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Potential of Unconventional Sources of Natural Gas

“Potential of Unconventional Sources of Natural
Gas in India”
Dissertation submitted to college of Management and Economic Studies for the
partial fulfillment of the degree of

MBA (Energy Trading)
Guided by
Surbhi Arora
Asst. Professor
College of Management Studies
University of Petroleum and Energy Studies
Submitted by –

Mohit Sharma
Enrollment no : R590211017
Sap ID: 500014825

College of Management and Economic Studies (CMES)
University of Petroleum and Energy Studies (UPES)
Dehradun, Uttrakhand (UK)
India (UK)
2011-13
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Potential of Unconventional Sources of Natural Gas
Acknowledgement
I acknowledge with my deep gratitude, from the bottom of my heart to the almighty and a
number of people (my parents, siblings, MBA Energy Trading course faculty) who always stood
by me at every and each stage of this project and helped me a lot to stay put motivated and keep
throughout this project.
I owe a debt of my gratitude to my mentor assistant professor Surbhi Arora, who despite of her
busy schedule, guided me in this project (with a background of extensive research and years of
study of Shale Gas, Coal Bed Methane and Gas Hydrates), provided suggestions and also shared
her experience which helped me in analyzing diverse aspects of this work
Last but not the least; I would like to thanks my peers who were in some way supporting me all
through the prevalence of this assignment.
*This online version report is redacted, baseline surveys and analysis is not covered.
© Freelance Talents, Mohit Sharma

Mohit Sharma
R590211017
MBA Energy Trading (2011-13)
University of Petroleum & Energy Studies
Dehradun

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Potential of Unconventional Sources of Natural Gas
Executive Summary
Depletion of conventional resources, and increasing demand for clean energy, forces India to
hunt for alternatives to conventional energy resources. Intense importance has been given for
finding out more and more energy resources; specifically non-conventional ones like CBM, shale
gas & gas hydrates, as gas is less polluting compared to oil or coal.
The Shale Gas revolution in past decades triggered the research and development of
unconventional sources of energy along with Shale Gas like Gas Hydrates, Coal Bed Methane
and Tight Sand Gas. With huge natural resources and diversity India have nig potential resources
of unconventional sources of gas and gradual development is going on to exploit these resources
and shift Indian energy usage pie from conventional sources to unconventional sources which
will reduce India’s dependence on oil and gas imports and provide a way for sustainable
development of the country, economy for an extended period of time. The gas demand in India is
limited by its access to gas supplies based on domestic production and imports availability. If
India can produce more gas than it can reduce its coal imports which is environmentally more
unfriendly, its gasoline consumption through the use of compressed natural gas, and its demand
for LPG through piped natural gas to meet residential cooking and heating requirements, etc.
Natural gas is a versatile fuel and more environment friendly. Unfortunately, Indian government
has not been able to implement the right kind of gas policies even after the recommendations
given by multiple commissions. The current gas sector gives plenty of opportunity for rent
seeking because of extensive government control.
In the recent bidding process uner the New Exploration Licensing Policy separate blocks for
Shale Gas as well as Coal Bed Methane were offered. Under the aegis of the Ministry of Earth
Sciences (MoES), GoI, a comprehensive research-oriented gas hydrates program has been
launched emphasizing the scientific and technology development for identifying promising sites
on regional scale and estimating the resource potential, studying the impact of dissociation of
gas-hydrates on environment, and developing environment-safe technology for production.
Government will carry in future other similar bidding processes and rounds. The National
Geophysical Research Institute (NGRI) and National Institute of Oceanography (NIO) are
pursuing the scientific objectives for the identification, delineation and evaluation of gashydrates
in various offshore basins. While the National Institute of Ocean Technology (NIOT) is
developing remotely-operated vehicles and autonomous coring systems for validating the ground
truth, and viable technologies for producing gas from gas-hydrates. Coalbed methane is
generated during coalification process which gets adsorbed on coal at higher pressure. However,
it is a mining hazard. Presence of CBM in underground mine not only makes mining works
difficult and risky, but also makes it costly. Even, its ventilation to atmosphere adds green house
gas causing global warming. However, CBM is a remarkably clean fuel if utilized efficiently.
CBM is a clean gas having heating value ofapproximately 8500 KCal/kg compared to 9000
KCal/kg of natural gas.

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Potential of Unconventional Sources of Natural Gas

Table of Contents
Part

Topic

Page

1

Research Methodology
Research Design
Objective of Study
Data Collection
Significance of Study
Review of Literature
Indian Energy Scenario
Background and Introduction
Resource Exploration and Categorization
Energy Security and Related Aspects
Research and Development in Energy Sector
Indian Geography
Coal Bed Methane
Introduction
Indian and Global Scenario
Gas Hydrates
History & Introduction
Gas Hydrates in India
National Gas Hydrates Program
Tight Sand Gas
Shale Gas
Introduction
Characteristics
Shale Gas in India
General Methodology for Exploration
Draft Policy for Exploration and Exploitation of
Shale Gas

7
7
7
8
8
9
10
10
24
33
41
43
47
47
49
57
57
60
62
74
76
76
79
82
87

1.1
1.2
1.3
1.4
1.5
2

3
4
4.1
4.2
5
5.1
5.2
6
7
7.1
7.2
7.3
7.4

7.5
8
9

Conclusion and Recommendations
Bibliography and References

91
97
98

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Potential of Unconventional Sources of Natural Gas
List of Figures and Tables
Figure/Table

Description

Page

1
2
3
4
5
6
7

Primary Energy Sources (India)
Preferential Fuel Table
Environment Indicators Table
Health & Safety Indicators Table
CBM Resources : Global Perspective
Major Coal Fields in India
CBM Blocks in India

9
19
28
29
46
47
48

8
9
10
11
12

Stratigraphic Horizons (Coal)
Gas Hydrates Reserves (World)
Gas Hydrates Reserves (India)
Tight Sand Gas Exploration
Shale Gas in India

50
54
60
71
81

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Potential of Unconventional Sources of Natural Gas
Part 1 - Research Methodology
Research is a tool to interpret knowledge and data and further increasing the value,
understandability of the given matter and statistics. Research is known as “ the manipulation of
things, concepts or symbols done for the sole purpose of generalizing to extend, correct or verify
knowledge, whether that knowledge aids in construction of theory or in the practice of an art.” In
this study 4 type of unconventional sources of natural gas are taken into consideration.

1.1 Research Design
The research is analytical and descriptive in nature. Main purpose of descriptive research is the
description of state of affairs as they exist at present and tracing the the course of their history.
The feature of this method is that the researcher has no control over the variables and the
researcher can only project what has happened or what is happening. The research is analytical in
nature because the usage of data, facts and information already available has been done and an
analysis has been done to the available data with the help of various interpretational and
statistical tools.

1.2 Objectives of the Study


To study the various unconventional resources of natural gas in India.



To analyze the various exploration techniques, methods and movements.



To suggest a legal framework suiting the specific needs related to unconventional gas
resources.



The study of the shale gas extraction and production technology used by the various
countries so as to focus on the Indian scenario of shale extraction.



To understand the existing processes and techniques for Shale Gas, CBM, Gas Hydrates
Production.



To analyze the historical trend of such resources of natural gas & explore the leading factors for
the same.
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Potential of Unconventional Sources of Natural Gas


To study the factors those affect the production, transportation and use of such resources of gas

1.3 Data Collection
Data for the research has been collected from both primary and secondary sources. Primary data
has been obtained from Industry professionals, Working class and the Business class of the
society through a questionnaire. Semi-structural questions were asked from the executives i.e.,
Delphi Method. Secondary data is further cross-referenced to primary data in order to
process triangulation and from different articles & reviews of current academic literature &
information gleaned from published industry sources. Secondary Data has been collected
from various sources such as Reports, Journals, Newspapers, Magazines and Internet etc.

1.4 Significance of the Study
Significance of the study is that it will provide an in depth understanding about various aspects
of Coal Bed Methane, Gas Hydrates, Tight Sand Gas and Shale Gas which includes initial
surveys, how the natural gas is extracted from the different formations lying underneath the
earth’s surface, production techniques, governmental policies and future predictions. The study
will be helpful in understanding the impact of different kinds of natural gas in the India’s energy
portfolio, change in Indian energy usage pie and hurdles faced in the production and
development of shale gas, CBM, Gas Hydrates and how it can be avoided. The study would look
upon the policies and regulations that should be adapted by India. And the study will help in
finding the potential of shale gas in India.
1.5 Literature Review
The basic overview of Tight Sand Gas is provided by Chandra, Avinash, 2009, Tight Sand Gas :
Potential and Prospects. Gas Hydrates policies, extraction, potential reserves and related
activities are listed in, P.M., 2010, Methods of Estimation of Gas Hydrates, Coal Bed
Methane Concentration, GUPTA, H.K. and SAIN, K. (2011) Gas-hydrates: Natural Hazard.
In: P. Bobrowsky (Ed.), Encyclopedia of Natural Hazards. The challenges and regulatory
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Potential of Unconventional Sources of Natural Gas
regimes that India might face when Shale Gas acreages are taken into consideration. According
to the report “A strategic imperative for India”, India’s current gas demand is limited by its
access to natural gas supplies which is based on domestic production and imports availability are
looked upon by Deloitte (India).
Following books, reasearch ebooks, papers formed base for the research activity.
*) - Energy and Security in South Asia: Cooperation or Conflict?
*) – ONGC Bulletin (2007-2011)
*) - Investing in Renewable Power Market (2009).
*) - Assessment of Potential Shale Gas Resources.
*) - India Energy Report – 2012
*) - Power Plays: Energy Options in the age of Peak Oil.
*) – Energy Market and Different Legal Frameworks.

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Potential of Unconventional Sources of Natural Gas
Part 2
Indian Energy Scenario
2.1 : Background and Introduction

India’s Combined Installed Capacity – 215 GW (which is fifth largest in world)
India’s energy pie is largely dependent on thermal power plants and non-renewable sources of
energy and for sustainable development it is essential to increase the share of renewable
sources of energy. The per capita avg. annual domestic electricity consumption in India was 95
(year - 2009) kWh in rural areas and 287 kWh in urban areas for those with access to
electricity, in contrast to the worldwide per capita annual average of 2650 kWh and 6250 kWh
in the European Union. India's total domestic, agricultural and industrial (all primary, secondary as
well as tertiary sectors) per capita energy consumption estimate varies depending on the source. Two
sources place it between 400 to 700 kWh in 2008–2009. As of January 2012, one report found the per
capita total consumption in India to be 778 kWh.

Installed Capacity
Non-Renewable Sources – 87.5% (7/8)
Renewable Sources – 12.5% (1/8)

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Potential of Unconventional Sources of Natural Gas
Electricity has become an important aspect, the life blood of the modern world, without which
the world will come to almost a virtual standstill. Any sluggishness in the growth of the
electricity industry in any part of the world can throw the region far behind other regions in
industrial, economic and social growth. Thus, power has been widely recognized as one of the
key factors of infrastructure development, for a sustained growth of the country.
Power/Electricity is a primary input factor on which the progress of the economy of a country
largely depends. Full utilization of other input factors, such as manpower, land including
irrigation, and capital-related resources of an economy depend upon the availability of
electricity. In other words, it is not only a key input factor but it also plays a strategic role in
utilizing fully the other resources towards the progress of the economy. In addition, electricity
has become an essential factor in improving the social conditions and welfare of people. Thus,
power is an input essential to the integrated economy of the country. Electricity, therefore, acts
with a multiplier effect. Any shortfall in the availability of such a significant and strategic input
factor will make the betterment of economy of a nation a distant hope. Thus, electricity is the
most essential and vital ingredient for the growth of the nation in the social, industrial,
commercial, and agricultural sectors. Hence a balanced development of electricity was
identified as an important goal. Well recognized as ‘the industry of industries’ or the as the
‘mother industry’, electricity industry deserves priority in development and necessary support
for sustainability during the planning process by the Government.
Also, in the social field, power maintains its supremacy on all fronts, from daily needs and
comforts-entertainment to as basic as agriculture and kitchen operations. The role of power
sector in economic development is so tremendous that numerous economists very often
establish a one-to-one correspondence between energy and economic development. The
considered view of many of the influential groups of experts is that the poor state of affairs in
infrastructure, including power, is one of the basic maladies of tardy economic growth, a
volume or multitude of problems are rising up in the field of electricity industry. This has
attracted keen attention from policy makers around the world and rigoros efforts to tackle
these problems have become the order of the day. Industrial growth has been so fast and
explosive in these years that the increase in energy supply could not maintain an equal pace.
The main problems faced by the world are rapid depletion of non-renewable energy sources,
also known as unconventional sources increasing costs for energy, and inability to create
sufficient number of ROI for growth. These problems have created a shortage of power in both
quantity and quality. Electricity industry was mainly treated as a Government business all over
the world, considering its importance as a vital infrastructure for the growth of the country. But
growth in the sector, however impressive it was, looked insufficient to cope with the impulsive
growth in industrial and other sectors. Consequently, the whole vision on the subject has been
undergoing a swift change. A major shift in the electrical industry worldwide is the thinking that
it is to be managed by the private sector rather than by the government. Thus, an era of reform
for the power sector has opened up.

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Potential of Unconventional Sources of Natural Gas
The swift ability to cater to the growing demands of the society and maintaining a sustainable
pattern of functioning are few of the main challenges before the industry. Considering its
importance as the vital infrastructure for the industrial, economic and social growth of
humanity, experts, engineers, economists and policy formers of various countries are working
hard for identification of the possible flaws and remedies for them.
Power is extracted or derived from various sources to meet many requirements of humans in
this modern age. Energy is used for lighting/illumination, heating, motive power in automobiles,
ships & aero planes, water pumping, refrigeration & air conditioning, cooking, motive power of
various appliances/machinery, electronic data storage, etc in all sectors such as agriculture,
industrial, commercial and domestic sectors. The value of energy minerals produced in India is
more than 85% (about 5/6) of all the minerals produced. In addition India imports large
quantity of fossil fuels spending huge chunk of its exports income. These energy minerals are
also used as raw material in production of industrial products but the usage as source of energy
is many folds.
The following are the primary energy sources





Thermal energy (India is largely dependent on this source of energy): Fossil fuels (ex: coal,
natural gas, crude oil & its products), nuclear fuels, biomass (including wood), geo thermal
energy, industrial by products (ex: LPG, coke oven gas & blast furnace gas), etc.
Hydro power(Development of this source has been steady over the years): Hydro power
energy excluding pumped storage operation.
Non conventional energy: Solar energy, wind power, wave power, tidal power, animal
draught power, etc in which due to the diversity possessed by India it has huge potential
but in the lack of techniques, methods to tap those sources or make a conversion the
power derived is far less than the actual potential, even when compared to nations which
do not get the amount of sunlight and related diversity factors associated with the
sunlight.

However, energy exists in many forms such as electricity, thermal/heat/chemical energy,
potential energy, kinetic energy, etc. Power is the most coveted form of energy since it is
simple to convert in to other energy forms at very high-conversion efficiency and least effects
on environment with the help of motors, furnaces, etc. Also transmitting electricity by cables /
conductors is comparatively simple and clean method. All the primary energy resources are
used to produce power as an intermediate energy before converting in to final power
requirements. The major drawback of power is that it cannot be stored in bulk for using in
mobile/transport applications. So the liquid fuels are predominantly used in transport sector.
The countries which are endowed with crude oil (considered source of liquid fuels) reserves are

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Potential of Unconventional Sources of Natural Gas
considered as potentially rich countries irrespective of non energy minerals and availability of
human resources.

These power fuels are not uniformly distributed on earth to meet their demand. Exploration,
extraction and transportation along with final conversion of fuels to ultimate energy is a very
highly capital intensive. They also emit pollutants such as dust, SOx, NOx and various green
house gases which are harmful to human beings health and long survival. All fossil or biomass
fuels contain carbon and hydrogen elements which are mainly contributing to heat energy
when burnt or oxidized. The carbon present in the solid/liquid form in these fuels is converted
in to gaseous form carbon dioxide. Continuous use of these carbonaceous fuels for meeting
ever increasing global energy consumption is gradually increasing the CO2 in the earth
atmosphere. Higher concentrations of Carbon di Oxide in the earth atmosphere will aid the
green house phenomenon or global warming. So carbon derived energy is gradually
discouraged. Coal emits 95% of heat energy from its carbon content whereas natural gas (NG),
petroleum fuels & bio mass emit less than 50% of heat energy. Global warming point of view,
coal is considered as main culprit.
India is endowed with vast coal reserves though other conventional fuels are not adequately
available. India is also endowed with abundant non conventional energy resources such as
Thorium nuclear fuel and solar energy but commercially viable technologies are not available to
harness these resources on large scale. The various energy resources used in India are given
below Petroleum products: These are derived from crude oil which India imports 80% of its
requirements. Diesel, petrol, etc are used in transport sector as motive fuel for road vehicles,
locomotives and ships. Many of these products are also used as raw material in the
manufacture of organic chemicals, synthetic fibers, synthetic rubbers, plastics, fertilizers, etc.
which have wide application in present day civilization. When other fuels are not available,
these petroleum products are also used for electricity generation, heating and lighting purposes
as alternative fuels. The major advantage of these fuels is their transportability by the transport
networks such as roads, railways and ships. They can also be stored easily for mobile and
stationary applications. Due to these advantages, petroleum products are extensively and
intensively used to power all mobile vehicles covering road, rail, marine and air transport
sectors.
Natural gas: This is a gaseous fuel and relatively less polluting fuel. Unlike liquid fuels, its inland
transportability is possible by pipeline network only and maritime transport is possible by
refrigerating in to liquid below minus 160°C temperature. In maritime transport of Liquefied
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Potential of Unconventional Sources of Natural Gas
Natural Gas (LNG), heavy investments are incurred in liquefaction, transport and re-gasification
processes. NG has commercial limitation in transporting across the seas. Being a clean fuel and
ease of use, it is preferred fuel especially in domestic and commercial sectors. To control the air
pollution in cities, Compressed Natural Gas (CNG) is increasingly used in intra city transport
vehicles in place of diesel/petrol fuels. Natural gas can also be used in Iron manufacturing to
reduce the coking coal consumption in blast furnaces. At present, the available NG is mainly
used in fertilizer manufacture and power generation.
LPG: Liquefied Petroleum Gas (LPG) is extracted from natural gas or produced as a by product
from crude oil refining. This gas can be easily liquefied by compressing it to 8 bar pressure at
ambient temperature. In addition to pipe line transport, LPG is also transported and stored in
pressurized cylinders / tanks. LPG is also clean fuel similar to natural gas and also can be stored
in bulk for use in mobile vehicles. The indigenously available LPG is not adequate to meet its
ever increasing consumption. In India, most of the LPG produced and imported is used as
cooking fuel.
Nuclear Fuels: These fuels are used to generate electricity in addition to meet military
requirements. The conventional nuclear fuels are Uranium and Plutonium which are used for
electricity generation. India does not have substantial conventional nuclear fuels to depend on
these fuels for its electricity requirements. However India is blessed with substantial Thorium
reserves which can be used for electricity generation once the relevant technology is perfected
for commercial level use.
Using nuclear fuels is also fraught with environmental problems such as radiation leakages,
disposal of spent radioactive fuels & equipment, decommissioning of nuclear reactors after
their useful life, etc. The initial capital requirements and the decommissioning expenses of
nuclear power plants are very high. Some critics say that the electricity consumed in
establishing and operating a nuclear power plant exceeds the electricity it can generate in its
life time.
Hydro power: Electricity is generated by harnessing the water energy when water is descending
in the rivers from high level to lower level. Hydro power is very clean energy. Hydropower
plants installation submerges vast area of land and creates social and environmental problems
such as displacement of population, submergence of forests, etc. The hydro electricity potential
in India is approximately 85,000 MW at 60% load factor. Most of the untapped hydro power is
located in North Eastern states. Another 1,00,000 MW at 60% load factor is available lying on
both sides of border between China and India which can be jointly harnessed in future.
Wind Power: Electricity is generated from the wind energy. The areas with wind speeds
exceeding 15 Km per hour is suitable for locating wind power generators. Wind power is also
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Potential of Unconventional Sources of Natural Gas
clean fuel but birds get killed when they try to pass through the wind generator rotor. There is
no control on electricity generation from these units as the power is generated depending on
erratic wind availability. India has nearly 10,000 MW wind energy potential at 60% load factor.

