1 According to UN India is anticipated to become the world’s Essay

1. According to UN, India is anticipated to become the world’s most populated country by around 2028 with a population of 1.45 billion, surpassing China. This is of great concern for the policy makers and energy leaders, as India’s continuous thirst for energy is unlikely to get eased in near future. There is a growing need to adjust responsively to match with the increasing demand of energy. Natural gas, in particular, could be a game changer if it is suitably harnessed to address these shortcomings.

Therefore, the perspectives for future of natural gas in India shall depend on discovering and solving various obstacles. Few predicaments and Government reforms on the anvil are enumerated in the following paragraphs.

Don't use plagiarized sources. Get Your Custom Essay on
1 According to UN India is anticipated to become the world’s Essay
From as low as $9/Page
Order Essay

(a) India’s Commitment Post Ratifying Paris Agreement. Being responsible for 7% of the global CO2 emissions (3rd highest after China & US) due to increased use of coal in thermal power stations and other industries, the deployment of coal in the country as the preferred energy solution for mass development needs a deliberate afterthought.

According to the WHO database of 2016, of the 50 urban areas with the worst ambient air pollution, 22 are in India. After having ratified the Paris Agreement on climate change on 02 Oct 16, India is now globally accountable towards minimising the adverse environmental impact of increased CO2 emissions.

(a) Coal vs Natural Gas – Benefits and Risks. Coal poses as a direct rival against the growth of natural gas sector in India due to its easier availability. The competition is mostly in the power sector which faces the challenge of adding capacity expeditiously in the long term, especially to provide electricity in rural areas. Most of the electricity in India is thermally generated in power stations in comparison to nuclear and renewables. As on Mar 17, coal (60.13%) and natural gas (7.95%) are having an aggregate share of 68.08% in the total installed power station capacity in India. It is pertinent to mention that all the future energy policies listed in the soon to be published National Energy Policy (NEP) by Niti Aayog have been contrived, keeping the environmental concerns in mind.

(i) Reforms in Power Sector. While fertilizer industries are presently the largest consumer of natural gas at 31%, the demand from the power sector (presently 28%) is expected to increase in future and would be driven, not only by the rising cost of imported coal and associated environmental concerns but also by increased domestic gas supply and power sector reforms. In the case of natural gas, the import bills are still high but the ill effects are much lesser compared to coal.

(ii) Greenhouse Gas Emissions vs Methane Leaks. High efficiency natural gas-fired power stations produce up to 50% lower greenhouse gas emissions than the existing latest technology black coal-fired generators. Higher heat content, lower carbon intensity, and higher overall efficiency of natural gas in comparison to coal, makes it more sustainable. However, methane which is a super-potent greenhouse gas that is leaked and vented from the fossil gas supply chain can seriously undermine the emissions reductions of burning fossil gas in place of coal.

(iii) Expensive Infrastructure. Further augmentation of natural gas in the energy mix requires additional onshore facilities which are quite expensive to build and require a huge investment. With only four LNG terminals at present, the anticipated expansion in LNG imports will be matched by a similar jump in the re-gasification capacity as a result of commitments made in recent years.

(b) Dependency on Imports. As discussed earlier, the production from domestic sources will not be sufficient to meet the energy requirements and therefore has to depend on imports. It will be a constant endeavor for India to reduce its import dependency on hydrocarbons. Accordingly, the Government had constituted an experts committee under the Chairmanship of Dr. Vijay Kelkar, former chairman of the Finance Commission of India and a renowned economist, to carve out a roadmap for reduction in import dependency in hydrocarbon sector by 2030. The committee submitted an extensive report in Dec 13, with a series of recommendations. The Government has made few changes in extant policies based on the recommendations as a start point.

(c) Technology. Due to lack of suitable technology for the exploration and production, the total domestic production of natural gas in India is a very small fraction of the available reserves. India also lacks technology for the cost-effective extraction of gas from non-conventional reserves such as shale gas, CBM etc., where the global players have made significant progress. Strengthening of R&D programmes, foreign collaborations etc. are the need of the hour for sustained production from these reserves.

