New coal auction lets 'gas' worth crores escape

The new coal auction policy of the government – envisaged to auction coal blocks cancelled by Supreme Court (SC) -- is likely to result in a huge loss of coal-bed methane (CBM) gas. The release of this greenhouse methane gas into the atmosphere will cause massive damage to the environment and will have implications on climate change, dna has found.

Despite requests from Ministry of Petroleum and Natural Gas (MoPNG) to incorporate CBM gas auction along with coal auction so that the loss of this gas can be prevented, Ministry of Coal (MoC) is unmoved.

As per the global standard practice, globally, methane gas, which is trapped in the pores of coal, is harnessed prior to mining of coal. If it is extracted, it can be used to run industries, power stations among others.

Otherwise, this gas, which is like any other (as natural gas extracted from Krishna Godavari basin or from the Gujarat coast), will escape into the atmosphere.

"First CBM has to be extracted then only coal should be mined. It's an industry standard," former coal secretary, P C Parakh, told dna.

"A conservative estimate shows that methane gas worth Rs 280 crore will be lost annually if 200 million tonne (mt) of annual coal production is achieved as planned through this auction. By letting this gas escape, 1.75 lakh tonne of destructive methane gas will be emitted into the atmosphere" said Vivek Gilani, Ashoka Fellow and director, cBalance Solutions Hub, a company that conducted a study along with Central Institute of Mining, Fuel Research (CIMFR), and Indian Institute of Management (IIM) Ahmedabad on the carbon footprint of Coal India Ltd's (CIL) Ashoka and Piparwar mines. The loss calculations are are based on the above study.

The study commissioned by Central Coalfields Ltd (CCL), a subsidiary of CIL, in its exhaustive report of March 2014, said, "During mining, fugitive emissions occur due to release of trapped seam gases i.e. methane and CO2. In the case of some mine projects, significant volumes of trapped methane gas can be economically viable to extract and stored through CBM extraction technology."

The report said, "In instances where CBM extraction and use is not feasible and/or not practiced (as is the case with the project mines), the trapped methane is released during mining and post mining activities."

Every molecule of the released methane gas into the atmosphere is 21 times more damaging than normal carbon dioxide emissions. According to the Directorate General of Hydrocarbons (DGH), the country has CBM reserves of about 4.6 trillion cubic metres trapped in coal blocks.

Even as the coal ministry has started the process of auctioning of 23 coal blocks in the first round, the officials of MoP&NG have expressed concern over the permanent loss of CBM gas and the damage it will cause to the environment.

Dharmendra Pradhan, Minister of State for Petroleum and Natural Gas, confirmed to dna about the talks with the MoC. He said, "We are discussing how to go about it. Since it's a new technology we are exploring all possibilities. Our mandate is to produce gas and theirs coal. We have to keep in mind that coal production should not stop. It's a purely technical issue and we will talk and find a way. There are absolutely no differences."

It all started when Oil and Natural Gas Corporation (ONGC) wrote a letter to MoPNG and MoC in November 2014 soon after a SC judgement raised the issue that a few CBM blocks were allocated to ONGC for production were overlapping with the blocks that were allocated by coal ministry for coal mining. In the first part of the series, dna had shown how because of arbitrary allocation of Parbatpur coal block by the previous UPA regime to favour a private company ONGC is losing crores every year as it is not able to extract CBM gas. Even in the first phase of coal auction, the central government has put out this Parbatpur Central block, against ONGC's wishes.

Soon after the ONGC's letter, in the first week of December, the idea was mooted in the MoPNG that provisions for the auction of both coal blocks and CBM trapped in them must be made so that there is no loss of gas.

However, MoC notified the draft rules for coal blocks alone in the third week of December.

Ironically, the government had in December 2013 allowed CIL to explore and produce CBM in its existing coal mines. "Now that CIL has now been allowed to do extract CBM, it is hard to understand why the successful bidders of the new auction should not extract the gas as well," said B Akala, former chairman & managing director of Coal Mine Planning and Design Institute (CMPDI) and CCL.