I am being very conservative in wondering if this could be the decade of natural gas. There are folks who are wondering aloud if this could be the CENTURY of natural gas.
These folks are no doubt buoyed by the recent successes in shale gas exploration, but that alone is not the reason for natural gas being in the limelight. The properties of natural gas – more bang for the buck than oil as a transport fuel, and much lower CO2 emissions than coal as a feedstock for power – make it a preferred choice to oil or coal.
It was thus interesting for me to read an article in the Economic Times ( Jun 25, 2010), written by R.S.Pandey, former petroleum secretary, about the potential for energy savings and reducing our import bill through the use of natural gas.
It was a very interesting read, and the following were stuff that made me sit up:
“Gas users pay less. In Delhi, the per km of running a car with gas is Rs 1.31 as against 2.54 for diesel and 3.2 for petrol. If all three fuels were sold at market prices (the gap will be even higher, in favour of gas). This is because gas is cheaper than oil. One barrel of crude produces the same energy as 6 mmbtu of gas. Therefore, at crude price of $80 per barrel, gas should be priced at approximately $13 per mmbtu. Happily, most of the gas is being sold in India at $4.2 per mmbtu, and the imported gas is available at about $5 per mmbtu. So, there is a clear disconnect between the price of crude oil and gas.”
Indeed, there is. A 60% cost reduction for petrol (1.31 vs 3.2) is no joke; neither is a 50% reduction for diesel (1.31 vs 2.54) – and well, when you consider that many diesel vehicles such as lorries and locomotives travel thousands of kilometers per WEEK, it is a big deal, isn’t it?
The recent moves by Reliance (RIL) when it bought stakes in not one, but two, US shale gas based companies in the past few months, only highlights the importance large Indian companies are according natural gas. Oh well, the Indian business magnates are not alone. The Texan oil tycoon Boone Pickens has gone on record (many times, and aloud – Pickens is not exactly a person who thinks silence is golden, obviously) that the United States will be powered by natural gas, to a significant extent, within the next ten years or so.
With so much going for natural gas, it is only natural that all energy industry professionals are busy dusting up their knowledge about it.
What about you?