Demystifying coal security

14 Apr 2006
Recently, two articles in these columns (November 16 and December 6, 2005) discussed about the security of energy supplies in India. We reiterate certain facts brought out in both the articles and put forth an analysis so that the issue of finitude of domestic coal reserves and related issues of energy security can be seen in right the perspective.

All along, the inventory of coal resource reported by the GSI (Geological Survey of India) has given the impression that the coal reserves would last for a couple of centuries at the current level of consumption.

Even the British Petroleum Stats (an extensively quoted international data source on energy) reports a reserve-to-production ratio of 230 years, assuming that all the proven reserves as reported by the GSI are fully extractable. Such reporting of 'reserves' has resulted in a misplaced perception about the domestic coal as the mainstay of energy resources in India on a long-term basis.

Indian coal resources are generally reported on the basis of the Indian Standard Procedure 1956, which treats all resources as reserves based on certain stipulations.

This is a geological resource-classification system without the assessment of quality, mineability, or extractability of deposits. Such a method of resource reporting tends to present a highly inflated picture, because it has little relationship with economically mineable/ extractable reserves.

India is still to recast and report its coal resources in the internationally acceptable UNFC (United Nations Framework Classification) format, according to which "mineral reserve" is the economically mineable (and technically feasible) part of a measured, or proved, or indicated mineral resource.

Even the proven resources need to be scaled down based on the techno-economic feasibility of a particular deposit, as also the recovery factor.

Pending this, the CMPDIL (Central Mine Planning and Design Institute Ltd) has reported that the total extractable reserves for India as in the year 2005 - out of the total geological resource base of about 250 BT (billion tonnes) - stands at 52 BT. In other words, only about 21% of the total geological resources of 250 BT may be extractable.

Interestingly, GSI/CMPDIL while reporting the inventory of coal resources do not take into consideration the depletion due to more than the past 200 years of mining in India, the coal that has been sterilised due to various reasons like fire, inundation, etc., or the reserves, which have already been projectised (and are no more available for constructing a new mine thereon).

The locked coal in partially developed/abandoned mines, mine barriers, under rivers and other water bodies, below towns, roads, railways, reserve forests, etc., also remain included in the reported figure of resources.

Now it is known that over 8 BT of coal have already been depleted due to past mining, leaving behind only 44 BT, of which about 26 BT has already been projectised in 231 blocks - mostly occurring at shallow depths with an annual capacity of 228 MT (million tonnes). The leftover proven reserve is a meagre 18 BT.

While these virgin reserves get projectised in the coming years, the production from some older projects will start declining and that from others may be reaching a plateau. It is estimated that the production from the large existing open-cast mines will start declining by the year 2030 or even much earlier if they are overexploited to bridge the present demand–supply gap.

Very recently, it is reported that the PIB (Public Investment Board) cleared 16 proposals of Coal India Ltd and its subsidiaries, which would contribute extra 100 MT annually in a very short time frame and at low specific investment.

The projects cleared by the PIB are mostly 'expansion projects', which, in other words, are projects to over-exploit the existing large open-cast mines, further reducing the productive life of these mines. Another seven such proposals are reported to be in the pipeline.

The effort to bridge the gap by producing more coal from the existing mines and projects happens to adversely impact coal availability in the long run. Reposing our absolute faith on the domestic coal supplies for years to come looks questionable now in view of the meagre reserves of coal.

In the short run, in a business-as-usual scenario, fuels other than coal may bridge the ever-increasing gap between demand and supply. But India will have to seriously consider developing appropriate technology for the use of nuclear energy and renewable energy options in the long run.

There is a need to have a right kind of policy and regulatory framework, R&D and incentives that will form the basis for increased use of all renewable energy sources, which are in abundance in India.

Of course, a pragmatic and long-lasting energy policy and an appropriate regulatory framework must be in place for ensuring energy security of India.