The Hindu Business Line : Plan for private role in underground coal gassification

On the cards
Policy for access to different coal seams in the same block for different purposes, by different parties.
Will also address issues related to safety and environmental impact, especially ground water

Kolkata , Nov. 12

The Centre is considering a policy and legal framework to promote private sector participation in the emerging option of underground coal gassification (UCG).

The framework includes extension of fiscal benefits in the line of coal bed methane (CBM) policy.

The Ministry has also set 2010-11 deadline for commercial utilisation of UCG.

Talking to newspersons here today, the Union Coal Secretary, Mr H. C. Gupta, said that the Union Coal Ministry would soon discuss the issues related to fiscal benefits with the Finance Ministry.

Unlike development of CBM, which is governed by the Union Ministry of Petroleum and Natural Gas, both coal gassification would be monitored by the Coal Ministry.

Earlier addressing the Indo-US energy dialogue working group on coal, and Asia Pacific partnership coal mining task force workshop on underground coal gassification, Mr Gupta said that apart from fiscal benefits, UCG may be notified as an end use under the present captive mining policy to facilitate allocation of coal blocks to potential entrepreneurs.

It may be mentioned that though underground coal gassification offers an opportunity to make viable use of deeper coal seams which are otherwise unutilised, the present set of legislations does not allow use of coal blocks by private sector for any other purposes other than captive mining.

Amending Acts

Focussing on the need to amend the Mines Act and Coal Mines Regulations, preferably through a notification, he said a legal framework is due to be created to enable access of different coal seams in the same coal block for different purposes by different parties.

For example, there should not be any legal complication when different coal seams in the same block are allocated to different parties for UCG or for mining purposes.

The legal and policy framework will also address issues related to safety and environmental impact, especially with reference to ground water.

It may be mentioned that the Union Coal Ministry has already approved a proposal from Neyveli Lignite Corporation for funding a pilot UCG project at its lignite reserves in Rajasthan.

Also, ONGC has agreements in place with both NLC and Coal India Ltd for pilot UCG studies.

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