Wave energy: Wave power is secondary power from wind power. When the wind is blowing on
seas/ water bodies, some of the wind energy gets transmitted to water creating wave energy.
Till now wave energy is not harnessed for electricity generation on major scale. However there
are possibilities to harness wave and wind energy available on oceans to augment fresh water
availability and hydro electricity generation. Due to deference in solar radiation incidence on
earth surface, the atmospheric global winds are generated on land as well as on oceans. These
winds while passing over the seas pick up moisture and convert in to clouds. These clouds yield
most of the fresh water in the form of rains on the land mass. Often, rain fall is not adequate in
many regions/countries due to unfavorable conditions in the oceans such as ocean currents,
surface temperature, etc though the global wind patterns are not changing. The available wave
and wind power on the oceans can be utilized to enrich the winds with moisture irrespective of
nature’s vagaries. The oscillating water surface when waves are formed are used to pump sea
water few meters above the surface level and further atomized in to fine droplets / mist by
using wind energy. The mist spayed in to the winds would fully vaporize enhancing the humidity
of air / winds. The augmented moisture in the winds segregates in to clouds to yield more rain
subsequently on land mass.
The south west winds and north east winds are the sources of monsoon rains on Indian
subcontinent. South west monsoon winds come from Arabian Sea and cross the peninsular
India yielding rain and pass on Bay of Bengal and blow in to North India yielding rain again.
North east monsoon winds enrich with moisture while passing on Bay of Bengal and
subsequently yield rain in southern part of India. Though the augmentation of global/monsoon
winds with moisture is a gigantic infrastructure building task, it is technically feasible by
harnessing a fraction of renewable wind energy available on the territorial oceans. Land mass
becomes greener / rich in vegetation acting as carbon sequestration. Many countries face
severe water shortage frequently and many more countries are occupied by vast deserts
(middle east and north Africa) though sea is located adjacent to these regions.
Biomass: In agriculturally developed pockets of India, agro waste such as rice husk, crop waste,
baggassi, inedible plants and leaves, wood from old plantations, etc is available. Generally rural
masses consume bio mass for their cooking requirements. When it is found in surplus, it is also
used in electricity generation and process industry. Bio-mass also can be gasified to produce
synthetic gas, liquefied by fast pyrolysis process to produce bio-oil and carbonized by slow

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Potential of Unconventional Sources of Natural Gas
pyrolysis to produce charcoal. All these processes produce varying percentage of bio-char
(charcoal), bio-oil and bio-gas.
Biomass carbonization: This is well known technology to produce charcoal and town gas in
olden days. The biomass is carbonized either at low temperature (up to 600 deg C) or at high
temperature (up to 1200 deg C) in the absence of oxygen. The products of biomass
carbonization/slow pyrolysis are charcoal (25% by wt), 850 Nm3 town gas per ton of dry
biomass and organic liquid chemicals (30% by wt). The town gas contains hydrogen (45% by wt)
with gross calorific value of 3000 Kcal/Nm3.
Bio-oil production: Bio mass can be converted in to bio-oil / pyrolysis oil by the latest fast
pyrolysis technologies with conversion efficiency up to 70%. Bio-oil has only 50% of heating
value of crude oil and also unstable liquid. The bio-oil is rich in Oxygen content and also acidic
unlike crude oil and its derivatives. Extensive research is being done to make bio-oil suitable for
mobile vehicles though it can be used for stationary low and medium speed diesel engines and
gas turbines with minor changes. The production cost of bio-oil is around Rs 10 per kg when the
dry biomass cost is Rs 2.5 per kg.
Pyrolysis oil can be separated in to a water soluble fraction rich in oxygen content and a heavier
pyrolytic lignin. Pyrolytic lignin can be used as feed stock to produce naphtha, diesel, etc by
hydro-processing (i.e. reaction with Hydrogen). Hydrogen is produced from water soluble
fraction of pyrolysis oil.
The garbage collected in Indian cities and towns has higher water content and biomass. This
type of wet / watery garbage is converted commercially in to Bio-oil / Bio-crude by Hydro
thermal upgrading (HTU) method which is also a type of pyrolysis process.
Biomass gasification: Biomass is gasified in the presence of steam and air to generate producer
gas/synthetic gas. Most of the biomass is converted in to producer gas which is rich in hydrogen
(15% by wt) with gross calorific value of 1500 kcal/Nm3. In gasification process, the available
thermal energy is utilized to produce more hydrogen by splitting water molecules for optimum
hydrogen yield. The nutrients (nitrogen, phosphorous and potassium) present in the biomass
are accumulated in the produced ash which can be used as fertilizer.
Presently, the non woody surplus biomass such as inedible leaves, inedible crop waste, twigs,
etc are either burnt or allowed to degenerate in the fields emitting green house gases such as
methane and carbon dioxide. Cattle droppings, human excreta, household garbage, bagasse,
poultry droppings, chicken feathers, waste hair, used tires, waste paper, etc are also biomass
which can be used for producing bio-oil, bio-gas and bio-char. The spent dung from anaerobic
digesters (gobar gas plants) can also be used in production of bio-oil. In India, the dry inedible
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Potential of Unconventional Sources of Natural Gas
biomass availability is nearly equal to all the fossil fuels consumption which is approximately
750 million tons per year. This biomass quantity can produce bio-oil three times equal to India’s
crude oil imports and generate Bio-char of 200 million tons annually. The bio-char with heating
value 7500 Kcal/kg can replace all the mined coal consumed by its thermal power stations. The
bio-gas produced from pyrolysis process contains nearly 5% hydrogen by weight. The hydrogen
in the bio-gas generated can produce 50 million tons of Urea fertilizer which will transform
India in to Urea exporter after meeting all internal consumption.
Ethanol: Ethanol / ethyl alcohol is fermented from biomass which is rich in starch /
carbohydrates content. It is also consumed by humans in large quantities as liquor. Ethanol can
be used as transport fuel by blending in diesel and gasoline fuels. Presently ethanol is produced
from food grains and sugarcane which are costly and predominantly used as food source. The
economics of using food grains and sugarcane as fuel source is not favorable since they fetch
more value as food source in India. Sugar cane is a long duration irrigated crop and consumes
lot of water. Cultivation of sweet sorghum which is seasonal dry land crop is a better source of
biomass and Ethanol production in huge quantities for meeting the needs of transport fuel.
Bio-diesel: The inedible oil seeds produced by plants and trees can be the source of fuel for
mobile vehicles to replace costly imported diesel and petrol (gasoline) fuels. The non edible
vegetable oils extracted from Jathropa, Karanj (Hindi) / Honge (Kannada) / Koroch (Pongamia
pinnata), Algae, etc can be used directly by blending 20% oil in diesel fuel or can be converted
in to bio-diesel by esterification of these vegetable oils to replace diesel and petrol fuels totally.
Esterification is achieved by adding methanol or ethanol to the vegetable oils. The estimated
vegetable oil yields of bio-diesel crops are







Soybean: 0.4 tonnes oil/ha.year
Rapeseed: 0.8 tonnes oil/ha.year
Jathropha: 1-1.5 tonnes oil/ha.year (non edible)
Palmoil: 4 tonnes oil/ha.year
Koroch / Karanj: 3 – 4.5 tonnes oil/ha.year (non edible)
Algae: 10-25 tonnes oil/ha.year (non edible)

The most promising sources of bio-diesel are Algae and Koroch (Bengali) which need not
compete with other crops and natural forests for land, water, sunlight, etc.
Algae: Algae (pond scum) are tiny cellular plants suspending in water (fresh, brackish and sea
water) which absorb dissolved carbon dioxide in water to produce biomass by photosynthesis
with the help of sun light. Algae grow fast and many species of algae contain up to 60% of its
dry mass as Bio-diesel (lipids / fats). The de-oiled algae cake is rich in proteins and is good
source to augment proteins in cattle and poultry feed. Extensive research has taken place on
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Potential of Unconventional Sources of Natural Gas
algae cultivation in developed countries to demonstrate the farming technology but it could not
be commercialized in these countries because of limited favorable weather conditions and high
cost of labor. However India has favorable tropical climate to cultivate algae throughout the
year on its sandy coastal areas using abundantly available sea water or brackish water. The only
external raw material required is carbon dioxide gas in Indian climate. The gobar gas produced
in rural areas by using cattle dung contains 50% carbon dioxide gas and 50% methane. When
this gobar gas is used in electricity generation by diesel engines, the available exhaust gas is the
cheap source of carbon dioxide gas for algae cultivation in rural areas. The combustion gases
from Biomass / bio char burning can also be cheap local source of carbon dioxide gas. The
skilled labor cost in rural India is also nominal compared to western countries.
Algae cultivation is not new in India. Algae are used to treat the sewage water in natural
oxidation ponds to produce oxygen to meet the Biological Oxygen Demand (BOD). Algae
produced in the oxidation ponds are not yet harnessed for Bio-diesel production in India. Indian
climate is very much suitable for Algae cultivation similar to natural oxidation ponds. Spirulina
which is an alga rich in proteins content is commercially cultivated in India.
Koroch: Koroch in Bangladesh is a fresh water flooded tree. This tree can grow on lands which
are water inundated up to1.5 meters depth for six months at a stretch. The seedlings can
survive under water during the long submergence period. Koroch tree reaches 20 meters height
and lives for 100 years. The dry seed pods contain 25% toxic vegetable oil which can be used as
bio-diesel. Koroch / Honge is a tree native of India whose oil is used in illumination lamps in
olden days. Since Koroch is a flooded forest tree, it can be grown in our man made water
reservoirs up to a depth of 1.5 meters without the need to compete with land based food
crops. India has nearly 30,000 square km of manmade water bodies and many water storage
reservoirs are yet to be built to harness the water resources fully. The reservoir bed up to 1.5
meters depth are exposed for seven months in a year when the stored water in these water
bodies are used for irrigation, drinking water, etc,
India can become self sufficient in its energy requirements if one year oil imports cost (50
billion US$) is invested on pyrolysis oil and bio-diesel production technologies/infrastructure to
meet its energy needs. India is endowed with tropical climate to sustain these renewable and
carbon neutral energy resources.
Solar energy: The energy of sun light is used for electricity generation during day time. The
average solar radiation per square meter is one KW during day time. Clouds free sky is required
to generate solar power and also it needs vast unused area by farm lands, water bodies and
forests which also depend on sun light for their existence. Solar power generation on major
scale is not yet commercially proven. Though it is a clean energy, the materials used in solar
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Potential of Unconventional Sources of Natural Gas
cells may be source of soil and water contamination causing health hazards. India is blessed
with vast solar energy resources and substantial solar power generation is possible as the
technology matures.

Animal draught power: Animal power is extensively used in agriculture and transport in rural
areas. The draught animals such as bullocks and he-buffaloes can be used for generating
commercially viable electricity for meeting daily peak load demand. It will boost the rural
employment and income by using the idle time of the cattle for electricity generation. The
installation cost and time are comparatively low. In many countries & few parts of India also,
cows & she-buffaloes are used for draught power and can also be used for electricity
generation.

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Potential of Unconventional Sources of Natural Gas

TABLE – PREFERENTIAL FUEL
Purposes

Preferred fuels

Next preferred fuels

Least preferred
fuels

*Mobile military Diesel, petrol
hardware

Ethanol, bio-diesel

-

*Air transport

bio-diesel

Ethanol

ATF, HSK

Marine transport

Bio-oil / pyrolysis oil

LDO, HFO, bunker fuel, Nuclear fuel,
LNG

Civilian transport Bio diesel, CNG, LPG
vehicles

Battery
power/electricity

Diesel / petrol

Railways

Pyrolysis oil, Electricity, Bio LPG
diesel

Diesel

Illumination/
lighting

Electricity, Koroch / bio Natural gas, LPG
diesel

Kerosene

Domestic- cooking

Natural Gas, Koroch / bio LPG, Electricity
diesel, charcoal

Kerosene

Domestic - space & Pyrolysis oil, charcoal, LPG
water heating
Solar energy, Natural Gas

Electricity,
Kerosene

Domestic - other Electricity
appliances

Diesel / petrol

Commercialcooking

Natural Gas, bio-char

Battery power

LPG, Pyrolysis
Electricity

oil, Kerosene

Commercial- space Solar energy, Natural Gas, LPG
& water heating
Pyrolysis-oil

Electricity,
Kerosene

Commercial- other Electricity, bio-diesel,
appliances

Diesel / petrol

Battery power

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Potential of Unconventional Sources of Natural Gas
Industrial- motive Pyrolysis-oil,
bio-diesel, Natural Gas, LPG
power
bio-gas, Electricity
Industrial- heating Pyrolysis-oil, Coal, lignite, Natural
& cooling
Bio-char
Electricity
Urea fertilizer

Industrialmaterials

Bio-gas / synthetic gas, Natural gas, coal,
bio-char
raw As required

Agriculture- water Pyrolysis-oil,
pumping
Electricity

-

bio-diesel, LPG

Diesel / petrol

Gas, Fossil liquid fuels

Naphtha

-

Diesel / petrol

Agricultureheating & drying

Bio-mass, Pyrolysis-oil,

LPG, bio-gas

Diesel / petrol

Agriculturetransport

Bio-diesel, LPG

CNG, bio-gas

Diesel / petrol

Agricultureappliances

Bio-diesel, Electricity

LPG, bio-gas

Diesel / petrol

Electricity

Local coal, bio-char, lignite, Natural gas (peaking Petrol, Diesel, NGL,
nuclear, bio mass, pyrolysis power)
LPG,
LDO, HFO,
Naptha
oil, bio-gas, gobar gas,
hydro, wind, (As per
economical cost at user
locations)

Coal and lignite: These are mainly used to generate electricity, to fire boilers in process
industry, to produce cement, etc. Coking coal is used as raw material in Iron manufacturing
which is in shortage in India. India imports most of its coking coal requirements. India is blessed
with 200 billon tons coal reserves which will last for 400 years at the present rate of
consumption. The coal reserves will last for 40 years even the consumption is increased by 10
folds. These reserves are estimated based on coal found up to 600 meters depth. The reserves
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Potential of Unconventional Sources of Natural Gas
would increase further if the exploration is carried out at more depths and also under shallow
sea water area. The presently used coal mining technologies are not cost competitive beyond
600 meters depth. However, underground coal gasification technology is maturing to convert
coal in to clean gaseous fuel. The latest technology adopted from oil & gas wells drilling such as
serpentine drilling / inseam drilling, guided drilling, bunching of wells, etc. has made in situ coal
gasification technology a reliable and commercial proposition.
Big country like India cannot depend on imports as it is going to be huge portion of
international trade in energy fuels. Coal is going to be the backbone of its energy sector until
another lucrative energy harnessing technology is developed. The per capita CO2 emission by
Indians will be less than world average, even after the coal consumption is increased to five
times of present consumption.
Indian coal is of low calorific value with high ash content. They have comparatively less sulfur
and heavy metals which are advantageous in pollution point of view. Indian coal also has high
ash fusion temperature which is a positive factor in coal fired boiler design. Well proven boiler
technologies are in use to fire high ash content coal.
The existing rail infrastructure to transport coal to various distant power stations is not
adequate. Dedicated cross country coal slurry pipe lines are to be constructed to meet the coal
transport requirements.
Energy starvation: It is defined as people living in surroundings where the temperature is less
than 20˚C and more than 30˚C. When natural ambient temperature is not in the range of 20˚30˚C and surrounding temperature is not controlled, it is considered that energy starvation
conditions are prevailing. This can be while in house or in work place or in commercial
establishment or in mobile vehicle. The per capita energy starvation duration in India is in
excess of 70%. Thus lot of demand for various energy resources will be felt in future decades as
the living standards of people reach that of developed countries.
Energy policy of India: Depending on availability & geographical distribution of various energy
sources and commercially viable technologies, the short & long term energy policies of India are
to be framed for meeting energy requirements. Other than petroleum products and natural
gas, all other energy resources are predominantly used for electricity generation. The following
points are to be implemented in India



Since the liquid fuels are imported in large quantities, their consumption should be limited
to unavoidable mobile hardware such as military vehicles, marine transport and air
transport only.
Bio-diesel, CNG and LPG are preferred fuels for rest of transport sector.

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Potential of Unconventional Sources of Natural Gas








Domestic & commercial sectors shall be supplied with piped natural gas for meeting heating
and catering requirements.
Cross country natural gas pipe lines and city gas distribution piping network are to be
constructed to supply natural gas to all users.
All available energy resources other than liquid and gaseous fuels should be used for
electricity generation. The means of electricity generation shall be based on the delivery
cost of electricity at user door step taking in to account generation and transmission costs.
For transporting coal to long distant power stations, cross country coal slurry pipe lines are
to be constructed to reduce the cost of coal transport.
Since coal is abundantly available, underground coal gasification technology is to be
developed on commercial scale to convert coal in to gaseous fuel not only for electricity
generation and but also for other energy requirements.
There shall be technology mission to commercialize bio-diesel production from Algae and
Koroch cultivation to replace the conventional transport fuels.
There shall be extensive efforts to popularize biomass gasification and biomass pirolysis to
serve as chemical feed stocks, raw material in Urea production, and heating fuels.

The preferred fuels for various requirements are indicated in Table-I. When these preferred
fuels are used for each application, the import of petroleum products, LNG, coal and nuclear
fuels could be minimized to build self dependent energy sector till the commercially proven
technologies are established for using biomass, solar energy and Thorium nuclear fuel.
India's network losses exceeded 32% in 2010 including non-technical losses, compared to world
average of less than 15%. Both technical and non-technical factors contribute to these losses,
but quantifying their proportions is difficult. But the Government pegs the national T&D losses
at around 24% for the year 2011 & has set a target of reducing it to 17.1% by 2017 & to 14.1%
by 2022. Some experts estimate that technical losses are about 15% to 20%, A high proportion
of non‐technical losses are caused by illegal tapping of lines, but faulty electric meters that
underestimate actual consumption also contribute to reduced payment collection. A case study
in Kerala estimated that replacing faulty meters could reduce distribution losses from 34% to
29%.
Key implementation challenges for India's electricity sector include new project management
and execution, ensuring availability of fuel quantities and qualities, lack of initiative to develop
large coal and natural gas resources present in India, land acquisition, environmental clearances
at state and central government level, and training of skilled manpower to prevent talent
shortages for operating latest technology plants.

