Thousands of years ago, in the historic silk-route city of Baku on the banks of the Caspian Sea, ancients worshipped a phenomenon they could hardly comprehend: pillars of fire leaping skywards out of the ground. The flaming columns were in fact high-pressure natural-gas fields that had caught fire and could not be extinguished. We have traveled a long way since those times. Technology has enabled us to tame this gas, pipe it for burning in homes, offices and factories. More importantly, with the advent of the combined-cycle gas-turbine technology, humankind has learned to harness the full potential of natural gas, converting it into electricity, the most convenient form of energy. Being clean-burning, natural gas has acquired salience in a post-Kyoto world exercised over global warming caused by the indiscriminate burning of dirty fossil fuels such as coal and oil.
The ease with which natural gas can be transported by way of pipelines makes it essentially a regional or continental resource. While liquefaction technologies that allow for the fuel to be transported in containers have been around for several decades, and while the cost of liquefaction has been declining steadily over that time, liquefied natural gas (LNG) still accounts for no more than a tenth of the global gas trade. LNG remains an option only where pipelines cannot reach. The big gas consumers – the US and Europe – are crisscrossed by gas pipelines, those in the former carrying the fuel in from Canada and those in the latter from Russia, the North Sea and even Algeria. New pipelines are being built everywhere: the west-east pipeline in China, for instance, recently started supplying Shanghai with gas from Xinjiang, and the newly completed Blue Stream pipeline runs from Russia to Turkey under the Black Sea. Many other such lines are under construction in different parts of the world. For India, too, it is ideal that gas be supplied through pipelines from neighbouring countries, not least because the price of LNG is firmly linked to crude prices, which in the last two years have not only been volatile, but have distinctly moved to a more expensive bracket. Besides, once constructed, pipelines offer security of supply because piped gas, unlike LNG tankers, cannot be diverted by recalcitrant producer states to other markets.
Natural gas currently accounts for around eight percent of India's energy use. With its energy-intensive growth paradigm, and given technological factors, efficiency and environmental obligations, the country has a virtually bottomless appetite for natural gas, especially for power generation and fertiliser production, both of which together constitute over 80 percent of all gas consumed in the country. Gas is an ideal fuel for power generation because it is converted into electricity more efficiently than coal, diesel or fuel oils and, unlike these, also burns relatively cleanly. Unlike hydropower projects, the use of gas to produce electricity does not displace great numbers of people, and unlike the use of nuclear power it produces no hazardous waste.
Fortunately, the Indian peninsula is ringed by gas-rich neighbours on virtually all sides – Pakistan to the west, Iran a bit further to the west, Turkmenistan to the north, Bangladesh to the east, and Burma to the southeast. In the last few years, substantial offshore gas finds have also been reported by Indian companies in the Krishna-Godavari Basin off the country's east coast. It is estimated that this basin could contain up to 15 trillion cubic feet (tcf) of gas. When brought on-stream, such a reserve could take away the urgency to tap neighbourhood gas. But transnational gas pipelines promise to be to Southasia what they have proven themselves to be the world over: not only energy lifelines, but the cement for geo-political alliances and business ties. Also in favour of piping gas from neighbourhood countries is the fact that the Krishna-Godavari Basin finds are deep-sea, offshore fields: the technological challenge they pose and the cost of extraction renders neighbourhood gas an attractive alternative for the moment.