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State-run Coal India Ltd (CIL) on Thursday got permission to explore coal bed methane (CBM) in its blocks on a nomination basis.
A proposal to this effect was cleared by the Cabinet Committee on Economic Affairs (CCEA), allowing CIL to explore CBM in 450,000 hectares leased or licensed under the Coal Mines Act.
According to regulations, simultaneous extraction of coal and CBM from the same blocks were not allowed. Major private sector CBM entities in India include Great Eastern Energy Corporation, Essar Oil and Reliance Industries.
From 2001, 33 CBM blocks were awarded in four auctions, with three under a nomination basis. However, a policy regime for simultaneous extraction was not in place. CBM production in India was expected to touch 7.4 million standard cubic metres a day in a couple of years. The directorate-general of hydrocarbons had estimated CBM reserves at around 4.6 trillion cubic metres.
The CCEA decision would put an end to a dispute between the petroleum and coal ministries on CBM jurisdiction. The petroleum ministry would now get the responsibility.
Petroleum Minister M Veerappa Moily was batting for allowing simultaneous CBM extraction rights for captive coal producers, too.
With the government unable to find a consensus in this regard, due to strong opposition from coal minister Shriprakash Jaiswal, the plan was put on hold.
According to reports, CBM extracted by CIL would be priced and marketed according to the petroleum ministry's gas pricing and utilisation policy.
CIL had reportedly shortlisted five blocks in Jharkhand, with an estimated reserve of a trillion cubic feet, in the initial stage.