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Potential of Unconventional Sources of Natural Gas

2.2 : Resource Exploration and Categorization
In view of the significance of the oil & gas sector for overall economic growth, the Government
of India, under the Industrial Policy Resolution of 1954, announced that petroleum would be
the core sector industry. In pursuance of the Industrial Policy Resolution, 1954, petroleum
exploration & production activity was controlled by the government-owned National Oil
Companies (NOCs), namely Oil & Natural Gas Corporation (ONGC) and Oil India Private Ltd
(OIL). Consequent to the various initiatives taken by the government, currently the area under
exploration has increased fourfold. Prior to implementation of NELP, 11% of Indian sedimentary
basins area was under exploration. With the conclusion of seven rounds of NELP, the area
under exploration has increased to about 50%. One of the world’s largest gas discoveries was
made by Reliance Industries Ltd in 2002, in Jamnagar (about 5 trillion cubic meters). Besides,
the entry of international companies like Hardy Oil & Gas, Santo, Geo-Global Resources Inc,
Newbury, Petronas, Niko Resources and Cairn Energy into India has helped boost the growth of
the industry. While the basic framework of the procedures to be followed, guidelines to be
framed is similar in India compared to other countries but due to the lack of uniformity outside
the production/extraction units and infrastructure there is a need of extra measures to be
implemented in order to create a sync between the health, safety and environmental measures
and the Indian framework for the optimum utilization of resources and smooth functioning of
downstream oil industry. As a result of dynamic nature of the sector it can be divided into
*) – Refineries, Oil Rigs and stationary plants from where crude oil, natural gas are extracted or
refined. Separate, long term measures of safety are required.
*) – Distribution Mode, which includes pipelines, vehicles and other mode of transport of
different types of fuel.
*) – Chemical safety as well as occupational transport-handling-warehousing safety at different
levels.
Comparison, feasibility and implementation of internationally approved standards, methods are
also analyzed with the help of data and records.

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Potential of Unconventional Sources of Natural Gas

Oil and Gas Industry is a wide supply chain industry which constitutes various operations,
activities beginning from the extraction, procurement to the transportation of different forms
of fuel to the end consumer. The industry is mainly categorized under i) – Upstream
This category is used to refer to the recovery/searching for and production of natural gas, crude
oil. The upstream sector also includes the searching for potential underground or underwater
oil and gas fields, drilling of exploratory wells, and subsequently operating the wells that
recover and bring the crude oil and/or raw natural gas to the surface. With the advancement in
technology and increase in the share of unconventional sources of natural gases in the energy
pie in general upstream sector is becoming broader gradually.
ii) – Midstream
The midstream sector (which is quite flexible term and often used interchangeably for various upstreamdownstream activities) generally involves the transportation, storage and marketing of the various oil
and gas products produced by petroleum crude oil refineries and by natural gas processing plants.

iii) – Downstream
Downstream sector includes purification-processing of different types of natural gas and
refining of crude oil and further marketing-distribution of the products derived. As mentioned
above it depends on the company’s policy and the host country’s laws whether to assign an
activity under midstream or downstream.
In India and majority of world, integrated oil and gas companies participate in all of these
businesses, smaller companies may have operations in only one, or part of one, of them. In
addition, both large and small oil and gas companies may engage in one or more secondary
activities that are not typically associated with the oil and gas industry, including:

*) - Power generation
*) - Metal Production
*) - Natural gas transmission (City Gas Distribution Model implemented in major cities across
India.)
*) - Coal Mining
*) - Renewable energy systems
*) - Specialty chemical production

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Potential of Unconventional Sources of Natural Gas
The way in which oil and gas companies divide their activities into different businesses varies
from firm to firm. As well as reporting consolidated company performance, companies often
separately report data for different activities, particularly where there are important
differences between the activities for the indicator.

Indian Downstream Sector
There are multiple occupational hazards, health and safety concerns associated with the
different processes of the industry. Due to various activities of different nature and degree of
danger involved in downstream industry, Health, Safety and Environment guidelines,
regulations, checks and precautions help in smooth running of the industry. Operating sectors
will have significantly different regulated hazardous waste streams with different treatment
and management options available. In downstream operations, major shutdowns and periodic
maintenance activities can result in short term increases in hazardous waste generated. Large,
one-time construction projects, remediation activities, and high-volume aqueous wastes should
be tracked separately. However, due to lack of industry norms, flexibility in rules and
regulations in India there are certain areas which form significant part of HSE model of a
company in which India lag behind compared to other countries.

Reporting
Compared to world average, Indian downstream industry in terms of transport by mode of
roadways, railways and pipelines in order to save time, effort and money unofficially discourage
their employees in reporting issues especially if the magnitude-volume is relatively low.
However, after certain events, accidents some companies are beginning to consider reporting
on wider impacts of their activities in the context of a value chain that extends beyond the
normal activities within its organizational boundaries. For example, a company may choose to
report on how they are influencing emission reductions or improved social responsibility within
their supply chain, or in addition on the customer side, companies may choose to report on
programs aimed at informing consumers about the efficient use of oil and gas products.
An impact may be described as “direct” when an activity is under the company’s control (as
owner or operator). When an activity is under another’s control, but the company has some
degree of influence over this activity, the resulting impact may be described as “indirect”. By
separately addressing relevant indirect impacts, the company is extending the scope of its
reporting within its value chain. Key factors related to reporting are also missing in the
companies under Indian downstream industry which are *) - Transparency – An important factor which takes a backseat in India because of corruption,
favorism and greed along with petty politics which puts many lives on the line. Information
should be reported in a clear, understandable, factual and coherent manner, and facilitate
independent review. Transparency relates to the degree to which information on the processes,
procedures, assumptions and limitations in report preparation are disclosed.
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Potential of Unconventional Sources of Natural Gas
*) - Relevance – It is significant that the reported information is considered by report users,
both internal and external to the company to be meaningful and valuable to the user(s) for
information purposes. Level of relevance can be exhibited in training sessions.
*) - Consistency – The consistent application of information gathering processes and boundary
definitions is essential to the development of credible reports. Consistency in what is reported
and how it is reported enables meaningful comparisons of a company’s performance over time
and facilitates shared understanding, especially internally within companies, as well as
comparisons with peer companies.
*) - Completeness – Information that is relevant to internal and external users should be
included in a manner that is consistent with the stated purpose, scope and boundaries of the
report. Reported information should be complete with respect to appropriate operational
boundaries and scope of information.
*) - Accuracy – Information should be sufficiently accurate and precise to enable intended users
to understand the relevance of information with a reasonable level of confidence. Accuracy
refers to the levels of certainty and uncertainty of

Performance Benchmarking
Earlier to reduce the money, time and efforts the standardization in terms of measurements,
records was not preferred. Many oil and gas companies actively engage in HSE benchmarking
initiatives and are increasingly involved in sustainability and other non-financial indicator
benchmarking. Benchmarking provides an effective tool to improve performance, because it
can provide a systematic approach to identify and learn from others about good practices and
innovative solutions. Infusing benchmarking helps in long term growth of the company and also
improves the goodwill among the consumers.
It offers an external view of a company’s performance and can help identify what is needed for
continual improvement in different aspects. Oil and gas companies often rely on industry
groups to facilitate benchmarking processes by developing key performance indicators, and by
collecting and analyzing performance information. This document provides a common point of
reference that can help support broader engagement in benchmarking studies of sustainability
or non-financial indicators among oil and gas companies, and thereby encourage good practice
sharing to enhance individual company performance.

Data Aggregation

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Potential of Unconventional Sources of Natural Gas
Under the obligation of government and laws Indian companies report performance data at
varying levels of aggregation ranging from individual facilities to national, regional locations and
to global coverage for the entire corporation. Aggregate reporting at the corporate level is most
commonly observed for reporting occupational injuries, environmental emissions and incident
data as part of both regulated and voluntary public reporting. Reporting companies are
encouraged to determine the level of aggregation that is appropriate and provides a
meaningful representation of the data being presented. Reporting companies often present
raw performance data in terms of absolute quantities that can be expressed in a physical unit of
measurement related to weight, volume, energy or financial value. In general, absolute data
can be expressed in units of measurement that are readily convertible. Absolute quantities may
provide information about the magnitude or size of an output, input, value, or result depending
upon the prevailing need, evaluating method, comparative entity/norm. The normalised
quantities are those figures which represent ratios between two absolute quantities of the
same or different kind. Ratios allow comparisons among operations of different size and
facilitate comparisons of similar products or processes. They also help relate the performance
and achievements of one company, business unit, or organization to those of another. Ratio
indicators can provide information on the efficiency of an activity, on the relative intensity of an
output (e.g., energy intensity) or on the relative quality of a value or achievement.

Infrastructure
The company’s and the Special Economic Zones (SEZs), Export Promotion Areas, Towns of
Export Excellence etc infrastructure may suit the downstream activities, but the transport
network is not at par with the upstream infrastructure and the industry have to adopt some
additional measures to avoid accidents involving internal—external sources (in the process of
distribution and marketing). In Indian context companies have to
*) – Adapt to increasing share of Inland Waterways in the transport sector especially in the case
of rural-remote areas which are connected to a flowing water body compared to road-rail
network.
*) – Regular point check of pipelines at various pumping stations, keeping special measures for
leak prone areas.
*) – Guidelines, specialized roadways and railways routes suiting the downstream activities in
Indian states.
*) – Different measures for different topographies and geographical regions.

Environment

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Potential of Unconventional Sources of Natural Gas
The companies in oil and gas industry recognizes that their operations have potential impacts
on the environment. Some of the environmental impacts may have social and/or economic
implications. Companies in the industry have made many commitments to manage and
minimize negative environmental impacts. Often, these commitments go beyond regulatory
obligations. The environmental performance indicators described in the table may be useful in
describing the performance of company operations.

Indicators such as spills, emissions, wastes and energy use, when expressed as absolute
quantities provide a sense of magnitude or scale. Normalization of these quantities facilitates
comparisons among organizations of different sizes, and can help express environmental
performance in economic terms. Independent records, evaluation, archiving and guideline
stabilization is significant to attain optimum level of sustainable growth of the company along
with taking care of multiple environmental factors which can differ from one region to another
on which a company is operating. Even the additional areas listed here are interdependent to
the core areas which proves that a company’s priority should be core areas but neglecting
additional areas (in different categories) can prove to be hazardous for the company in the
longer run.

Health and Safety
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Potential of Unconventional Sources of Natural Gas
The oil and gas industry recognizes that some health and safety hazards are inherent in its
operations and products. Companies in the industry have made many commitments to achieve
excellence in managing these risks. Often these commitments go well beyond regulatory
obligations. The health and safety performance indicators described in this section are
generally recognized as good indicators that may help companies manage operations and
promote improvements in health and safety performance.

*) Indicator (H&S-1) :
Indicates the Implementation and coverage of an Occupational Health and Safety
Management System.
An occupational health and safety management system is a process that applies a disciplined
and systematic approach to managing safety and health activities. This approach uses a cyclical
process that takes experiences and learning from one cycle and uses them to improve and
adjust expectations during the next cycle. Management systems should convey a company’s
structure, responsibilities, practices, procedures, and resources for implementing occupational
health and safety management, including processes to identify root causes of poor
performance, prevent recurrences, and drive continuous improvement. A health and safety
management system may be integrated into an environmental, health and safety management
system or may stand alone.
Many companies within the oil and gas industry employ management systems as a principal
means to achieve continuous improvement of business performance including performance
against health and safety objectives.

*) – Indicator (H&S-2)

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Potential of Unconventional Sources of Natural Gas
The indicator is used for the purpose of joint management and employee safety and health
programs and procedures to ensure participation of employees at all levels in safety and
health activities and dialogues.
Provides the detailing of the structure of joint management and employee safety and health
mechanisms set up to facilitate active employee involvement in safety process improvements
and consultations. Include in the discussion how these mechanisms are functionally integrated
into the overall health and safety management system and/or how participation of employees
through all levels in the company is encouraged. Describe the current status of employee
access to and/or participation in safety and health consultations or dialogues, including plans to
address any need for improvement. Contract employees often have their own employee and
management health and safety programs that are the responsibility of their direct
management. Consideration should be given to describing the interactions between company
employee participation mechanisms with those of the contractors and partners working on
company sites.
The participation programs of employees which address worksite safety and health issues are
important in all work environments. It is widely acknowledged that the advantage of employee
participation is the in-depth practical knowledge of specific tasks coupled with the larger
overview of company policies and procedures.
Another significant benefit is the enhancement of a cooperative attitude among all parts of the
work force toward solving health and safety problems. This indicator acknowledges that there
are a variety of mechanisms available to promote active employee participation in safety and
health efforts. Companies are encouraged to report on those mechanisms that support full
involvement of the workforce in suggesting safety and health improvements.

*) – Indicator (H&S-3)
Programs and practices to understand the general health risks and experiences affecting the
local workforce.
Describe the processes and programs the company has for identifying the general workforce
health problems that are most significant in each location and approaches used to address
these health problems. This indicator addresses health problems in the workforce that are both
work-related and non work-related. It could include health issues that are prevalent in the
communities where businesses are located. Sources of information can include local public
health officials, medical absenteeism data, health benefits data, information from company
sponsored medical clinics, health impact assessment (HIA) information, knowledge of workrelated incidents and summary data from employee personal health risk and wellness data.
The programs to understand work force health issues will vary widely by location. Dialogue with
employees is an effective method of obtaining a good understanding of opportunities for improvement.

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Potential of Unconventional Sources of Natural Gas

*) – Indicator (H&S-4)
Fourth indicator for Records-Archive System for recording occupational injuries and illnesses,
and reporting them as the following rates:
*) - Total Number of Injury Rate
*) - The Lost Time-Injury Rate
*) - Fatality Rate
*) – Miscellaneous Time and Injury Comparative Analysis.
Guidance on recordability criteria for occupational injuries and fatalities is given in the
“References and Supporting Document” summary (below). While it appears that OSHA
recordkeeping guidance is frequently employed across the industry for global corporate
reporting, there is not adequate consensus at this time to recommend this as a standard
practice throughout the oil and gas industry.
Work-related incident rates (frequencies) for total recordable injuries, total recordable illnesses
and lost time injuries are calculated on a basis of number of incidents per 1 million hours
worked. The fatality rate is calculated on a basis of number of fatalities per 100 million hours
worked. Reporting of total injury, lost time injury and fatality rates should include separate and
combined rates for both company employees and contracted workers. The total illness rate
should be reported for company employees only.

*) – Indicator (H&S-5)
Existence of a process to invest in and act on product-related knowledge, and to
communicate results of the risk characterization and management process to customers and
the public.
Describe processes and programmes that the company has in place for characterizing and
managing product health risks, and to make the results available to customers and the public.
This process applies to all products sold to customers.

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Potential of Unconventional Sources of Natural Gas

2.3 : Energy Security and Related Aspects
India hopes to achieve a high rate of growth over the next several decades, notwithstanding
the recent global financial crisis. Energy availability—in adequate quantity and good quality—
would be a pre-requisite to sustain targeted levels of economic growth and the desired levels
and spread of social development. However, the quantum of energy demand would obviously
be a function of the energy pathways that India can choose to adopt or design to follow. Using
the MARKAL (MARKet ALlocation) model an analysis has been undertaken of four alternative
energy development pathways that could lead to significantly different outcomes in terms of
the fuel mix, technologies deployed and, therefore, total conventional energy demand. Also
presented and discussed are policies and measures that would need to be implemented to
ensure realization of each of these scenarios. Given the long lifetimes of energy infrastructure,
it is extremely important that investments made today serve us their full life and, therefore,
such investments must be aligned with the long-term choices that India may need to make.
All four scenarios present results up to 2031/32 (end of the Fifteenth Five-year Plan) and
uniformly assume an average annual economic growth rate of about 8% over this period, a
consistent population growth and affluence level, and the same socio-economic structure. The
model itself has been configured to 2036/37, recognizing the long gestation time for setting up
of energy projects. With economic growth, access to modern fuels and technology choices is
assumed to increase as sections of society progress along the economic ladder. The pace of
implementation of already announced government policies and programs has been adjusted so
as to capture more realistic trends in the short to medium term. For example, while the
progress with regard to electrification has been slow in comparison to the targets for providing
universal access to electricity by 2012, it is assumed that all households would have electricity
by 2017, at least. Moreover, households are assumed to make a transition towards cleaner
cooking fuels such as LPG with a rise in incomes.
One of the eight missions defined in the NAPCC recognizes the importance of energy efficiency.
The challenge of promoting energy efficiency in India lies not so much in the availability of
technology, as it does with a distorted pricing system that leads to perverse incentives to either
promote wasteful energy consumption or to resort to theft! The issue of high initial costs does
exist, primarily due to the existence of a large and unregulated market for non-standardized
products, but is relatively simpler to design a solution for. The experience with energy
efficiency in any sector of the economy — be it agriculture, the residential sector, industry
(including small and medium enterprises [SMEs]) or the commercial sector – points towards