(d) New Age Explorations. Natural gas exploration from non-conventional sources has not been accorded precedence by the Government for a long time. Exploration of these unconventional hydrocarbon resources needs to be undertaken vigorously, considering the requirement of long-term availability of natural gas. Frameworks followed by the global players in the path-breaking development of shale gas needs to be understood and incorporated towards achieving self-reliance in the indigenous production of oil and gas sector. Towards this, the draft policy for exploration and exploitation of Shale Oil and Gas in India was initiated in 2012. However, the Government took over six years to finally approve the policy framework for exploration and exploitation of unconventional hydrocarbons in Aug 18. This is expected to spur new investment and reduce import dependencies too.

(e) Pipeline Infrastructure. The gas pipeline network in the country is concentrated in the western region, which is the hub for domestic production and also the location of LNG import terminals. By default, the western region is the highest consumer, whereas the distribution of pipeline network remains significantly low in the southern, eastern and central parts of India. The gas pipeline network is expected to be doubled to 30,000 km in the next few years but is still considered grossly inadequate, given the geographical expanse and immense requirement of the country. The development of the trunk pipelines for cross-country transportation and city-gas distribution network needs to be accorded priority to remove the regional balance in the country. However, despite the devised increase in the footprint of pipeline infrastructure, India’s energy security can be optimally achieved only if these pipelines operate at 100% capacity, which is presently not the case.

(f) India’s Gas Trading Hub. To date, India does not have a gas trading hub of its own. The Government fixes the price of domestically produced natural gas using price prevalent in gas-surplus nations like US, Canada, UK, and Russia, wherein LNG import prices varies based on market forces. However, in order to further boost the consumption of natural gas in the country, Government is considering the establishment of a Gas Trading Hub/ Exchange (GTHE), where natural gas can be traded, and supplied through a market-based mechanism instead of multiple formula driven prices. This would allow for better price discovery for domestic as well as imported gas and certainly help the domestic market to mature to its full potential. It could eventually become Asia’s pricing hub in the future, competing with other trading hubs in Asia.

(g) Trans-National Pipelines. India is yet to source natural gas from her gas-rich neighbours through a trans-national pipeline. Despite having realised the importance and initiated three projects almost two decades back, not one has reached the Indian borders. Two of them did not fructify over issues of pricing and transit fees, whereas construction of TAPI pipeline is under progress and is behind schedule. The geopolitical and geostrategic hurdles have to be set aside and the neighbouring nations must come together for secure and affordable energy, keeping in mind the mutual interests.

(h) Efficacy of HELP. HELP was introduced in 2016 as an investment-friendly policy to allow the offshore energy producing companies to market and sell their products with minimal government interference. The first auction under the new scheme was held in Jan 18 and the results were declared in Aug 18. Vendata Ltd. won exploration licenses for 41 out of the 55 oil and gas blocks auctioned, with ONGC winning barely two since it placed extremely conservative bids. No foreign company participated in the auction and Reliance Industries too, kept out of the bidding. It is somewhat evident that the new policy has not panned out the way the Government envisaged, leaving a lot more desired for the E&P activities needs to be scaled-up.

(j) Gas Utilisation Policy. The existing Gas Utilisation Policy actually contravenes the right of the NELP producers to trade gas on purely commercial basis, since the gas is allocated by the Government to certain priority sectors first. Industrial consumers and Independent Power Producers (IPPs) rank at the bottom of the priority list, thereby smothering the potential gas demand in the country. Moreover, further upstream investments are restricted as the high cost of off-shore exploration cannot be recovered from the price sensitive priority sectors.

2. As stated by PNGRB in its Vision 2030 document released in 2013, the Government expects the share of natural gas in the energy mix to be 20% by 2025. However, the large difference between the present day 6% share and a tall order of 20% clearly depicts the difficulties faced by the Government to ensure a well-managed expansion of energy supply and striking the correct balance in the energy mix. While the effects mentioned in the above paragraphs will form the foundation for India’s future foothold in the growth of natural gas market, a major contribution has to come from the untapped domestic reserves through both conventional and unconventional means. Therefore, the natural gas policy must be robust and informed, continuously factoring for the changes in market forces.


