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India’s rapid take-up of electric vehicles prompts rethink about long-term fuel needs

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India's rapid take-up of electric vehicles prompts rethink about long-term fuel needs

The rapid take-up of electric vehicles in India’s fledgling market has prompted a major rethink about the country’s long-term fuel needs as refiners in Asia’s third-largest economy hasten their shift away from oil production.

India, one of the world’s fastest-growing oil markets, has lagged behind major economic peers in Europe and Asia in the adoption of EVs but sales are now picking up and investment in the production of new autos and energy infrastructure is accelerating.

The faster-than-anticipated industry growth means India’s gasoline consumption will peak sooner than previously thought, some analysts and industry participants say, forcing top oil firms to expedite transition plans to alternative business lines, notably increased petrochemical manufacturing.

“We were anticipating that peak gasoline demand will be around 2040-2045 earlier, but going by the trend and the speed with which we are developing the ecosystem around EVs, the peak demand would be the mid-2030s,” Debasish Mishra, Partner, energy, resources and industrials, Deloitte India told Reuters. He expects diesel demand to peak around the same time as petrol.

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Slowing fuel demand will be quite visible by around 2030 as EV technologies stabilise, compared with an earlier projection of the 2040s, an industry source at an India-based refinery told Reuters, adding that the heavy trucking sector will see changes a little later.

“Refiners are already investing in petrochemical integration to cope with the potential loss in fuel demand,” said the source who declined to be named because he is not authorised to speak to the media.

Currently, around 90% of Indian petrochemical demand is met by China, he said, so a shift by Indian refiners towards domestic chemical needs could dramatically change supply dynamics.

Indian refiners are investing billions of dollars to raise petrochemical capacity. Indian Oil Corp (IOC.NS), the country’s top refiner, is raising the petrochemical capacity at its Panipat refinery by 13% and building new plants linked to its Paradip and Gujarat refineries.

Reliance Industries Ltd (RELI.NS), operator of the world’s biggest refining complex, plans to invest 750 billion rupees ($9.38 billion) to expand its chemical business, while Essar Group plans to set up a 400 billion rupee petrochemical complex in east India.

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Nayara Energy (ESRO.M3) expects 15-20 new integrated petrochemical plants will start in the next decade.

EVs, TRUCKS

China currently dominates global EV production and domestic adoption of new energy vehicles is well advanced. The China Passenger Car Association expects sales of new energy cars, mainly EVs, to hit 8.5 million units this year, or 36% of all new sales.

Despite new momentum in India, the question for the country is whether it will be enough to ultimately shake its fossil fuel dependency.
“Limited charging infrastructure, low domestic EV production and high EV battery costs remain some of the key hurdles in maintaining strong EV uptake in the long run,” said Dylan Sim, oil market analyst at FGE.

India’s progress is modest by global comparisons, however, last year registered EVs tripled to 1.01 million from 2021, most of them two- and three-wheelers.

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While EVs make up just 1% of the 3 million cars sold each year, New Delhi wants to grow this to 30% by 2030 and has introduced a range of policies to get there, including tax breaks for consumers.

India’s state refiners, which dominate fuel retailers, plan to set up EV charging facilities at more than 22,000 fuel stations and highways by 2024.

The private sector is also providing EV bulls hope.

Gurugram-headquartered ride-hailing service Blusmart, which owns a fleet of 3,000 EVs, has seen brisk growth.

Its co-founder Punit Goyal told Reuters it now provides 500,000 monthly trips, up from about 35,000 when it started in 2019.

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Local automakers like Tata Motors and Mahindra & Mahindra have made big investments while foreign players like Kia and BYD have announced premium models for the Indian market.

About 40% of India’s fuel demand is for diesel, which is mostly used by trucks.
Chetan Maini, chairman of Sun Mobility, which provides electric mobility solutions, said India’s smaller trucks, including three-wheelers, are likely to be early adopters in the transition given the cost advantage for e-commerce and delivery firms.

His company currently has 80 battery swapping stations in Delhi for two- and three-wheelers and plans to set up 200 by March.

“A large opportunity by 2030 is going to be on the trucking side because the cost economics will work out really well,” Maini said.

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World’s first hydrogen-powered commercial ferry to run on San Francisco Bay for free ride

World’s first hydrogen-powered commercial ferry to run on San Francisco Bay for free ride

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World's first hydrogen-powered commercial ferry to run on San Francisco Bay for free ride

The world’s first hydrogen-powered commercial passenger ferry will start operating on San Francisco Bay as part of plans to phase out diesel-powered vessels and reduce planet-warming carbon emissions, California officials said Friday, demonstrating the ship.

The 70-foot (21-meter) catamaran called the MV Sea Change will transport up to 75 passengers along the waterfront between Pier 41 and the downtown San Francisco ferry terminal starting July 19, officials said. The service will be free for six months while it’s being run as part of a pilot program.

“The implications for this are huge because this isn’t its last stop,” said Jim Wunderman, chair of the San Francisco Bay Area Water Emergency Transportation Authority, which runs commuter ferries across the bay.

“If we can operate this successfully, there are going to be more of these vessels in our fleet and in other folks’ fleets in the United States and we think in the world.”

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Sea Change can travel about 300 nautical miles and operate for 16 hours before it needs to refuel. The fuel cells produce electricity by combining oxygen and hydrogen in an electrochemical reaction that emits water as a byproduct. 

The technology could help clean up the shipping industry, which produces nearly 3% of the world’s total greenhouse gas emissions, officials said. That’s less than from cars, trucks, rail or aviation but still a lot — and it’s rising.

