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Bridging with Natural Gas: A Key Opportunity for India’s Clean Energy Transition
Bridging with Natural Gas: Unlocking Critical Investment Potential in India’s Energy Future
Context: Natural gas is globally promoted as a ‘bridge fuel’ in the transition to net-zero emissions.However, the political and investment landscape surrounding natural gas is complex, particularly in developing countries like India.
India’s Declining Share of Natural Gas
Political Economy of Natural Gas: Beyond Good vs. Bad
- The promotion of natural gas is not a binary issue of environmental benefit vs. harm.
- Political decisions are driven more by distributional impacts than by scientific facts or majority interests.
- Public choice theory indicates that policy outcomes are often shaped by well-organised minorities rather than the energy-poor majority.
- In energy policy, these minorities include activist groups and well-funded lobbyists, not always aligned with broader public welfare.
- As per Gordon Tullock, lobbyists influence policy by providing overwhelming information and expertise to overburdened bureaucracies.
- India’s natural gas share in primary energy consumption fell from 9.4% in 2010 to 5.8% in 2023.
- Key reasons:
- High import dependency and rising prices.
- Inadequate domestic production.
- Competition from cheaper coal for base-load power needs.
Reasons for declining share of Natural Gas:
- Influence of Global Narratives on Indian Investment
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- Decisions in India are indirectly influenced by lobbying in natural gas-exporting countries, especially in the Global North.
- The ‘Baptist and Bootlegger’ theory by Bruce Yandle (1983) explains how:
- Environmentalists (Baptists) supported natural gas for climate reasons.
- The shale gas industry (Bootleggers) backed it for commercial gains.
- Example: US tycoons like Aubrey McClendon and T. Boone Pickens funded massive campaigns to promote natural gas as a clean alternative and pushed laws for gas infrastructure subsidies.
- Methane Emissions: Complicating the Clean Image
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- Revised US EPA (2011) estimates increased methane emission figures by 120% for 2008.
- Methane is 25 times more potent than CO₂ over a 20-year period, even though it persists for a shorter time.
- Shale gas has an 8–11% higher lifecycle GHG footprint than conventional gas per MMBtu.
- Natural gas combustion emits 50% less CO₂ than coal, but full lifecycle emissions reduce this benefit.
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- Shift in Environmental Alliances and Anti-Gas Lobbying
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- Once evidence on methane leaks emerged, many environmental groups withdrew support for gas.
- New groups, funded by tech and finance billionaires (with stakes in renewables), began opposing fossil fuels, including natural gas.
- Funding for anti-fossil fuel lobbying now exceeds fossil fuel lobbying by 3 times.
India’s Draft Climate Finance Taxonomy: Natural Gas Missing
- The draft taxonomy recognises coal’s role in ensuring energy security and supports clean coal technologies like:
- Supercritical (SC)
- Ultra Supercritical (USC)
- Advanced Ultra Supercritical (AUSC)
- However, natural gas is absent, despite its GHG benefits over coal.
- Reasons for exclusion:
- High costs of natural gas.
- Heavy reliance on imports, compromising energy security.
- Climate-Supportive and Transition-Supportive Activities
- The taxonomy includes activities that:
- Improve energy efficiency.
- Reduce emission intensity where absolute avoidance isn’t viable.
- Natural gas projects that reduce emissions compared to coal may qualify as:
- “Climate-supportive activities”.
- “Transition-supportive activities”.
- Reducing the Risk of Stranded Assets
- The inclusion of natural gas under the taxonomy can:
- Attract foreign investment.
- Reduce the risk of stranded assets in the gas sector.
- Reverse the declining trend in natural gas usage.
Conclusion
- Natural gas’s role in India’s energy transition remains contested due to political economic dynamics, methane concerns, and policy gaps.
- A revised taxonomy that pragmatically includes natural gas as a transitional fuel could:
- Balance energy security with climate goals.
- Unlock critical investment.
- Provide a realistic pathway towards a low-carbon economy in India.
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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH
