$60 Billion Natural Gas Grid: Challenges and Prospects

Prime Minister Narendra Modi announced an ambitious project of increasing the gas pipeline network from 17,500 km to 34,500km. This project will require an investment of 60 billion dollars, which is approximately 4.5 lakh crores in the Indian Rupees. Such a mammoth expenditure on a novel energy source is the need of the hour. The world is moving to cleaner sources of energy, and investments are directed to non-polluting sources.

Natural gas is a naturally occurring hydrocarbon, which is made primarily of methane (CH4), and varying quantities of other Alkanes along with small amounts of carbon dioxide. It is found along with other fossil fuels and escapes while drilling underground for petroleum sources. The gas is thus a non-renewable source of energy. 

Despite coming under the bracket of the much-defamed non-recyclable energy source, India needs to invest to reap its benefits. This is because the only by-product of natural gas is water and carbon dioxide, and we do not have to deal with pollutants such as Sulphur dioxide, Nitrogen Dioxide, etc. Also, India today has the dubious distinction of being the third-largest emitter of greenhouse gas after the USA and China. Switching to natural gas will help the Indian energy roadmap to move to greener pastures. It will also be in line with India’s energy commitments at COP 21, that is, the Paris Convention of 2015. We have pledged to reduce carbon emission by 33-35% as compared to 2005 levels in India.

One can go on listing various benefits of switching to natural gas, besides reducing the carbon footprint. With the goal of Atmanirbhar Bharat at the forefront, investing in pipeline infrastructure will be a step forward in self-reliance, and decreased dependency on imports. Also, pipelines are an economical, safe, and hassle-free mode of gas transportation. Transparency and speedy progress in the natural gas sector will promote ease of doing business. This in turn will generate employment in gas-consuming sectors and will aid investment in industries downstream, such as City Gas Distribution.

To be adopted on a large scale, a clean energy fuel must also prove its utility at par with the conventional sources of energy. Living up to the challenge, we see applications of natural gas in the day-to-day activities of industries and households. Manufacturing, fertilizer industry, urea manufacturing, and other commercially important chemicals are manufactured by using natural gas as an energy source. Other applications include electricity generation, cooking gas at home, and fuel for vehicle transportation. 

Total consumption of natural gas in India stands at 148.02 Million Metric Standard Cubic Meter Per Day. 

The government is looking forward to achieving the goal of clean energy, by increasing the share of natural gas in the primary energy basket of India from 6.2% to 15% by 2030. Globally, the share of energy production from natural gas stands at 23.4%. India thus has a lot of catching up to do when compared to its global counterparts. The $60 billion gas pipeline project is in line with this goal. 

The execution of the gas pipeline project envisioned by the Prime Minister will be an uphill task because the scope of natural gas is severely limited in India at present. Firstly, the gas fields are concentrated in only a few pockets across the country, namely in Bombay high, offshore Mumbai coast, Tripura and Assam in the North East, and Krishna Godavari Basin down south. Secondly, the pipeline system is insufficient, given that it connects only the northern states. The existing pipelines are also grossly underutilized. For example, GAIL has noted, it can use only 47% of its existing 11,500km gas pipeline capacity. This leads to a low return on investment for companies, thus disincentivizing more companies to carry forth natural gas exploration. Due to these infrastructural hiccups, we have to import Liquified Natural Gas (LNG) from the USA and Qatar, through the Open General License (OGL). Also, we have only six natural gas refueling terminals presently, including those at Mundra, Ennore, etc.

Apart from the above, there are other pressing issues the government must address before utilizing the taxpayer’s money to construct a pipeline. It is noteworthy that Petroleum, including natural gas, falls under the Union List in the Constitution of India. This implies that only the central government can make laws and take decisions in the gas energy department. This leads to clashes in land acquisition at the local level, further delaying gas projects. Obtaining permission to lay the pipelines is only one of the hurdles, following which safety issues of the workers become a major concern given the explosive nature of natural gas, including accidents due to human error and technical fault.

Apart from the impact on human beings, drilling to explore gas can have major repercussions on the marine habitat. Marine life is already suffering due to excessive oil drilling and oil spills, added to which exploring natural gas can further deteriorate their habitat. We have often heard that Whales lose their way due to disturbance in the communication frequency and land up getting stranded. The fish and coral present on the immediate offshore are also declining. One of the primary causes of these disasters is excessive human interference due to drilling and exploration. 

To address these issues, the government has brought about various policies and made clear its intention to expand natural gas pipeline infrastructure. In February 2020, the union government declared its plan to expand the gas infrastructure as a part of the annual budget. Taking the government agenda forward, the Cabinet Committee on Economic Affairs has approved the ‘Natural Gas Marketing’  reform in November 2020. Recently, an investment of 70,000 crores is being made along the east coast. Further, the Ministry of petroleum and natural gas has released a draft city gas distribution pipeline. It may be adopted by City Gas Distribution (CGD) Network. Reduced road tax and VAT will also be offered to vehicles running on natural gas. All these are proactive measures, taking us a step ahead in the right direction towards a gas-based economy.

Despite these ventures, a lot is left to be achieved. The central government can start by connecting gas sources to gas consumption domains. The gas lines are presently distributed unevenly across the country, leading to uncertainty of a smooth supply of gas. India will also have to invest in technology that facilitates deeper drilling, and engage in large-scale import tie-ups till domestic pipelines are fully functional.

It’s a common idiom, that the proof of the pudding is in the eating. We are yet to see tangible outcomes from this energy source, which is still in its nascent stage. To reap the benefits, Natural Gas has to be a viable source of energy, and India needs to balance affordability, access, energy security, and environmental sustainability. This must be accompanied by developing requisite infrastructure in the form of terminals, stations, and pipelines.