Group to study alternative coal use

Prime Minister Manmohan Singh today directed an Inter- Ministerial Group in the Planning Commission to study the feasibility of converting coal to liquid fuel and gas, on a specific suggestion from the Investment Commission.

The commission, chaired by Ratan Tata, in a presentation to the prime minister said that Coal to Liquids (CTL) was feasible in India, and should become an integral part of the country's strategy for oil security.

Singh suggested preparation of a time-bound action plan in this regard to ensure the nation's oil security. The Investment Commission pointed out that about five CTL projects can double the country's proven oil reserves, and the liquid fuel produced would not only be petrol but also naphtha and LNG, according to an official release here.

Arguing that the country would need to import over 90 per cent of its oil needs in the future and that new discoveries were unlikely to reduce oil imports, the commission said CTL projects were imperative to ensure oil security.

It pointed out that low-grade coal in India was not a constraint in CTL projects and the output would be ultra clean.