Context: In the currently ongoing India Energy Forum, experts have argued that bringing natural gas under the Goods and Services Tax (GST) regime. 

• Currently petrol, diesel, aviation turbine fuel, natural gas and crude oil fall outside GST regime.

Importace

• Bringing natural gas under the GST would lead to a reduction in the cascading impact of taxes on industries such as power and steel, which used natural gas as an input.
• This would do away with the central excise duty and different value-added taxes imposed by states.
• This would lead to an increase in the adoption of natural gas in line with the government’s stated goal to increase the share of natural gas in the country’s energy basket from 6.3% to 15%.

What is Natural Gas?

• Natural gas is a fossil energy source that is formed deep beneath the earth's surface.
• The largest component of natural gas is methane, natural gas liquids and nonhydrocarbon gases, such as carbon dioxide and water vapour are also found.
• Many by-products are extracted while processing of natural gas like propane, ethane, butane, carbon dioxide, nitrogen etc.
• Natural gas deposits are found on land, and some are offshore and deep under the ocean floor.

Applications:

• Generating electricity and heat.
• Compressed Natural Gas is used as fuel for vehicles.
• It is used as fuel for boilers and air conditioners.
• Making fertilizers i.e. mainly ammonia.

Variants:

• Conventional natural gas:  Natural gas which moved into large cracks and spaces between layers of overlying rock.

Unconventional natural gas: Natural gas occurring in the tiny pores (spaces) within some formations of shale, sandstone, and other types of sedimentary rock.

• This natural gas is also referred to as shale gas or tight gas.

Associated natural gas:  Natural gas also occurs with deposits of crude oil, and this natural gas is called associated natural gas.

• Coalbed methane: A type of natural gas found in coal deposits.

Natural Gas Resources in India

• India acquires natural gas from domestic sources and through imports.
• Domestic Gas is produced in Mumbai offshore & KG basin as well as the North East Region (Assam & Tripura).
• In FY 2018-19, total domestic gas production was about 90.05 MMSCMD(Million Metric Standard Cubic Meter Per Day)
• India accounts for about 1% of the world's total natural gas reserves

Import of Liquefied Natural Gas (LNG)

• Liquefied Natural Gas (LNG) is imported through the Open General License (OGL) in the country.
• At present, India has six (6) operational LNG regasification terminals operational with a capacity of about 38.8 MMTPA (~ 140 MMSCMD).

Pipelines

• At present, there are about 16800 km long Natural Gas pipeline network which is operational in the country. Additional 14,300 km is being envisaged to complete the National Gas Grid.

Some major pipeline projects

• Jagdishpur – Haldia/Bokaro – Dhamra Pipeline Project (JHBDPL) & Barauni- Guwahati Pipeline project (BGPL)
• North East Region (NER) Gas Grid
• Kochi-Koottanad- Bangalore-Mangalore (Ph-II) Pipeline Project (KKBMPL)
• Ennore-Thiruvallur-Bangalore-Nagapattinum– Madurai – Tuticorin Natural gas pipeline (ETBNMTPL)