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Betting on natural gas as a 'clean' fossil fuel

A new book on India’s energy future argues the case of natural gas as a ‘clean’ fuel for the future. But does it make sense?

Vendors delivering LPG cylinders in Chennai.
Vendors delivering LPG cylinders in Chennai. (Getty Images)

These are crucial and defining years in the battle against the existential threat posed to humanity by man-made climate change. Multiple UN reports have, over the past few years, pointed out that as the decade progresses, the window of opportunity for acting decisively to lower, and ultimately end new planet-warming CO2 emissions is getting smaller and smaller. The world has already missed some important deadlines.

By now, fresh global CO2 emissions should have been on a declining trend. To limit global temperature rise to well below 2 degrees Celsius from pre-industrial levels by 2100, CO2 emissions need to reduce by one-two billion tonnes every year through the next decade at least. To limit heating to 1.5 degrees Celsius by 2100, net global CO2 emissions need to fall by 45% from 2010 levels by 2030.

Also Read: The effects of global warming are here and we should be very scared

Global economic lockdowns in 2020 did see global CO2 emissions fall by 2.6 billion tonnes, 7% below 2019 levels. The largest share of this decrease was due to a drop in transport emissions. To put things in perspective, the world needs the equivalent of a global lockdown once every two years to meet the 2015 Paris Climate Agreement targets.

It is in this larger context that we should read The Next Stop: Natural Gas And India’s Journey To A Clean Energy Future, edited by Vikram S. Mehta. Through a collection of 24 essays written by experts who are, in large part, associated with the oil and gas industry, the book argues the case for natural gas, a fossil fuel, as a “bridge fuel” for India’s transition to a clean energy future based on renewable energy (RE). Mehta is a highly respected voice in the oil and gas industry. He is currently chairman of the Delhi-based think tank Centre for Social and Economic Progress (formerly Brookings India). In the past, he has worked with Oil India and was chairman of the Shell Group of Companies for 18 years, till 2012. He is also on the board of a number of companies (including HT Media, Mint’s parent company). His essay introduces the subject and makes the case for natural gas.

The Next Stop: Natural Gas And India's Journey To A Clean Energy Future. Edited by Vikram S. Mehta, 625 pages,  <span class='webrupee'>₹</span>799, HarperCollins.
The Next Stop: Natural Gas And India's Journey To A Clean Energy Future. Edited by Vikram S. Mehta, 625 pages, 799, HarperCollins.

The case, broadly speaking, is this. The book argues that gas should be seriously considered by the Indian government as an intermediate, “stepping stone” energy source to reduce the country’s dependence on coal. To that end, the book argues that the share of natural gas in India’s energy mix, currently about 6-6.5%, should increase massively in the near future. This is because gas is a “green fuel”, that is, it emits about half the CO2 that coal does. Analysts in the book argue that a transition to gas can prevent the disruption caused by shutting down coal, and industries will be able to adapt easily without huge investments in retrofitting their systems. Moreover, natural gas, especially LPG, would provide secure and affordable energy without degrading the environment. The various essays in the book analyse the minutiae of making this transition, including pricing and tax regimes, the need for more LNG regasification terminals, the need for better penetration of gas pipeline networks, the use of gas in the MSME sector as well as in transport. The argument also extends to natural gas partnering RE, by becoming the fuel of choice to balance any fluctuations or shortfalls in the RE grid.

Also Read: Climate Change will decimate India’s GDP by 2050

The book makes case for the liberalisation of gas pricing and taxation and the need to bring gas under the GST, or goods and services tax, regime. It also calls for exploration of domestic production of natural gas (India is currently the world’s fourth largest LNG importer and these imports accounted for over 50% of the country’s natural gas supply in 2019). To this end, the book says there should be better Centre-state coordination for land acquisition, pipeline routing and royalty payments. And finally, it bats heavily for a greater share of private players in India’s natural gas sector.

What the book suffers from, however, is a lack of balance. It doesn’t paint a full picture that takes into account reasons why countries are increasingly turning away from gas, instead of towards it. First of all, the UN has made it very clear that any further development of untapped gas reserves is inconsistent with the goals of the Paris Agreement. Existing and already approved gas, oil and coal projects are expected to push emissions to beyond the 1.5 degrees Celsius mark.

Also Read: G7 nations talk climate neutrality but fund fossil fuels

The leakage of methane, a short-lived but far more intense planet-warming gas than CO2, has long dogged the gas sector. It has not been fixed. Multiple studies, as well as UN reports, have pointed out that as RE technology—which also includes storage—becomes cheaper (it’s already cheap), renewables can entirely replace coal and gas by 2050, the year set for the global energy sector to fully decarbonise. The UN’s Intergovernmental Panel on Climate Change (IPCC) has clearly stated that to limit warming to below catastrophic levels, global gas consumption needs to decline by 55% by 2050.

What of India? The government has a progressive and much lauded objective of reaching 450GW of RE capacity by 2030. This has spurred investments in RE and will continue to do so. As manufacturing in the sector increases, it can match, and even exceed, the employment that coal currently provides. The ability of natural gas to do so is limited by comparison. Focusing heavily on investments in natural gas at this stage poses the question of resource allocation. Should the government invest in gas, which is ultimately incompatible with a decarbonised future and may result in stranded assets? To be sure, gas can, and perhaps should be, a candidate to replace coal-generated power in certain sectors, especially when it comes to “dirty” and inefficient coal. But to set gas up as a supporting fuel to RE seems inadvisable. Investing in, or acquiring, gas reserves of resource-rich countries and investing in fresh domestic exploration and production, both of which the book argues for, fails every sustainability test.

Also Read: How climate change is changing the Indian monsoon

India just doesn’t have the luxury of growing now and cutting emissions later, especially with regard to gas, as European nations or the UK did 30-40 years ago. Growth and lower emissions need to happen simultaneously. So, instead of an opportunistic policy framework when it comes to meeting India’s energy needs, the focus should instead be a strategic one. In that strategy, gas will have a role to play, given that India does in any case plan to increase the share of natural gas in the energy mix to 15% by 2030. The Next Stop has some strategic advice to give but in its policy formulations, it seems confined to an older, opportunistic language.

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