The United States has drafted India into the axis of virtue. The Bush administration believes India is a major energy market.

It wants India to build "strategic oil reserves", which can be drawn upon in case of another oil shock to the world economy.

Specifically, throwing the Enron-Dabhol controversy to the winds, the US government is lending its weight to American firms seeking to invest in India's energy sector.

A task force on the US Energy Policy, constituted by US President George Bush, sees "India as one of the major energy markets."

As part of a policy realignment, the US Department of Energy has offered to support "any industry expertise required by India to create its own strategic reserves."

The US wants India to replicate its model, wherein petroleum is stored in "natural, underground salt caverns."

The US has built capacities to store up to 700 million barrels at four sites. These give it a drawdown capacity of 4.4 million barrels a day, which "at full level (of drawdown) is equivalent to the production of the fourth largest supplier in the world."

Petroleum Minister Ram Naik has apprised Prime Minister Atal Bihari Vajpayee of the recent changes in the US energy policy.

As many as 66 US oil and gas majors have shown interest in the recent roadshows, in which the Indian government invited multinationals to explore 24 blocks under the New Exploration Licensing Policy-IV.

The campaign contained a promotional roadshow for the second round of bids for coal-bed methane blocks, in which 32 US firms, including CDX Gas and Burlington Resources, participated.

The Centre has offered nine such blocks, housing about 400 billion cubic metres of exploitable gas.

With support from the US government, India is likely to see a number of American energy firms descending on its shores in search of hydrocarbons and to set up energy units.

Despite the Enron debacle, the US firms are encouraged by the recent gas discoveries made by Reliance Industries in the Krishna-Godavari deep-water block and by Oil and Natural Gas Corporation in Vasai (off Mumbai), the deregulation of the oil industry and the proposed government divestment in oil companies.