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Potential of Unconventional Sources of Natural Gas
the need for correcting the pricing of either the fuels to reflect their true scarcity value or the
prices of appliances/equipment through appropriate fiscal interventions.
Residential sector - The residential sector, at 25% of final electricity consumption,
is the second largest contributor to demand and possibly the largest contributor to
peak demands in the system. Lighting accounts for 35% and space conditioning
for 30% of the total electricity consumed in the sector. Approximately 13% of the electricity is
consumed by refrigerators and 8% in water heating. Trends in consumption patterns reveal that
electricity consumption is increasing at a rate of approximately 10% in this sector. The lighting,
space conditioning, and water heating demands coincide substantially with peak load periods,
and the introduction of well-designed time-of-day pricing can, affect savings of nearly 30%.
With the exception of lifeline consumers, all other consumers must be charged a peak tariff
that is at least a factor of two or three higher than the off- peak tariff, and a recommendation
on the minimum differential must be stipulated in the National Electricity Policy. The Mission
on Energy Efficiency must also work with state regulatory commissions to encourage them to
increase such a differential if their local contexts demand so. Industrial sector Industry
accounts for about 50% of the total commercial energy consumption in the country. The
energy-intensive industries fall in both the large industry segment (for example, iron and steel,
cement, fertilizer, pulp and paper, textiles, and aluminium) as well as in the medium, small and
micro-enterprises (MSMEs) segment (for example, foundries, forging, glass, ceramics,
brassware, brick making, refractories, rice mills, and a highly dispersed food–processing
sector). Many units in the industrial sectors like iron and steel, chemicals, pulp and paper,
aluminium, and textiles also fall under the broad category of the MSME sector. This large
sector is already experiencing a transformation towards high energy efficiency levels largely
due to the cost implications of the existing tariff structures as also the pressures of
competition. However, it is the MSME sector that requires a push in terms of ensuring that
energy-efficient technologies get adopted in the sector on a large scale.
The low end-use efficiencies in MSMEs can be attributed to several barriers,
(i) use of obsolete technologies,
(ii) non-availability of readymade technological solutions,
(iii) low level of awareness/information availability,
(iv) non-availability of technology providers at local/cluster level, and
(v) relatively high cost of technologies and poor access to finance.
Given the diversity of the MSME sector, the promotion of technology up-gradation in this
sector necessitates the development of sector-specific integrated programs for technology
development. TERI’s experience of working in the small-scale industrial sector during the last 10
years shows that it is possible to reduce energy consumption by up to 30%–35%, if sustained
and concerted efforts are put in RDD&D for developing cluster/sector-specific technologies.
For example, in case of the Firozabad glass industry cluster, TERI has developed and
demonstrated an energy-efficient glass melting furnace in the cluster, and already nearly 50%
of the units in this cluster have switched over to this energy-efficient design, thus saving close
to 10000 toe (tonne of oil equivalent) of natural gas annually. Specific cluster programmes for
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Potential of Unconventional Sources of Natural Gas
MSMEs that are aimed towards technology upgradation and improvement of energy efficiency
must be launched. These can be done quickly for nearly 150 manufacturing clusters that are
energy intensive. The interventions in different energy-intensive MSME subsectors would
require undertaking detailed diagnostic studies, focusing on technology and needs assessment,
designing, developing, and demonstrating energy-efficient technologies to suit local conditions,
providing advisory support to small units for disseminating these technologies and building
local capacities so that the new, energy-efficient technology options may be adopted by a
relatively large number of units in the clusters. A public–private partnership (PPP) model
comprising industry, academia/R&D institutions, service providers, and government is
required for each cluster for developing and implementing programmes. One of the key tasks of
the Mission on Energy Efficiency should be to strengthen the Bureau of Energy Efficiency’s
(BEE) initiative on SMEs through the establishment of such goal-oriented partnerships with
adequate funding and performance targets over a sufficiently long-term period. Identifying
energy- efficiency goals for each cluster, this programme should first carry out competitive bids
for demonstrating efficiency improvement interventions (including any technology
development/adaptation costs) with appropriate weightage being provided to more ambitious
and early-impact programmes. Involving the key stakeholders of such a consortium in
facilitating the widespread dissemination of successful interventions would be a useful ‘carrot’
to increase the success rate of such a programme. Such demonstration projects should also be
required to address the key institutional and capacity barriers that might exist to rapid
implementation of efficiency improvements. Agricultural sector The initial high cost of energyefficient motors, poor pricing regimes, and lack of knowledge about the long-term gains are
the major factors responsible for sub-optimum efficiencies. Motors used by the farmers are
generally of poor quality and efficiency. Energy-efficient motors account for a very small
percentage of motor sales in India. The cost of energy-efficient motors is ~20%–30% higher
than standard motors in India. Higher prices of these and subsidies on power consumed lead to
low demand, creating a vicious cycle and making it difficult for prices to reflect economies of
scale. Financial incentives in the form of reductions in sales tax, abolishment of octroi on
energy-efficient products, and reduction in customs and excise duty on imported energyefficient equipment must be provided. Retrofitting of even 10% of the existing inefficient
pump sets (~15.35 million as of March 2007) annually, would translate into a savings of ~4
billion kWh (kilowatt-hour) per year at the user’s end and ~900 MW of equivalent generation
capacity. The Mission on Energy Efficiency must intervene with relevant stakeholders to
achieve the desired outcome. The avoided capacity requirements would amount to an avoided
in fructuous investment of over Rs 4000 crores annually. Setting aside this amount for such a
retrofit programme could almost fully cover its cost.
The National Mission on Energy Efficiency must set quantitative goals for bringing about
efficiency improvements. Such goals must be bold enough to specify an energy intensity goal
for the economy as a whole and must be supported by well-defined sector and subsector goals
and requisite budgets as illustrated above. As a reasonable illustration, India could aspire to
bring down its overall energy intensity of the economy by about 30% of 2001/02 levels by
2021/22, which would still translate into a higher total energy consumption but a rate of
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Potential of Unconventional Sources of Natural Gas
growth of energy demand that could be significantly lower. This reduction in demand can be
achieved by setting efficiency targets for specific sectors, such as:
*) - Reducing technical losses on the transmission and distribution (T&D) network
from the current 16%–19% to a level of 8%–12%.
*) - Achieving an energy saving of around 20% by 2020 in the industry sector.
*) - Improving the average efficiency of vehicles by 15%.
*) - Maintaining the share of public transport in total motorized, road-based
passenger movement at 70%.
*) - Accelerating the efficiency performance of the stock of household appliances
as follows:
*) - Refrigerators
By 7% over the autonomous efficiency improvements assumed
in the business as usual (BAU)
*) - Air conditioners
By about 25% over the efficiency improvement in the BAU.
This Mission must have a high powered governance structure, along the lines
of the Telecom Commission chaired in the past by Mr Sam Pitroda, and must
work through a system of task forces comprising experts from relevant sectors,
representatives of relevant ministries (at least at the joint secretary level), and
representatives from industry and financial institutions. The chairman of this
Mission must report to the Prime Minister of India.

Maximizing Energy Efficiency
The levels of energy efficiency in the economy can, in turn, be best achieved by a combination
of factors that need to work in concert. These include a pricing strategy that clearly reflects the
cost (real and opportunity) of energy service provision; a fiscal regime on appliances,
equipment, and infrastructure that clearly incentivizes efficiency; ensuring competition in
demand satisfaction at every point along the supply chain; and a regulatory framework that
progressively rewards efficiency-related innovations. Energy pricing and competition
The desirable elements of efficient pricing have been stressed for decades in various
committee reports of the government and are reiterated, in principle, in the Electricity Act
2003. However, it is obvious that real concerns on issues of affordability and political
acceptability of moving to cost-of-service pricing have impeded the implementation of such a
pricing regime. The government must take advantage of the high technological prowess of the
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Potential of Unconventional Sources of Natural Gas
country to design effective and transparent subsidies that overcome the challenge of energy
access in a progressive manner (see section on Energy Access for further details). Energy pricing
itself must recognize the trade-offs and substitutability between various energy sources, and
must be undertaken in an integrated manner with full consciousness of their implications for
driving consumer choices and substitution possibilities, both in the short and long terms.

Pricing of petroleum products, natural gas, and electricity has been the subject
of raging debates in recent times. As a general guideline, this paper recommends
the following.
*) - In an increasingly open economy, the pricing of Primary energy resources must reflect their
opportunity cost at the border, when there is the option of international trade. Therefore,
trade pricing of crude oil should reflect the cost insurance and freight (CIF) price of crude that
India imports, but the free on board (FOB) price of any crude quality that it exports.
*) - When a resource is not trade-able, either due to global surpluses or due to quality
Considerations, then a rational and rigorous process for domestic discovery of prices should be
facilitated. If this requires a restructuring of energy markets (for example, coal), then an
expeditious action plan needs to be drawn up for the purpose with necessary amendments to
laws and regulatory frameworks.
*) - Pricing of secondary energy forms, along the supply chain, must be left to the
market, under effective regulatory oversight, and must allow players to benefit
from any competitive advantage arising from efficiency investments as they
deem fit.
*) - India’s energy infrastructure—be it the transmission and distribution networks
or the natural gas pipelines or even the energy production/generation/import infrastructure—
needs major expansion and upgrading. Infrastructure expansion is driven by several factors
including projected long-term energy demand and considerations of regional growth—it
cannot be responding merely to current needs! As such, and in order for a planned
development of such infrastructure, the government must pursue its strategy of competitive
bidding for both infrastructure expansion and upgrading projects. As we move down the supply
chain, the cost of energy would be the sum of the energy infrastructure service cost and the
energy resource cost.
*) - Where infrastructure needed for energy transport is shared with other beneficiaries (as in
the case of railways), the tariff determined for the transport service provided must recognize
the implications that it may have for the competitiveness of the energy resource concerned. It
is necessary that such tariffs are established in consultation with the institution responsible for
energy price oversight, and in accordance with the principle of proportionality.
*) - Congestion pricing (time-of-day pricing in case of electricity supply) must
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Potential of Unconventional Sources of Natural Gas
be resorted to in order to signal capacity constraints and avoid high-cost
infrastructure expansion needs.
*) - Energy subsidies to targeted consumers must be provided as far down the supply chain as
possible so as to encourage efficiencies and prevent subsidy leakages in the system.
Finally, the treatment of by products and ‘waste’ products should be consistent and supportive
of the energy sector.
Under the Ministry of Environment and Forests (MoEF) notification, all coal- and lignite-fired
power stations have to dispatch fly ash free of cost to anybody desirous of having it, including
cement manufacturers, traders, and exporters who can, in turn, sell it at any price they desire.
Under this regime, wherein the value of fly ash is largely being derived by middlemen, neither
is the electricity sector benefiting from the potential revenues nor are the government or the
common man benefiting from the lower raw material costs od cement manufacture. In sum,
the loss to electricity and cement consumers is providing windfall profits to the traders,
exporters, and cement manufacturers. Properly priced, fly ash used by cement producers could
result in electricity price reduction of nearly 10 p/unit.
Fiscal Regime
The taxes and subsidies on energy resources and on energy- using appliances/equipment must
be designed to support energy efficiency in the economy and reflect externality costs. While
coordinated action in this area at the central level is feasible, the challenge of ensuring this at
the state level would be significantly bigger. The central government must clearly specify the
fiscal responsibility of states with regard to state-level taxes and subsidies. At the state level,
the coordinating committee of the state finance ministers needs to incorporate this
prioritization of energy-efficient appliances while determining the common taxation
framework across different states. Regulation for efficiency One of the biggest dilemmas for
service providers is what is referred to as the ‘rebound’ effect—if service providers were to get
involved in encouraging energy efficiency amongst their consumers, it would reduce the size
of their market! This is a typical challenge faced by most distribution utilities across sectors and
countries. The energy regulators need to be constantly reviewing and implementing innovative
pricing and regulatory mechanisms for overcoming this challenge and rewarding (reducing the
pain) service providers for this effort. This would require high level expertise among regulatory
bodies on regulatory economics, price elasticity concepts and estimation (both in the short and
long runs), and associated welfare effects. Regular training of regulators by professional
institutions on the technical, regulatory, economic, and environmental aspects of the energy
business should be made a requirement of service.

Securing Energy Resources
Securing India’s energy supplies, after ensuring its most efficient utilization, is a function of
domestic resource exploitation, tying up international resources— either directly or through
equity investments—creating the necessary import/transport infrastructure and
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Potential of Unconventional Sources of Natural Gas
developing/accessing technologies for harnessing energy resources efficiently. As seen from the
scenarios defined above, there exists significant potential for reducing our demand for energy
resources by ensuring energy-efficient development paths and maximizing the use of
renewable energy.

Energy imports
Even with the aggressive push towards efficiency and renewable energy, India would still need
to have to import coal at a peak level of ~200 MT and crude oil of ~300 MT between now and
2030. At these significantly higher manageable levels of imports, we need to reevaluate the
relative economics of entering into long-term contracts vis-à-vis making equity investments
abroad. Assuming that other major international consumers of fossil fuels would also be
moving along similar paths as being defined by India, the global demand for these energy
forms could soften substantially. While evaluating this option, the experience of allowing the
corporate sector to make such investments as part of competitively bid projects (for example,
coal mines acquired by private companies for power-generation purposes) should be borne in
mind.
Coal
After decades of make believe that we had enough coal resources to last us for another 200
years, the Government of India has finally accepted that the life of the resource may be limited
to about 45 years. However, recognizing that any country’s ability to rely heavily on this highly
polluting energy form would be short lived, India must restrategize its coal development to
exhaust its reserves in the next 30 years or so. The new coal-based thermal power generating
capacity should be limited at a level that is sustainable with available domestic resources
without having to invest in new import infrastructures. The failure of the coal ministry to bring
about reforms in the sector—including productivity improvements, private participation, and
competition—and the vulnerabilities this creates in the power sector, indicate the need to set
up a joint commission, comprising government, industry, and representatives of the power
sector and the coal sector. The commission would be empowered to revise policy, establish
and implement competition policies, and provide the necessary environment for private-sector
participation. The GOI strategy to link coal mines to the private power plants
would ensure a more efficient production profile from coal mines, which would
enhance production levels.
Oil
India’s oil vulnerability is well documented. At the same time, the country is unable to generate
enough interest in exploration and production activities despite various improvements made in
the different rounds of the NELP. The NELP programme was started nearly 10 years ago, but
only 20% of the country’s sedimentary basins can still be classified as ‘well explored’. India
needs to quickly move towards the Open Acreage Licensing Policy so as to exploit any potential
resources towards alleviating its medium-term energy security challenge. In addition, all efforts
must be made to maximize the sustainable flow of oil from existing wells. TERI, in partnership
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Potential of Unconventional Sources of Natural Gas
with Oil and Natural Gas Corporation (ONGC), has demonstrated the economic attractiveness
of its microbiologically enhanced oil recovery (MEOR) processes. The cost of this technology is
less than half of that of the conventional enhanced oil recovery methods. If applied to the
~7000 stripper oil wells within India itself, an additional 3 million barrels of oil per year can be
generated. India could explore licensing this technology to the oil-rich countries for a certain
percentage of the incremental oil generated!
Natural gas
While natural gas consumption must increase, its use for power generation is suggested
primarily for industrial captive use purposes and for fertilizer production—both limited to the
extent of domestic availability of the resource. Larger domestic finds would, of course, result in
gas increasingly substituting for coal. As such, the existing gas, import facilities that have been
established should suffice for the longer term as well. The significance of the Iran–Pakistan–
India gas pipeline in the context of energy security can diminish substantially! The natural gas
pricing policy needs to be clarified at the earliest to give a push to natural gas and related
infrastructure sectors. Rather than pursuing multiple prices and the pricing system as currently
existing in the country, it is suggested that natural gas from various sources be pooled and
supplied to consumers though a transparent bidding/auctioning process. The role of the
regulator in ensuring smooth and fair functioning of the process is immense.
Nuclear Energy
India has done well to conclude the civil nuclear agreement with the US. It now also has to
urgently give attention to other dimensions of establishing nuclear capacity in the country.
Putting in place and creating public awareness on its nuclear safety and accident prevention
protocols, identifying potential nuclear power plant sites and initiating public dialogues,
creating the requisite capacity in educational institutions to meet the human resource
requirements, addressing concerns on waste disposal, among other initiatives, are all
proactivemeasures that are best undertaken sooner than later. The nuclear establishment
carries with it a public perception of secrecy and a defence connotation. Scaling up nuclear
power generation and possibly inviting the private sector to participate require a much more
open and transparent consultative process to be institutionalized.
Waste-to-energy
Some of the existing gap between demand and supply of electricity in cities can be met by using
waste as a source of energy. Though energy generation from industrial waste sources like
distillery, paper and pulp, bagasse, dairy, and slaughterhouse waste is well practised in the
country, energy generation from urban waste, especially municipal solid waste (MSW), is still
not a feasible option. MSW generated in the country contains on an average 40%–50% organic
waste and 15%–20% recyclable waste (primarily paper and plastic wastes). These waste
streams can be used as a feedstock by biomethanation and refuse-derived fuel (RDF) processes
to generate power in units ranging from 1 MW to 1024 MW cap.
India’s energy security: new opportunities for a sustainable future
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Potential of Unconventional Sources of Natural Gas
It is estimated that the annual power generation potential from MSW alone in the country
would be around 36000 MW. However, as we do not have sufficient experience in operating
these technologies on commercial levels, technology customization and indigenization would
be required. High capital cost is one of the most important barriers to MSW-based waste-toenergy processes in India.

Based on projects implemented as on date, the cost of a typical 5 MW unit comes to around Rs
40–60 crore, with each MW of electricity consuming 150 tonnes of municipal waste annually.
This amounts to an investment of Rs 8–10 crore per MW, or three to four times the cost of
conventional thermal power. While it will be difficult for such plants to compete economically
with conventional plants, the incidental benefits in terms of waste management and avoided
health damage could make this an attractive option. Favourable power purchase agreements,
combined with capital cost-based incentives, could be designed for such projects.
The scale of the energy challenge that the country faces compels it to seek aggressive private
sector participation. While it is essential and non-negotiable to follow due process when
awarding projects to the private sector, a few key points
need to be kept in mind.
*) - Clear delineation of long-term policy and regulatory framework that would
enhance investor confidence.
*) - The need to provide a level playing field to all players, including the public
sector organizations.
*) - The high economic cost of delays .

2.4 : Research and Development in the Energy Sector
India’s R&D efforts have often been criticized for being sub-optimal and lacking in goal
orientation. The situation in energy-related R&D is perhaps even more serious. The challenge of
the sector, as brought out in earlier pages, is too large for it to be continued to be treated as a
vehicle of social largesse and diffused capacity building.
While India may not be able to match the R&D resources of the developed world, it is all the
more imperative that its scarce financial resources are targeted strategically—to bring about
cost reductions, develop/exploit context-specific resources, and develop relevant
applications—and with purpose. Some technologies that could be on the verge of commercial
deployment, with just an additional resource injection for design improvements, which the
government could place on its priority list, include the following.
*) - Biomass gasification systems

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Potential of Unconventional Sources of Natural Gas
Several organizations in the country have related biomass gasification systems that require
critical innovations relating to gas clean-up systems and engine design. Such systems could also
be modified for providing clean cooking energy solutions for school canteens, dhabas, and
other establishments, with appropriate safety features built in.

*) - Biofuels
A second generation biofuels programme needs to be designed and
implemented in a mission mode.
*) - Solar energy
R&D on solar PV and thermal technologies, per se, has advanced
significantly at the global level. India would do well to focus its R&D efforts on
developing context-specific applications and research on grid interface issues.
*) - Wind energy
Resource mapping exercises have to be refined to be in line with new technology developments
globally, with a particular emphasis on offshore wind resources.
*) - SME sector
Designing, developing, and demonstrating energy-efficient technologies to suit specific
conditions of SME clusters.
*) - The Smart grids
The increasing share of renewable energy in India’s energy mix and the greater emphasis on
energy efficiency could have serious implications on—and be limited by—the nature of
electricity grids. India needs to implement pilot projects on the concept of ‘smart’ grids that
would prepare us for such large-scale integration of non-firm and distributed energy sources
into our energy systems and their management. In line with the general call for an integrated
approach to this sector, it may be worthwhile creating an integrated energy R&D fund
administered under the guidance of a research advisory committee at the highest level.

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Potential of Unconventional Sources of Natural Gas

Part 3
Indian Geography
On the south, India projects into and is bounded by the Indian Ocean – in particular, by the
Arabian Sea on the southwest, the Laccadive Sea to the south, and the Bay of Bengal on the
southeast. The Palk Strait and Gulf of Mannar separate India from Sri Lanka to its immediate
southeast, and the Maldives are some 400 kilometres (250 mi) to the southwest. India's
Andaman and Nicobar Islands, some 1,200 kilometres (750 mi) southeast of the mainland,
share maritime borders with Burma, Thailand and Indonesia. Kanyakumari at 8°4′41″N and
77°32′28″E is the southernmost tip of the Indian mainland, while the southernmost point in
India is Indira Point on Great Nicobar Island. India's territorial waters extend into the sea to a
distance of 12 nautical miles (13.8 mi; 22.2 km) from the coast baseline.
The northern frontiers of India are defined largely by the Himalayan mountain range, where the
country borders China, Bhutan, and Nepal. Its western border with Pakistan lies in the Punjab
Plain and the Thar Desert. In the far northeast, the Chin Hills and Kachin Hills, deeply forested
mountainous regions, separate India from Burma. On the east, its border with Bangladesh is
largely defined by the Khasi Hillis and Mizo Hills, and the watershed region of the Indo-Gangetic
Plains.The Ganges is the longest river originating in India. The Ganges-Brahmaputra system
occupies most of northern, central, and eastern India, while the Deccan Plateau occupies most
of southern India. Kanchenjunga, on the border between Nepal and the Indian state of Sikkim,
is the highest point in India at 8,598 m (28,209 ft) and the world's 3rd highest peak. Climate
across India ranges from equatorial in the far south, to alpine in the upper reaches of the
Himalayas.

