Turf war between coal, petroleum ministries, a stumbling block on methane extraction

Everyone knows that coal methane can be a viable energy source in a gas-starved Eastern Region. The region arguably pays highest prices for gas in the country indicating demands far outstripping a few thousand cubic metres of coal-bed-methane supplies. But, that doesn't make much difference to the officialdom in the Union Government.

For more than a year now a turf battle between coal and petroleum ministries is blocking way for private investment in harnessing nearly 25 billion cubic metre of methane from gassy mines. And, even if they arrive at a ‘consensus' as in January 24 to pave way for such investments “within a month”, Babus simply forget to live up to their promises.

Coal production hit

In April last year, Coal India decided to invite private participation for extraction of methane from five extremely gassy underground mines in Jharkhand. According to the regulations set by the Directorate General of Mine Safety, high concentration of gas made underground mining “unsafe” in the identified assets.

A tender was soon floated to pave way for extraction of methane and ensure safe underground mining of over 100 million tonne of medium grade coking coal. Used in steel manufacturing, coking coal is available in limited quantities in India and is largely imported.

The tender has attracted expression of interest from a large number of private players from India and abroad engaged in coal seam exploration. They were ready to take the risk at no cost to CIL, provided they were allowed to market the gas to earn profit.

CIL actually borrowed the idea from a captive miner in Jharkhand who struck a similar JV but could not take it forward due to resistance from the officialdom.

Turf battle

The proposal was resisted by the ministry of petroleum and natural gas (MoPNG) which felt that the tender was overlapping in nature with CBM Policy and, should not be awarded without the requisite approval from the upstream regulator under the ministry.

The coal ministry, on the other hand, felt that the ambit of the CBM Policy does not include the CIL leasehold area. Also, in line with the Mining Act there was no space for a second “licensee” in a particular mining leasehold area.

In continuation to the never ending deliberations, the secretaries of two ministries met again on January 24. According to the available minutes, it was decided that the “MoPNG would prepare a cabinet note (for a separate policy formulation ensuring mine methane extraction) in consultation with coal ministry in the next 30 days and take it to the cabinet for its approval.”

Leave alone submission of any such proposal, sources told Business Line that the elusive note was still under preparation.

CIL, in the meantime, is understood to have been verbally asked to start working again on the tender. The pep-talk, however, has little impact as the company cannot award tenders in the absence of clear approval on commercial issues from coal ministry.

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