Centre Proposes Stricter Oversight On Emissions, Flaring In Oil & Gas Sector, See What The Draft Includes

Routine gas flaring often occurs at oilfields due to the absence of infrastructure that would allow for alternative uses such as reinjection, onsite consumption, or transportation to markets.

To address this, the draft policy mandates that lessees and contractors report quarterly figures detailing the volume of gas flared along with the corresponding emissions.

Source : Freepik

The Indian government has introduced a draft policy aimed at tightening environmental controls within the upstream oil and gas sector. This proposed framework targets the mitigation of environmental impact stemming from exploration and production activities, with a specific focus on gas flaring and greenhouse gas (GHG) emissions monitoring.

Routine gas flaring often occurs at oilfields due to the absence of infrastructure that would allow for alternative uses such as reinjection, onsite consumption, or transportation to markets. To address this, the draft policy mandates that lessees and contractors report quarterly figures detailing the volume of gas flared along with the corresponding emissions. These reports must follow a prescribed format and be submitted within 15 days of each calendar quarter’s end, reported IANS.

Further, operators will be required to outline concrete steps to limit emissions generated during mineral oil operations and adhere strictly to existing environmental laws. A comprehensive monitoring plan must also be submitted within 180 days from the start of production. This plan should identify emission sources and describe the methodologies and frequency of measurements. Updates to these plans will be expected periodically, reflecting operational changes or new regulatory expectations.

Draft Rules Clarify Pre-emption Rights, Storage Permits, and Emergency Protocols

Alongside environmental measures, the draft regulations also introduce clearer provisions concerning greenhouse gas sequestration, pre-emption rights, and emergency measures. Any operator seeking to explore the potential for geological storage of GHGs must first secure authorisation from the government. Upon completing a feasibility assessment, they may apply for a temporary injection permit valid for two years. These permits are limited to pilot projects and do not imply long-term storage rights.

Injection activities must be carried out according to a government-approved plan, and no deviations are permitted without prior consent. Should the geological formations prove suitable, operators may then apply for a full storage permit for permanent GHG sequestration. Applicants will be required to submit an environmental management plan and a disaster plan to address risks such as groundwater contamination, surface water impacts, and atmospheric releases.

The policy also reinforces government authority in times of crisis. According to the draft, “In the case of a national emergency in respect of petroleum products or mineral oil, Government of India shall, at all times, during such emergency, have the right of preemption of the mineral oils, refined petroleum or petroleum or mineral oil products produced from the crude oil or natural gas extracted from the leased area."

This right extends to both refined and unrefined products, whether for domestic use or export. Operators will be compensated at the prevailing market rate during such pre-emption, though the government reserves the sole authority to define what constitutes a national emergency.

Industry observers believe that situations such as war, large-scale conflict, or severe natural disasters could prompt such action. The draft also introduces force majeure exemptions for oil and gas operators, shielding them from regulatory obligations under extreme, uncontrollable events. These include natural disasters, pandemics, civil unrest, or other extraordinary circumstances beyond the lessee’s control.

The Ministry of Petroleum and Natural Gas has opened the draft policy to stakeholder comments, following the passage of the amended Oilfields (Regulation and Development) Act earlier this year. The updated legal framework aims to modernize a regime that had remained largely unchanged since 1948, aligning it with the country’s evolving energy transition, investment goals, and climate responsibilities.