* Importance of natural gas
Natural Gas is a new age fuel. Natural Gas is the cleanest of fossil fuels. Natural Gas satisfies most of the requirements for fuel in a modern day industrial society, being efficient, non-polluting and relatively economical. Natural Gas requires a strong distribution network to not only support existing demand, but also fuel future demand. A big challenge lies in bridging the physical gap between demand and supply centers in an efficient, safe and eco-friendly manner. Pipeline transportation of gas offers a safe, economic and environmentally sound alternative to most other modes of energy transport. Meeting the emerging demand for gas requires transportation of gas across the length and breadth of India through creating gas transportation infrastructure of more than 2-3 times the present size. The Government and Regulator also recognize the need to augment the natural gas transmission infrastructure in the country. With the Petroleum and Natural Gas Regulatory Board in place, the conditions to support an expanded natural gas grid (NGG) and a fully functioning natural gas market are in place.
Many environmentalists view natural gas as a natural bridge fuel between the dominant fossil fuels of today and the renewable fuels of tomorrow. For a given amount of heat energy, burning natural gas produces about half as much carbon dioxide, the main cause of global warming, as burning coal. Since one of the primary consumption of natural gas is as a source for electrical generation & it is increasingly becoming popular because it burns cleaner than oil and coal and produces less greenhouse gases. This ability of natural gas raises the possibility that it could emerge as a critical transition fuel that could help to battle global warming.
In nature Natural gas is much more in abundance than Oil. Most oil economists put the Natural gas reserves at least 50% higher than Oil reserves at the current consumption rates. At present Natural gas reserves are estimated to last in excess of 60 yrs. whereas Oil reserves are estimated at 40 odd years.
At one point in the past, Natural Gas used to be a regionally based fuel, frequently flared off in oil fields because it was of little use, but now with the creation of pipelines and LNG, it is now fast becoming a major international commodity.
CHAPTER 2: REGULATION
* REGULATORY ENTITIES
Government of India plays a key role in different energy sectors through dedicated ministries. A total of five ministries or departments oversee the energy sector: the Ministry of Power, the Ministry of Coal, the Ministry of Petroleum and Natural Gas, the Ministry of New and Renewable Energy and the Department of Atomic Energy. Two regulators now exist for the upstream and downstream oil and gas sectors. The main players for the gas industry are therefore the following:
* The Ministry of Petroleum and Natural Gas (MoPNG) oversees the exploration and production of oil and natural gas; their refining, distribution and marketing; and the import, export and conservation of petroleum, products and liquefied natural gas. It has been regulating the allocation and pricing of gas produced by ONGC and OIL through administrative orders while the gas from JVs and NELP is governed by Production Sharing Contracts (PSC). A total of 14 Public Service Undertakings (PSU) such as GAIL, and ONGC, depend on the ministry as well as 8 entities such as the Petroleum Planning and Analysis Cell (PPAC) and the Directorate General for Hydrocarbons.
* The Directorate General for Hydrocarbons (DGH) was established in 1993 and can be considered as the upstream regulator. It has responsibilities of promoting the NELP and new exploration programs, and managing the PSCs.
* The Petroleum and Natural Gas Regulatory Board (PNGRB) was created in 2006 to oversee the downstream part of the market. The members of the Board are nominated by the...