Lack of infrastructure: India has enough storage capacity of the current state of domestic consumption of natural gas. However, to fill the entire energy bucket, we need to increase energy storage.
Import dependence: Energy consumption in India is growing at 4.2 per cent per annum, which is the fastest among major economies of the world. Presently 52% of our domestic consumption relies on imported LNG. Moreover, the global disruptions in the import supply-chain can wreak havoc as the general hikes in Diesel prices do.
Safety concerns: The global oil and gas market remains vulnerable to a wide range of risk factors, including natural disasters, major technical accidents, and geopolitical tensions among others.
Domestic issues and delays: Petroleum including gas falls under the Union List. Pipeline laying has faced land acquisition challenges due to local farmers’ protest and unviable routes causing major project delays.
Underutilization: GAIL is getting hit over the scarcity of domestic natural gas leading to underutilization of its 11,500 km of the pipeline network. Its network is operating at an average of 47% capacity.
Less-feasible power alternative: Within the power sector, natural gas has received little traction primarily because the per-unit cost of electricity generated by a gas-fired power plant in India is higher than that from fossil fuels such as coal.
Ecological concerns: Offshore drilling operations can possibly affect fish, lead to a build-up of heavy water contaminants, disorient whales and sea life that rely on sonar for navigation and exacerbate the risk of oil spills.
Energy Trilemma: In order to build a strong basis for prosperity and competitiveness, India must balance the three core dimensions of the energy trilemma: affordability and access, energy security and environmental sustainability.
