-changing endeavour.  

The blog has been contributed by Mr Bhaskar Jyoti Phukan, Chairman, CII North East Oil & Gas, Energy and Water Core Committee & Director ( Technical) Numaligarh Refinery Limited

Disclaimer- The opinions expressed in this reflect the authors’ personal views and may not represent the views of CII.