Cdm - Clean Development Mechanism Opportunities In Coal Bed Methane

CDM and its Relation with Coal Exploitation in INDIA

By: Mohammed Kabiruddin

Introduction 1) India is 3rd largest in Coal reserves, estimated to be 460 billion tons. 2) India is the fourth largest producer of coal in the world. 3) If recovered effectively CBM gas associated with coal reserves and emitted during coal exploitation could be a significant potential source of energy. 4) While India has a vast coal resources it has huge gas deficit. 5) Against present demand of 98MMcmd,the production is about 60 MMcmd the demand is expected to increase up to 285MMcmd by 2009-2010.

What is CBM (gas from coal)? 1) Coal Bed Methane(CBM) is a natural gas formed by geological, or biological processes in coal seams. 2) Primarily formed in coal seams by chemical reactions. 3) CBM consist predominantly of methane[CH4]. 4) If effectively recovered,CBM could be a significant potential source of energy.

CBM potential ! 

Estimated global CBM potential are between 84 and 281 TCM(trillion cubic meters).

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CBM resources in India are estimated to be about 1 TCM with heat value 8500-9000KCal/m3.

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Globally Australia,China,America are having huge recoverable reserves of CBM.

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CBM can contribute up to 15% of India’s natural gas production. DGH in India has offered a total of 26 blocks of CBM exploitation in its 3rd round of bidding, covering an area of 7,800 sq. km. The blocks are in the states of Jharkhand,W. Bengal, Chattisgarh,M.P,Andhara Pradesh and Rajasthan. Example: Jharia and Prabhatpur Coalfield.

Current CBM block ownership distribution S.No Company

No. of Blocks

1)

ONGC

9

2)

Reliance

9

3)

GAIL

3

4)

Others TOTAL

5 26

Different categories of methane from gas 1) Coal mine methane (CMM): Methane released as a

result of mining activity when a coal seam is mined out. Maximum concentration of CH4 can reach up to 70% or more. It is further divided into two categories depending upon the way Methane is released. 1.1) Ventilation Air Methane (VAM): Methane released from coal seams into the ventilation air of the active coal mine is called VAM. 1.2) Abandoned Mine Methane (AMM). Methane continues to be emitted from all the coal seams, when an active coal mine is closed or abandoned is called AMM.

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2) Virgin Coal Mine Methane (VCBM). - Production of Methane independent of mining activity is termed as VCBM. - Methane concen.in VCBM are generally very high, around 99%. - It can be used as a replacement for natural gas supplies.

BARRIERS TO CBM EXPLOITATION TECHNOLOGY NEEDS: 1) Heavy reliance on imported technologies, services and technical assistance.

2) Quantity and quality of available data is invariably unsatisfactory. 3) Drilling technologies and borehole design. 4) Technologies for gas use

COSTS: 1) VCBM completion costs vary from country to country and also with technology.

2) Too little information is available to be able to comment on cost for VCBM exploration, testing, well completion and production drilling.

OTHER BARRIERS: 1) A lack of industry awareness about CDM. 2) High transaction costs associated with the CDM project cycle. 3) A lack of policy framework for the promotion of smaller CDM projects. 4) No clear understanding how smaller CDM projects can be bundled to bring down transaction cost.

What is CDM ? 

Clean Development Mechanism (CDM) is a flexible market based mechanism defined under Kyoto Protocol of UNFCCC.

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Through this mechanism, additional finance has become available for emission reduction project worldwide.

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In a Developing country like India CDM projects holds a great opportunity.

Objectives of CDM projects

The specific objectives of CDM projects to promote CBM utilization in India are as follows : 1) Evaluate the attractiveness of CBM projects under CDM. 2) Enhance the utilization of CBM through the use of CDM to obtain additional finance. 3) Reduce the emission of GHG.

4) Create greater competition among CBM project developers.

Criteria for Evaluation of CDM Project

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For evaluating CDM project in India we look into four criteria: Social (Education, Health parameters).

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Environmental (Reduction of GHGs).

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Economical (Financial benefits).

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Technological (New & Innovative Technology).

Key Stakeholders in CBM Projects 1)DGH(Under MoP&NG,GoI). 2)Ministry of Coal & Mine. 3)Ministry of Environment & Forests. 4)Ministry of Non-Conventional Energy Sources. 5)Ministry of Power. 6)CBM Project developers in India. 7)CBM capture & utilization technology providers.

CDM and its relationship with CBM Methane as a Green House Gas (GHG): 1)Methane is a powerful GHG gas and one of the basket of gases covered by the Kyoto protocol. 2) It has short residence time in the atmosphere before it disappears. 3) It has a very high Global Worming Potential (GWP),21 times that of CO2.

CBM as a Fuel Switching Option ! - Combustion of1M meter cube CBM=2000t of CO2. - Combustion of 1M meter cube Coal/petroleum product emits >>2000t of CO2. Thus, with efficient exploration & distribution operations, emission reduction achieved could be in the order of 1ktCO2e/Mm3.

Impact of CDM: 1) CBM project under CDM can make a significant difference to the economics of CBM exploration and supply business. 2) CBM project can be presented as a Fuel Switching Project. 3) Without the CDM incentive it is likely that the gas would be too expensive.

4) Registration of CBM project under CDM will also foster the involvement of private sector. 5)Finally,it will strengthen the GOI’s effort to promote clean energy options.

CONCLUSION 1) As coal dominates the Indian energy basket so it has vast potential of utilizing CBM during coal mining. 2) Government of India has identified VCBM as having a vital role in meeting energy shortfall. 3) The use of CDM to support CBM development is an option. 4) There are vast methane resources available in India but until commercial production is obtained the prospects of CBM will be largely unknown.

5) No methodologies have yet been approved to date that are directly applicable to CBM projects in India.

Thank you !

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DETAILS OF COALBEDD METHANE BLOCKS ON OFFER UNDER

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FIRST OFFER OF BIDDING (CBM-I)

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SI No. STATE COALFIELD BLOCK NAME APPROX. AREA (SQ. KM.) 1. WEST BENGAL RANIGANJ RG(East)-CBM-2001/1 500.00 2. JHARKHAND BOKARO BK-CBM-2001/1 95.00 3. NORTH KANPURA NK-CBM-2001/1 340.00 4. MADHYA PRADESH SOHAGPURA SP (East)-CBM-2001/1 495.00 5. SP (West)-CBM-2001/1 500.00 6. SATPURA SP-CBM-2001/1 500.00 7. RAJASTHAN BARMER BASIN NB-CBM-2001/1 410.00