Environment Business

1. Natural Resources

2. Earth’s Resources
• Atmosphere
– Oxygen for human beings, animals & fauna
– Oxygen as part of CO2 for plants ( in turn used by humans)
• Hydrosphere
– Water for drinking, washing, cooking
– Agriculture & industry, water based food resources
• Lithosphere
– Soil for food; stone & sand for housing; minerals
– Oil, coal & gas
• Biosphere
– Food for all forms of life
– Biomass fuel wood for energy
– Timber for industry

3. Types of Resources
• Renewable:
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Water & biological (within certain limits linked to natural cycles. & usage)
Forests & its produce( Ideally India’s forest cover should be 33% , but, is 12%)
Land ( if used carefully)
Food ( land & aquamarine) again if used wisely
Energy
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Sun
Wind
Hydro
Geothermal
• Non-Renewable:
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Minerals
Oil & natural gas
Coal
Nuclear

4. Are we using Resources wisely?
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Consumption/capita of developed countries >50 times than developing countries
Developed countries produce 75% of industrial waste and green house gases
USA with 4% of world’s population consumes 25% of world resources
India & China because of high population also overuse
Water: 31 countries already facing crisis and by 2025 will rise to 48. Dams though
increases irrigated area impacts lives & habitat. Silver line: Drip irrigation
Forest: Deforestation causing flood & drought
Minerals: Exploitation causes soil erosion, pollution, deforestation
Food: 64 of 105 developing countries still need to attain sufficiency. 18 million
people worlwide die/yr due to malnutrition
Fishery: 44% of world’s fisheries heavily exploited
Energy: As per ‘98 report, avg. American uses 24 times more energy than Indian
– Silver line: Denmark produces 15000 KW electricity from biogas

5. Natural Resource: Curious case of KG Basin
Case Study: GoI Vs. RIL
In 2002, KG basin contract was given to RIL which promised in 2004 to supply gas to
NTPC for 17 years @ USD 2.4/unit. But, in 2007, RIL wanted USD 4.2/unit. RIL wants USD
14.25/unit. At that price Electricity supply shall cost Rs. 7/unit.
In 2013, Petroleum Ministry informed that the cost of production of gas in the KG D6
block, works out to be just $2.74 mbtu. RIL which were supposed to supply at least 80
mcumt/per day even at U.S. $4.20/unit(revised in 2007) , but, produced less than 25% of
that quantity(deliberate?). RIL say bureaucratic system has slowed the progress.
The GoI decision to double natural gas prices to USD 8.4/unit from April 2014 ostensibly
to incentivise domestic gas production. It approved an international pricing mechanism from
April 2014 under the Rangarajan formula.
What cost model should be adopted to fix the price of the natural resource?
On another note, The Govt. also asked Reliance Industries Ltd (RIL) to give up 81 per
cent of its KG-D6 gas block, including five discoveries, as the time allocated for producing
from them had expired.
(Give your views!)

7. Decline in Gas Production :
Source: Deccan Herald
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Shocking decline of gas production in Krishna-Godavari Basin
India’s energy sector was on cloud nine when Reliance discovered huge gas
reserves of 40 trillion cubic feet in block D6 of Krishna Godavari in 2002. We were
equally and rightly proud when in a record time of seven years, gas started to flow
and reached a high of 61 million cubic metres per day (mmcmd).
At that time the prognosis was to reach 80 mmcmd by April 2012. The reality turned
out to be different. By November 30, 2010, the gas production had started to
decline. The current production is under 50 mmcmd and is likely to go down even
more.
According to Reliance, because of water ingress there has been pressure drop in the
wells leading to lower production. According to them drilling more wells is not a
solution. However the consultant hired by DGH has been recommending that by
drilling more wells in newer areas production can be increased.
Reliance must have realised that it will not be able to manage the complexity of the
gas reservoir and sought to form a joint venture with a multinational like BP with
greater expertise in deep water technology.
The situation has been made even more complex with the interference of petroleum
ministry in forcing Reliance to sell gas to the so called priority sectors like power
generation, fertiliser companies, residential consumers and LPG extraction plants
and cutting off supplies to steel companies, petrochemical plants and refineries.
Steel companies have gone to the court complaining about their huge losses.

