The Oilfields (Regulation and Development) Amendment Bill, 2024, is a bold step toward aligning India’s energy sector with its economic and sustainability goals. 

Key Provisions of the Bill

1. Clarifying the Scope of the Oilfields Act
   • The original Oilfields Act of 1948 governed both oilfields and minerals until 1957, when the Mines and Minerals (Development and Regulation) Act was introduced. 
   • Over the years, the two Acts have overlapped in language and scope, causing confusion, particularly around terms like “minerals” and “mineral oils.”
2. New Definition for Mineral Oils: The Bill defines “mineral oils” comprehensively to include all naturally occurring hydrocarbons like crude oil, petroleum, and natural gas in various forms.
   • However, it explicitly excludes coal, lignite, and helium associated with petroleum or coal, as they remain under the jurisdiction of the Mines and Minerals Act.
3. Petroleum Leases over Mining Leases: References to “mining leases” are replaced with “petroleum leases.” 
   • These leases now cover activities like exploration, production, and sale of mineral oils, aligning the terminology with the specific nature of petroleum-related activities.
4. Expanding Central Authority: The Bill enhances the Centre’s rule-making powers, and regulations of oilfields allowing it to:
   • Regulate carbon emissions.
   • Promote renewable energy projects at oilfields.
     These additions reflect an effort to align the oil and gas sector with sustainability goals.
5. Encouraging Private Investment: The Bill aims to attract private players by removing punitive criminal provisions.
   • From Punishment to Fines: Instead of imprisonment for violations of the Act, the Bill proposes financial penalties, up to ₹25 lakh initially, and an additional ₹10 lakh per day for continued violations. 
     • This shift lowers barriers for private investors while maintaining accountability.
   • Assurance for Existing Leases: Mining leases granted under the earlier framework will remain valid and will not be altered adversely for lessees during their tenure. 
     • This stability seeks to build investor confidence.

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Criticisms and Concerns

• Potential Impact on State Rights: Opposition parties like the DMK argue that the Bill encroaches on states’ authority. States traditionally have the power to tax and collect royalties on mining activities under Entry 50 of the State List in the Indian Constitution.
  • By redefining “mining leases” as “petroleum leases,” the Bill potentially shifts the legal foundation to Entry 53 of the Union List, which grants the Centre authority over oilfields and mineral oil resources. 
  • It gives parliament the authority to legislate on matters concerning the regulation and development of oilfields, mineral oil resources, petroleum, petroleum products, and other liquids or substances declared by law to be dangerously inflammable.
  • Union Minister Hardeep Singh Puri has assured that states will still have the power to grant petroleum leases, but concerns remain regarding diminished financial autonomy for states.
• Environmental Implications: The Bill’s focus on private investment has sparked fears about reduced oversight of environmental practices.
  • Critics argue that public companies such as ONGC should be prioritized over private firms, given their track record of balancing economic and environmental interests.
  • While the Bill aims to simplify processes for private players, concerns arise about whether penalties alone will ensure adherence to environmental norms.

Conclusion

The Oilfields (Regulation and Development) Amendment Bill, 2024, is a commendable step aligned with the current demands of energy security and economic growth. However, policymakers must carefully balance the push for private investment with robust safeguards to prevent compromises on environmental standards and ensure that the fiscal autonomy of states remains intact.

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