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The Union Ministry of Petroleum and Natural Gas (MoPNG) has decided to allow extraction of mine methane from Coal India mines.
The Ministry was engaged in a turf battle with the Coal Ministry on the issue for more than a year now.
The proposal was mooted by the coal major in early 2011 for safe mining, and ensure gainful use of the greenhouse gas which was otherwise released in the atmosphere leading to environmental impact.
According to sources, the draft Cabinet note prepared by the Ministry in this regard comes with a rider. CIL should take prior approval from MoPNG for initiating any such project. In line with the CBM policy, the mine methane extraction agency is also required to pay production-linked-payments (PLP) to the Union Government.
Objection
Though it welcomed the move to open up the sector, the Coal Ministry has reportedly raised its objections on MoPNG proposal for granting approval to such project on a case-to-case basis.
According to sources, methane gas is proposed to be extracted from existing CIL leasehold area and is outside the ambit of the CBM policy. Accordingly, the Coal Ministry was pushing for an umbrella policy and the regulatory guidelines, if any, for the extraction of gas.
However, the draft proposal if implemented would add to the red tape.
“Mine methane extraction projects are small in nature. Considering the vast mining operations of CIL, the proposed policy would only ensure Petroleum Ministry's control over the company on every de-gasification bid,” a source said.
In April last year, Coal India decided to invite private participation for extraction of methane from five extremely gassy and “unsafe” underground mines in Jharkhand. The project was estimated to help unlock nearly 100 million tonne of medium grade coking coal and 25 billion cubic metre of methane.
The tender attracted interest of a large number of private players from India and abroad, but could not be awarded due to objections raised by the MoPNG.
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