Location:
Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma and Pakistan
Geographic coordinates:
20 00 N, 77 00 E
Map references:
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Potential of Unconventional Sources of Natural Gas
Asia
Area:
total: 3,287,263 sq km
country comparison to the world: 7
land: 2,973,193 sq km
water: 314,070 sq km
Area - comparative:
slightly more than one-third the size of the US
Land boundaries:
total: 14,103 km
border countries: Bangladesh 4,053 km, Bhutan 605 km, Burma 1,463 km, China 3,380 km,
Nepal 1,690 km, Pakistan 2,912 km
Coastline:
7,000 km
Maritime claims:
territorial sea: 12 nm
contiguous zone: 24 nm
exclusive economic zone: 200 nm
continental shelf: 200 nm or to the edge of the continental margin
Climate:
Current Weather
varies from tropical monsoon in south to temperate in north
Terrain:
upland plain (Deccan Plateau) in south, flat to rolling plain along the Ganges, deserts in west,
Himalayas in north
Elevation extremes:
lowest point: Indian Ocean 0 m
highest point: Kanchenjunga 8,598 m
Natural resources:
coal (fourth-largest reserves in the world), iron ore, manganese, mica, bauxite, rare earth
elements, titanium ore, chromite, natural gas, diamonds, petroleum, limestone, arable land
Land use:
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Potential of Unconventional Sources of Natural Gas in India

