According to reports, the Cabinet Committee on Economic Affairs on Thursday allowed Coal India Ltd to explore coal bed methane (a form of gas found in coal beds) in its existing mines.
This puts to end the year-long dispute between the Ministries for Petroleum & Natural Gas and Coal on simultaneous mining of coal and CBM.
India does not have a policy regime for simultaneous extraction of CBM and coal. But, it does have a CBM policy, wherein the Ministry for Petroleum & Natural Gas auctions these blocks.
M. Veerappa Moily, Minister for Petroleum & Natural Gas, and his officials are in favour of allowing private players to explore CBM along with Coal India in the latter’s existing mines. But, Coal Minister Sriprakash Jaiswal was against this move.
With no consensus emerging, the only option left is to allow Coal India to extract CBM, which does not have any experience in gas exploration.
The Petroleum & Natural Gas Ministry has till now auctioned 30 CBM blocks in four bidding rounds. Three others have been allocated on nomination basis.
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 resource has been estimated to be around 4.6 trillion cubic meters, according to the Directorate General of Hydrocarbons.
Currently, three CBM blocks are producing around 0.15 million standard cubic metres per day (mscmd). This is likely to touch 7.4 mscmd by 2013, according to the DGH.