Oil exploration in forests to become cheaper, easier
Oil exploration in forests is set to become cheaper and easier as the Centre has simplified norms to allow mining companies to pay a fee for the land affected by each borehole and not for the total forest area leased out for exploration, according to minutes of the Union environment ministry’s Forest Advisory Committee (FAC) meeting published on its website. The norms were revised at an FAC’s meeting.
Mining companies earlier paid 2% to 5% of Net Present Value (NPV) of the forest areas leased out to them for the exploration of hydrocarbons. As per the simplified norms, the NPV now would be based on the area dug up for each borehole (around 0.1 ha) which is likely to be a fraction of what is charged earlier.
NPV is the upfront payment made to compensate for the loss an infrastructure project causes to a forest and its ecosystem services and is used for conservation efforts. The Supreme Court in 2002 mandated NPV for all infrastructure projects in forest areas.
The NPV is calculated depending on the canopy density and quality of a forest. For instance, the NPV per ha for very dense forests was ₹10,43,000 in 2019, according to the environment ministry’s handbook on forest conservation rules.
The Union mines ministry had sought simplification of norms for the exploration of hydrocarbons, as well as metallic and non-metallic minerals inside forests. It has also requested that prospecting and exploration in forest areas may be exempted from the purview of the Forest (Conservation) Act and hence from prior approval.
The mines ministry has called NPV payments avoidable expenditure because only 1% of areas explored are converted to mining. “We have agreed to the proposal on paying as per land used for each borehole but have not given them a complete exemption on NPV payment. A decision on completely exempting all exploration of hydrocarbons from provisions of the Forest Conservation Act has not been taken yet. It is a proposal that the ministry of mines has made,” said an environment ministry official on condition of anonymity. “We want efficiency. So, processes need to simpler and quicker. Charging as per borewells dug up can also discourage companies from digging more.”
The environment ministry is also considering allowing flexibility in prescribing scales of maps for exploration so that exploration projects can be cleared faster.
Digging of up to 25 exploratory boreholes is exempted from prior forest clearance. But projects with more than 25 boreholes require a seismic survey, prior forest clearance, payment of NPV, etc.
Kanchi Kohli, a legal researcher at New Delhi’s Centre for Policy Research, said FAC has taken a careful view of exemption sought mines ministry sought and not allowed for a blanket exemption. “However, such deliberations also raise a larger question on how decision making on land and natural resource use is increasingly being determined. Mining exploration often requires access to areas or villages where there is human habitation or are important wilderness areas. If and how exemptions are to be accepted is not just a legal matter, but a socio-ecological one too.”
The environment ministry has faced a backlash from environmental groups and activists for granting forest clearance to Oil India Limited (OIL) for drilling exploratory boreholes for hydrocarbons that extend up to Assam’s Dibru Saikhowa National Park. The biodiversity-rich Park is near Baghjan, where an OIL gas well has been on fire since June following a gas and oil leak beginning May 27.
Environmental activists have moved the Guwahati high court saying the Centre brought an amendment dated January 16 to avoid mandatory public hearings by OIL under Environment Impact Assessment Notification, 2006.
OIL spokesman Tridiv Hazarika said they will use technology to ensure they do not need to drill inside the forests at all. “We will be drilling outside the national park but it will help us explore reserves inside the park.”