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MOSL: OIL & GAS-Green revolution 2.0; Toward higher industrial usage of natural gas

OIL & GAS: Green revolution 2.0; Toward higher industrial usage of natural gas

The first green revolution in the 1960s was introduced to counter frequent famines, the lack of financing and to increase India’s agricultural productivity, thus making the country self-sufficient.

Due to air pollution, China suffered high total welfare losses (~10% of GDP) in 2013. This led to China waging a war against air pollution, with natural gas playing a central role in the battle. Similar to China, India too suffered total welfare losses (~8% of GDP) in 2013. Though delayed, India appears to be moving in a similar direction as China – efforts to curb pollution by using natural gas.

We have already seen a good focus on CNG so far. Natural gas adoption by industries in India could result in Green Revolution 2.0 in the country. This bodes well for a few CGDs and all gas transporters/LNG importers.

China's action plan to defend the blue sky by 2020
China introduced the Air Pollution Prevention & Control Action in 2013, setting specific indicators. A clear 10-point strategy including focus on usage of natural gas resulted in a sharp reduction in pollution levels. Beijing-Tianjin-Hebei region, for example, recorded 39.6% reduction in PM2.5 v/s the targeted 25%.

Post expiry of the 2013 plan, China came up with the Three-Year Action Plan for Winning the Blue Sky War, which aims to achieve at least 80% good-air days in a year in cities.
As a result, share of natural gas in China's primary energy mix is expected to increase - from ~7.4% in 2018 to 10% by 2020.