Policy

Centre releases draft Bill to bring hydrogen under Oilfields Act

Our Bureau New Delhi | Updated on June 25, 2021

Hydrogen gas is a clean source of energy, which can be produced, distributed and regulated in conjunction with natural gas

Seeks public comments before June 30

The Centre plans to bring hydrogen generated from crude oil under the ambit of the Oilfields (Regulation & Development) Act, 1948, according to a draft amendment Bill prepared by the Petroleum Ministry.

As part of the pre-legislative consultation policy, the Petroleum Ministry has now sought public comments on the draft Amendment Bill before June 30. The Directorate General of Hydrocarbons ( DGH) released the draft amendment Bill on Friday.

“Scientific advancements are making production and utilisation of modern and clean energy derived from petroleum-based resources economically feasible. Hydrogen gas is one such clean source of energy, which can be produced, distributed and regulated in conjunction with natural gas,” said a Petroleum Ministry note.

“Presently, the Oilfields (Regulation & Development) Act deals with ‘mineral oils’ as understood in the conventional sense. In order to facilitate development and production of alternative/derivative clean energy sources that are being or may be developed in future, this Bill seeks to re-define ‘mineral oils’,” the note added.

Next-gen fuels

“The term as defined in the Bill includes not merely hydrocarbons but also the next-gen fuels viz ‘other gases which are capable of being used as fuels occurring in association with mineral oils or can be produced from mineral oils such as hydrogen,” it said.

The Bill also seeks to offer the industry lease on stable terms and prescribe a compensation mechanism to protect the investment. “The exploration, development and production operations carried out by investors are capital intensive,” DGH said. “The compensation shall be payable in case of suspension, revocation or cancellation of the lease or any part thereof or in case of restriction of access in respect of the leased area or any part thereof.”

The amendment will also empower the Centre to designate an authority to formulate standards, procedures and guidelines for the safety of mineral oil resource operations, conduct audits and seek compliance of safety standards.

After Prime Minister Narendra Modi’s announced a National Hydrogen Mission, the fuel has emerged as one of the most favoured by the oil and gas industry. Reliance Industries Ltd has earmarked ₹60,000 crore to manufacture green hydrogen, along with setting up large-scale factories for solar equipment and batteries, CMD Mukesh Ambani announced on Thursday. In April, the firm also co-founded the India H2 Alliance industry group along with American energy equipment manufacturer Chart Industries.

Meanwhile, Indian Oil Corporation Ltd is undertaking a pilot based on grey hydrogen, or hydrogen-CNG (H-CNG), where hydrogen is blended with CNG to the extent of 18 per cent for use as transportation fuel. Under this pilot, 50 buses in Delhi are plying on blended hydrogen in CNG.

Published on June 25, 2021

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