  • 1.
  • 2. Potential of Unconventional Sources of Natural Gas “Potential of Unconventional Sources of Natural Gas in India” Dissertation submitted to college of Management and Economic Studies for the partial fulfillment of the degree of MBA (Energy Trading) Guided by Surbhi Arora Asst. Professor College of Management Studies University of Petroleum and Energy Studies Submitted by – Mohit Sharma Enrollment no : R590211017 Sap ID: 500014825 College of Management and Economic Studies (CMES) University of Petroleum and Energy Studies (UPES) Dehradun, Uttrakhand (UK) India (UK) 2011-13 Page | 2
  • 3. Potential of Unconventional Sources of Natural Gas Acknowledgement I acknowledge with my deep gratitude, from the bottom of my heart to the almighty and a number of people (my parents, siblings, MBA Energy Trading course faculty) who always stood by me at every and each stage of this project and helped me a lot to stay put motivated and keep throughout this project. I owe a debt of my gratitude to my mentor assistant professor Surbhi Arora, who despite of her busy schedule, guided me in this project (with a background of extensive research and years of study of Shale Gas, Coal Bed Methane and Gas Hydrates), provided suggestions and also shared her experience which helped me in analyzing diverse aspects of this work Last but not the least; I would like to thanks my peers who were in some way supporting me all through the prevalence of this assignment. *This online version report is redacted, baseline surveys and analysis is not covered. © Freelance Talents, Mohit Sharma Mohit Sharma R590211017 MBA Energy Trading (2011-13) University of Petroleum & Energy Studies Dehradun Page | 3
  • 4. Potential of Unconventional Sources of Natural Gas Executive Summary Depletion of conventional resources, and increasing demand for clean energy, forces India to hunt for alternatives to conventional energy resources. Intense importance has been given for finding out more and more energy resources; specifically non-conventional ones like CBM, shale gas & gas hydrates, as gas is less polluting compared to oil or coal. The Shale Gas revolution in past decades triggered the research and development of unconventional sources of energy along with Shale Gas like Gas Hydrates, Coal Bed Methane and Tight Sand Gas. With huge natural resources and diversity India have nig potential resources of unconventional sources of gas and gradual development is going on to exploit these resources and shift Indian energy usage pie from conventional sources to unconventional sources which will reduce India’s dependence on oil and gas imports and provide a way for sustainable development of the country, economy for an extended period of time. The gas demand in India is limited by its access to gas supplies based on domestic production and imports availability. If India can produce more gas than it can reduce its coal imports which is environmentally more unfriendly, its gasoline consumption through the use of compressed natural gas, and its demand for LPG through piped natural gas to meet residential cooking and heating requirements, etc. Natural gas is a versatile fuel and more environment friendly. Unfortunately, Indian government has not been able to implement the right kind of gas policies even after the recommendations given by multiple commissions. The current gas sector gives plenty of opportunity for rent seeking because of extensive government control. In the recent bidding process uner the New Exploration Licensing Policy separate blocks for Shale Gas as well as Coal Bed Methane were offered. Under the aegis of the Ministry of Earth Sciences (MoES), GoI, a comprehensive research-oriented gas hydrates program has been launched emphasizing the scientific and technology development for identifying promising sites on regional scale and estimating the resource potential, studying the impact of dissociation of gas-hydrates on environment, and developing environment-safe technology for production. Government will carry in future other similar bidding processes and rounds. The National Geophysical Research Institute (NGRI) and National Institute of Oceanography (NIO) are pursuing the scientific objectives for the identification, delineation and evaluation of gashydrates in various offshore basins. While the National Institute of Ocean Technology (NIOT) is developing remotely-operated vehicles and autonomous coring systems for validating the ground truth, and viable technologies for producing gas from gas-hydrates. Coalbed methane is generated during coalification process which gets adsorbed on coal at higher pressure. However, it is a mining hazard. Presence of CBM in underground mine not only makes mining works difficult and risky, but also makes it costly. Even, its ventilation to atmosphere adds green house gas causing global warming. However, CBM is a remarkably clean fuel if utilized efficiently. CBM is a clean gas having heating value ofapproximately 8500 KCal/kg compared to 9000 KCal/kg of natural gas. Page | 4
  • 5. Potential of Unconventional Sources of Natural Gas Table of Contents Part Topic Page 1 Research Methodology Research Design Objective of Study Data Collection Significance of Study Review of Literature Indian Energy Scenario Background and Introduction Resource Exploration and Categorization Energy Security and Related Aspects Research and Development in Energy Sector Indian Geography Coal Bed Methane Introduction Indian and Global Scenario Gas Hydrates History & Introduction Gas Hydrates in India National Gas Hydrates Program Tight Sand Gas Shale Gas Introduction Characteristics Shale Gas in India General Methodology for Exploration Draft Policy for Exploration and Exploitation of Shale Gas 7 7 7 8 8 9 10 10 24 33 41 43 47 47 49 57 57 60 62 74 76 76 79 82 87 1.1 1.2 1.3 1.4 1.5 2 3 4 4.1 4.2 5 5.1 5.2 6 7 7.1 7.2 7.3 7.4 7.5 8 9 Conclusion and Recommendations Bibliography and References 91 97 98 Page | 5
  • 6. Potential of Unconventional Sources of Natural Gas List of Figures and Tables Figure/Table Description Page 1 2 3 4 5 6 7 Primary Energy Sources (India) Preferential Fuel Table Environment Indicators Table Health & Safety Indicators Table CBM Resources : Global Perspective Major Coal Fields in India CBM Blocks in India 9 19 28 29 46 47 48 8 9 10 11 12 Stratigraphic Horizons (Coal) Gas Hydrates Reserves (World) Gas Hydrates Reserves (India) Tight Sand Gas Exploration Shale Gas in India 50 54 60 71 81 Page | 6
  • 7. Potential of Unconventional Sources of Natural Gas Part 1 - Research Methodology Research is a tool to interpret knowledge and data and further increasing the value, understandability of the given matter and statistics. Research is known as “ the manipulation of things, concepts or symbols done for the sole purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art.” In this study 4 type of unconventional sources of natural gas are taken into consideration. 1.1 Research Design The research is analytical and descriptive in nature. Main purpose of descriptive research is the description of state of affairs as they exist at present and tracing the the course of their history. The feature of this method is that the researcher has no control over the variables and the researcher can only project what has happened or what is happening. The research is analytical in nature because the usage of data, facts and information already available has been done and an analysis has been done to the available data with the help of various interpretational and statistical tools. 1.2 Objectives of the Study  To study the various unconventional resources of natural gas in India.  To analyze the various exploration techniques, methods and movements.  To suggest a legal framework suiting the specific needs related to unconventional gas resources.  The study of the shale gas extraction and production technology used by the various countries so as to focus on the Indian scenario of shale extraction.  To understand the existing processes and techniques for Shale Gas, CBM, Gas Hydrates Production.  To analyze the historical trend of such resources of natural gas & explore the leading factors for the same. Page | 7
  • 8. Potential of Unconventional Sources of Natural Gas  To study the factors those affect the production, transportation and use of such resources of gas 1.3 Data Collection Data for the research has been collected from both primary and secondary sources. Primary data has been obtained from Industry professionals, Working class and the Business class of the society through a questionnaire. Semi-structural questions were asked from the executives i.e., Delphi Method. Secondary data is further cross-referenced to primary data in order to process triangulation and from different articles & reviews of current academic literature & information gleaned from published industry sources. Secondary Data has been collected from various sources such as Reports, Journals, Newspapers, Magazines and Internet etc. 1.4 Significance of the Study Significance of the study is that it will provide an in depth understanding about various aspects of Coal Bed Methane, Gas Hydrates, Tight Sand Gas and Shale Gas which includes initial surveys, how the natural gas is extracted from the different formations lying underneath the earth’s surface, production techniques, governmental policies and future predictions. The study will be helpful in understanding the impact of different kinds of natural gas in the India’s energy portfolio, change in Indian energy usage pie and hurdles faced in the production and development of shale gas, CBM, Gas Hydrates and how it can be avoided. The study would look upon the policies and regulations that should be adapted by India. And the study will help in finding the potential of shale gas in India. 1.5 Literature Review The basic overview of Tight Sand Gas is provided by Chandra, Avinash, 2009, Tight Sand Gas : Potential and Prospects. Gas Hydrates policies, extraction, potential reserves and related activities are listed in, P.M., 2010, Methods of Estimation of Gas Hydrates, Coal Bed Methane Concentration, GUPTA, H.K. and SAIN, K. (2011) Gas-hydrates: Natural Hazard. In: P. Bobrowsky (Ed.), Encyclopedia of Natural Hazards. The challenges and regulatory Page | 8
  • 9. Potential of Unconventional Sources of Natural Gas regimes that India might face when Shale Gas acreages are taken into consideration. According to the report “A strategic imperative for India”, India’s current gas demand is limited by its access to natural gas supplies which is based on domestic production and imports availability are looked upon by Deloitte (India). Following books, reasearch ebooks, papers formed base for the research activity. *) - Energy and Security in South Asia: Cooperation or Conflict? *) – ONGC Bulletin (2007-2011) *) - Investing in Renewable Power Market (2009). *) - Assessment of Potential Shale Gas Resources. *) - India Energy Report – 2012 *) - Power Plays: Energy Options in the age of Peak Oil. *) – Energy Market and Different Legal Frameworks. Page | 9
  • 10. Potential of Unconventional Sources of Natural Gas Part 2 Indian Energy Scenario 2.1 : Background and Introduction India’s Combined Installed Capacity – 215 GW (which is fifth largest in world) India’s energy pie is largely dependent on thermal power plants and non-renewable sources of energy and for sustainable development it is essential to increase the share of renewable sources of energy. The per capita avg. annual domestic electricity consumption in India was 95 (year - 2009) kWh in rural areas and 287 kWh in urban areas for those with access to electricity, in contrast to the worldwide per capita annual average of 2650 kWh and 6250 kWh in the European Union. India's total domestic, agricultural and industrial (all primary, secondary as well as tertiary sectors) per capita energy consumption estimate varies depending on the source. Two sources place it between 400 to 700 kWh in 2008–2009. As of January 2012, one report found the per capita total consumption in India to be 778 kWh. Installed Capacity Non-Renewable Sources – 87.5% (7/8) Renewable Sources – 12.5% (1/8) Page | 10
  • 11. Potential of Unconventional Sources of Natural Gas Electricity has become an important aspect, the life blood of the modern world, without which the world will come to almost a virtual standstill. Any sluggishness in the growth of the electricity industry in any part of the world can throw the region far behind other regions in industrial, economic and social growth. Thus, power has been widely recognized as one of the key factors of infrastructure development, for a sustained growth of the country. Power/Electricity is a primary input factor on which the progress of the economy of a country largely depends. Full utilization of other input factors, such as manpower, land including irrigation, and capital-related resources of an economy depend upon the availability of electricity. In other words, it is not only a key input factor but it also plays a strategic role in utilizing fully the other resources towards the progress of the economy. In addition, electricity has become an essential factor in improving the social conditions and welfare of people. Thus, power is an input essential to the integrated economy of the country. Electricity, therefore, acts with a multiplier effect. Any shortfall in the availability of such a significant and strategic input factor will make the betterment of economy of a nation a distant hope. Thus, electricity is the most essential and vital ingredient for the growth of the nation in the social, industrial, commercial, and agricultural sectors. Hence a balanced development of electricity was identified as an important goal. Well recognized as ‘the industry of industries’ or the as the ‘mother industry’, electricity industry deserves priority in development and necessary support for sustainability during the planning process by the Government. Also, in the social field, power maintains its supremacy on all fronts, from daily needs and comforts-entertainment to as basic as agriculture and kitchen operations. The role of power sector in economic development is so tremendous that numerous economists very often establish a one-to-one correspondence between energy and economic development. The considered view of many of the influential groups of experts is that the poor state of affairs in infrastructure, including power, is one of the basic maladies of tardy economic growth, a volume or multitude of problems are rising up in the field of electricity industry. This has attracted keen attention from policy makers around the world and rigoros efforts to tackle these problems have become the order of the day. Industrial growth has been so fast and explosive in these years that the increase in energy supply could not maintain an equal pace. The main problems faced by the world are rapid depletion of non-renewable energy sources, also known as unconventional sources increasing costs for energy, and inability to create sufficient number of ROI for growth. These problems have created a shortage of power in both quantity and quality. Electricity industry was mainly treated as a Government business all over the world, considering its importance as a vital infrastructure for the growth of the country. But growth in the sector, however impressive it was, looked insufficient to cope with the impulsive growth in industrial and other sectors. Consequently, the whole vision on the subject has been undergoing a swift change. A major shift in the electrical industry worldwide is the thinking that it is to be managed by the private sector rather than by the government. Thus, an era of reform for the power sector has opened up. Page | 11
  • 12. Potential of Unconventional Sources of Natural Gas The swift ability to cater to the growing demands of the society and maintaining a sustainable pattern of functioning are few of the main challenges before the industry. Considering its importance as the vital infrastructure for the industrial, economic and social growth of humanity, experts, engineers, economists and policy formers of various countries are working hard for identification of the possible flaws and remedies for them. Power is extracted or derived from various sources to meet many requirements of humans in this modern age. Energy is used for lighting/illumination, heating, motive power in automobiles, ships & aero planes, water pumping, refrigeration & air conditioning, cooking, motive power of various appliances/machinery, electronic data storage, etc in all sectors such as agriculture, industrial, commercial and domestic sectors. The value of energy minerals produced in India is more than 85% (about 5/6) of all the minerals produced. In addition India imports large quantity of fossil fuels spending huge chunk of its exports income. These energy minerals are also used as raw material in production of industrial products but the usage as source of energy is many folds. The following are the primary energy sources    Thermal energy (India is largely dependent on this source of energy): Fossil fuels (ex: coal, natural gas, crude oil & its products), nuclear fuels, biomass (including wood), geo thermal energy, industrial by products (ex: LPG, coke oven gas & blast furnace gas), etc. Hydro power(Development of this source has been steady over the years): Hydro power energy excluding pumped storage operation. Non conventional energy: Solar energy, wind power, wave power, tidal power, animal draught power, etc in which due to the diversity possessed by India it has huge potential but in the lack of techniques, methods to tap those sources or make a conversion the power derived is far less than the actual potential, even when compared to nations which do not get the amount of sunlight and related diversity factors associated with the sunlight. However, energy exists in many forms such as electricity, thermal/heat/chemical energy, potential energy, kinetic energy, etc. Power is the most coveted form of energy since it is simple to convert in to other energy forms at very high-conversion efficiency and least effects on environment with the help of motors, furnaces, etc. Also transmitting electricity by cables / conductors is comparatively simple and clean method. All the primary energy resources are used to produce power as an intermediate energy before converting in to final power requirements. The major drawback of power is that it cannot be stored in bulk for using in mobile/transport applications. So the liquid fuels are predominantly used in transport sector. The countries which are endowed with crude oil (considered source of liquid fuels) reserves are Page | 12
  • 13. Potential of Unconventional Sources of Natural Gas considered as potentially rich countries irrespective of non energy minerals and availability of human resources. These power fuels are not uniformly distributed on earth to meet their demand. Exploration, extraction and transportation along with final conversion of fuels to ultimate energy is a very highly capital intensive. They also emit pollutants such as dust, SOx, NOx and various green house gases which are harmful to human beings health and long survival. All fossil or biomass fuels contain carbon and hydrogen elements which are mainly contributing to heat energy when burnt or oxidized. The carbon present in the solid/liquid form in these fuels is converted in to gaseous form carbon dioxide. Continuous use of these carbonaceous fuels for meeting ever increasing global energy consumption is gradually increasing the CO2 in the earth atmosphere. Higher concentrations of Carbon di Oxide in the earth atmosphere will aid the green house phenomenon or global warming. So carbon derived energy is gradually discouraged. Coal emits 95% of heat energy from its carbon content whereas natural gas (NG), petroleum fuels & bio mass emit less than 50% of heat energy. Global warming point of view, coal is considered as main culprit. India is endowed with vast coal reserves though other conventional fuels are not adequately available. India is also endowed with abundant non conventional energy resources such as Thorium nuclear fuel and solar energy but commercially viable technologies are not available to harness these resources on large scale. The various energy resources used in India are given below Petroleum products: These are derived from crude oil which India imports 80% of its requirements. Diesel, petrol, etc are used in transport sector as motive fuel for road vehicles, locomotives and ships. Many of these products are also used as raw material in the manufacture of organic chemicals, synthetic fibers, synthetic rubbers, plastics, fertilizers, etc. which have wide application in present day civilization. When other fuels are not available, these petroleum products are also used for electricity generation, heating and lighting purposes as alternative fuels. The major advantage of these fuels is their transportability by the transport networks such as roads, railways and ships. They can also be stored easily for mobile and stationary applications. Due to these advantages, petroleum products are extensively and intensively used to power all mobile vehicles covering road, rail, marine and air transport sectors. Natural gas: This is a gaseous fuel and relatively less polluting fuel. Unlike liquid fuels, its inland transportability is possible by pipeline network only and maritime transport is possible by refrigerating in to liquid below minus 160°C temperature. In maritime transport of Liquefied Page | 13
  • 14. Potential of Unconventional Sources of Natural Gas Natural Gas (LNG), heavy investments are incurred in liquefaction, transport and re-gasification processes. NG has commercial limitation in transporting across the seas. Being a clean fuel and ease of use, it is preferred fuel especially in domestic and commercial sectors. To control the air pollution in cities, Compressed Natural Gas (CNG) is increasingly used in intra city transport vehicles in place of diesel/petrol fuels. Natural gas can also be used in Iron manufacturing to reduce the coking coal consumption in blast furnaces. At present, the available NG is mainly used in fertilizer manufacture and power generation. LPG: Liquefied Petroleum Gas (LPG) is extracted from natural gas or produced as a by product from crude oil refining. This gas can be easily liquefied by compressing it to 8 bar pressure at ambient temperature. In addition to pipe line transport, LPG is also transported and stored in pressurized cylinders / tanks. LPG is also clean fuel similar to natural gas and also can be stored in bulk for use in mobile vehicles. The indigenously available LPG is not adequate to meet its ever increasing consumption. In India, most of the LPG produced and imported is used as cooking fuel. Nuclear Fuels: These fuels are used to generate electricity in addition to meet military requirements. The conventional nuclear fuels are Uranium and Plutonium which are used for electricity generation. India does not have substantial conventional nuclear fuels to depend on these fuels for its electricity requirements. However India is blessed with substantial Thorium reserves which can be used for electricity generation once the relevant technology is perfected for commercial level use. Using nuclear fuels is also fraught with environmental problems such as radiation leakages, disposal of spent radioactive fuels & equipment, decommissioning of nuclear reactors after their useful life, etc. The initial capital requirements and the decommissioning expenses of nuclear power plants are very high. Some critics say that the electricity consumed in establishing and operating a nuclear power plant exceeds the electricity it can generate in its life time. Hydro power: Electricity is generated by harnessing the water energy when water is descending in the rivers from high level to lower level. Hydro power is very clean energy. Hydropower plants installation submerges vast area of land and creates social and environmental problems such as displacement of population, submergence of forests, etc. The hydro electricity potential in India is approximately 85,000 MW at 60% load factor. Most of the untapped hydro power is located in North Eastern states. Another 1,00,000 MW at 60% load factor is available lying on both sides of border between China and India which can be jointly harnessed in future. Wind Power: Electricity is generated from the wind energy. The areas with wind speeds exceeding 15 Km per hour is suitable for locating wind power generators. Wind power is also Page | 14
  • 15. Potential of Unconventional Sources of Natural Gas clean fuel but birds get killed when they try to pass through the wind generator rotor. There is no control on electricity generation from these units as the power is generated depending on erratic wind availability. India has nearly 10,000 MW wind energy potential at 60% load factor. Wave energy: Wave power is secondary power from wind power. When the wind is blowing on seas/ water bodies, some of the wind energy gets transmitted to water creating wave energy. Till now wave energy is not harnessed for electricity generation on major scale. However there are possibilities to harness wave and wind energy available on oceans to augment fresh water availability and hydro electricity generation. Due to deference in solar radiation incidence on earth surface, the atmospheric global winds are generated on land as well as on oceans. These winds while passing over the seas pick up moisture and convert in to clouds. These clouds yield most of the fresh water in the form of rains on the land mass. Often, rain fall is not adequate in many regions/countries due to unfavorable conditions in the oceans such as ocean currents, surface temperature, etc though the global wind patterns are not changing. The available wave and wind power on the oceans can be utilized to enrich the winds with moisture irrespective of nature’s vagaries. The oscillating water surface when waves are formed are used to pump sea water few meters above the surface level and further atomized in to fine droplets / mist by using wind energy. The mist spayed in to the winds would fully vaporize enhancing the humidity of air / winds. The augmented moisture in the winds segregates in to clouds to yield more rain subsequently on land mass. The south west winds and north east winds are the sources of monsoon rains on Indian subcontinent. South west monsoon winds come from Arabian Sea and cross the peninsular India yielding rain and pass on Bay of Bengal and blow in to North India yielding rain again. North east monsoon winds enrich with moisture while passing on Bay of Bengal and subsequently yield rain in southern part of India. Though the augmentation of global/monsoon winds with moisture is a gigantic infrastructure building task, it is technically feasible by harnessing a fraction of renewable wind energy available on the territorial oceans. Land mass becomes greener / rich in vegetation acting as carbon sequestration. Many countries face severe water shortage frequently and many more countries are occupied by vast deserts (middle east and north Africa) though sea is located adjacent to these regions. Biomass: In agriculturally developed pockets of India, agro waste such as rice husk, crop waste, baggassi, inedible plants and leaves, wood from old plantations, etc is available. Generally rural masses consume bio mass for their cooking requirements. When it is found in surplus, it is also used in electricity generation and process industry. Bio-mass also can be gasified to produce synthetic gas, liquefied by fast pyrolysis process to produce bio-oil and carbonized by slow Page | 15
  • 16. Potential of Unconventional Sources of Natural Gas pyrolysis to produce charcoal. All these processes produce varying percentage of bio-char (charcoal), bio-oil and bio-gas. Biomass carbonization: This is well known technology to produce charcoal and town gas in olden days. The biomass is carbonized either at low temperature (up to 600 deg C) or at high temperature (up to 1200 deg C) in the absence of oxygen. The products of biomass carbonization/slow pyrolysis are charcoal (25% by wt), 850 Nm3 town gas per ton of dry biomass and organic liquid chemicals (30% by wt). The town gas contains hydrogen (45% by wt) with gross calorific value of 3000 Kcal/Nm3. Bio-oil production: Bio mass can be converted in to bio-oil / pyrolysis oil by the latest fast pyrolysis technologies with conversion efficiency up to 70%. Bio-oil has only 50% of heating value of crude oil and also unstable liquid. The bio-oil is rich in Oxygen content and also acidic unlike crude oil and its derivatives. Extensive research is being done to make bio-oil suitable for mobile vehicles though it can be used for stationary low and medium speed diesel engines and gas turbines with minor changes. The production cost of bio-oil is around Rs 10 per kg when the dry biomass cost is Rs 2.5 per kg. Pyrolysis oil can be separated in to a water soluble fraction rich in oxygen content and a heavier pyrolytic lignin. Pyrolytic lignin can be used as feed stock to produce naphtha, diesel, etc by hydro-processing (i.e. reaction with Hydrogen). Hydrogen is produced from water soluble fraction of pyrolysis oil. The garbage collected in Indian cities and towns has higher water content and biomass. This type of wet / watery garbage is converted commercially in to Bio-oil / Bio-crude by Hydro thermal upgrading (HTU) method which is also a type of pyrolysis process. Biomass gasification: Biomass is gasified in the presence of steam and air to generate producer gas/synthetic gas. Most of the biomass is converted in to producer gas which is rich in hydrogen (15% by wt) with gross calorific value of 1500 kcal/Nm3. In gasification process, the available thermal energy is utilized to produce more hydrogen by splitting water molecules for optimum hydrogen yield. The nutrients (nitrogen, phosphorous and potassium) present in the biomass are accumulated in the produced ash which can be used as fertilizer. Presently, the non woody surplus biomass such as inedible leaves, inedible crop waste, twigs, etc are either burnt or allowed to degenerate in the fields emitting green house gases such as methane and carbon dioxide. Cattle droppings, human excreta, household garbage, bagasse, poultry droppings, chicken feathers, waste hair, used tires, waste paper, etc are also biomass which can be used for producing bio-oil, bio-gas and bio-char. The spent dung from anaerobic digesters (gobar gas plants) can also be used in production of bio-oil. In India, the dry inedible Page | 16
  • 17. Potential of Unconventional Sources of Natural Gas biomass availability is nearly equal to all the fossil fuels consumption which is approximately 750 million tons per year. This biomass quantity can produce bio-oil three times equal to India’s crude oil imports and generate Bio-char of 200 million tons annually. The bio-char with heating value 7500 Kcal/kg can replace all the mined coal consumed by its thermal power stations. The bio-gas produced from pyrolysis process contains nearly 5% hydrogen by weight. The hydrogen in the bio-gas generated can produce 50 million tons of Urea fertilizer which will transform India in to Urea exporter after meeting all internal consumption. Ethanol: Ethanol / ethyl alcohol is fermented from biomass which is rich in starch / carbohydrates content. It is also consumed by humans in large quantities as liquor. Ethanol can be used as transport fuel by blending in diesel and gasoline fuels. Presently ethanol is produced from food grains and sugarcane which are costly and predominantly used as food source. The economics of using food grains and sugarcane as fuel source is not favorable since they fetch more value as food source in India. Sugar cane is a long duration irrigated crop and consumes lot of water. Cultivation of sweet sorghum which is seasonal dry land crop is a better source of biomass and Ethanol production in huge quantities for meeting the needs of transport fuel. Bio-diesel: The inedible oil seeds produced by plants and trees can be the source of fuel for mobile vehicles to replace costly imported diesel and petrol (gasoline) fuels. The non edible vegetable oils extracted from Jathropa, Karanj (Hindi) / Honge (Kannada) / Koroch (Pongamia pinnata), Algae, etc can be used directly by blending 20% oil in diesel fuel or can be converted in to bio-diesel by esterification of these vegetable oils to replace diesel and petrol fuels totally. Esterification is achieved by adding methanol or ethanol to the vegetable oils. The estimated vegetable oil yields of bio-diesel crops are       Soybean: 0.4 tonnes oil/ha.year Rapeseed: 0.8 tonnes oil/ha.year Jathropha: 1-1.5 tonnes oil/ha.year (non edible) Palmoil: 4 tonnes oil/ha.year Koroch / Karanj: 3 – 4.5 tonnes oil/ha.year (non edible) Algae: 10-25 tonnes oil/ha.year (non edible) The most promising sources of bio-diesel are Algae and Koroch (Bengali) which need not compete with other crops and natural forests for land, water, sunlight, etc. Algae: Algae (pond scum) are tiny cellular plants suspending in water (fresh, brackish and sea water) which absorb dissolved carbon dioxide in water to produce biomass by photosynthesis with the help of sun light. Algae grow fast and many species of algae contain up to 60% of its dry mass as Bio-diesel (lipids / fats). The de-oiled algae cake is rich in proteins and is good source to augment proteins in cattle and poultry feed. Extensive research has taken place on Page | 17
