Govt relaxes rules for Coal India to ease coal-bed methane extraction

Till now, Coal India had to apply to oil ministry for a licence to extract CBM from its coal blocks

The Cabinet on Wednesday relaxed rules for state-owned Coal India Ltd for extraction of natural gas lying below coal seams in its blocks in a bid to quickly boost production.

Till now, Coal India Ltd had to apply to oil ministry for a licence to extract coal-bed methane (CBM) from its coal blocks. Now, the world's largest coal producer does not need such a permission.

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved an amendment to the November 2015 regulations issued by the Ministry of Petroleum & Natural Gas under Section 12 of the Oil Fields (Regulation and Development) Act, 1948 (ORD Act, 1948).

"Due to this amendment relaxation is granted under the Petroleum & Natural Gas Rules 1959 (PNG Rules, 1959), to Coal India Ltd (CIL) and its subsidiaries for not applying for grant of licence/lease under the PNG Rules, 1959 for extraction of CBM under their Coal Bearing Areas," an official statement said.

Stating that the decision is in line with the government's initiatives of 'ease of doing business', it said the move will expedite the exploration and exploitation of CBM, enhance the availability of natural gas and reduce the demand-supply gap.

"The increased development activities for exploration and exploitation of CBM gas reserves in-and-around the block will generate economic activities which in turn has potential to create employment opportunities in CBM operations and in the industries," the statement said.

The government issued a notification on November 3, 2015 granting rights to CIL and its subsidiaries for exploration and exploitation of CBM from all coal bearing areas for which they possess mining lease for coal.

Clause 3(vi) of the Notification provided that the "Lessee shall submit application under the P&NG Rules 1959 for grant of Mining Lease (ML) for CBM to Ministry of Petroleum and Natural Gas along with detailed recommendations of Central Mine Planning & Design Institute Limited (CMPDIL).