Coal Bed Methane (CBM) is emerging as a pivotal resource in shaping India's cleaner, more sustainable, and self-reliant energy future, according to Pankaj Kalra, CEO of Essar Oil & Gas Exploration & Production Ltd. Speaking on a recent CII Podcast, Kalra underscored CBM's potential to significantly reduce India's energy import dependence, increase the share of natural gas in the national energy mix, and lower carbon emissions, presenting a compelling opportunity for the nation's evolving energy landscape.

India’s energy sector is undergoing a profound transformation, driven by an imperative to meet escalating demand while pursuing ambitious net-zero emission targets by 2070. Despite accounting for approximately 25% of the world’s growth in oil demand in 2024, with consumption reaching 5.1 million barrels per day, India remains heavily reliant on imports, sourcing over 85% of its crude oil. Natural gas is positioned as a critical transitional fuel, offering a balanced solution that addresses sustainability, reliability, and affordability. It emits 20% less CO2 than solid fossil fuels and 30% less than liquid fuels, providing operational flexibility crucial for integrating intermittent renewable energy sources like solar and wind. Key drivers for natural gas demand include the city gas distribution (CGD) sector, renewable integration for grid stability, and robust growth in industrial and refining sectors, which have seen increases of 70% and 15% year-on-year, respectively. India’s natural gas demand grew by 10% in 2024 and is projected to reach 103 billion cubic meters (BCM) by 2050, a 60% increase from current levels. However, domestic production remains constrained at around 35 BCM, necessitating increased LNG imports, with over 60% transiting through the geopolitically sensitive Strait of Hormuz.

Kalra highlighted CBM as a largely untapped indigenous energy resource, holding a distinct position within India's energy portfolio due to its local abundance. India is estimated to possess 92 trillion cubic feet (TCF) of in-place CBM reserves, primarily concentrated in coal-rich states such as Jharkhand, Madhya Pradesh, Chhattisgarh, and West Bengal. The Indian government has actively promoted CBM development, allocating 15 blocks at various stages: 6 in production, 2 in development, and 7 under exploration. CBM currently contributes approximately 2.2 million standard cubic meters per day (MMSCMD) of gas, accounting for roughly 2% of India’s total gas production. Essar Oil & Gas Exploration & Production Ltd. stands as the pioneer and largest producer of CBM in the country.

The strategic benefits of CBM are multifaceted. It directly reduces import dependence by providing a legitimate domestic source of methane, aligning with the nation's goal to mitigate reliance on imported RLNG, which constitutes nearly half of India's natural gas consumption. Environmentally, CBM serves as a cleaner fuel alternative to conventional liquid and solid fossil fuels, contributing to emission reductions and improved air quality. Furthermore, CBM development, particularly in eastern India, fosters regional socio-economic impact by promoting local employment, expanding energy access, and supporting the growth of micro, small, and medium enterprises. Economically, harnessing just 10% of India’s recoverable CBM reserves has the potential to reduce the country’s energy import bill by approximately $3 billion annually, underscoring its significant economic contribution. Overall, CBM represents a strategic indigenous energy source that complements India’s broader energy transition objectives.