Coal India against others exploiting CBM and shale gas

Coal India has cautioned that there would be safety issues if the government allows other parties to harness coal-bed methane (CBM) in its leasehold areas. "We would like to explore it directly and a proposal has been sent to the Centre in July, requesting them to reconsider plans to offer CBM rights to others. A final decision is still pending with the government," Coal India chairman and managing director S Narsing Rao said on the sidelines of a board meeting.

Also Read: Look at independent fuel sampling system: CoalMin to CIL An estimated 20 per cent of CBM reserves were in CIL's leasehold areas and there would be a threat if the government allowed others to harness the gas, Rao said. CIL cautioned that due to practical and safety issues, it did want any other player to operate in its leasehold areas. Rao said CIL only wanted extraction and collection rights for CBM and marketing would be done as per government policy. According to reports, the government was considering to offer CBM blocks on Coal India lease land without bidding, which might require Cabinet approval. Rao indicated that CIL would have a similar stand on shale gas, as third party exploration might lead to safety issues. But no concrete proposal has been sent to the government. According to the Directorate General of Hydrocarbons, India is estimated to have around 4.6 trillion cubic meter of CBM reserves. One TCF of natural gas is enough to generate about 100 billion kilowatt hours of electricity. India's CBM production is estimated to reach 4 million standard cubic meter per day (mmscmd) by 2016-17, as compared to the current level of 0.23 mmscmd in 2011-12. The total commercial production of CBM in the country in 2011-12 (up to February, 2012) was 74.833 mmscmd. Government has so far allocated 33 blocks to different companies, both PSUs and private sector, in four auctions.