Day 32 – Q 4.Examine the economic prospects of pipelines in India. What measures have been taken to expand pipeline networks in India? Examine.
4. Examine the economic prospects of pipelines in India. What measures have been taken to expand pipeline networks in India? Examine.
भारत में पाइपलाइनों की आर्थिक संभावनाओं की जाँच करें। भारत में पाइपलाइन नेटवर्क के विस्तार के लिए क्या उपाय किए गए हैं? जांच करें।
Transportation by pipelines is a rising development being preferred nowadays in India for cost-effective projects in various fields. Pipelines are most convenient, efficient and economical mode of transporting liquids like petroleum, petroleum products, natural gas, water, milk, etc. Even solids can also be transported through pipelines after converting them into slurry.
Economic prospects of pipelines in India:
- Extensive coverage and inclusion: India has just completed its biggest city gas distribution (CGD) auction. This is expected to extend coverage to more than half of its 1.3 billion people across a third of the nation’s area. This project aims to see 10 million homes linked to gas grids by 2020 and bring relief to smog filled cities.
- Boost to the steel industry: Steel pipe makers are set to become beneficiaries of India’s $10 billion push to expand its natural gas network with approx 12,500 kilometres of pipes within the next three to four years.
- Domestic Business opportunity: Low penetration of pipes, and government measures such as setting up the National Gas Grid and revamping the water and sanitation infrastructure using pipelines underground, provide a domestic business opportunity of more than 300 billion rupees ($4 billion).
- Reduced import costs: While seeking to double the share of natural gas in the country’s energy mix to 15 percent by 2030 and slashing emissions by a third, a gas-based economy helped by pipelines would help India be less reliant on crude oil imports by substituting the use of oil products in industrial and residential applications. A 10% replacement of liquid fuel into gas will reduce India’s import bill by nearly $3billion every year.
- Foreign investment and domestic economy strengthening: Several pipeline projects are providing opportunities of foreign investment and support, there by attracting global investments and domestic industry giants. For example: The Torrent Group is preparing to invest Rs 3,000 crores (US$ 417 million) for installation of gas pipeline network in Uttar Pradesh. This gas pipeline network will be utilised for domestic, commercial and industrial consumers.
- Transportation of solid materials and future prospects: Nowadays solid minerals are being transported through pipelines too, cutting down on operating and transportation costs considerably. Ex: Iron ore in form of slurry from Kudremukh to Mangalore port, Rock phosphate from Malton mines to Debari smelter plant in Udaipur etc. Dairy industries in many countries like New Zealand are efficiently using pipelines to transport milk. Suitable infrastructure can be used similarly in India.
- Economical construction and maintenance: Low energy consumption and low maintenance costs. Additionally they can be built in difficult terrains, under water etc.
- Reduction in accidental charges and economic efficiency in the long run: Pipelines are safe, accident-free and environmental friendly.
- Reduces regional disparity and helps economic growth: The far inland location of refineries like Barauni, Mathura, Karnal and gas based fertiliser plants at Jagdishpur and other places could be thought of only because of pipelines.
- Lesser delivery costs: Pipeline delivery comparatively immunizes against inflation of transportation costs. Also, natural gas is less costly when compared with other conventional fuels.
- Reduction in subsidy expenditure: Most importantly, the gas grid project would bring down government subsidy to LPG. Also, siphoning of cylinders to black market would come to an end, thereby reducing corruption and misuse of the same.
Measures taken to expand pipeline networks in India:
- Pradhan Mantri Urja Ganga project: The gas pipeline project aims to provide piped cooking gas to residents of Varanasi and later to millions of people in states like Bihar, Jharkhand, West Bengal and Odisha. According to GAIL, with the Urja Ganga project, 20 lakh households will get PNG connections.
- Different pipeline projects across the country:
- Barauni to Guwahati Pipeline- The pipeline will pass through the Bihar, West Bengal, Sikkim & Assam;
- North East Region(NER) Gas Grid-It will pass through Assam, Sikkim, Mizoram, Manipur, Arunachal Pradesh, Tripura, Nagaland and Meghalaya in a phased manner;
- Kochi-Koottanad-Bangalore-Mangalore Pipeline (Phase-II): It will pass through Kerala and Tamil Nadu;
- Ennore-Thiruvallur-Bengluru-Puducherry-Nagapatinam-Madurai-Tuticorin Pipeline (ETBPNMTPL): It will pass through the State of Tamil Nadu, Andhra Pradesh & Karnataka.
- India has 16,000 km of gas trunk pipelines in operation, and 13,000 km more approved and in various stages of construction. The PNGRB has awarded licenses to build city gas distribution networks across the country, targeting districts that cover about 70 percent of India’s population.
- The central government is promoting a gas based economy which needs a massive network of pipelines for transportation of natural gas to various corners of the country.
- City Gas Distribution (CGD) Network: CGD refers to transportation or distribution of natural gas to consumers in domestic, commercial or industrial and transport sectors through a network of pipelines. Recently, the Indian Prime Minister laid Foundation Stones of City Gas Distribution (CGD) Projects in 65 Geographical Areas (GAs) in 129 Districts.
- Public Utility Status granted to CGD Projects by Ministry of Labour and Employment.
- High initial costs and inability to increase capacity once the pipeline is laid.
- Delays due to policy failure, non-cooperation of State Governments, or apprehensions of common citizens to adapt to pipeline supply.
- Difficulty in repair and leakage detection.
Pipelines have relieved the increasing pressure on the existing surface transport system and can go a long way as the future of transportation of essential materials, especially as India is intending to move towards a gas-based economy by increasing the share of natural gas in India’s energy basket from the current 6-7% to 15% by 2022. A robust and efficient policy for the same will not only ensure this, but also help in the overall economic growth of the country.