India to Invest up to $10 Billion in Tar Sands

As oil creeps towards an unprecedented $150 a barrel the Indian Petroleum and Natural Gas Minister Murli Deora has denied that India and China were responsible for the recent oil rise.

Deori said that the growth in consumption in India was less than in many nations: “I take this opportunity to set the record straight. While China and India account for over one-third of the global population, their combined oil consumption is less than one-eighth of the world’s consumption.”

But others believe that India’s demand for oil , is in part, causing the record oil prices. And now in its race to secure oil, India is looking at Canadian oil sands.

State-owned Indian energy companies are said to be looking to invest at least $2.5-billion and as much as $10-billion in Alberta’s oil sands as part of a national strategy aimed at finding oil to fuel India’s fast-growing economy.

“We have looked into those [oil sands] opportunities in Canada and done our due diligence,” said R.S. Sharma, the chairman and managing director of India’s Oil and Natural Gas Corp. (ONGC). “We can go up to $8- or $10-billion.”

For India, the oil sands are starting to look attractive, not only because of the rocketing price, but the oil sands are also one of the few remaining places in the world where companies can still acquire vast reserves of crude.

“In times to come, when we know that a resource base for oil and gas is drying up everywhere and the prices going up so high, this production from tar sands is a good commercial proposition,” Mr. Sharma is quoted as saying.

India’s involvement in tar sands gives its opponents a real headache. It is one thing to argue that America should not be developing this dirty, energy intensive and polluting fuel, as it has the economic capacity to invest in clean alternatives. But if western NGOs start attacking India’s involvement, and are seen as holding back India’s economic growth, their critics could start accusing them of ecological imperialism.

As the arguments intensify so does the activity on the ground in Alberta…