Commercial sale to be governed by Oil Ministry norms

The tussle between Coal and Petroleum Ministries over extraction of coal mine methane (CMM) has been sorted out, with the Petroleum Ministry now agreeing to the proposal of allowing Coal India Ltd to explore CMM. But, the approval comes with a rider.

“Yes, we have agreed to this. Since, the mining lease is with Coal India, they can extract CMM,” the Petroleum Secretary, Mr G.C. Chaturvedi, told Business Line on Tuesday.

But, for commercialisation of the gas, Coal India will have to seek the Petroleum Ministry’s nod. Mr Chaturvedi said that things such as pricing and allocation had to be governed by existing norms decided by the Petroleum Ministry.

The issue was discussed between Mr Alok Perti, former Coal Secretary and present Advisor to Coal Ministry, and Mr Chaturvedi on June 27. This was followed by discussions between the Additional Secretaries of the Ministries.

The Coal Ministry is of the view that since Coal India is into mining, it is appropriate for the company to extract CMM too. Two companies working simultaneously in the same block is not advisable from both the financial and technical angles.

Along with the discussions between the two Ministries, the Government has also set up an inter-ministerial panel headed by Member Planning Commission, Mr B.K. Chaturvedi, to formulate long-term strategies for exploiting CMM and CBM.

The panel has met only once so far on May 16 and is yet to come up with a roadmap.

Currently, CMM is not tapped in India and is blown out of coal mines with the help of fans. CMM is available on the coal bed surface, which has to be simultaneously extracted while mining out coal unlike CBM. The CBM is extracted from virgin coal mines after drilling at least 250-300 metres.

At present, there are no estimates for CMM reserves in the country. CMM may be utilised to fire captive power units installed on the pit head of mines.

Industry experts tracking the sector say that it is found in all coal blocks where mining is undertaken. There are several blocks in Raniganj where large volumes of CMM have been detected. In some cases, Coal India has abandoned mines due to the higher concentration of CMM that is considered harmful.

Earlier, Coal India had sought permission to extract CMM from five blocks in the leasehold areas of BCCL and CCL.

(This article was published on July 19, 2012)
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