Frank Wolak, president and CEO of the Fuel Cell & Hydrogen Energy Association, said the ferry is meaningful because it’s hard to reduce greenhouse gas emissions from vessels.

“The real value of this is when you multiply out by the number of ferries operating around the world,” he said. “There’s great potential here. This is how you can start chipping away at the carbon intensity of your ports.”

Backers also hope hydrogen fuel cells could eventually power container ships.

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The International Maritime Organization, which regulates commercial shipping, wants to halve its greenhouse gas releases by midcentury.

As fossil fuel emissions continue warming Earth’s atmosphere, the Biden administration is turning to hydrogen as an energy source for vehicles, manufacturing and generating electricity.

It has been offering $8 billion to entice the nation’s industries, engineers and planners to figure out how to produce and deliver clean hydrogen.

Environmental groups say hydrogen presents its own pollution and climate risks. For now, the hydrogen that is produced globally each year, mainly for refineries and fertilizer manufacturing, is made using natural gas.

That process warms the planet rather than saving it. Indeed, a new study by researchers from Cornell and Stanford universities found that most hydrogen production emits carbon dioxide, which means that hydrogen-fueled transportation cannot yet be considered clean energy.

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Yet proponents of hydrogen-powered transportation say that in the long run, hydrogen production is destined to become more environmentally safe.

They envision a growing use of electricity from wind and solar energy, which can separate hydrogen and oxygen in water. As such renewable forms of energy gain broader use, hydrogen production should become a cleaner and less expensive process.

The Sea Change project was financed and managed by the investment firm SWITCH Maritime. The vessel was constructed at Bay Ship and Yacht in Alameda, California, and All-American Marine in Bellingham, Washington.

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Webb Telescope shows pair of intertwined galaxies glowing in infrared

Webb Telescope shows pair of intertwined galaxies glowing in infrared

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Webb Telescope shows pair of intertwined galaxies glowing in infrared

The Webb Space Telescope has captured a pair of intertwined galaxies glowing in the infrared.

The observatory operated by NASA and the European Space Agency photographed the two galaxies 326 million light-years away, surrounded by a blue haze of stars and gas.

A light-year is 5.8 trillion miles. The pictures, released Friday, marks the second anniversary of Webb’s science operations.

The neighboring galaxies, nicknamed Penguin and the Egg, have been tangled up for tens of millions of years, according to NASA. They’ll eventually merge into a single galaxy.

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The same interaction will happen to our own Milky Way and the Andromeda Galaxy in 4 billion years, the space agency said.

Considered the successor to the aging Hubble Space Telescope, Webb is the biggest and most powerful astronomical observatory ever launched.

It rocketed away in 2021 and underwent six months of commissioning, before its first official images were released in July 2022. 

It’s positioned 1 million miles (1.6 million kilometers) from Earth. “In just two years, Webb has transformed our view of the universe,” NASA’s Mark Clampin said in a statement.

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US senators call out Big Tech’s new approach to poaching talent, products from smaller AI startups

US senators call out Big Tech’s new approach to poaching talent, products from smaller AI startups

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US senators call out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them.

Now three members of the U.S. Senate are calling for an investigation.

San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept’s AI systems and datasets.

Some call it a “reverse acqui-hire.” Others call it poaching. Whatever it’s called, it’s alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies.

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“I’m very concerned about the massive consolidation that’s going on in AI,” U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press.

“The technical lingo is ‘up and down the stack’. But, in plain English, a few companies control a major portion of the market, and just concentrate — rather than on innovation — trying to buy out everybody else’s talent.”

So-called “acqui-hires,” in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what’s happening in the AI industry is a little different. 

“To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that’s a new twist,” Cusumano said.

A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft’s consumer AI business, along with Inflection’s chief scientist and several of its top engineers and researchers.

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That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal.

He and fellow Democratic Sens. Elizabeth Warren of Massachusetts and Peter Welch of Vermont sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that “sustained, pointed action is necessary to fight undue consolidation across the industry.”

“What is going on here is instead of buying startups outright, big tech companies are trying a new play,” Wyden said in an interview before sending the letter. ”They don’t want to formally acquire the companies, avoiding the antitrust scrutiny. I think that’s going to be the playbook until the FTC really starts digging into these deals.”

The DOJ and FTC said they received the senators’ letter but declined further comment.

President Joe Biden’s administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras.

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U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing close business partners Microsoft and OpenAI.

Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. “It seems clever. I would think, though, that they’re not fooling anybody,” he said.

For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists.

Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once — build the foundational AI technology as well as the products for end users.

But continuing on that path “would’ve required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision,” it said in a statement explaining the Amazon deal.

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“They may have made a decision that they have no real future and just don’t have deep enough pockets to compete in this space, so they probably prefer to be acquired outright,” Cusumano said. “But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them.”

Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed.

But in the AI industry, he said, “companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources.”

The letter asks enforcers to examine how tech giants are entrenching their AI dominance “through partnerships, equity deals, acquisitions, cloud computing credits, and other arrangements.”

John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn’t a “reverse acqui-hire,” he said.

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Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook parent Meta Platforms and spin it as a positive, for example, even if wasn’t the founders’ original plan.

“This isn’t an acqui-hire. This is a straight up poach,” Coyle said of Amazon and Adept.

This doesn’t just happen in the tech world, he said, calling the move “a version of a very old story.” In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them.

“There are innumerable instances where one company went and raided another to take all their employees,” Coyle said. “That existed before the acqui-hire, that is going to happen after the acqui-hire.”

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