Can India Grasp the Shale Gas Opportunity
Sizeable shale gas finds are encouraging. But the government would have to tread carefully between fiscal policy and green concerns.
In an article for The Hindu, Abhishek Shukla and Ankur Sharma with the Energy and Chemical Practice of Evalueserve discuss the shale gas opportunity in India and the impact of fiscal, administrative and environment policies on prospective development.
Oil industry has an adage – while the 20th century belonged to oil, the 21st century will be for gas - shale gas to be more precise!
The US is a prime example of what shale gas can do to gas and oil markets. From a key importer, it is now expected to be a key exporter. In Europe as well, early estimates of shale gas reserves could actually alter international diplomacy.
Much like the US and Europe, India too struggles to quench its gas thirst. While the demand for gas defies gravity, supplies are not easily forthcoming —Krishna Godavari (KG) basin included. Even when they are, prices act as a hindrance.
It seems, after all, that geological factors might transform India's destiny. Initial tests show that India is endowed with significant shale gas resources.
Schlumberger, an international service major, pegs India's initial in-place shale gas reserves at 300 -2100 TCF—much higher than our current gas reserves of about 39.4 TCF according to BP Statistical Review. India suddenly is in the league. Perhaps, it can change the very characteristic of an energy-intensive economy. However, we will have to be prudent.
Merely being endowed with a resource will not ensure prosperity for the landlord (Government of India). That would largely be governed by how we choose to monetise the resource.
The Government is serious. The Minister of State for Petroleum and Natural Gas, in mid-March, informed Parliament in a written reply that the government has initiated action to identify prospective areas of shale gas resources as well as to formulate a policy for its exploration and exploitation.
However, the key questions that needs to be answered: Does the government have the necessary institutional capabilities to monetise this resource? Can we expect it to come clean on key fiscal parameters?
Read the Full Article from The Hindu HERE