Companies & Sectors
Need for quick policy review for coal bed methane extraction

The government needs to do a quick policy review to cover simultaneous extraction of coal and methane. Existing coal block allottees should be cleared to proceed with plans for extracting methane gas without any further delay


Since 1950, methane gas, or coal bed methane (CBM) as it is otherwise known, has been extracted successfully, by the US. Many other western countries, such as Canada, East European nations, UK and others like Australia and China have benefited from this source of energy. India is lagging behind in developing this important source of fuel.

Coal bed methane is gas that is stored and buried deep in the coal seams and is like any other natural gas. This is lethal, 21 times more potent than carbon dioxide, if inhaled, but a clean fuel for generating power. During the excavation or mining of coal, this methane escapes, literally evaporating into thin air.

The Central Mine Planning and Design Institute has been studying this very important fuel source and has prepared data on eight prospective coal bed methane blocks in Johilla, Singrauli coalfields and Cambay basin. Recently, they have submitted their reports to the Director General of Hydrocarbons (DGH) and these blocks are likely to be put for global bidding soon.

According a press report available on the subject, the estimated recovery of potential coal bed methane gas in India is said to be between 710 and 948 billion cubic metres methane. Coal block owners like Coal India, NTPC and others could also explore for CBM themselves. In fact, since 2001, as many as 33 CBM blocks have been allotted in four rounds of global bidding. Government has prepared a policy on coal bed methane, but it has no separate policy covering the extraction of both coal and methane simultaneously.

In the interest of long term planning, it would be imperative that such a policy is prepared, as both are interlinked, and cannot be separated from each other, when it comes to extraction. At the moment, Minister Dharmendra Pradhan is responsible for Petroleum and Natural Gas, while Minister Piyush Goyal takes care of Power, Coal, New and Renewable Energy. It would be desirable that one of them is made responsible for dealing with the generation of methane gas. Otherwise, there would be an avoidable clash of personalities that would affect the nation's progress in tapping this important fuel resource.

This is based on the past experience of the Ministers in the UPA government. In the past, it appears, that Veerappa Moily, as Petroleum Minister, had proposed that private players be allowed to explore CBM along with Coal India in its existing mines but the Coal Minister, Sriprakash Jaiswal was not in favour.  In the end, nothing really happened, while the methane evaporated in thin air!

Therefore, the tug-of-war between these two ministries is said to cover: "as to who will implement the production sharing contract?"  This situation would continue even today, if a clear-cut cabinet decision at the Prime Minister level is not made. The focus of getting the methane would be lost in the wilderness of this argument.

Digressing for a moment, the 11th Five Year Plan has listed in-situ tapping of coal bed methane as a key intervention that will also help reduce greenhouse gas emission from mining activities and recovery of methane.

In the meanwhile, Reliance Power now has 4 CBM blocks, in MP (609 sq kms), Rajasthan (1,168 and 739 sq kms) and Andhra Pradesh (735 sq kms), and is supported by a consortium partner, Geopetrol International Inc.  They have drilled 12 core holes. Two test wells are producing incidental gas from day one! Commercial quantity of CBM from Sohagpur block from August 2014 has been higher than 4,000 m3/d and the Director General of Hydrocarbons (DGH) has accepted "gas-in-place" reserve of about 54.5 BCM!

On the other hand, the Kaveri delta CBM project undertaken by the Great Eastern Energy Corporation Ltd (GEECL), Gurgaon, Haryana, has been recently suspended due to some environmental issues and farmers’ agitation.

The issue before the government is to draw up a quick policy review to cover simultaneous extraction of coal and methane. Existing coal block allottees should be cleared to proceed with plans for extracting methane gas without any further delay.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)




2 years ago

CBM has a very good potential for fulfilling our energy crisis but it can never tradeoff for agriculture land. The place they identified for CBM in TamilNadu is a complete farming area and the rice bowl of the state. Its good that the project has been suspended there.

No PDS for taxpayers, class I & II govt officers?

The Modi government has asked states to try a scheme of excluding income tax payers and Class I and II officers from PDS. Madhya Pradesh government is already implementing a scheme on these lines


Incomes Tax (I-T) payers and ranking officials in government may be out of the ambit of the public distribution system (PDS) if a thinking in the Indian government gathers momentum.


