Concerned over maintaining continued fuel supplies – coal and gas – for sectors such as power, exploration of gas along with coal mining is finding favour with the oil and coal ministries.

The two key ministries – Petroleum & Natural Gas and Coal – had earlier attempted to work out a system wherein contractors were to be allowed to mine gas from coal seams or coal bed methane (CBM) and coal in the same block. But, due to the turf war between the two ministries the concept did not take off.

“This is an option which we should consider…it has been a success globally. Officials in the two ministries are favourably inclined, but there are issues like who will implement the production sharing contract,” a senior official in Petroleum Ministry said adding that a decision will need to be taken at the ministerial level as well.

Coal bed methane is the natural gas stored in deeply buried coal seams, and is similar to other sources of natural gas. In the backdrop of the recent de-allocation of coal blocks by the Supreme Court, leading to pressure on Coal India to enhance output, CBM could be a worthwhile option to explore.

Turf war In fact, during the UPA regime, the then Petroleum Minister M Veerappa Moily had proposed that private players be allowed to explore CBM along with Coal India in its existing mines. But, the then Coal Minister Sriprakash Jaiswal was against it.

The proposal to allow private companies to explore CBM in Coal India blocks was floated by the Petroleum Ministry twice in the past. But, the Coal Ministry had objected to it.

Significant reserves With the third-largest proven coal reserves, and the fourth largest coal producer in the world, India holds significant prospects for commercial recovery of CBM. The country has an estimated 710.39-948.73 billion cubic metre of CBM gas.

In fact, there was also a proposal to ask public sector oil exploration majors such as ONGC and Oil India to take up the job with Coal India, but the turf war between the nodal ministries resulted in the proposal not taking off. It was felt that companies such as Coal India and NTPC, which owned coal blocks, could explore CBM themselves.

“It is a feasible option and in collaboration with PSUs like ONGC and OIL it should be considered,” said Sudhir Vasudeva, former Chairman and Managing Director ONGC.

There was a high-level panel which had gone into the proposal and thrashed out the issues, but today the status of that report is not known, said another official.

While stating that such policies were worth exploring, Kuljit Singh, Partner-Infrastructure Practice EY said, “The Government should use the current situation to reform the coal sector. Address all the issues which are coming in way for enhancing the coal output in the country.”

Besides, India does not have a policy regime for simultaneous extraction of CBM and coal. But, it does have a CBM policy. Since 2001, 33 CBM blocks have been allotted in four rounds of global bidding.

Prospective blocks Meanwhile, the Central Mine Planning and Design Institute (CMPDI) has also prepared data on eight prospective CBM blocks in Johilla, Singrauli Coalfields and Cambay basin which have been submitted to the Director General Hydrocarbons. The blocks will be up for global bidding in the next round.

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