India's Pain in the Ass-am

As the price of oil further reaches new heights, beyond just the United States, other nations also have their fair share of controversy and problems surrounding gas prices. The state of Assam in the northwest sector of India, is home to some of the richest reserves of crude oil and other minerals in India. The Gulf Times (A Middle Eastern paper reporting on another nation's oil production, I find humor in this) says that Assam accounts for a major part of India's oil production:

India produces about 30mn tonnes of crude oil annually, with Assam accounting for about 5mn tonnes of the total...Assam has over 1.3bn tonnes of proven crude oil and 156bn cubic meters of natural gas reserves of which about an estimated 58% of these hydrocarbon reserves are yet to be explored. Assam currently produces about 5mn cubic meters of natural gas annually.

With the nature of Assam's geological endowments, India faced a critical issue recently in their oil needs. Recently 72-hour protest was laid by a student union groups against Oil India Limited (OIL) calling for a more comprehensive economic package for Assam. The effects of the protest made a critical impression on the production and energy needs of India. An OIL spokesman said:

'The protests have hit hard our operations, and the production loss till late Friday is estimated to be about 1,200 to 1,500 kilo litres. The entire operations is likely to be severely affected today (Sunday) with the protest becoming stronger,' Bharali said.

The recent protests are only a small part of India's increasingly difficult relations with the state of Assam. With oil as one the main wealth coming out of the region, relatively speaking (actually it is tea, where Assam is the largest producer of in the world), it only becomes the target of interest for the government, but other groups seeking power or attention of somekind. The United Liberation Front of Assam (ULFA) has been active insurgent group operating for a good decade within the boundaries of Assam:

"United Liberation Front of Assam (ULFA) was formed on April 7, 1979...to establish a 'sovereign socialist Assam' through an armed struggle."

Some interesting facts before I get to the point...

Subsequently, links were established with Pakistan's Inter Services Intelligence (ISI) and the Afghan Mujahideen. Reports indicate that at least 200 ULFA activists received training in Pakistan and Afghanistan. Seized documents and interrogation of some arrested activists revealed that the Defense Forces Intelligence (DFI) of Bangladesh had also trained ULFA cadres in the Sylhet district.

Paresh Baruah has been regularly visiting Karachi since 1992-93. He is also reported to have met Osama bin Laden in 1996 during a visit to Karachi. The ULFA leader was reportedly taken to a camp on the Pakistan-Afghanistan border, where he not only received assurance of military help in the form of arms and ammunition, but also assurances of co-operation and logistical support of all international organisations owing allegiance to bin Laden, including the International Jehad Council, the Tehrik-ul-Jehad, Harkat-ul-Jehadi-e-Islami (HuJI), apart from the Al Qaeda.

With all that taken into bunk, ULFA is a major source of problems for India. Naturally as any insurgent group would operate, they look to dismantle or strike fear or a destablize/disable the entire nation through the boundaries that they are contained in. Assam all the way in Northwestern India, the only way to shake up a nation of 1 billion people: go for the oil.

Suspected rebels launched renewed attacks overnight on pipelines in eastern India, leaving oil operations in the remote region in critical shape, a top oil official said Monday...
"Our production is on, but our storage capacity is going down, and our operations are turning critical," G.K. Talukdar, the head of state-owned Oil India Limited's operations in the eastern state of Assam...
Late Sunday night, a crude oil pipeline was blown up in a small village outside of Duliajan, while a natural gas pipeline, which had been feeding an electricity power plant, was blown up in another nearby village, Bokuloni.

In another event:

GAUHATI, Nov 26: A powerful Indian separatist rebel group claimed responsibility on Friday for blowing up an oil well and injuring at least five soldiers.

A spokesman for the United Liberation Front of Assam told reporters the blasts on Thursday were in response to a "lack of positive response from the Indian government" to their offer of peace talks.

The blasts came soon after Prime Minister Manmohan Singh rejected the group's demand for independence for Assam. The rebels blew up an injection well belonging to India's state-owned Oil India in the Lankachi area in the east of the state.

So why does this matter? It seems most insurgent groups have become more and more keen on be able to destablize a nation or even the world through targeting the means of running economies or the livelihood of nations: energy. It is a very signficant pattern that reoccurs and makes a huge flux in oil prices. It has been apparent in many cases especially in the Middle East.

But despite this, many newspapers and other media outlets repeatedly comment on the growing rise of China and India's economies - which are probably the fastest growing in the world. This combined with their huge respective populations, drives a direct relationship on each nation's consumption of oil.. that is, with they economies and population, they will each consume a huge amount of oil:

IN 2004 alone, India's oil consumption spurted by 11 per cent despite sky-high oil prices. India is now the world's fourth biggest oil consumer, following U.S., China and Russia.

India's oil consumption, now about 2.25 million bbl/day, is estimated to rise, at present rates of expansion, to a huge 5 million bbl in five to seven years.

Our oil companies are looking to Russia, Latin America, and African countries from Angola to Chad, Niger, Ghana and Congo, to Sudan. Other targets include Ecuador, Sri Lanka, Iraq and Venezuela. There is Myanmar of course; and above all, Iran with which a deal for a 2,600-km gas pipeline through Pakistan is likely to be signed. India has signed a $2 billion contract for a 20 per cent holding in Russia's Sakhalin-I field. It wants to secure one million bbl/day from Russia alone.

India has emerged as China's main rival in grabbing oil contracts in as many countries as possible - following a long trail of rising powers, including imperialist states

With India's own internal troubles, it forces the nation to depend on other sources of oil to meet its growing needs. In the year 2006, the economy of the nation undoubtly has gone up since 2004. But coupling India's need for oil, internal struggles, and then looking for more sources of oil all these little actions and events are bound to have a huge chain reaction on the worldwide demand of oil and drive the prices further up. Considering that India's GDP is far below any average American or European, for a population of its size, the price of gas will probably have an effect 100 times harder than the average American consumer.