3. Climate change is a real and serious issue. Currently, about half of the CO2 released from the burning of fossil fuels is not absorbed by vegetation or the oceans and remains in the atmosphere. But there are great examples from where lessons can be learned. For instance, the biggest decline in CO2 emissions came from the US which has registered the third consecutive year of decline. While coal-to-gas switching played a major role in reducing emissions in previous years, the drop in 2016 was the result of higher renewables-based electricity generation and a decline in electricity demand. Few of the steps that the Indian Government should forcibly ensure are:-

(a) Foreign Investments. A major reason which is hampering the growth of the gas sector is the lack of foreign investments and their involvements in Indian E&P acreages. Despite being an attractive market in terms of demand potential, India loses on the critical extraneous participation due to inherent policy and regulatory challenges. Tax reforms, Government concessions, R&D programmes, etc. needs to be adopted in order to attract foreign investment.

(b) Domestic Production. Attaining self-reliance through enhanced domestic production by stepping-up of exploration efforts to fully exploit unexplored basins in order to enhance gas productivity in a time bound manner is critical.

(c) Pipeline Network. Further augmentation of the gas pipeline network needs to be actively undertaken in order to ensure access to gas for all prospective industrial locations across the country. Another critical requirement is the running of these transmission lines at full capacity which can only happen if more avenues for end users are created.

(d) City Gas Distribution (CGD). Despite market potential, the City Gas Distribution network has not blossomed due to either non-availability of a transmission line in a particular geographical area or delays in the ongoing project, posing as a risk to prospective CGD developers.

(e) Transportation Sector. The Government launched the first LNG fuelled bus in Aug 16 in Kerala, as part of the plan to use LNG directly for mass transportation. Despite having initiated the pilot project two years ago, not much of a progress has been made till date including the utility of CNG for small vehicles. This sector too faces infrastructure-related challenges similar to those of CGD. Vehicle conversions form liquids to gas have been limited due to uncertainty and perceived inconvenience, and therefore, needs to be aggressively promoted, made more attractive, and to some extent, forced upon. On a longer run, LNG is economical than petrol and diesel, while the domestic gas currently used in CNG can be better utilised to cut the subsidy burden of the government.

4. Renewable energy is obviously very compelling due to its long-term low-cost and environmental benefits. Climate goals require the power sector to be decarbonised by mid-century, which means usage of fossil fuels, including both coal and natural gas, must be phased out and not increased. Therefore, it will be a constant challenge for the country to ensure energy security and at the same time, contribute effectively towards cleaner and greener future with little or no pollution. But till such time the roadmaps are well established, coal will continue to remain the backbone of India’s energy mix towards ensuring long-term energy security, whereas the Government would continue to make forays towards achieving a gas-based economy.

5. In conclusion, this thesis only touched on the topic of natural gas business of India, based on the current market scenario and known conditions. The potential for further research in this area is great and opens a completely new set of questions related to policies and reforms of the government in the years to come.

How to place an order?

Take a few steps to place an order on our site:

  • Fill out the form and state the deadline.
  • Calculate the price of your order and pay for it with your credit card.
  • When the order is placed, we select a suitable writer to complete it based on your requirements.
  • Stay in contact with the writer and discuss vital details of research.
  • Download a preview of the research paper. Satisfied with the outcome? Press “Approve.”

Feel secure when using our service

It's important for every customer to feel safe. Thus, at The Homework Writings, we take care of your security.

Financial security You can safely pay for your order using secure payment systems.
Personal security Any personal information about our customers is private. No other person can get access to it.
Academic security To deliver no-plagiarism samples, we use a specially-designed software to check every finished paper.
Web security This website is protected from illegal breaks. We constantly update our privacy management.

Get assistance with placing your order. Clarify any questions about our services. Contact our support team. They are available 24\7.

Still thinking about where to hire experienced authors and how to boost your grades? Place your order on our website and get help with any paper you need. We’ll meet your expectations.

Order now Get a quote