  • 18. Potential of Unconventional Sources of Natural Gas algae cultivation in developed countries to demonstrate the farming technology but it could not be commercialized in these countries because of limited favorable weather conditions and high cost of labor. However India has favorable tropical climate to cultivate algae throughout the year on its sandy coastal areas using abundantly available sea water or brackish water. The only external raw material required is carbon dioxide gas in Indian climate. The gobar gas produced in rural areas by using cattle dung contains 50% carbon dioxide gas and 50% methane. When this gobar gas is used in electricity generation by diesel engines, the available exhaust gas is the cheap source of carbon dioxide gas for algae cultivation in rural areas. The combustion gases from Biomass / bio char burning can also be cheap local source of carbon dioxide gas. The skilled labor cost in rural India is also nominal compared to western countries. Algae cultivation is not new in India. Algae are used to treat the sewage water in natural oxidation ponds to produce oxygen to meet the Biological Oxygen Demand (BOD). Algae produced in the oxidation ponds are not yet harnessed for Bio-diesel production in India. Indian climate is very much suitable for Algae cultivation similar to natural oxidation ponds. Spirulina which is an alga rich in proteins content is commercially cultivated in India. Koroch: Koroch in Bangladesh is a fresh water flooded tree. This tree can grow on lands which are water inundated up to1.5 meters depth for six months at a stretch. The seedlings can survive under water during the long submergence period. Koroch tree reaches 20 meters height and lives for 100 years. The dry seed pods contain 25% toxic vegetable oil which can be used as bio-diesel. Koroch / Honge is a tree native of India whose oil is used in illumination lamps in olden days. Since Koroch is a flooded forest tree, it can be grown in our man made water reservoirs up to a depth of 1.5 meters without the need to compete with land based food crops. India has nearly 30,000 square km of manmade water bodies and many water storage reservoirs are yet to be built to harness the water resources fully. The reservoir bed up to 1.5 meters depth are exposed for seven months in a year when the stored water in these water bodies are used for irrigation, drinking water, etc, India can become self sufficient in its energy requirements if one year oil imports cost (50 billion US$) is invested on pyrolysis oil and bio-diesel production technologies/infrastructure to meet its energy needs. India is endowed with tropical climate to sustain these renewable and carbon neutral energy resources. Solar energy: The energy of sun light is used for electricity generation during day time. The average solar radiation per square meter is one KW during day time. Clouds free sky is required to generate solar power and also it needs vast unused area by farm lands, water bodies and forests which also depend on sun light for their existence. Solar power generation on major scale is not yet commercially proven. Though it is a clean energy, the materials used in solar Page | 18
  • 19. Potential of Unconventional Sources of Natural Gas cells may be source of soil and water contamination causing health hazards. India is blessed with vast solar energy resources and substantial solar power generation is possible as the technology matures. Animal draught power: Animal power is extensively used in agriculture and transport in rural areas. The draught animals such as bullocks and he-buffaloes can be used for generating commercially viable electricity for meeting daily peak load demand. It will boost the rural employment and income by using the idle time of the cattle for electricity generation. The installation cost and time are comparatively low. In many countries & few parts of India also, cows & she-buffaloes are used for draught power and can also be used for electricity generation. Page | 19
  • 20. Potential of Unconventional Sources of Natural Gas TABLE – PREFERENTIAL FUEL Purposes Preferred fuels Next preferred fuels Least preferred fuels *Mobile military Diesel, petrol hardware Ethanol, bio-diesel - *Air transport bio-diesel Ethanol ATF, HSK Marine transport Bio-oil / pyrolysis oil LDO, HFO, bunker fuel, Nuclear fuel, LNG Civilian transport Bio diesel, CNG, LPG vehicles Battery power/electricity Diesel / petrol Railways Pyrolysis oil, Electricity, Bio LPG diesel Diesel Illumination/ lighting Electricity, Koroch / bio Natural gas, LPG diesel Kerosene Domestic- cooking Natural Gas, Koroch / bio LPG, Electricity diesel, charcoal Kerosene Domestic - space & Pyrolysis oil, charcoal, LPG water heating Solar energy, Natural Gas Electricity, Kerosene Domestic - other Electricity appliances Diesel / petrol Commercialcooking Natural Gas, bio-char Battery power LPG, Pyrolysis Electricity oil, Kerosene Commercial- space Solar energy, Natural Gas, LPG & water heating Pyrolysis-oil Electricity, Kerosene Commercial- other Electricity, bio-diesel, appliances Diesel / petrol Battery power Page | 20
  • 21. Potential of Unconventional Sources of Natural Gas Industrial- motive Pyrolysis-oil, bio-diesel, Natural Gas, LPG power bio-gas, Electricity Industrial- heating Pyrolysis-oil, Coal, lignite, Natural & cooling Bio-char Electricity Urea fertilizer Industrialmaterials Bio-gas / synthetic gas, Natural gas, coal, bio-char raw As required Agriculture- water Pyrolysis-oil, pumping Electricity - bio-diesel, LPG Diesel / petrol Gas, Fossil liquid fuels Naphtha - Diesel / petrol Agricultureheating & drying Bio-mass, Pyrolysis-oil, LPG, bio-gas Diesel / petrol Agriculturetransport Bio-diesel, LPG CNG, bio-gas Diesel / petrol Agricultureappliances Bio-diesel, Electricity LPG, bio-gas Diesel / petrol Electricity Local coal, bio-char, lignite, Natural gas (peaking Petrol, Diesel, NGL, nuclear, bio mass, pyrolysis power) LPG, LDO, HFO, Naptha oil, bio-gas, gobar gas, hydro, wind, (As per economical cost at user locations) Coal and lignite: These are mainly used to generate electricity, to fire boilers in process industry, to produce cement, etc. Coking coal is used as raw material in Iron manufacturing which is in shortage in India. India imports most of its coking coal requirements. India is blessed with 200 billon tons coal reserves which will last for 400 years at the present rate of consumption. The coal reserves will last for 40 years even the consumption is increased by 10 folds. These reserves are estimated based on coal found up to 600 meters depth. The reserves Page | 21
  • 22. Potential of Unconventional Sources of Natural Gas would increase further if the exploration is carried out at more depths and also under shallow sea water area. The presently used coal mining technologies are not cost competitive beyond 600 meters depth. However, underground coal gasification technology is maturing to convert coal in to clean gaseous fuel. The latest technology adopted from oil & gas wells drilling such as serpentine drilling / inseam drilling, guided drilling, bunching of wells, etc. has made in situ coal gasification technology a reliable and commercial proposition. Big country like India cannot depend on imports as it is going to be huge portion of international trade in energy fuels. Coal is going to be the backbone of its energy sector until another lucrative energy harnessing technology is developed. The per capita CO2 emission by Indians will be less than world average, even after the coal consumption is increased to five times of present consumption. Indian coal is of low calorific value with high ash content. They have comparatively less sulfur and heavy metals which are advantageous in pollution point of view. Indian coal also has high ash fusion temperature which is a positive factor in coal fired boiler design. Well proven boiler technologies are in use to fire high ash content coal. The existing rail infrastructure to transport coal to various distant power stations is not adequate. Dedicated cross country coal slurry pipe lines are to be constructed to meet the coal transport requirements. Energy starvation: It is defined as people living in surroundings where the temperature is less than 20˚C and more than 30˚C. When natural ambient temperature is not in the range of 20˚30˚C and surrounding temperature is not controlled, it is considered that energy starvation conditions are prevailing. This can be while in house or in work place or in commercial establishment or in mobile vehicle. The per capita energy starvation duration in India is in excess of 70%. Thus lot of demand for various energy resources will be felt in future decades as the living standards of people reach that of developed countries. Energy policy of India: Depending on availability & geographical distribution of various energy sources and commercially viable technologies, the short & long term energy policies of India are to be framed for meeting energy requirements. Other than petroleum products and natural gas, all other energy resources are predominantly used for electricity generation. The following points are to be implemented in India   Since the liquid fuels are imported in large quantities, their consumption should be limited to unavoidable mobile hardware such as military vehicles, marine transport and air transport only. Bio-diesel, CNG and LPG are preferred fuels for rest of transport sector. Page | 22
  • 23. Potential of Unconventional Sources of Natural Gas        Domestic & commercial sectors shall be supplied with piped natural gas for meeting heating and catering requirements. Cross country natural gas pipe lines and city gas distribution piping network are to be constructed to supply natural gas to all users. All available energy resources other than liquid and gaseous fuels should be used for electricity generation. The means of electricity generation shall be based on the delivery cost of electricity at user door step taking in to account generation and transmission costs. For transporting coal to long distant power stations, cross country coal slurry pipe lines are to be constructed to reduce the cost of coal transport. Since coal is abundantly available, underground coal gasification technology is to be developed on commercial scale to convert coal in to gaseous fuel not only for electricity generation and but also for other energy requirements. There shall be technology mission to commercialize bio-diesel production from Algae and Koroch cultivation to replace the conventional transport fuels. There shall be extensive efforts to popularize biomass gasification and biomass pirolysis to serve as chemical feed stocks, raw material in Urea production, and heating fuels. The preferred fuels for various requirements are indicated in Table-I. When these preferred fuels are used for each application, the import of petroleum products, LNG, coal and nuclear fuels could be minimized to build self dependent energy sector till the commercially proven technologies are established for using biomass, solar energy and Thorium nuclear fuel. India's network losses exceeded 32% in 2010 including non-technical losses, compared to world average of less than 15%. Both technical and non-technical factors contribute to these losses, but quantifying their proportions is difficult. But the Government pegs the national T&D losses at around 24% for the year 2011 & has set a target of reducing it to 17.1% by 2017 & to 14.1% by 2022. Some experts estimate that technical losses are about 15% to 20%, A high proportion of non‐technical losses are caused by illegal tapping of lines, but faulty electric meters that underestimate actual consumption also contribute to reduced payment collection. A case study in Kerala estimated that replacing faulty meters could reduce distribution losses from 34% to 29%. Key implementation challenges for India's electricity sector include new project management and execution, ensuring availability of fuel quantities and qualities, lack of initiative to develop large coal and natural gas resources present in India, land acquisition, environmental clearances at state and central government level, and training of skilled manpower to prevent talent shortages for operating latest technology plants. Page | 23
  • 24. Potential of Unconventional Sources of Natural Gas 2.2 : Resource Exploration and Categorization In view of the significance of the oil & gas sector for overall economic growth, the Government of India, under the Industrial Policy Resolution of 1954, announced that petroleum would be the core sector industry. In pursuance of the Industrial Policy Resolution, 1954, petroleum exploration & production activity was controlled by the government-owned National Oil Companies (NOCs), namely Oil & Natural Gas Corporation (ONGC) and Oil India Private Ltd (OIL). Consequent to the various initiatives taken by the government, currently the area under exploration has increased fourfold. Prior to implementation of NELP, 11% of Indian sedimentary basins area was under exploration. With the conclusion of seven rounds of NELP, the area under exploration has increased to about 50%. One of the world’s largest gas discoveries was made by Reliance Industries Ltd in 2002, in Jamnagar (about 5 trillion cubic meters). Besides, the entry of international companies like Hardy Oil & Gas, Santo, Geo-Global Resources Inc, Newbury, Petronas, Niko Resources and Cairn Energy into India has helped boost the growth of the industry. While the basic framework of the procedures to be followed, guidelines to be framed is similar in India compared to other countries but due to the lack of uniformity outside the production/extraction units and infrastructure there is a need of extra measures to be implemented in order to create a sync between the health, safety and environmental measures and the Indian framework for the optimum utilization of resources and smooth functioning of downstream oil industry. As a result of dynamic nature of the sector it can be divided into *) – Refineries, Oil Rigs and stationary plants from where crude oil, natural gas are extracted or refined. Separate, long term measures of safety are required. *) – Distribution Mode, which includes pipelines, vehicles and other mode of transport of different types of fuel. *) – Chemical safety as well as occupational transport-handling-warehousing safety at different levels. Comparison, feasibility and implementation of internationally approved standards, methods are also analyzed with the help of data and records. Page | 24
  • 25. Potential of Unconventional Sources of Natural Gas Oil and Gas Industry is a wide supply chain industry which constitutes various operations, activities beginning from the extraction, procurement to the transportation of different forms of fuel to the end consumer. The industry is mainly categorized under i) – Upstream This category is used to refer to the recovery/searching for and production of natural gas, crude oil. The upstream sector also includes the searching for potential underground or underwater oil and gas fields, drilling of exploratory wells, and subsequently operating the wells that recover and bring the crude oil and/or raw natural gas to the surface. With the advancement in technology and increase in the share of unconventional sources of natural gases in the energy pie in general upstream sector is becoming broader gradually. ii) – Midstream The midstream sector (which is quite flexible term and often used interchangeably for various upstreamdownstream activities) generally involves the transportation, storage and marketing of the various oil and gas products produced by petroleum crude oil refineries and by natural gas processing plants. iii) – Downstream Downstream sector includes purification-processing of different types of natural gas and refining of crude oil and further marketing-distribution of the products derived. As mentioned above it depends on the company’s policy and the host country’s laws whether to assign an activity under midstream or downstream. In India and majority of world, integrated oil and gas companies participate in all of these businesses, smaller companies may have operations in only one, or part of one, of them. In addition, both large and small oil and gas companies may engage in one or more secondary activities that are not typically associated with the oil and gas industry, including: *) - Power generation *) - Metal Production *) - Natural gas transmission (City Gas Distribution Model implemented in major cities across India.) *) - Coal Mining *) - Renewable energy systems *) - Specialty chemical production Page | 25
  • 26. Potential of Unconventional Sources of Natural Gas The way in which oil and gas companies divide their activities into different businesses varies from firm to firm. As well as reporting consolidated company performance, companies often separately report data for different activities, particularly where there are important differences between the activities for the indicator. Indian Downstream Sector There are multiple occupational hazards, health and safety concerns associated with the different processes of the industry. Due to various activities of different nature and degree of danger involved in downstream industry, Health, Safety and Environment guidelines, regulations, checks and precautions help in smooth running of the industry. Operating sectors will have significantly different regulated hazardous waste streams with different treatment and management options available. In downstream operations, major shutdowns and periodic maintenance activities can result in short term increases in hazardous waste generated. Large, one-time construction projects, remediation activities, and high-volume aqueous wastes should be tracked separately. However, due to lack of industry norms, flexibility in rules and regulations in India there are certain areas which form significant part of HSE model of a company in which India lag behind compared to other countries. Reporting Compared to world average, Indian downstream industry in terms of transport by mode of roadways, railways and pipelines in order to save time, effort and money unofficially discourage their employees in reporting issues especially if the magnitude-volume is relatively low. However, after certain events, accidents some companies are beginning to consider reporting on wider impacts of their activities in the context of a value chain that extends beyond the normal activities within its organizational boundaries. For example, a company may choose to report on how they are influencing emission reductions or improved social responsibility within their supply chain, or in addition on the customer side, companies may choose to report on programs aimed at informing consumers about the efficient use of oil and gas products. An impact may be described as “direct” when an activity is under the company’s control (as owner or operator). When an activity is under another’s control, but the company has some degree of influence over this activity, the resulting impact may be described as “indirect”. By separately addressing relevant indirect impacts, the company is extending the scope of its reporting within its value chain. Key factors related to reporting are also missing in the companies under Indian downstream industry which are *) - Transparency – An important factor which takes a backseat in India because of corruption, favorism and greed along with petty politics which puts many lives on the line. Information should be reported in a clear, understandable, factual and coherent manner, and facilitate independent review. Transparency relates to the degree to which information on the processes, procedures, assumptions and limitations in report preparation are disclosed. Page | 26
  • 27. Potential of Unconventional Sources of Natural Gas *) - Relevance – It is significant that the reported information is considered by report users, both internal and external to the company to be meaningful and valuable to the user(s) for information purposes. Level of relevance can be exhibited in training sessions. *) - Consistency – The consistent application of information gathering processes and boundary definitions is essential to the development of credible reports. Consistency in what is reported and how it is reported enables meaningful comparisons of a company’s performance over time and facilitates shared understanding, especially internally within companies, as well as comparisons with peer companies. *) - Completeness – Information that is relevant to internal and external users should be included in a manner that is consistent with the stated purpose, scope and boundaries of the report. Reported information should be complete with respect to appropriate operational boundaries and scope of information. *) - Accuracy – Information should be sufficiently accurate and precise to enable intended users to understand the relevance of information with a reasonable level of confidence. Accuracy refers to the levels of certainty and uncertainty of Performance Benchmarking Earlier to reduce the money, time and efforts the standardization in terms of measurements, records was not preferred. Many oil and gas companies actively engage in HSE benchmarking initiatives and are increasingly involved in sustainability and other non-financial indicator benchmarking. Benchmarking provides an effective tool to improve performance, because it can provide a systematic approach to identify and learn from others about good practices and innovative solutions. Infusing benchmarking helps in long term growth of the company and also improves the goodwill among the consumers. It offers an external view of a company’s performance and can help identify what is needed for continual improvement in different aspects. Oil and gas companies often rely on industry groups to facilitate benchmarking processes by developing key performance indicators, and by collecting and analyzing performance information. This document provides a common point of reference that can help support broader engagement in benchmarking studies of sustainability or non-financial indicators among oil and gas companies, and thereby encourage good practice sharing to enhance individual company performance. Data Aggregation Page | 27
  • 28. Potential of Unconventional Sources of Natural Gas Under the obligation of government and laws Indian companies report performance data at varying levels of aggregation ranging from individual facilities to national, regional locations and to global coverage for the entire corporation. Aggregate reporting at the corporate level is most commonly observed for reporting occupational injuries, environmental emissions and incident data as part of both regulated and voluntary public reporting. Reporting companies are encouraged to determine the level of aggregation that is appropriate and provides a meaningful representation of the data being presented. Reporting companies often present raw performance data in terms of absolute quantities that can be expressed in a physical unit of measurement related to weight, volume, energy or financial value. In general, absolute data can be expressed in units of measurement that are readily convertible. Absolute quantities may provide information about the magnitude or size of an output, input, value, or result depending upon the prevailing need, evaluating method, comparative entity/norm. The normalised quantities are those figures which represent ratios between two absolute quantities of the same or different kind. Ratios allow comparisons among operations of different size and facilitate comparisons of similar products or processes. They also help relate the performance and achievements of one company, business unit, or organization to those of another. Ratio indicators can provide information on the efficiency of an activity, on the relative intensity of an output (e.g., energy intensity) or on the relative quality of a value or achievement. Infrastructure The company’s and the Special Economic Zones (SEZs), Export Promotion Areas, Towns of Export Excellence etc infrastructure may suit the downstream activities, but the transport network is not at par with the upstream infrastructure and the industry have to adopt some additional measures to avoid accidents involving internal—external sources (in the process of distribution and marketing). In Indian context companies have to *) – Adapt to increasing share of Inland Waterways in the transport sector especially in the case of rural-remote areas which are connected to a flowing water body compared to road-rail network. *) – Regular point check of pipelines at various pumping stations, keeping special measures for leak prone areas. *) – Guidelines, specialized roadways and railways routes suiting the downstream activities in Indian states. *) – Different measures for different topographies and geographical regions. Environment Page | 28
  • 29. Potential of Unconventional Sources of Natural Gas The companies in oil and gas industry recognizes that their operations have potential impacts on the environment. Some of the environmental impacts may have social and/or economic implications. Companies in the industry have made many commitments to manage and minimize negative environmental impacts. Often, these commitments go beyond regulatory obligations. The environmental performance indicators described in the table may be useful in describing the performance of company operations. Indicators such as spills, emissions, wastes and energy use, when expressed as absolute quantities provide a sense of magnitude or scale. Normalization of these quantities facilitates comparisons among organizations of different sizes, and can help express environmental performance in economic terms. Independent records, evaluation, archiving and guideline stabilization is significant to attain optimum level of sustainable growth of the company along with taking care of multiple environmental factors which can differ from one region to another on which a company is operating. Even the additional areas listed here are interdependent to the core areas which proves that a company’s priority should be core areas but neglecting additional areas (in different categories) can prove to be hazardous for the company in the longer run. Health and Safety Page | 29
  • 30. Potential of Unconventional Sources of Natural Gas The oil and gas industry recognizes that some health and safety hazards are inherent in its operations and products. Companies in the industry have made many commitments to achieve excellence in managing these risks. Often these commitments go well beyond regulatory obligations. The health and safety performance indicators described in this section are generally recognized as good indicators that may help companies manage operations and promote improvements in health and safety performance. *) Indicator (H&S-1) : Indicates the Implementation and coverage of an Occupational Health and Safety Management System. An occupational health and safety management system is a process that applies a disciplined and systematic approach to managing safety and health activities. This approach uses a cyclical process that takes experiences and learning from one cycle and uses them to improve and adjust expectations during the next cycle. Management systems should convey a company’s structure, responsibilities, practices, procedures, and resources for implementing occupational health and safety management, including processes to identify root causes of poor performance, prevent recurrences, and drive continuous improvement. A health and safety management system may be integrated into an environmental, health and safety management system or may stand alone. Many companies within the oil and gas industry employ management systems as a principal means to achieve continuous improvement of business performance including performance against health and safety objectives. *) – Indicator (H&S-2) Page | 30
  • 31. Potential of Unconventional Sources of Natural Gas The indicator is used for the purpose of joint management and employee safety and health programs and procedures to ensure participation of employees at all levels in safety and health activities and dialogues. Provides the detailing of the structure of joint management and employee safety and health mechanisms set up to facilitate active employee involvement in safety process improvements and consultations. Include in the discussion how these mechanisms are functionally integrated into the overall health and safety management system and/or how participation of employees through all levels in the company is encouraged. Describe the current status of employee access to and/or participation in safety and health consultations or dialogues, including plans to address any need for improvement. Contract employees often have their own employee and management health and safety programs that are the responsibility of their direct management. Consideration should be given to describing the interactions between company employee participation mechanisms with those of the contractors and partners working on company sites. The participation programs of employees which address worksite safety and health issues are important in all work environments. It is widely acknowledged that the advantage of employee participation is the in-depth practical knowledge of specific tasks coupled with the larger overview of company policies and procedures. Another significant benefit is the enhancement of a cooperative attitude among all parts of the work force toward solving health and safety problems. This indicator acknowledges that there are a variety of mechanisms available to promote active employee participation in safety and health efforts. Companies are encouraged to report on those mechanisms that support full involvement of the workforce in suggesting safety and health improvements. *) – Indicator (H&S-3) Programs and practices to understand the general health risks and experiences affecting the local workforce. Describe the processes and programs the company has for identifying the general workforce health problems that are most significant in each location and approaches used to address these health problems. This indicator addresses health problems in the workforce that are both work-related and non work-related. It could include health issues that are prevalent in the communities where businesses are located. Sources of information can include local public health officials, medical absenteeism data, health benefits data, information from company sponsored medical clinics, health impact assessment (HIA) information, knowledge of workrelated incidents and summary data from employee personal health risk and wellness data. The programs to understand work force health issues will vary widely by location. Dialogue with employees is an effective method of obtaining a good understanding of opportunities for improvement. Page | 31
  • 32. Potential of Unconventional Sources of Natural Gas *) – Indicator (H&S-4) Fourth indicator for Records-Archive System for recording occupational injuries and illnesses, and reporting them as the following rates: *) - Total Number of Injury Rate *) - The Lost Time-Injury Rate *) - Fatality Rate *) – Miscellaneous Time and Injury Comparative Analysis. Guidance on recordability criteria for occupational injuries and fatalities is given in the “References and Supporting Document” summary (below). While it appears that OSHA recordkeeping guidance is frequently employed across the industry for global corporate reporting, there is not adequate consensus at this time to recommend this as a standard practice throughout the oil and gas industry. Work-related incident rates (frequencies) for total recordable injuries, total recordable illnesses and lost time injuries are calculated on a basis of number of incidents per 1 million hours worked. The fatality rate is calculated on a basis of number of fatalities per 100 million hours worked. Reporting of total injury, lost time injury and fatality rates should include separate and combined rates for both company employees and contracted workers. The total illness rate should be reported for company employees only. *) – Indicator (H&S-5) Existence of a process to invest in and act on product-related knowledge, and to communicate results of the risk characterization and management process to customers and the public. Describe processes and programmes that the company has in place for characterizing and managing product health risks, and to make the results available to customers and the public. This process applies to all products sold to customers. Page | 32
