policy for development of Underground Coal Gasification (UCG)

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved a policy framework for development of Underground Coal Gasification (UCG) in coal and lignite bearing areas in the country. UCG is a method of extraction of energy from coal/lignite resources which are otherwise regarded as uneconomical to work through conventional mining methods. 
A policy on the lines broadly similar to the existing policy for Coal Bed Methane (CBM) development on revenue sharing basis will be adopted for offering the blocks through competitive bidding. Development of UCG is envisaged to provide for energy security. An Inter-Ministerial Committee under the Ministry of Coal with members from concerned Ministries will be responsible for identification of the areas, deciding about blocks to be put to bidding or awarding them to PSUs on nomination basis. 
Ministry of Coal may engage a consultant for development of the contract document. For development of bid documents, work programme, conducting the bidding process, evaluation of bids, monitoring and process protocols etc., Central Mine Planning and Design Institute Limited (CMPDIL) will be the nodal agency. 

About Underground Coal Gasification
A significant amount of the world’s coal resources are too deep to be mined by traditional methods. However, gasification that occurs underground can convert much of this “stranded” coal into syngas that can then be used to produce power and other useful products—without having to mine it. 
Economic Benefits of UCG
There are a number of significant economic benefits associated with UCG that include:
1. No need for the coal to be mined
2. No need for coal handling
3. No need to transport the coal
4. No need to prepare the coal to be fed into a reactor
5. No need for disposing of ash or slag
6. No need for an above ground gasification plant
7. Significantly lower capital cost for project development than that of above ground plants
Environmental Benefits of UCG
There are also a number of environmental benefits with UCG:
1. Minimal land use
2. Significantly reduced use of groundwater or freshwater
3. Underground saline water is used
4. No environmental impacts traditionally associated with coal mining and handling
5. Coal seams being gasified are below the fresh drinking water supplies
6. Significantly reduced criteria air pollutants
7. All or a substantial portion of the sulfur, mercury, arsenic, tar, ash and particulates found in coal remain underground.
8. Any sulfur or metals that reach the surface do so in a chemically reduced state, making them easier to remove
9. No landfill disposal required for ash or slag    
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