1. Since the beginning of industrialization in the 19th century, coal has had a significant impact on the world’s energy supply. To this day, coal is still one of the leading energy sources among all the non-renewable resources. India too, has had a long history of commercial coal mining spanning over 240 years. Started in 1774 by East India Company in the Raniganj Coalfield along the western bank of river Damodar, the Indian Coal Industry has consistently evolved over the ages. With the enactment of the Coal Mines Act, 1973, all coal mines in India were nationalized, which otherwise, had primarily been a private sector enterprise. Subsequently, Coal India Limited (CIL) was constituted as a new public-sector company on 01 Nov 75, to enable better organizational and operational efficiency in coal sector. CIL is now the world’s largest coal-producing company, which produced 554.14 Million Tons (MT) in 2016 – 17, contributing to 84% of the country’s entire coal output. However, the monopoly over commercial mining that state-owned Coal India enjoyed since nationalisation in 1973, was broken by the government in Feb 18, by permitting private firms to enter the commercial coal mining industry.

2. Right from its genesis, commercial coal mining has always been dictated by the needs of the domestic consumption. Last year, India was the second largest coal consumer in the world after China, with a share of 11% in the global coal consumption. With the 5th largest proven coal reserves in the world after US, Russia, Australia ; China, selection of coal as the dominant fuel in the country’s energy mix is obvious.

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3. In contrast to the Coal Industry, the first commercial discovery of oil and natural gas in India was made in 1889 in Digboi, Assam. However, the Natural Gas Industry gained significance only in the 1970s, after the discovery of large reserves in the South Basin fields by Oil and Natural Gas Cooperation Limited (ONGC). Subsequently, the state-owned Gas Authority of India Limited (GAIL) was created in 1984, to promote gas use and develop midstream and downstream gas infrastructure.

4. While natural gas has historically been a part of India’s energy mix, it has never played a prominent role till date, due to lesser reserves in comparison and relatively easier availability of coal. However, the demand for natural gas is expected to rise due to the increasing need in energy production and the lesser environmental effects it has compared to other fossil fuels.

5. The largest consumers of coal in India are electricity generation, steel, cement and sponge iron industries, whereas natural gas finds its primary usage in fertiliser industries, power plants, city gas distribution and also sponge iron industries. In 2016, coal formed 57% of the primary energy consumption in the country, followed by oil and gas at 29% and 6% respectively. With most of the electricity in India being thermally generated in these power stations in comparison to nuclear and renewable, there is undoubtedly a very high dependency on these two fossil fuels for power generation. As per the report of the Central Electricity Authority, coal (60.13%) and natural gas (7.95%) have a aggregate share of 68.08% in the total installed power station capacity in India as on Mar 17.

6. India is in the early stages of a major transformation, bringing new opportunities to its 1.3 billion people and moving the country to centre stage in many areas of international affairs. The energy sector is expanding quickly but is set to face further challenges due to its dependency on fossil fuels and also the execution of envisaged projects towards shifting to renewable sources of energy. Both coal and natural gas will continue playing a critical role in the near future, towards ensuring energy security of the country. However, being responsible for 7% of the global CO2 emissions (3rd highest after China ; US), the policy makers have to keep in mind that the country is now globally accountable towards minimising the adverse environmental impact of increased CO2 emissions, after ratifying the Paris Agreement on climate change in Oct 16.

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