Govt tightening rules to check gas emissions in upstream oil sector

New Delhi, May 11 (IANS) The Centre’s new draft policy framed for the upstream oil & gas exploration and production sector aims to minimise the environmental impact of mineral oil operations, including gas flaring activities, and closer monitoring of greenhouse gas emissions and flared gas.

Routine flaring of gas takes place during production from oilfields due to the absence of facilities for gas utilisation, such as reinjection, on-site use, or transportation to market. The draft policy stipulates that all lessees and contractors shall submit reports specifying the volume of gas flared and the associated emissions on a quarterly basis in accordance with the format specified within fifteen days from the end of each calendar quarter.

The rules make it clear that every lessee and contractor will adopt measures to reduce greenhouse gas emissions that take place during the course of mineral oil operations and comply with the applicable environmental laws and norms.

The draft rules state that every lessee and contractor shall submit a monitoring plan within 180 days of the commencement of production of mineral oil from the leased area for the identification of sources of greenhouse emissions from mineral oil operations, and the methodology and frequency of measurements.

The lessee and contractor will also have to review and update the monitoring plan submitted from time to time as may be necessary.

Every lessee and contractor will also submit to the government reports of their greenhouse gas emissions in the manner as may be specified by the government from time to time.

The new draft also provides for clear steps in the authorisation for greenhouse gas (GHG) sequestration, injection and storage permit.

Any lessee or contractor intending to assess the feasibility of geological storage of greenhouse gases (GHGs) within a leased or contract area shall, prior to commencement of any such activity, obtain an authorisation for such assessment from the Government.

Upon completion of such assessment, a lessee or contractor may submit an application for the issuance of an injection of GHGs permit to the government, in the format as may be prescribed from time to time.

The term of the injection permit, in the first instance, shall be two years, which may be renewed thereafter upon satisfactory performance and compliance with these rules and the terms as prescribed by the Government of India in this regard from time to time.

The injection permit shall only be for executing pilot tests and studies to establish the geological suitability of the reservoir for permanent sequestration and shall not grant long-term storage rights to the lessee or contractor.

The lessee or contractor shall conduct the injection of GHGs in accordance with a plan which shall be approved by the Government of India, and no deviation from such plan shall be made without prior approval of the government or any other agency or authority notified by the Centre in this regard, the draft rules further state.

After the completion of the injection tests and the establishment of the geological suitability of the reservoir for sequestration in the designated geological formations, a lessee or contractor intending to store greenhouse gases may apply and obtain a storage permit for permanent storage of greenhouse gases for sequestration purposes from such authority, and in the manner, as may be notified by the Government of India, from time to time.

The lessee or contractor shall submit an environmental management plan and a disaster plan to the Government of India outlining the measures to mitigate risks to the environment, including groundwater contamination, surface water impacts, and atmospheric releases and shall comply with such plans, the draft rules add.

The Ministry of Petroleum and Natural Gas has invited the comments of stakeholders on the draft policy.

--IANS

sps/dpb

New Delhi, May 11 (PTI) The government will hold pre-emption rights over all oil and natural gas produced in the country in any event of national emergency, according to draft rules being framed under a revamped oilfields legislation.

A pre-emption right (or preemptive right) is the legal right of a party - often a government or existing shareholder - to purchase or claim a product, asset, or resource before it is offered to others.

The inclusion of such rights over crude oil - extracted from underground or beneath the seabed and refined into fuels like petrol and diesel - as well as natural gas, which is used for power generation, fertilizer production, CNG for vehicles, and piped cooking gas, is intended to help the government prioritize national interests and ensure public welfare during emergencies.

The producer of oil and natural gas will be paid a "fair market price prevailing at the time of pre-emption", the draft rules said.

Ministry of Petroleum and Natural Gas has invited comments on draft rules after Parliament earlier this year passed the Oilfields (Regulation and Development) Amendment Bill which replaced outdated provisions from the 1948 Act, to boost domestic production, attract investment, and support the country's energy transition goals.

"In the case of a national emergency in respect of petroleum products or mineral oil, Government of India shall, at all times, during such emergency, have the right of preemption of the mineral oils, refined petroleum or petroleum or mineral oil products produced from the crude oil or natural gas extracted from the leased area, or of the crude oil or natural gas where the lessee is permitted to sell, export or dispose of without it being refined within India," the rules stated.

This right will be exercised by providing a "fair market price prevailing at the time of pre-emption to the lessee by Government of India, for the petroleum or petroleum or mineral oil products or the crude oil or natural gas taken in pre-emption."

The rules however did not define what would constitute a national emergency. Industry sources said war or war-like situations - like the one that the country faced in the military standoff with Pakistan - or natural disasters could constitute a national emergency.

"Government of India shall be the sole judge as to what constitutes a national emergency in respect of mineral oils, and its decision in this respect shall be final," the rules said.

The draft rules also provide for oil and gas operators being exempt from their obligations under the Act in force majeure conditions.

Force majeure includes an act of God, war, insurrection, riot, civil commotion, tide, storm, tidal wave, flood, lightning, explosion, fire, earthquake, pandemic and any other happening which the lessee could not reasonably prevent or control, the rules added.