India’s Shale Gas Boom: Dream or Reality?
Image Credit: Alex Graves

India’s Shale Gas Boom: Dream or Reality?


As India prepares for the release of its long anticipated shale gas policy, pressure continues to mount on New Delhi. An increase in coal imports over the past 12 months has demonstrated the stress on current energy supply and the negative impacts it has on India’s public health and environment. 

In March, Veerappa Moily, India’s Minister for Petroleum and Natural Gas, said that the government’s shale gas policy would be released in early April, yet such a policy, which Moily stated in an interview with Reuters in March would be a “game changer” for India, is still to materialize. Many analysts continue to point to the importance of improving the country’s energy security. Indeed, shale gas production could offer a reprieve for energy-starved India as well as a much needed boost to its economy.

Shale gas is often described as a game changer in energy politics, prompting Daniel Yergin and Robert Ineson to define it as “the biggest energy innovation of the decade.” India is a fast developing country and energy is pivotal to maintain its steady economic growth, stability, and development. As the third-largest energy consumer in the world, according to a 2011 Enerdata report, and a natural gas net importer since 2004, it is easy to see why the South Asian nation is placing high hopes on its own “shale gas revolution.” But is it a realistic prospect that India could relive the American experience of a shale gas boom?

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Energy demand in India has been consistently increasing and is expected to rise by 7-8% annually in the coming decade. Indeed, many in India are still waiting for their first electricity connection. Hence, energy security is at the forefront of the Indian government’s agenda, and unconventional resources like shale oil and shale gas have the potential to improve its situation. The U.S. experience with shale gas not only resulted in more advanced knowledge of the extraction process, but has also allowed a decrease in production costs and drilling time, making it both more feasible and competitive. Moreover, for a country like India, where coal still dominates the energy mix – coal imports increased to a record 135 million tons in the last fiscal year – shale gas can represent a promising alternative, both in terms of costs and environmental impact thanks to its potentially lower emissions.

In 2002, Reliance Industries, a leading Indian energy company, discovered 14 trillion cubic feet (tcf) of natural gas in a reservoir in the Krishna-Godavari basin in shale formations, generating high expectations for future production. From that moment onward, the exploration and assessment of India’s shale gas resources became an imperative. Policy, however, has not.

Current research has identified six main basins that could be successfully exploited once the Indian government reveals its national shale oil and gas policy: Cambay (Gujarat), Assam-Arakan (North-East), Gondwana (Central India), Krishna Godawari onshore (East coast), Cauvery onshore, and Indo-Gangetic basins. Although the release of a comprehensive national shale oil and gas policy has been postponed, in 2010 the government signed a Memorandum of Understanding (MoU) with the U.S. in order to cooperate in developing Indian shale gas resources. Exploration and assessment of the potential of shale gas are part of the objectives of the MoU and, under the agreement, in 2012 the U.S. Geological Survey assessed the resources in a number of basins (the Cambay, Cauvery, and Krishna-Godavari basins), estimating the total of recoverable resources to be 6.1 tcf. This figure contrasts with the estimates suggested by the U.S. Energy Information Administration in 2011 of 63 tcf.

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