  • 33. Potential of Unconventional Sources of Natural Gas 2.3 : Energy Security and Related Aspects India hopes to achieve a high rate of growth over the next several decades, notwithstanding the recent global financial crisis. Energy availability—in adequate quantity and good quality— would be a pre-requisite to sustain targeted levels of economic growth and the desired levels and spread of social development. However, the quantum of energy demand would obviously be a function of the energy pathways that India can choose to adopt or design to follow. Using the MARKAL (MARKet ALlocation) model an analysis has been undertaken of four alternative energy development pathways that could lead to significantly different outcomes in terms of the fuel mix, technologies deployed and, therefore, total conventional energy demand. Also presented and discussed are policies and measures that would need to be implemented to ensure realization of each of these scenarios. Given the long lifetimes of energy infrastructure, it is extremely important that investments made today serve us their full life and, therefore, such investments must be aligned with the long-term choices that India may need to make. All four scenarios present results up to 2031/32 (end of the Fifteenth Five-year Plan) and uniformly assume an average annual economic growth rate of about 8% over this period, a consistent population growth and affluence level, and the same socio-economic structure. The model itself has been configured to 2036/37, recognizing the long gestation time for setting up of energy projects. With economic growth, access to modern fuels and technology choices is assumed to increase as sections of society progress along the economic ladder. The pace of implementation of already announced government policies and programs has been adjusted so as to capture more realistic trends in the short to medium term. For example, while the progress with regard to electrification has been slow in comparison to the targets for providing universal access to electricity by 2012, it is assumed that all households would have electricity by 2017, at least. Moreover, households are assumed to make a transition towards cleaner cooking fuels such as LPG with a rise in incomes. One of the eight missions defined in the NAPCC recognizes the importance of energy efficiency. The challenge of promoting energy efficiency in India lies not so much in the availability of technology, as it does with a distorted pricing system that leads to perverse incentives to either promote wasteful energy consumption or to resort to theft! The issue of high initial costs does exist, primarily due to the existence of a large and unregulated market for non-standardized products, but is relatively simpler to design a solution for. The experience with energy efficiency in any sector of the economy — be it agriculture, the residential sector, industry (including small and medium enterprises [SMEs]) or the commercial sector – points towards Page | 33
  • 34. Potential of Unconventional Sources of Natural Gas the need for correcting the pricing of either the fuels to reflect their true scarcity value or the prices of appliances/equipment through appropriate fiscal interventions. Residential sector - The residential sector, at 25% of final electricity consumption, is the second largest contributor to demand and possibly the largest contributor to peak demands in the system. Lighting accounts for 35% and space conditioning for 30% of the total electricity consumed in the sector. Approximately 13% of the electricity is consumed by refrigerators and 8% in water heating. Trends in consumption patterns reveal that electricity consumption is increasing at a rate of approximately 10% in this sector. The lighting, space conditioning, and water heating demands coincide substantially with peak load periods, and the introduction of well-designed time-of-day pricing can, affect savings of nearly 30%. With the exception of lifeline consumers, all other consumers must be charged a peak tariff that is at least a factor of two or three higher than the off- peak tariff, and a recommendation on the minimum differential must be stipulated in the National Electricity Policy. The Mission on Energy Efficiency must also work with state regulatory commissions to encourage them to increase such a differential if their local contexts demand so. Industrial sector Industry accounts for about 50% of the total commercial energy consumption in the country. The energy-intensive industries fall in both the large industry segment (for example, iron and steel, cement, fertilizer, pulp and paper, textiles, and aluminium) as well as in the medium, small and micro-enterprises (MSMEs) segment (for example, foundries, forging, glass, ceramics, brassware, brick making, refractories, rice mills, and a highly dispersed food–processing sector). Many units in the industrial sectors like iron and steel, chemicals, pulp and paper, aluminium, and textiles also fall under the broad category of the MSME sector. This large sector is already experiencing a transformation towards high energy efficiency levels largely due to the cost implications of the existing tariff structures as also the pressures of competition. However, it is the MSME sector that requires a push in terms of ensuring that energy-efficient technologies get adopted in the sector on a large scale. The low end-use efficiencies in MSMEs can be attributed to several barriers, (i) use of obsolete technologies, (ii) non-availability of readymade technological solutions, (iii) low level of awareness/information availability, (iv) non-availability of technology providers at local/cluster level, and (v) relatively high cost of technologies and poor access to finance. Given the diversity of the MSME sector, the promotion of technology up-gradation in this sector necessitates the development of sector-specific integrated programs for technology development. TERI’s experience of working in the small-scale industrial sector during the last 10 years shows that it is possible to reduce energy consumption by up to 30%–35%, if sustained and concerted efforts are put in RDD&D for developing cluster/sector-specific technologies. For example, in case of the Firozabad glass industry cluster, TERI has developed and demonstrated an energy-efficient glass melting furnace in the cluster, and already nearly 50% of the units in this cluster have switched over to this energy-efficient design, thus saving close to 10000 toe (tonne of oil equivalent) of natural gas annually. Specific cluster programmes for Page | 34
  • 35. Potential of Unconventional Sources of Natural Gas MSMEs that are aimed towards technology upgradation and improvement of energy efficiency must be launched. These can be done quickly for nearly 150 manufacturing clusters that are energy intensive. The interventions in different energy-intensive MSME subsectors would require undertaking detailed diagnostic studies, focusing on technology and needs assessment, designing, developing, and demonstrating energy-efficient technologies to suit local conditions, providing advisory support to small units for disseminating these technologies and building local capacities so that the new, energy-efficient technology options may be adopted by a relatively large number of units in the clusters. A public–private partnership (PPP) model comprising industry, academia/R&D institutions, service providers, and government is required for each cluster for developing and implementing programmes. One of the key tasks of the Mission on Energy Efficiency should be to strengthen the Bureau of Energy Efficiency’s (BEE) initiative on SMEs through the establishment of such goal-oriented partnerships with adequate funding and performance targets over a sufficiently long-term period. Identifying energy- efficiency goals for each cluster, this programme should first carry out competitive bids for demonstrating efficiency improvement interventions (including any technology development/adaptation costs) with appropriate weightage being provided to more ambitious and early-impact programmes. Involving the key stakeholders of such a consortium in facilitating the widespread dissemination of successful interventions would be a useful ‘carrot’ to increase the success rate of such a programme. Such demonstration projects should also be required to address the key institutional and capacity barriers that might exist to rapid implementation of efficiency improvements. Agricultural sector The initial high cost of energyefficient motors, poor pricing regimes, and lack of knowledge about the long-term gains are the major factors responsible for sub-optimum efficiencies. Motors used by the farmers are generally of poor quality and efficiency. Energy-efficient motors account for a very small percentage of motor sales in India. The cost of energy-efficient motors is ~20%–30% higher than standard motors in India. Higher prices of these and subsidies on power consumed lead to low demand, creating a vicious cycle and making it difficult for prices to reflect economies of scale. Financial incentives in the form of reductions in sales tax, abolishment of octroi on energy-efficient products, and reduction in customs and excise duty on imported energyefficient equipment must be provided. Retrofitting of even 10% of the existing inefficient pump sets (~15.35 million as of March 2007) annually, would translate into a savings of ~4 billion kWh (kilowatt-hour) per year at the user’s end and ~900 MW of equivalent generation capacity. The Mission on Energy Efficiency must intervene with relevant stakeholders to achieve the desired outcome. The avoided capacity requirements would amount to an avoided in fructuous investment of over Rs 4000 crores annually. Setting aside this amount for such a retrofit programme could almost fully cover its cost. The National Mission on Energy Efficiency must set quantitative goals for bringing about efficiency improvements. Such goals must be bold enough to specify an energy intensity goal for the economy as a whole and must be supported by well-defined sector and subsector goals and requisite budgets as illustrated above. As a reasonable illustration, India could aspire to bring down its overall energy intensity of the economy by about 30% of 2001/02 levels by 2021/22, which would still translate into a higher total energy consumption but a rate of Page | 35
  • 36. Potential of Unconventional Sources of Natural Gas growth of energy demand that could be significantly lower. This reduction in demand can be achieved by setting efficiency targets for specific sectors, such as: *) - Reducing technical losses on the transmission and distribution (T&D) network from the current 16%–19% to a level of 8%–12%. *) - Achieving an energy saving of around 20% by 2020 in the industry sector. *) - Improving the average efficiency of vehicles by 15%. *) - Maintaining the share of public transport in total motorized, road-based passenger movement at 70%. *) - Accelerating the efficiency performance of the stock of household appliances as follows: *) - Refrigerators By 7% over the autonomous efficiency improvements assumed in the business as usual (BAU) *) - Air conditioners By about 25% over the efficiency improvement in the BAU. This Mission must have a high powered governance structure, along the lines of the Telecom Commission chaired in the past by Mr Sam Pitroda, and must work through a system of task forces comprising experts from relevant sectors, representatives of relevant ministries (at least at the joint secretary level), and representatives from industry and financial institutions. The chairman of this Mission must report to the Prime Minister of India. Maximizing Energy Efficiency The levels of energy efficiency in the economy can, in turn, be best achieved by a combination of factors that need to work in concert. These include a pricing strategy that clearly reflects the cost (real and opportunity) of energy service provision; a fiscal regime on appliances, equipment, and infrastructure that clearly incentivizes efficiency; ensuring competition in demand satisfaction at every point along the supply chain; and a regulatory framework that progressively rewards efficiency-related innovations. Energy pricing and competition The desirable elements of efficient pricing have been stressed for decades in various committee reports of the government and are reiterated, in principle, in the Electricity Act 2003. However, it is obvious that real concerns on issues of affordability and political acceptability of moving to cost-of-service pricing have impeded the implementation of such a pricing regime. The government must take advantage of the high technological prowess of the Page | 36
  • 37. Potential of Unconventional Sources of Natural Gas country to design effective and transparent subsidies that overcome the challenge of energy access in a progressive manner (see section on Energy Access for further details). Energy pricing itself must recognize the trade-offs and substitutability between various energy sources, and must be undertaken in an integrated manner with full consciousness of their implications for driving consumer choices and substitution possibilities, both in the short and long terms. Pricing of petroleum products, natural gas, and electricity has been the subject of raging debates in recent times. As a general guideline, this paper recommends the following. *) - In an increasingly open economy, the pricing of Primary energy resources must reflect their opportunity cost at the border, when there is the option of international trade. Therefore, trade pricing of crude oil should reflect the cost insurance and freight (CIF) price of crude that India imports, but the free on board (FOB) price of any crude quality that it exports. *) - When a resource is not trade-able, either due to global surpluses or due to quality Considerations, then a rational and rigorous process for domestic discovery of prices should be facilitated. If this requires a restructuring of energy markets (for example, coal), then an expeditious action plan needs to be drawn up for the purpose with necessary amendments to laws and regulatory frameworks. *) - Pricing of secondary energy forms, along the supply chain, must be left to the market, under effective regulatory oversight, and must allow players to benefit from any competitive advantage arising from efficiency investments as they deem fit. *) - India’s energy infrastructure—be it the transmission and distribution networks or the natural gas pipelines or even the energy production/generation/import infrastructure— needs major expansion and upgrading. Infrastructure expansion is driven by several factors including projected long-term energy demand and considerations of regional growth—it cannot be responding merely to current needs! As such, and in order for a planned development of such infrastructure, the government must pursue its strategy of competitive bidding for both infrastructure expansion and upgrading projects. As we move down the supply chain, the cost of energy would be the sum of the energy infrastructure service cost and the energy resource cost. *) - Where infrastructure needed for energy transport is shared with other beneficiaries (as in the case of railways), the tariff determined for the transport service provided must recognize the implications that it may have for the competitiveness of the energy resource concerned. It is necessary that such tariffs are established in consultation with the institution responsible for energy price oversight, and in accordance with the principle of proportionality. *) - Congestion pricing (time-of-day pricing in case of electricity supply) must Page | 37
  • 38. Potential of Unconventional Sources of Natural Gas be resorted to in order to signal capacity constraints and avoid high-cost infrastructure expansion needs. *) - Energy subsidies to targeted consumers must be provided as far down the supply chain as possible so as to encourage efficiencies and prevent subsidy leakages in the system. Finally, the treatment of by products and ‘waste’ products should be consistent and supportive of the energy sector. Under the Ministry of Environment and Forests (MoEF) notification, all coal- and lignite-fired power stations have to dispatch fly ash free of cost to anybody desirous of having it, including cement manufacturers, traders, and exporters who can, in turn, sell it at any price they desire. Under this regime, wherein the value of fly ash is largely being derived by middlemen, neither is the electricity sector benefiting from the potential revenues nor are the government or the common man benefiting from the lower raw material costs od cement manufacture. In sum, the loss to electricity and cement consumers is providing windfall profits to the traders, exporters, and cement manufacturers. Properly priced, fly ash used by cement producers could result in electricity price reduction of nearly 10 p/unit. Fiscal Regime The taxes and subsidies on energy resources and on energy- using appliances/equipment must be designed to support energy efficiency in the economy and reflect externality costs. While coordinated action in this area at the central level is feasible, the challenge of ensuring this at the state level would be significantly bigger. The central government must clearly specify the fiscal responsibility of states with regard to state-level taxes and subsidies. At the state level, the coordinating committee of the state finance ministers needs to incorporate this prioritization of energy-efficient appliances while determining the common taxation framework across different states. Regulation for efficiency One of the biggest dilemmas for service providers is what is referred to as the ‘rebound’ effect—if service providers were to get involved in encouraging energy efficiency amongst their consumers, it would reduce the size of their market! This is a typical challenge faced by most distribution utilities across sectors and countries. The energy regulators need to be constantly reviewing and implementing innovative pricing and regulatory mechanisms for overcoming this challenge and rewarding (reducing the pain) service providers for this effort. This would require high level expertise among regulatory bodies on regulatory economics, price elasticity concepts and estimation (both in the short and long runs), and associated welfare effects. Regular training of regulators by professional institutions on the technical, regulatory, economic, and environmental aspects of the energy business should be made a requirement of service. Securing Energy Resources Securing India’s energy supplies, after ensuring its most efficient utilization, is a function of domestic resource exploitation, tying up international resources— either directly or through equity investments—creating the necessary import/transport infrastructure and Page | 38
  • 39. Potential of Unconventional Sources of Natural Gas developing/accessing technologies for harnessing energy resources efficiently. As seen from the scenarios defined above, there exists significant potential for reducing our demand for energy resources by ensuring energy-efficient development paths and maximizing the use of renewable energy. Energy imports Even with the aggressive push towards efficiency and renewable energy, India would still need to have to import coal at a peak level of ~200 MT and crude oil of ~300 MT between now and 2030. At these significantly higher manageable levels of imports, we need to reevaluate the relative economics of entering into long-term contracts vis-à-vis making equity investments abroad. Assuming that other major international consumers of fossil fuels would also be moving along similar paths as being defined by India, the global demand for these energy forms could soften substantially. While evaluating this option, the experience of allowing the corporate sector to make such investments as part of competitively bid projects (for example, coal mines acquired by private companies for power-generation purposes) should be borne in mind. Coal After decades of make believe that we had enough coal resources to last us for another 200 years, the Government of India has finally accepted that the life of the resource may be limited to about 45 years. However, recognizing that any country’s ability to rely heavily on this highly polluting energy form would be short lived, India must restrategize its coal development to exhaust its reserves in the next 30 years or so. The new coal-based thermal power generating capacity should be limited at a level that is sustainable with available domestic resources without having to invest in new import infrastructures. The failure of the coal ministry to bring about reforms in the sector—including productivity improvements, private participation, and competition—and the vulnerabilities this creates in the power sector, indicate the need to set up a joint commission, comprising government, industry, and representatives of the power sector and the coal sector. The commission would be empowered to revise policy, establish and implement competition policies, and provide the necessary environment for private-sector participation. The GOI strategy to link coal mines to the private power plants would ensure a more efficient production profile from coal mines, which would enhance production levels. Oil India’s oil vulnerability is well documented. At the same time, the country is unable to generate enough interest in exploration and production activities despite various improvements made in the different rounds of the NELP. The NELP programme was started nearly 10 years ago, but only 20% of the country’s sedimentary basins can still be classified as ‘well explored’. India needs to quickly move towards the Open Acreage Licensing Policy so as to exploit any potential resources towards alleviating its medium-term energy security challenge. In addition, all efforts must be made to maximize the sustainable flow of oil from existing wells. TERI, in partnership Page | 39
  • 40. Potential of Unconventional Sources of Natural Gas with Oil and Natural Gas Corporation (ONGC), has demonstrated the economic attractiveness of its microbiologically enhanced oil recovery (MEOR) processes. The cost of this technology is less than half of that of the conventional enhanced oil recovery methods. If applied to the ~7000 stripper oil wells within India itself, an additional 3 million barrels of oil per year can be generated. India could explore licensing this technology to the oil-rich countries for a certain percentage of the incremental oil generated! Natural gas While natural gas consumption must increase, its use for power generation is suggested primarily for industrial captive use purposes and for fertilizer production—both limited to the extent of domestic availability of the resource. Larger domestic finds would, of course, result in gas increasingly substituting for coal. As such, the existing gas, import facilities that have been established should suffice for the longer term as well. The significance of the Iran–Pakistan– India gas pipeline in the context of energy security can diminish substantially! The natural gas pricing policy needs to be clarified at the earliest to give a push to natural gas and related infrastructure sectors. Rather than pursuing multiple prices and the pricing system as currently existing in the country, it is suggested that natural gas from various sources be pooled and supplied to consumers though a transparent bidding/auctioning process. The role of the regulator in ensuring smooth and fair functioning of the process is immense. Nuclear Energy India has done well to conclude the civil nuclear agreement with the US. It now also has to urgently give attention to other dimensions of establishing nuclear capacity in the country. Putting in place and creating public awareness on its nuclear safety and accident prevention protocols, identifying potential nuclear power plant sites and initiating public dialogues, creating the requisite capacity in educational institutions to meet the human resource requirements, addressing concerns on waste disposal, among other initiatives, are all proactivemeasures that are best undertaken sooner than later. The nuclear establishment carries with it a public perception of secrecy and a defence connotation. Scaling up nuclear power generation and possibly inviting the private sector to participate require a much more open and transparent consultative process to be institutionalized. Waste-to-energy Some of the existing gap between demand and supply of electricity in cities can be met by using waste as a source of energy. Though energy generation from industrial waste sources like distillery, paper and pulp, bagasse, dairy, and slaughterhouse waste is well practised in the country, energy generation from urban waste, especially municipal solid waste (MSW), is still not a feasible option. MSW generated in the country contains on an average 40%–50% organic waste and 15%–20% recyclable waste (primarily paper and plastic wastes). These waste streams can be used as a feedstock by biomethanation and refuse-derived fuel (RDF) processes to generate power in units ranging from 1 MW to 1024 MW cap. India’s energy security: new opportunities for a sustainable future Page | 40
  • 41. Potential of Unconventional Sources of Natural Gas It is estimated that the annual power generation potential from MSW alone in the country would be around 36000 MW. However, as we do not have sufficient experience in operating these technologies on commercial levels, technology customization and indigenization would be required. High capital cost is one of the most important barriers to MSW-based waste-toenergy processes in India. Based on projects implemented as on date, the cost of a typical 5 MW unit comes to around Rs 40–60 crore, with each MW of electricity consuming 150 tonnes of municipal waste annually. This amounts to an investment of Rs 8–10 crore per MW, or three to four times the cost of conventional thermal power. While it will be difficult for such plants to compete economically with conventional plants, the incidental benefits in terms of waste management and avoided health damage could make this an attractive option. Favourable power purchase agreements, combined with capital cost-based incentives, could be designed for such projects. The scale of the energy challenge that the country faces compels it to seek aggressive private sector participation. While it is essential and non-negotiable to follow due process when awarding projects to the private sector, a few key points need to be kept in mind. *) - Clear delineation of long-term policy and regulatory framework that would enhance investor confidence. *) - The need to provide a level playing field to all players, including the public sector organizations. *) - The high economic cost of delays . 2.4 : Research and Development in the Energy Sector India’s R&D efforts have often been criticized for being sub-optimal and lacking in goal orientation. The situation in energy-related R&D is perhaps even more serious. The challenge of the sector, as brought out in earlier pages, is too large for it to be continued to be treated as a vehicle of social largesse and diffused capacity building. While India may not be able to match the R&D resources of the developed world, it is all the more imperative that its scarce financial resources are targeted strategically—to bring about cost reductions, develop/exploit context-specific resources, and develop relevant applications—and with purpose. Some technologies that could be on the verge of commercial deployment, with just an additional resource injection for design improvements, which the government could place on its priority list, include the following. *) - Biomass gasification systems Page | 41
  • 42. Potential of Unconventional Sources of Natural Gas Several organizations in the country have related biomass gasification systems that require critical innovations relating to gas clean-up systems and engine design. Such systems could also be modified for providing clean cooking energy solutions for school canteens, dhabas, and other establishments, with appropriate safety features built in. *) - Biofuels A second generation biofuels programme needs to be designed and implemented in a mission mode. *) - Solar energy R&D on solar PV and thermal technologies, per se, has advanced significantly at the global level. India would do well to focus its R&D efforts on developing context-specific applications and research on grid interface issues. *) - Wind energy Resource mapping exercises have to be refined to be in line with new technology developments globally, with a particular emphasis on offshore wind resources. *) - SME sector Designing, developing, and demonstrating energy-efficient technologies to suit specific conditions of SME clusters. *) - The Smart grids The increasing share of renewable energy in India’s energy mix and the greater emphasis on energy efficiency could have serious implications on—and be limited by—the nature of electricity grids. India needs to implement pilot projects on the concept of ‘smart’ grids that would prepare us for such large-scale integration of non-firm and distributed energy sources into our energy systems and their management. In line with the general call for an integrated approach to this sector, it may be worthwhile creating an integrated energy R&D fund administered under the guidance of a research advisory committee at the highest level. Page | 42
  • 43. Potential of Unconventional Sources of Natural Gas Part 3 Indian Geography On the south, India projects into and is bounded by the Indian Ocean – in particular, by the Arabian Sea on the southwest, the Laccadive Sea to the south, and the Bay of Bengal on the southeast. The Palk Strait and Gulf of Mannar separate India from Sri Lanka to its immediate southeast, and the Maldives are some 400 kilometres (250 mi) to the southwest. India's Andaman and Nicobar Islands, some 1,200 kilometres (750 mi) southeast of the mainland, share maritime borders with Burma, Thailand and Indonesia. Kanyakumari at 8°4′41″N and 77°32′28″E is the southernmost tip of the Indian mainland, while the southernmost point in India is Indira Point on Great Nicobar Island. India's territorial waters extend into the sea to a distance of 12 nautical miles (13.8 mi; 22.2 km) from the coast baseline. The northern frontiers of India are defined largely by the Himalayan mountain range, where the country borders China, Bhutan, and Nepal. Its western border with Pakistan lies in the Punjab Plain and the Thar Desert. In the far northeast, the Chin Hills and Kachin Hills, deeply forested mountainous regions, separate India from Burma. On the east, its border with Bangladesh is largely defined by the Khasi Hillis and Mizo Hills, and the watershed region of the Indo-Gangetic Plains.The Ganges is the longest river originating in India. The Ganges-Brahmaputra system occupies most of northern, central, and eastern India, while the Deccan Plateau occupies most of southern India. Kanchenjunga, on the border between Nepal and the Indian state of Sikkim, is the highest point in India at 8,598 m (28,209 ft) and the world's 3rd highest peak. Climate across India ranges from equatorial in the far south, to alpine in the upper reaches of the Himalayas. Location: Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma and Pakistan Geographic coordinates: 20 00 N, 77 00 E Map references: Page | 43
  • 44. Potential of Unconventional Sources of Natural Gas Asia Area: total: 3,287,263 sq km country comparison to the world: 7 land: 2,973,193 sq km water: 314,070 sq km Area - comparative: slightly more than one-third the size of the US Land boundaries: total: 14,103 km border countries: Bangladesh 4,053 km, Bhutan 605 km, Burma 1,463 km, China 3,380 km, Nepal 1,690 km, Pakistan 2,912 km Coastline: 7,000 km Maritime claims: territorial sea: 12 nm contiguous zone: 24 nm exclusive economic zone: 200 nm continental shelf: 200 nm or to the edge of the continental margin Climate: Current Weather varies from tropical monsoon in south to temperate in north Terrain: upland plain (Deccan Plateau) in south, flat to rolling plain along the Ganges, deserts in west, Himalayas in north Elevation extremes: lowest point: Indian Ocean 0 m highest point: Kanchenjunga 8,598 m Natural resources: coal (fourth-largest reserves in the world), iron ore, manganese, mica, bauxite, rare earth elements, titanium ore, chromite, natural gas, diamonds, petroleum, limestone, arable land Land use: Page | 44