Friday, May 24, 2013

Potential of Unconventional Sources of Natural Gas in India (Book)

Published: May 12, 2013
Words: 32,969 (approximate)
Pages: 101
Language: Commonwealth English
Author: Mohit Sharma 
Publisher: Freelance Talents
ISBN: 9781301257324

 Depletion of conventional resources, and increasing demand for clean energy forces India to hunt for alternatives to conventional energy. Intense importance has been given for finding out more and more energy resources; specifically unconventional ones like shale gas & gas hydrates, as gas is less polluting compared to oil or coal. This redacted report covers potential of such energy sources. NELP has helped in increased and fair participation of private sector, but a separate and independent bidding round is required for the unconventional sources of natural gas, which will help in optimal utilization of resources, as these are not considered practically in the oil and gas exploration blocks. Major oil companies, while drilling for oil and gas, have hit thick structures of coal and shale, but do not show interest in testing and drilling because they are not permitted to do so.

A policy that enables oil and gas companies to drill for unconventional oil and natural gas and to extract and produce shale gas along with conventional natural gas. This change may revive old wells too, which have been declared as commercially nonviable and it may also increase the energy capacity of the country.

• The gases also serve as an alternative for cleaner fuel compared to conventional oil and coal.
• Acquiring overseas assets for exploring the shale gas structures is very important as it will help the Indian oil and gas companies to gain the technical knowhow and the skills needed to operate the business.
• The government’s assistance towards public and private sector companies in importing the shale gas, CBM, Gas Hydrates and Tight Sand Gas extraction technology to India by providing incentives.
• Proper development of service capabilities. Customization of techniques and methods used in different parts of world according to the topography, blocks present in India.

• However, in case of Shale gas It is necessary to address the environmental concerns regarding the shale gas operations. There are studies going on to understand the environmental and public health impact due to shale gas development in the US. India should use them to shape appropriate regulation.

• The fiscal policy could include either a royalty tax or severance tax, apart from corporate income tax. The earnings should be shared amongst the State and the Central Government to incentivize the state government’s role in acquiring land. These earnings through taxes will also help the Government to improve the required services and infrastructure. However, the Government should also be aware of highly taxing economic rent as it may alter the prospects of the interested companies. While considering tax exemptions or tax holiday, the government should be aware of the fact that the shale gas production is the highest in the initial years before the production starts to fall rapidly. Hence, the tax holidays should be given at the end stage of the shale gas production, while knowing the life span of the formation beforehand.

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