Mumbai: The world will run out of traditional cheap oil in the future and so it is necessary to look for alternative fuel irrespective of the cost of production, an economic think-tank body has said in its monthly macro-economic report.
“The government should take the initiative to design a prototype photo-bio reactor within the precincts of a coal-fired generating station to produce biodiesel,” National Council of Applied Economic Research (NCAER) said in its report.
High crude oil prices in the international market has forced NCAER to look at alternative fuels such as bio-diesel to be “highly promising”.
“India may have to (be) contend with limited crude oil supplies over the medium-to-long run due to a peak oil problem,” it said.
“Algae is the most promising feedstock for bio-diesel and ethanol production because the yield of oil from algae is many times higher than that from traditional oilseeds.”
“Algae could be grown on sewages next to power plants and in wastelands,” NCAER said.
Nuclear energy from fission is another form of fuel that NCAER believes on.
“With internationally sponsored monitoring mechanisms in place and enhanced safety measures, nuclear energy could become a mainstay and a viable fuel,” it said.
Nuclear energy from fission is cost-effective, but for the cost of decommissioning the spent fuel, which is highly radioactive and risky, it said.
India can shift to a cheaper and more abundant source of energy fuel such as coal, but greenhouse gas emissions from coal are higher than oil, entailing global warming consequences, it said.
NCAER laid the emphasis that it is important to find alternate fuel with low emission coefficients, but also to design end-use technologies compatible with alternate fuels.
The oil consumption patterns in India, China and West Asia would continue to increase their intake at a rapid rate in the near future, but that of the US has stagnated, it said.
To meet the consumption increase of India, China and West Asia, OPEC would have to increase its output. The cartel’s supply to the globe is at 41 per cent.
But the production rate of the OPEC countries is falling at an alarming rate, it said. The 12 OPEC countries produced 35.5 million bpd in 2005, which fell to 35.5 million bpd in 2006 and down to 34.7 million bpd in 2007.
“This prompts apprehension that the supplies from the OPEC countries may have peaked,” NCAER said.