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Can water-starved TN afford hydrocarbons?
As India’s crude oil import bill rises steadily, the government goes on overdrive to identify new sources of hydrocarbons amid environmental concerns.
By
migrator
migrator
Chennai
The raging controversy over the hydrocarbon project in Tamil Nadu refuses to be put down as accusations and counters fly back and forth.
The debate rears its head every time there is a new development. Even as the Centre grants new licenses for exploration of oil in Tamil Nadu, the state minister, C Ve Shanmugam, has said in the Assembly that permission will not be granted. A closer look at the hydrocarbon sector will help understand the merits and demerits of the case.
What are hydrocarbons?
Hydrocarbons are nothing but fossil fuels known in lay terms as petrol, diesel, gas, kerosene and so on. Hydrocarbons are generally classified into conventional or unconventional depending upon where they are found and how they are extracted.
Conventional hydrocarbons are deposits of oil and gas that can be directly extracted by drilling through the Earth. Unconventional hydrocarbons such as coal bed methane, shale gas and gas hydrates are found trapped deep below the Earth’s surface and require unconventional methods of extraction.
The reason for the focus
The Directorate General of Hydrocarbons (DGH) was formed in 1993 as the nodal agency for exploration and production, with a view to promoting new fields and increasing indigenous production. According to the annual report of the DGH, developing the hydrocarbon sector would help India reduce its oil imports by 10% by 2022.
In 2018-19 India’s import of crude oil was around 83.7 per cent based on consumption, (226.6 million metric tonnes) according to the estimates of the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum.
According to industry experts, given the huge dependence on imported oil and gas, India is nowhere near making a substantial difference to imports. As it is, there are less than 5,000 wells operating in India.
The licencing policy
In 2014, the Hydrocarbon Exploration and Licensing Policy (HELP) was put in place by the DGH, placing all hydrocarbons under a single umbrella.
Currently, there are 700 wells in operation in Tamil Nadu, licensed under the old dispensation, annually producing 600 tonnes of oil and 30 lakh cubic meters of gas across 31 contract areas.
The new licences are being sanctioned under the Discovered Small Fields Policy of the DGH. These were fields discovered by the ONGC but unused because they were too small to be viable. Accordingly, 44 fields in 31 contract areas were given out in the bid round in 2016.
The process
When the government decides to put up a block for bidding, it releases a bid package consisting of all available data for a particular area. Once the bid is awarded, the following process is followed:
- The company applies for Terms of Reference (TOR) to Ministry of Environment and Forests (MoEF)
- The company conducts an Environmental Impact Assessment (EIA).
- MoEF in most cases specifies a public hearing. This is organized by the Pollution Control Board in the presence of the District Collector. Any of the stakeholders may raise concerns about the project.
- A report of the proceedings is filed by the District Collector
- Once the company gets Central clearance, it applies for state government approval
- Next is to obtain consent to operate certificate from the Pollution Control Board.
- All of this can take them between 3 to 4 years.
The controversy
The projects have been caught in the eye of a storm in Tamil Nadu over accusations of severe water, air and soil pollution caused by existing wells in the Cauvery Delta. (See the TN story). Projects sanctioned have not been able to take off owing to the protests.
The debate about renewable sources Globally nations are examining the possibility of moving towards alternate sources of renewable energy such as solar and wind energy. Substantial work has been done in India too, but experts say that alternate sources are nowhere as robust or cheap as the conventional sources. The sector that has the largest dependence on oil is the transport sector and unless India also works simultaneously on alternatives on that front, the country cannot afford to ignore the existing potential in the conventional sources. It will also require a lifestyle change on the part of the consumers.
According to Banwari Lal, Head of TERI (The Energy and Resources Institute)’s Industrial Biotechnology Division, renewable energy can work in certain sectors, not everywhere. “Where possible, we should work with biofuels and renewable sources of energy, but our dependence on oil is so great that at the moment we cannot ignore hydrocarbons. It is possible to employ electric vehicles at the level of households or public transport, but what can we do about heavy vehicles? What about Aviation Turbine Fuel? We have no answers yet,” he says.
Sudha Mahalingam, former member of the Petroleum and Natural Gas Regulatory Board (2007-2012), says, “there must be tighter regulation and monitoring, pinning down violating companies with a financial commitment to restore the region after drilling or if the well is abandoned”.
Fears of environmental damage stall TN projects
In Tamil Nadu, two blocks were awarded – 10.4 sq km in Karaikal and 10 sq km in Neduvasal in 2016.
The Directorate General of Hydrocarbon's annual reports state that a net revenue stream of Rs 9,300 crore is expected from the project, of which the state government will get close to Rs 5,000 crore. Besides, the projects are expected to generate employment for 37,500 people.
According to industry sources, trouble began in 2011 with the award of one Coal Bed Methane (CBM) block in Mannargudi to the Great Eastern Energy Co Ltd in 2011. Fearing water contamination and pollution, farmers associations opposed the project, which was finally scrapped by the Tamil Nadu government in 2015, in deference to the wishes of the people.
However, the suspicion regarding oil and gas exploration and processing has since then been steadily rising, culminating in the protests when the Neduvasal project was sanctioned, say industry sources.
Protesters have raised objections that:
- The extraction process involves the use of large volumes of water to extract the gases. This will have to draw out a lot of the ground water and release contaminants into surface water.
- There is no way to treat the used water.
- Over time, this will impact the fertility of the region, which is today considered to be the rice bowl of Tamil Nadu.
- The other danger is the inundation of sea water under the surface, where large volumes of water have been removed.
- Protesters fear that the companies might have to use a technology called hydraulic fracturing or fracking to extract shale gas. (See What is Fracking)
Ecological Concerns
According to Nityanand Jayaraman, environmental activist, who was involved with the protests, the reason for the suspicion is the poor track record of oil companies in maintaining environmental standards. “The hydrocarbon industry is a very opaque one. There is no transparency with respect to their plans or operations,” he says. Soil samples from the Cauvery Delta, from fields damaged by drilling activity in 2004 still show high traces of hydrocarbons, he says.
In many cases abandoned wells have not been closed according to the prescribed procedure and people not compensated financially or otherwise for their losses, he says.
The US Environmental Protection Agency (EPA) and the US Geological Service have in the past expressed concerns about the detrimental effects of reckless drilling but industry experts counter that a proper technical and scientific assessment of impact can go a long way in mitigating any possible damage in the long term.
According to experts, the Tamil Nadu government must invest in scientific studies on environmental impact by international experts and give the protesters proper scientific responses.
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