CDM - Clean Development Mechanism Opportunities in Coal Bed Methane

CDM and its Relation with Coal

Exploitation in INDIA

By:

Mohammed Kabiruddin

Introduction1) 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).

CBM resources in India are estimated to be about 1

TCM with heat value 8500-9000KCal/m3.

Globally Australia,China,America are having huge

recoverable reserves of CBM.

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 5

TOTAL 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.

.

2) Virgin Coal Mine Methane (VCBM).

- Production of Methane independent of mining activity is termed as VCBM.

- Methane concen.inVCBM are generally very high, around 99%.

- It can be used as a replacement for natural gas supplies.

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

BARRIERS TO CBM EXPLOITATION

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.

Through this mechanism, additional finance has become

available for emission reduction project worldwide.

In a Developing country like India CDM projects holds a

great opportunity.

Objectives of CDM projectsThe 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

For evaluating CDM project in India we look into

four criteria:

Social (Education, Health parameters).

Environmental (Reduction of GHGs).

Economical (Financial benefits).

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 !

DETAILS OF COALBEDD METHANE BLOCKS ON OFFER UNDER

FIRST OFFER OF BIDDING (CBM-I)

SI No.STATECOALFIELDBLOCK NAMEAPPROX. AREA (SQ. KM.)1.WEST BENGALRANIGANJRG(East)-CBM-2001/1500.002.JHARKHANDBOKAROBK-CBM-2001/195.003.NORTH KANPURANK-CBM-2001/1340.004.MADHYA PRADESHSOHAGPURASP (East)-CBM-2001/1495.005.SP (West)-CBM-2001/1500.006.SATPURASP-CBM-2001/1500.007.RAJASTHANBARMER BASINNB-CBM-2001/1410.00