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Role of City Gas Distribution in Indias Sustainable Energy Future

India is one of the largest energy deficit countries in world. The energy requirements in

India are increasing due to the rising population and development activities resulting

from strong economic growth. To fulfill its energy needs India is not only utilizing its

own energy sources but also importing sources like crude oil and LNG from outside.

India which imports 80 % of its crude oil requirement is once again facing the problem of

rising crude oil price. Most of the oil is used in urban areas. The crude oil produced

during 2009-10 was 33.69 million tonnes, while its consumption was 160.03 million

tonnes1. The balance was managed through imports. During 2009-10 India imported

37.54 million metric tonnes (mmt) of crude oil and 9.34 mmt of LNG2. The rate of

growth of imported crude was consistent till 2008-09 at 9.13 % but it rose to 19.94 % in

2009-10. Also Indias import of coal during current fiscal year (2009-10) was about

67.744 million tonnes3, which could steeply jump nearly 70 % to 142 million tonnes in

next fiscal year of 2011-124. This is largely because of Indias indigenous coal contains

more ash content not suitable for power generation. More than half of the power

requirements in India are met by steam coal. This highlights the huge energy requirement

in India. Indias primary energy consumption in 2009 consisted of oil - 148.5 million

tonnes of oil equivalent (mtoe), natural gas 46.7 mtoe, coal 245.8 mtoe, nuclear

energy 3.8 mtoe and hydroelectric 24 mtoe.

Oil and coal which have the largest share in Indias primary energy consumption with 84

%5 is actually leading to environmental degradation. This is largely because of vehicles

run on petrol and diesel in urban areas. Moreover rise in crude oil prices is making the

affordability to run vehicles with this fuel difficult. Also with every rise in the prices of

petrol and diesel, the prices of necessary commodities are also increasing making the life

of the common man difficult. Thus the two immediate challenges faced by India are to

curb down its carbon intensity6and to tackle with the rising global crude oil prices. These1 Ministry of Petroleum and Natural Gas2http://petroleum.nic.in/petstat.pdf3 Economic Survey 2011, Energy Infrastructure and Communication Chapter 114http://in.reuters.com/article/2011/02/03/idINIndia-546176201102035 BP Statistical Review of World Energy, 20096 Carbon Intensity is the amount of carbon by weight emitted per unit of energy consumed. When there is

only one fossil fuel under consideration, the carbon intensity and the emissions coefficient are identical.

When there are several fuels, carbon intensity is based on combined emissions coefficient weighted by their

http://petroleum.nic.in/petstat.pdfhttp://petroleum.nic.in/petstat.pdfhttp://petroleum.nic.in/petstat.pdfhttp://in.reuters.com/article/2011/02/03/idINIndia-54617620110203http://in.reuters.com/article/2011/02/03/idINIndia-54617620110203http://in.reuters.com/article/2011/02/03/idINIndia-54617620110203http://petroleum.nic.in/petstat.pdfhttp://in.reuters.com/article/2011/02/03/idINIndia-54617620110203

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two challenges are areas of concerns for Indian policy makers to think more intensely

towards cleaner and cheaper energy options, like natural gas and renewable energy.

Natural gas is regarded as cleaner fossil fuel and ahs the natural advantage on other fuels

due to its easy replacement option with petrol, diesel, coal, LPG etc. It also emits least

amount of carbon dioxide among other petroleum products. One of the ways to deal with

these challenges is the lay more emphasis on those important and clean fuels in the

energy value chain which drives nations towards cleaner environment to live in like

natural gas. Natural gas value chain is one of the important parts of energy value chain as

it is through this source of energy one can faster towards sustainable energy growth.

Recent developments in natural gas sector could support Indias effort of moving on this

path of this sustainable growth. In this natural gas value chain7 it is the downstream part

comprising of transportation and marketing where the potential of expansion lies. This

downstream part is commonly known as City Gas Distribution8. The largest beneficiary

of CGD will be the common man, whose livelihood would become much better, if he is

able to afford his living besides living in a cleaner environment.

energy consumption levels.7 Natural Gas Value Chain broadly includes upstream, midstream and downstream. Under upstream

exploration and production of natural gas is done, in midstream processing of natural gas is done wherewater, impurities and hydrocarbons are removed to make it ready to be send to market, through pipelines

and tankers and thereafter distributing and selling the same through city gas distribution pipelines in the

form of piped natural gas for domestic, commercial and industrial use and compressed natural gas for

vehicles. This last part of transportation and marketing of gas falls under downstream activity.8 City Gas Distribution is a network of inter-connected underground gas pipelines and the associated

equipment used for importing gas from main transmission pipelines to the service pipelines supplying to

domestic, commercial and industrial users with a single city area.