Natural Gas

Major Characteristics:

• Natural gas is a colourless, odourless, environment friendly energy source. It is a gas consisting primarily of methane. It is found associated with fossil fuels, in coal beds, as methane clathrates, and is created by methanogenic organisms in marshes, bogs, and landfills. Natural gas is commercially produced mostly from oil fields and natural gas fields.
• Before natural gas can be used as a fuel, it must undergo extensive processing to remove almost all materials other than methane. The by-products of that processing include ethane, propane, butanes, pentanes and higher molecular weight hydrocarbons, elemental sulfur, carbon dioxide, and sometimes helium and nitrogen.
• The major difficulty in the use of natural gas is transportation and storage. While, pipelines are used for inland transport, it cannot be used under oceans, which is essential for global trade. Liquified Natural Gas (LNG) is a proven commercial technology for transporting natural gas across oceans. However, as special ships and separate LNG receiving terminals are required, LNG projects are highly capital intensive in nature.

Global Scenario:

• The world's proven natural gas reserves as on January 1, 2009 are estimated at 185.2 trillion cubic metre, of which almost three-quarters are located in the Middle East and Eurasia. Russia, Iran, and Qatar together account for about 57% of the total reserves.
• Natural gas consumption has increased strongly over the past decade. However, despite this rising consumption, reserves-to-production ratios for most regions are substantial. Worldwide, the reserves-to-production ratio is estimated at 63 years.
• The total global production of natural gas in 2008 is estimated to be 3065.6 billion cubic metre with the main producing countries being Russia Federation (602 billion cubic metre), US (582 bcm), Canada (175 bcm) and Iran (116 bcm).
• The total global consumption of natural gas in 2008 is estimated to be 3018.7 billion cubic metre with the main consuming countries being US (657 bcm), Russia Federation (420 billion cubic metre), Iran (117 bcm), Canada (100 bcm) are the major consumers.
• Globally, industries consume the largest portion of natural gas, followed by the power sector. Industrial consumption is expected to be around 40% of total global consumption by 2030 as projected by Energy Information Administration.

Crude Oil

General Characteristics:

• Crude oil is a mixture of hydrocarbons that exists in a liquid phase in natural underground reservoirs. Oil and gas account for about 60 per cent of the total world's primary energy consumption.
• Almost all industries including agriculture are dependent on oil in one way or other. Oil & lubricants, transportation, petrochemicals, pesticides and insecticides, paints, perfumes, etc. are largely and directly affected by the oil prices.
• The prices of crude are highly volatile. High oil prices lead to inflation that in turn increases input costs; reduces non-oil demand and lower investment in net oil importing countries.

Global Scenario:

• Oil accounts for 40 per cent of the world's total energy demand.
• The world consumes about 76 million bbl/day of oil.
• United States (20 million bbl/d), followed by China (5.6 million bbl/d) and Japan (5.4 million bbl/d) are the top oil consuming countries.
• Balance recoverable reserve was estimated at about 142.7 billion tones (in 2002), of which OPEC was 112 billion tones.