oct 10th, 2006
i think reliance, although famous for its prescience, has got it wrong here. this is the wrong kind of business: using india's land and india's skills to make polluting products for the consumption of the white guys. this is the china model that san likes, which i think is totally wrong.
furthermore, i see a time when crude-oil refining will become a dinosaur industry, as the world moves to renewable, non-polluting energy. i may be an optimist, but i think by 2020, we'll be off petroleum for energy in a big way. anybody who disagrees with me should read that classic paper "marketing myopia" by ted levitt in the harvard business review in 1966.
we may still need petroleum as feedstock for polymers, but that too will change, as biotechnology and material science finds substitutes.
the age of petroleum will end by 2050. our good friends the arabs will go back to sand and camels. that is, assuming our good friends the chinese dont manage to fry everything before then through reckless proliferation.
http://business.guardian.co.uk/story/0,,1892328,00.html
2 comments:
Guardian is not to be trusted - Reliance will make their money back within 3-5 years (from what I read). What is required is how much refined Petroleum India needs versus the total refining capacity in India - if someone can post these we would know that Guardian is BSing
Rajeev - there is so much that is visibly wrong - and this can be found from the article itself. Look at the following
we will have to make sure our savings in terms of labour and expertise will outweigh the cost of importing the crude
In other terms - slave wages for labor and trained scientific minds in the long run
They showed how use of high technology and low labour costs would attract such large-scale investments
Given how technology evolves we might come to a point where Moore's Law starts operating for petro-plants as well. What happens to these large investments then? The answer lies in the low labor costs - again Slave Wages!
$6bn stage two of the project, which will add 580,000 barrels a day
Impressive - what I would really like to see is how much SUSTAINABLE, WEALTH-CREATION happens as a result of this investment - the concerns being two fold
1- how many people (as opposed to manufacturing robots) get these jobs
2- For how long do these people (or manufacturing robots) get these jobs. I am thinking of technology obsolescence again.
How can you justify pouring down $6bn in manu-robots - which will be non-competitive in 5-10 years? Dont' believe me? - well listen to what the man says
It is a fast-closing window that India, not just Reliance, needs to exploit
habc - Reliance may make their money in 3-5 years - what happens after that? Jamnagar is left with a huge industrial shed that people use as a slum. India as an economy looses.
Most interesting is - the initial impetus came due to tighter environmental restrictions in the US (actually those tighter restrictions are a joke) - hence it is o.k. to poullute India. Petroleum refining yes - but not on my backyard!
Agriculture is the most SUSTAINABLE, ECO-FRIENDLY, HUGE WEALTH CREATOR for India. We were the richest nation on earth only on the basis of two pillars - Agriculture and Intellectual Property, hence the reverence for the Cow and Brahmin - but those being unsecular cannot be mentioned.
There should be mass investment in Infrastructure (ports, roads) and Agriculture. It's time to stop the state shafting our farmer's
Post a Comment