Rethinking gas

Context: India must rebalance its energy mix.

Effect due to COVID on global energy Market

• Demand destruction: the price of Brent crude oil had fallen to negative price range.
• The crisis enhanced the trend in the market previously been observed and efforts to cut production did not make much difference to price.

Changing oil supply dynamics

• United States as a leading oil producer: oil production has increased by 160% since 2008, but domestic demand remained steady.
• Russia and Saudi disagreement on price cut: will resurface after the crisis, impacting global supply and prices

• Re-examining India’s Energy Mix: Case against coal

• Insufficient domestic reserves of coal, the inferior quality of current production,  financial troubles for independent power producers.
• Socio-Economic costs: Negative impact of coal mining in tribal areas and public health costs also high operating cost.
• Commitment towards renewable energy targets also discourages coal usage.

Moving towards natural gas

• Natural gas is cleaner than coal or oil, its prices will also be lower in tandem with crude oil.
• Till an extensive physical pipeline system is created, natural gas tariffs can be flattened by creating “virtual” pipeline system.