Unconventional Hydrocarbons 21 Aug

Unconventional Hydrocarbons:-

• The Union Cabinet has approved the policy to permit exploration and exploitation of unconventional hydrocarbons such as Shale oil/gas, Coal Bed Methane (CBM) etc.
• It will be carried out under the existing Production Sharing Contracts (PSCs), CBM contracts and Nomination fields to encourage the existing Contractors in the licensed/leased area to unlock the potential of unconventional hydrocarbons in the existing acreages.
• This policy will enable the realization of prospective hydrocarbon reserves in the existing Contract Areas which otherwise would remain unexplored and unexploited.
• With this policy dispensation, new investment in Exploration and Production (E&P) activities and chances of finding new hydrocarbon discoveries and resultant increased domestic production thereof is expected.
• Exploration and exploitation of additional hydrocarbon resources is expected to spur new investment, impetus to economic activities, additional employment generation and thus benefitting various sections of society.
• This will lead to induction of new, innovative and cutting-edge technology and forging new technological collaboration to exploit unconventional hydrocarbons.

Shale gas:-

• In preliminary studies, ‘in place’ probable Shale gas resources in the range of 100-200 TCF in 5 Indian sedimentary basins have been assessed by various international agencies.
• Presence of Shale oil/gas has a strong possibility in basins such as Cambay, Krishna- Godavari (KG), Cauvery etc. where mature organic rich Shale exist.
• With the approval of this policy, there will be complete shift from ‘One hydrocarbon Resource Type’ to ‘Uniform Licensing Policy’ which is presently applicable in Hydrocarbon Exploration & Licensing Policy (HELP) and Discovered Small Field (DSF) Policy.

What is Coal Bed Methane (CBM)?:-

• Coal Bed Methane (CBM) is natural gas found in coal seams.
• It mainly consists of Methane (CH4) with minor amounts of nitrogen, carbon dioxide and heavier hydrocarbons like ethane.

What is the present scenario of CBM resources in India?:-

• The government has identified 26,000 square km of area for CBM operation with total estimated CBM Resources of 2,600 billion cubic meters (91.8 TCF).
• India has fourth largest proven coal reserves in the world.
• It has significant prospects for exploiting CBM.
• The Ministry of Petroleum and Natural Gas in consultation with Ministry of Coal has identified around 26,000 sq.km area for the operation of CBM.

What is Open Acreage License Policy (OALP)? :-

• OALP was introduced vide a Cabinet decision of the Government in 10th March 2016as part of the HELP or Hydrocarbon Exploration and Licensing Policy
• Under Open Acreage Licensing Policy (OALP), a bidder intending to explore hydrocarbons like oil and gas, coal bed methane, gas may apply to the Government seeking exploration of any new block
• Open Acreage Licensing Policy (OALP) gives an option to a company to select the exploration blocks on its own without waiting for the formal bid round from the Government.
• OALP is part of the strategy to make India a business and investor friendly destination and cut import dependence by 10%.
• Achieve the goal to double the existing oil production from current 80 million metric tons to about 150-155 million metric tons by 2022.

What are Hydrocarbon Exploration and Licensing Policy? :-

• The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Hydrocarbon Exploration and Licensing Policy (HELP).
• Under HELP, the companies will be able to tap other hydrocarbons including shale gas.
• Four main facets of this policy are:

1. Uniform license for exploration and production of all forms of hydrocarbon,
2. An open acreage policy,
3. Easy to administer revenue sharing model and
4. Marketing and pricing freedom for the crude oil and natural gas produced.

What are the advantages of CBM as a fuel?:-

• CBM is an environmentally safe gas: Methane has been labelled as a Green House Gas (GHG) by United Nations Framework Convention on Climate Change (UNFCCC).
• Using CBM as a fuel will halt methane emission into environment and thus reducing emission of greenhouse gas from coal mining.
• Extraction of CBM prior to coal mining activities makes mining activities safer by degassing the coal seams.
• Extraction of CBM would help in increasing the domestic gas production. Currently, contribution of CBM to domestic natural gas production is 1.6%.

What are the Issues related to Coal Bed Methane?:-

• Despite the huge reserves, a mismatch exists between estimated resources and gas in-place.
• The following are some of the issues with respect to the simultaneous operations of Coal Bed Methane and coal mining by multiple owners:

1. There is a possibility of damage of gas wells resulting in explosive atmosphere in coal mines during simultaneous extraction of coal and CBM in the same vertical boundary by two different owners.
2. Multiple ownership for simultaneous exploitation may not be desirable for the life, health and safety of the workers employed in such mines.
3. Simultaneous operation over the same leasehold area requires the development of Safe Operating Procedures (SOP) for each operation based on assessments of risks.