Neduvasal protests not justified

What is the Neduvasal “Hydrocarbon” protest all about? On Wednesday 15^th February Cabinet Committee on Economic Affairs (CCEA) approved award of contracts for 31 Discovered Small Fields Bid Round 2016. Out of 31 blocks 23 are onshore blocks, and only two of them are from Tamil Nadu.

One of the two blocks in Tamil Nadu is the Neduvasal block, CY/ONDSF/NEDUVASAL/2016 won by a new entrant GEM Laboratories Pvt Ltd. This is one of the Cauvery basin blocks held by India’s largest upstream company Oil & Natural Gas Corp, relinquished after discovery as unviable for production.

Under a new policy which was taking shape since the times of UPA government in 2014, the small and marginal fields policy was trying to take back the fields held by ONGC and rebid them in case small players, who are more cost efficient can bring them to production. This is directed at not only increasing India’s domestic crude oil production, but also aimed at bringing in new set of small and private entities into the upstream oil and gas sector.

This is an already discovered field, a conventional field that can produce both oil and gas at an average depth of 2700 meters. Experts tell me that at this depth there is no fear of ground water contamination as water is available between 180 to 270 meters.

Since this is a conventional oil and gas block, there is no question of fracking related to either shale gas or large number of wells being dug. So, the protest that the production here would kill all farmland is false. People are also unnecessarily getting confused about the “Unified Licensing Policy”. This policy is only to bring in bidding of all kinds of block under one regulation before the idea of bidding rounds makes way for open acreage policy. This is part of the reform process in the upstream sector and not a policy created to hoodwink one about the nature of blocks or their exploration methods.

Second, the talks about large scale use of chemicals in production that would contaminate water, agricultural fields nearby. Injection of chemicals take place only if there is a enhanced oil recovery project when the well’s production falls. At this stage in Neduvasal no talk of EOR or chemical injection. Even if there is chemical injection, the water can be treated and reinjected.  

Third, a 10 sq.m. oil field cannot lead to desertification of Tamil Nadu. In the Middle East, the oil rich region and a desert, oil companies and governments have consciously created green cover to combat any pollution. United Arab Emirates has planted from Neem treed to Tulsi plants to Jasmine blooming all across their oil fields. In fact one of the oasis in the Emirates, Al Ain which supplies drinking water to all of UAE also has a production oil field. If Al Ain can exist with a producing oil well, why not a Neduvasal?

What is my stake in defending Neduvasal project? After a gap of seven years we have had an oil and gas bidding round. The awards have just  been approved and the contracts yet to be signed. This round is crucial as it comes with new licensing norms, and brings in new set of entrepreneurs. Imagine the plight of a new entrepreneur in GEM Laboratories, even before signing the contracts has to face hurdles. Many large international oil companies have relinquished their blocks and left India because they couldn’t face regulatory and administrative hurdles. Stalling Neduvasal may not dent India’s oil production or Tamil Nadu’s revenue but it for sure would the investment climate.

ONGC produces just 0.25 million mt of oil and gas equivalent from its assets in Tamil Nadu, and that is not even 5% of their total production. So, if a Neduvasal goes, it doesn’t hurt anyone, but the state of Tamil Nadu and its business prospects. Even with that miniscule production the state earns a royalty of Rs.400 crores a year, and ONGC supports many a CSR projects in the state.

Protest should not become a way of life for Tamil Nadu. A highly urbanized state with ever increasing energy/fuel demand it cannot stall every energy project coming its way. Ennore oil and gas terminals face protest, the gas pipleline from Kerala that can bring gas from Petronet LNG’s Kochi terminal is stalled, Kudankulam went through enormous protests and now we see a Neduvasal protest. Can the protesting farmers do without a diesel for their tractors or their pumpsets?

Finally, I didn’t know what happened to the educated and informed population in the state, when a statement like this is uttered and printed, publicized. That the farmers gave the land for oil prospecting only because they were told that it would produce kerosene and they won’t give it if it is for “hydrocarbons”. This is not funny, that even the basic knowledge that kerosene cannot flow out of their farms as it is a refined product is not known. Who created this monster of a “hydrocarbon”? When did Tamil words “kacha ennai” and “iyarkkai eri vaayu” go out of dictionary and get replaced by a generic “hydrocarbon”?