Coal Bed Methane Current Affairs
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Union Cabinet has approved policy framework to permit exploration and exploitation of unconventional hydrocarbons such as Shale oil/gas, Coal Bed Methane (CBM) etc. It will be carried out under existing Production Sharing Contracts (PSCs), CBM contracts and Nomination fields to encourage existing contractors in licensed or leased area to unlock full potential of unconventional hydrocarbons in existing acreages.
With this policy, there will be complete shift from One hydrocarbon Resource Type to Uniform Licensing Policy which is presently applicable in Discovered Small Field (DSF) Policy and Hydrocarbon Exploration & Licensing Policy (HELP).
Benefits of this Policy Framework
It will enable the realization of prospective hydrocarbon reserves in existing contract areas which otherwise would have remain unexplored and unexploited. It will give impetus to new investment in exploration and production (E&P) activities and chances of finding new hydrocarbon discoveries and increasing domestic production. It will also spur exploration and exploitation of additional hydrocarbon resources giving impetus to new investment, economic activities, additional employment generation and thus benefitting various sections of society. This will also lead to induction of new, innovative and cutting-edge technology and forging new technological collaboration to exploit unconventional hydrocarbons.
Under existing contractual regime of PSCs, existing contractors are not allowed to explore and exploit CBM or other unconventional hydrocarbons in already allotted licensed or leased area. Similarly, CBM contractors are not allowed to exploit any other hydrocarbon except CBM. Acreages held at present by various contractors in PSCs and CBM blocks and National Oil Companies (NOCs) in nomination regime constitute a significant part of India’s sedimentary basin.
The Cabinet Committee on Economic Affairs (CCEA) has relaxed rules for state-owned Coal India Ltd (CIL) for extraction of Coal Bed Methane (CBM) lying below coal seams in its blocks in bid to quickly boost production. Till now, CIL had to apply to oil ministry for a licence to extract coal-bed methane (CBM) from its coal blocks.
CCEA has approved amending clause 3(xiii) of 2015 notification issued by Ministry of Petroleum & Natural Gas (MoP&NG) under Section 12 of Oil Fields (Regulation and Development) Act (ORD Act), 1948. The decision is in line with the Government’s initiatives of ‘Ease of Doing Business’.
The amendment is granted under Petroleum & Natural Gas Rules 1959 (PNG Rules, 1959) to CIL and its subsidiaries for not applying for grant of license and lease under PNG Rules, 1959 for extraction of Coal Bed Methane (CBM) under their coal bearing areas.
It will expedite the exploration and exploitation of CBM, enhance availability of natural gas and reduce gap in demand and supply of natural gas. The increased development activities for exploration and exploitation of CBM gas reserves will generate economic activities, thus create employment opportunities.
Coal Bed Methane (CBM)
CBM is generic term used for gas that is found in adsorbed state in coal. It is natural gas found in coal seams. It mainly consists of Methane (CH4) with minor amounts of nitrogen (N2), carbon dioxide (CO2) and heavier hydrocarbons like ethane (C2H6). It is clean source of energy. During the initial years of mining, CBM was vented out and wasted into the atmosphere as it was considered as serious safety hazard while conducting coal mining operations. However, later with advancement of technology it was possible to extract CBM, a precious energy resource and an unconventional form of natural gas.
Advantages of CBM as a fuel
It is environmentally safe and clean fuel which on combustion emits only carbon dioxide and water. It is not only considered as an efficient fuel but also reduces emission of greenhouse gas from coal mining. Its extraction prior to coal mining activities makes mining activities safer by degassing the coal seams.