To repeat the US success in shale gas/oil, India has to overcome challenges including public acceptance of shale exploration, said Maria van der Hoeven, Executive Director of the International Energy Agency.
While acknowledging that there may be shale gas potential in India, she said, this could be at a smaller scale at present.
But whether shale will be a game changer for India like in the US, she had reservations.
Besides public acceptance, the challenges before India as it embarks on its shale journey, according to her, are – to put in place proper infrastructure to transport gas, develop gas industry, solve water problem, have proper fiscal regime, land laws and a remunerative gas price.
Speaking to news persons here at the sidelines of the 8th Asia Gas Partnership Summit 2013 she said that public acceptance is crucial (shale requires people’s participation) as India is densely populated.
Infrastructure and developed gas industry are also key components to shale success, she said, adding that the US has both sufficient infrastructure and developed industry. Water problem (shale requires lot of water) is another aspect which India needs to solve.
Moreover, gas price in India, at present, is low and not enough to make shale a viable preposition, van der Hoeven said. She, however, was optimistic that with the Indian Government deciding to revise the gas price from April 2014, things may look better.
Another significant component where the US and India differ is that in the US the surface where the mineral is found is owned by individuals/land owners. This proves to be a big incentive for people.
Commercial production of shale in India will take sometime (another 10 years), she said. ONGC has last month started the first commercial exploration of shale gas.
According to IEA projections India's shale gas production might be 35 billion cubic metre by 2035 and Coal Bed Methane 25 billion cubic metre. But, this depends on several factors, van der Hoeven said.