India's Coal, Petroleum Ministries Differ on CBM Extraction Proposal

India’s Coal Ministry has objected to the regulatory proposals drafted by the Ministry of Petroleum and Natural Gas for extraction of methane gas from Coal India mines.

Business Line citing sources has reported that the Coal Ministry felt that the regulatory control sought by the Petroleum Ministry for coal-bed-methane operations in Coal India’s leasehold area may create hurdles for increased coal production.

Since the Coal India leasehold is already governed by the Mines Act, the Petroleum Ministry’s proposals will lead to a situation where the same space will be governed by two sets of regulations under different ministries.

The Coal Ministry, however, has agreed that Coal India should pay the royalty and requisite fees as is applicable for harnessing gas resources and the marketing principles of such energy to be extracted, should be formulated by the Petroleum Ministry.

In April 2011, Coal India proposed commercial exploitation of mine methane to reduce emission of greenhouse gas and ensure extraction of coal from five extremely gassy medium-grade coking coal assets. The project was estimated to help unlock nearly 100 million tonnes of medium grade coking coal and 25 billion cubic metres of methane.

Following a year long discussion between the two ministries in February , it was decided that the Petroleum Ministry would create a draft cabinet note, in consultation with the Coal Ministry, to frame a suitable policy to harness this energy source.

Accordingly, in May , The Petreoleum Ministry circulated a draft cabinet note which was forwarded by the Coal Ministry to Coal India for opinion. Coal India, in turn, said the Petroleumm Ministry had sought regulatory control in line with the coal-bed methane policy, ignoring the fact that the Mining Act is already taking care of such issues in a company leasehold area.

Source: Business Line