The Narendra Modi government has asked states to try such a scheme and Food Minister Ram Vilas Paswan will be discussing the issue with them.


It has also given enough signals that the much-touted welfare food security programme of the United Progressive Alliance (UPA) government will not be shelved.


In fact, plans are afoot to fine-tune the scheme to target the beneficiaries in a better way and address the foodgrains entitlement, a sensitive issue raised by states.


“It is possible. We are thinking on these lines. I believe that instead of identifying poor beneficiaries, it would be better to identify those who can be excluded from the scheme,” Paswan had said.


He was asked whether the Government has any plans to implement the much-discussed idea of excluding income tax payers from the ambit of PDS benefits.


The Minister cited the case of the Madhya Pradesh government already implementing a scheme on these lines.


“Class I and II officers and income tax payers are kept out of the ambit of PDS benefits in the state. We have asked all states to try this. I will discuss this issue with the State governments,” he said.


At the same time, Paswan also expressed dissatisfaction over the operation of the PDS. “The benefit that should reach the poor is not reaching. There are many complaints about PDS.”


With the expiry of the three-month deadline to states to implement the food law that costs over Rs1 lakh crore, he said the Centre will give another extension to the states.


“There is no question of closing down the scheme. There is no question of closing down the previous scheme till the new one is fully implemented,” he said.


He also rejected suggestions that the new government was not keen about the scheme launched by the previous government last year.




2 years ago

Don't think the class I and class II officers even bother to line up at the PDS outlets and consume the substandard cereals and millets that are delivered there.It is their drivers and maids who are given that as an incentive for working in their homes.

Listed PSUs to have 25% minimum public shareholding by 2017

The move would help in promoting wider investor base in listed state-run companies and also provide a boost to the government’s plan to raise funds from disinvestment programme


Paving the way for sale of public sector unit (PSU) shares worth an estimated Rs60,000 crore over next three years, the Indian government has notified rules for minimum 25% public shareholding in listed state-owned companies.


To comply with these norms, over 30 listed PSUs will need to raise their public shareholding to minimum 25% by 21 August 2017, as per a notification for amendment to the Securities Contracts (Regulation) Rules.


The move would help in promoting wider investor base in listed state-run companies and also provide a boost to the government’s plan to raise funds from disinvestment programme.


Previously, the listed PSUs were required to have at least 10% public holding, whereas the minimum public holding in non-PSU listed companies is already 25%.


The non-PSUs were asked in June 2010 to attain minimum 25% public shareholding within three years. Following the expiry of this deadline in June 2013, 105 listed companies were found to be non-compliant with these norms and necessary actions were initiated against them by regulator SEBI.


”... every listed public sector company which has public shareholding below twenty five%... shall increase its public shareholding to at least 25%, within a period of three years, in the manner, as may be specified, by the Securities and Exchange Board of India (SEBI),” the Finance Ministry has said in its new notification for PSUs.


The new notification would bring in uniformity among all listed entities, irrespective of their promoter being the government or private sector entities, when it comes to minimum threshold limit for non-promoter or public holding.


As per the current valuations, the dilution in promoter holding in over 30 listed PSUs would lead to the government garnering over Rs60,000 crore through sale of shares.


However, this figure might change as these share sales would take place over a long period of nearly three years.


The major PSUs, where public shareholding is below 25% include Coal India, Steel Authority of India Ltd (SAIL), Metals and Minerals Trading Corp of India (MMTC), National Hydroelectric Power Corporation (NHPC), National Mineral Development Corp (NMDC) and Sutlej Jal Vidyut Nigam (SJVN).


While private sector companies were given three years’ time in June 2010 to achieve minimum 25% public holding, the PSUs were also given three years in August that year to increase their public shareholding to at least 10%.


The earlier proposal in June 2010 also required PSUs to attain minimum 25% public holding, but these norms were relaxed later at that time.


However, a fresh proposal was mooted earlier this year and subsequently SEBI’s board approved in June a proposal to require PSUs to have minimum 25% public holding.


In case of 105 companies that were found non-compliant to minimum public holding norms, SEBI last year issued directions, including freezing of voting rights and corporate benefits such as dividend, issuance of rights and bonus shares, among others, with respect to excess of proportionate promoter shareholding in respective companies.


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