Companies that get licenses to find and produce coal-bed-methane (CBM), a clean fuel, later this month will have to adhere to a new environment clearance regime instead of what the petroleum ministry had originally said in a model contract.
The idea is to make it binding on the licensing companies to follow all future rules that the environment ministry would introduce for exploration and production business. The original model contract did not mandate this.
It only spoke about the time, the Centre can take in assessing the environment effect of projects and conceded state governments a say in clearing projects that involves forest land. State governments were required to give their recommendation to the Centre on every project with forest land.
The petroleum ministry is now talking to the environment ministry and law ministry to change the contract it had unveiled while calling bids for ten CBM blocks under the fourth round of auction, a government official told FE. The auction for blocks in Assam, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Tamil Nadu was held last October and the final results are awaited now. Companies such as Deep Industries, Great Eastern Energy Corporation, ONGC, Essar Oil, Arrow Energy and Tata Power bid for license to seek and produce CBM.
As per the new system, either the environment ministry or a three-member state-level agency set up by the Centre will take a final call on each project?s environmental impact. Although one of the members in the state-level agency would be a representative of the state, clearance would be given by the majority of members. Both the entities would be advised by experts, but their views are not binding on the union environment ministry or the centre-appointed agency at the state level. The move comes at a time when India is taking a more pro-active role globally in reducing carbon emissions.
The changes were proposed by the environment ministry, pointing out that the model contract did not reflect a 2006 notification that prescribed a new environment clearance regime for industries. But the petroleum ministry is going a step forward asking firms to follow all rules that the environment ministry may make from time to time, said an official.