8. Soil & Land Degradation
• Soil is the earth’s fragile skin that anchors all life on Earth.
• Half of the topsoil on the planet has been lost in the last 150 years.
• Increased demand for agriculture produce convert forests and
grasslands to farm fields and pastures.
• Transition to agriculture from natural vegetation cannot hold onto
the soil.
Large scale erosion forming a gully
system around six mt. deep. This is
due to over grazing by goats and
other livestock. The exposed bare
earth is washed away forming the
gully system. Deforestation in the
Lake Bogoria area is a serious threat
as it leads to a drop in the water
table and therefore streams and
swamps
drying
out.
Lake Bogoria, Kenya.
Source: WWF website

9. Causes of soil degradation
• Agriculture: Replaces natural vegetation. Topsoil is exposed and can dry out.
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Microorganisms that keeps soil fertile decrease. Nutrients wash out. Soil can be blown
away by the winds or washed away by rains.
Deforestation: Without trees, erosion occurs and sweep the land into rivers. The
agricultural plants( coffee, wheat etc) that often replace the trees cannot hold onto
the soil, but, actually worsen soil erosion. And as land loses its fertile soil, agricultural
producers move on, clear more forest and continue the cycle of soil loss.
Overgrazing: Conversion of natural ecosystems lead to high rates of erosion and loss
of topsoil and nutrients. Overgrazing can reduce ground cover, enabling erosion and
compaction of the land by wind and rain. This reduces the ability for plants to grow
and water to penetrate, which harms soil microbes and results in serious erosion of
the land.
Use of Agrochemicals: Pesticides and other chemicals used on crop plants have
helped farmers to increase yields. Scientists have found that overuse of some of these
chemicals changes soil composition, disrupts balance of microorganisms & stimulates
the growth of harmful bacteria at the expense of beneficial kinds.
Source: WWF website

10. Effect of Soil degradation
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Desertification: Droughts and arid conditions with huge economic costs for
nations where deserts are growing.
Loss of Arable Land: Arable land is any land that can be used to grow crops. Many
of the practices used in growing those crops can lead to the loss of topsoil and
destruction of soil characteristics that make agriculture possible.
Clogged and Polluted Waterways: Soil eroded from the land, along with pesticides
and fertilizers applied to fields, washes into streams and rivers. This sedimentation
and pollution can damage freshwater and marine habitats and the local
communities that depend on them.
Increased Flooding: Land is often transformed from a forest or other natural
landscape, such as floodplains and wetlands, into a crop field or pasture. The
converted land is less able to soak up water, hold soil thereby causing run off and
making flooding more common.

11. Effect of deforestation

12. Salvaging the situation
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Promoting Sustainable Agriculture: Agriculture gives us food, fibre, and even biofuels.
Farming is the world’s largest industry, employing a billion people who produce more than
$1 trillion of food annually. WWF and other agencies works with farmers, major
companies and their supply chains to promote the use and development of sustainable
agriculture that preserves and restores critical habitats and improves the health of soil and
water.
Reduce Deforestation:. Parts of the landscape will need to be reshaped and altered as
populations grow and change—but this can be balanced through sustainable forest
management, reforestation efforts and maintaining the integrity of protected areas.
Respect and empower local communities, maintain critical ecosystem services and reduce
greenhouse gas emissions. Some nations are already finding success. Paraguay reduced
deforestation by 85% in the years following enactment of 2004 Zero Deforestation Law.
Preventing Desert Expansion : Create a network of protected forests to integrate
conservation and development so that local people would benefit from their natural
heritage.
Alternate Food Sources: Innovate usage of fruits, gum, mushrooms and other natural
forest produce to break current agri patterns
Drip irrigation farming:
Grow unfamiliar crops: Nagli which is grown on poor soil on hill slopes pg 32.
Integrated Pest mgmt: pg 32
What can you do to help the situation?

13. India’s Economic Development & Resource Use
• Dams : Major contributor for increase in area under irrigation
to 271 mha in ‘98 from 100 mha in ’50.
– Benefits: Agriculture, industry & hydropower generation, drinking water
– Problems: Alter river flow, changes nature’s flood control mechanism,
displaces people & animals (cut off their migratory routes)
– Impact: 16-18 million displaced of which 40-50% tribal; 90% of Dams
cleared in ‘80s & 90s did not fulfill environmental conditions under
which GOI gave clearances under EPA of 1986
• Case Studies:
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Sardar Sarovar Project: World Bank’s withdrawal pg 27
Narmada Bachao Aandolan: pg 38
Sariska Tiger Reserve: Pg. 29
Hydel Power in Western Ghats: pg 37

14. Natural resource Accounting
• Natural resource accounting is an accounting
system that deals with stocks and stock
changes of natural assets, comprising biota
(produced or wild), subsoil assets (proved
reserves), water and land with their aquatic
and terrestrial ecosystems
– Recorded Forest area by region ( sq. Kms)
– Asset value of Forest & produce
– Arrive at National & State wise account