Liquified Petroleum Gas (LPG) has emerged over the past ten years as a cleaner and more environmentally friendly substitute to conventional fuelling commodities, such as coal and heating oil. As pre-eminent global climate change agreements and the catalysed green energy sector place greater importance on the reduction of greenhouse gas emissions, natural gas (NG in industry) and LPG have been identified as a promising ‘bridging fuel’. This is a low carbon-emitting energy source for an increasingly carbon wary world. In theory, LPG is better suited towards addressing the energy poverty crisis, compared to other low carbon-emitting fuels (such as NG). The results from India’s programmes promoting the use of LPG suggest that LPG is a promising energy source for the future of mid-developed countries.
LPG is the generic name for a mixture of light, gaseous hydrocarbons (predominantly propane and butane) that have been compressed at moderate pressures into a liquified state. The commodity is sourced as a by-product of the processing of NG and crude oil via the refining process. Like NG, LPG is a low carbon-intensive fuel, as discovered by a study from the World Liquified Petroleum Gas Association (WLPGA). The study, as shown in Figure 1, concluded that emissions from LPG on average were found to be marginally higher, per energy output, than those from NG and 15-17% lower than those from petrol and diesel. Secondly, LPG has a higher energy content per volume when compared to NG. The calorific value, a measure of energy content, of LPG is 93.2MJ/m3 compared to 38.7MJ/m3 for its lighter counterpart. This means LPG is able to hold more energy than natural gas in containerised form whilst producing comparable emissions. LPG is also easily transportable, thanks to its properties that allow it to be stored in tanks and cylinders at normal temperatures and moderate pressures. Given both NG and LPG are readily available, these benefits might not make LPG appear as a drastically radical or exciting prospect, however, the high energy content and easy portability of LPG make it a promising energy source for those residing in remote locations, where NG cannot be supplied via a pipeline, and thus LPG can constitute an environmental solution to the energy poverty situation.
Figure 1: A source from the WLPGA (2007) displaying the world average greenhouse gas emissions per energy provided by fuel. WLPGA.
Billions of people in poor countries or regions are currently dependent on environmentally dirty, inefficient and cheap traditional fuels. Global market demand for LPG stood at 331.29 million tonnes in 2020, based on a report from Grand View Research, and is estimated to grow at a compound annual growth rate of 4.4%. However, poor distribution systems and the unfamiliarity of using this emerging fuel act as a current impediment to further growth in demand. Now interventionist government policies and programmes aimed at increasing LPG consumption in low-income areas have been identified as the solution to these problems. This is observable in India, where the Pradhan Mantri Ujjwala Yojana (PMUY) welfare scheme has started to see success in promoting the use of LPG. The scheme was launched in 2016 and its main aim has been to distribute LPG connections to women below the poverty line. Data from the petroleum ministry shows that there were 80.2 million PMUY connections from LPG suppliers to low-income households by the 14th of January last year and these connections have accounted for 71% of growth in total domestic LPG connections in the country. These connections have contributed to a nation-wide gross LPG consumption of 27.41 million tonnes in 2020.
Whilst these figures in India look promising, environmentally unfriendly cooking fuels appear to remain in high use. Despite LPG consumers receiving subsidies, administration for these subsidies and high transport costs seem to be a barrier for their consumption. Instead, cheaper and dirtier fuels such as coal, heating oil and diesel appear to be the easiest and most accessible energy source given India’s aggregated carbon footprint. Having said this, LPG is still the most promising fuel for residential use and a short-term resolution in the struggle for a sustainable and green environment. It is also clear the high fuel content and easy transportability of LPG make it, at least for now, the most effective solution to combat the energy poverty crisis in a comparably sustainable fashion. The growing implementation of government and international programmes (such as the WLPGA and the United Nations Development Programme) that promote the use of this fuel in developing nations including India, Indonesia, Pakistan and Brazil suggest that it is an energy source that is likely to be present till the last days of non-renewable energy consumption.
By Jack Reid
Sector Head: Edouard Nelson