The oil ministry should return surrendered CBM blocks to the coal ministry so that it can allocate these to power generators as captive coal sources to meet their fuel needs. However, the coal ministry should lay strict time frames within which the allottees must start mining operations

Since 2007, Great Eastern Energy Corporation (GEECL) of New Delhi has been successful in producing coal bed methane (CBM) from south block, Raniganj, in West Bengal.

It is well known that CBM is found in all virgin coal beds but the process of tapping it is a technology that has been accomplished by a few international companies such as Dart Energy of Australia and Coal Gas Mart of the US. They are present in India, now.

ONGC, for instance, acquired four coal bed methane assets more than 10 years ago, and spent nearly Rs600 crore in exploration and development work, most of which was spent in the Jharia coal block, but with poor results!

However, three block assets in North Karanpura and Bokaro in Jharkhand and Raniganj in West Bengal have been estimated to hold one trillion cubic feet of methane gas each. But this needs to be extracted successfully.

What ONGC has planned, after its past experience, is to invite such stalwarts as Dart of Australia, offering them a 25% partnership in Jharkhand and a 10% in Raniganj.  Dart is already in India and is exploring CBM in two blocks.

Deep Industries of Ahmedabad, which is said to be in association with Coal Gas Mart of USA, has been offered a 10% stake by ONGC in Jharkhand. It is part of the consortium led by Jindal Petroleum, which believes that this asset in Jharkhand has good potential.

At the moment CBM production in India is only 0.15 mmscmd (million metric standard cubic metres per day), which is very negligible, but it is hoped to reach 7.4 mmscmd by 2013-14. It remains to be seen if the strategic partnerships offered to Dart and Deep bring the desired results for ONGC, so as to tap this natural resource that has been going waste in all the virgin coal mines.

In the meantime, several CBM blocks have been relinquished, due to inadequate gas reserves, but as coal can be mined in these blocks, the coal ministry has requested the ministry of petroleum and natural gas to return the same to them for this purpose.

According to the Director General of Hydrocarbons (DGH), for exploring coal bed methane, 33 contracts have been signed by the oil ministry through competitive bidding. Naturally, all these have abundant coal reserves and these are located in several states such as Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and West Bengal. Out of these, commercial production is expected to start in Jharia in Jharkhand and Sohagpur in Madhya Pradesh.

Since the surrendered CBM blocks have rich coal reserves, the coal ministry feels that it would be better to allocate these to power generators as captive coal sources to meet their fuel needs.  Of course, it is presumed that as these blocks have all the required clearances, which they must have obtained before they began their methane gas exploration, it would be easier for them to commence mining operations in a reasonable short span of time.

 It is hoped that the oil ministry returns these blocks and the coal ministry can go ahead with its plans, in a transparent manner, but laying strict time frames within which the allottees must start the mining operations.

As for coal bed methane, the coal ministry would do well to locate other prospective partners abroad so that time is not wasted in these strategic thrust areas.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was 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.)