The Union Cabinet, on Thursday, gave its approval to allow Coal India Ltd. (CIL) to carry out exploration of coal bed methane (CBM) gas in its existing mines, a move that will unlock nearly 100 million tonnes of medium grade coking coal and about one trillion cubic feet (tcf) of gas.
Emerging out of the meeting of the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, Coal Minister Sriprakash Jaiswal said the Cabinet had indeed approved the new policy. Current rules prohibit mining firms from extracting CBM during mining as the policy does not allow for simultaneous extraction of CBM and coal. CBM exploration and production is allowed only in pure coal-seam gas bearing blocks, which are auctioned. Since 2001, 33 CBM blocks have been awarded in four auction rounds.
Besides, two CBM blocks to Oil and Natural Gas Corporation (ONGC) and one to Great Eastern Energy Co Ltd were awarded on a nomination basis. According to the Directorate General of Hydrocarbons (DGH), India has CBM reserves of about 4.6 trillion cubic metres.
At present, 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. CIL holds at least 20 per cent of the estimated 60 billion tonnes of coal resources in India. It has coal mines in eight States, which are estimated to have CBM reserves of 3.5-4 trillion cubic feet. It was felt that may of the acreage of CIL were gaseous and unsafe mines, where mining of coal would be possible only after the extraction of CBM. Extracting methane gas ahead of coal mining from seams will allow CIL help unlock very significant quantities of coal reserves in areas of Jharkhand, West Bengal. CIL could possibly take ONGC as a partner for the venture. CIL is understood to have short-listed five blocks in Jharkhand with estimated CBM reserves of about 1 tcf for exploration in the first stage.