Sanjay Kumar Kar and Sayandeep Chandra
The positive linkage between energy and development has been fairly established. Energy is a key parameter for socio-economic development and researchers have established that its scarcity limits prosperity. Arguably availability and accessibility to modern energy could pull millions out of poverty.
India — the world’s second-largest populous country, sixth-largest economy and third-largest energy consumer — is highly dependent on energy for its development and growth. In 2017, its total energy consumption of 753 million tonne of oil equivalent (MTOE) was higher than Central and South America.
In 2017, India registered a 4.6 percent growth in primary energy consumption over the previous year. During 2006-16, its energy consumption growth rate (5.7 percent) was higher than China’s 4.4 percent. India’s over dependence on fossil fuel emerges as a bigger concern than its lower per capita energy consumption.
Coal and oil, with a share of 57 percent and 29 percent, respectively, dominate India’s energy mix. On the contrary, natural gas — the cleanest fossil fuel — contributes just over 6 percent in the energy mix compared to the global average of 24 percent. Renewable energy is expected to drive future energy needs. However, during the transition process, natural gas may serve as a bridging fuel.
Prime Minister Narendra Modi has been focusing on the environment and is committed to a carbon neutral economy. India’s Intended Nationally Determined Contribution (INDC) aims for successful reduction in carbon by 33-35 percent as a percentage of GDP by 2030. In the context, natural gas is stated to play an important role in minimising India’s carbon footprint.
From a 6 percent share in 2017, the Centre aims to expand share of natural gas to 15 percent by 2022 and 20 percent by 2030. A 9-14 percent increase in natural gas consumption will have a multiplier effect on the oil & gas value chain, consuming industries and infrastructure. The Centre is striving hard to build a much stronger foundation for a gas-based economy.
Considering the current economic growth rate, India’s primary energy consumption is estimated to touch 940 MTOE by 2022. During this period, demand for natural gas will swell to 141 MTOE — almost threefold of 47 MTOE in 2017. In 2017-18, domestic natural gas production was 32.6 BCM compared to 52 BCM in 2010-11. Dwindling gas production from the Krishna-Godavari (KG) basin, which was supposed to give a big boost to India’s gas industry, disappointed the producer, pipeline infrastructure developer, consuming industries and the government.
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