Coalbed Methane Report

North American coalbed methane development moves forward

US drillers continue development of Powder River and San Juan basins, while Canada explores new CBM areas in the Western Canadian Sedimentary Basin

Robert E. Snyder, Executive Engineering Editor

As overview numbers, the coal seams of the world may contain between 3,500 and 9,500 Tcf of in situ natural gas, with 1,000 to 3,000 Tcf in North America. Worldwide, some 34 countries have ongoing coalbed methane (CBM) exploration activity, with about half actively producing from CBM wells.¹

North America continues to lead the world in CBM production. Potential recoverable CBM resources were recently reported at 528 Tcf for Canada from the Western Canadian Sedimentary Basin (WCSB), and 243 Tcf from five basins in the Western US.² These two regions contribute daily production of 58 MMcfd from 1,735 wells (Canada), and 4,520 MMcfd from 16,000 wells (US). Over 3,300 CBM wells have been drilled in Canada; over 30,000 in the US.³

US CBM activity. Statistics on CBM reserves, production and wells are difficult to pinpoint. One problem is the interaction of conventional natural gas wells with CBM wells. In some cases conventional wells can be converted to CBM producers by perforating shallow zones penetrating coal seams. Several states do not keep the same reporting and permitting procedures for the two types of gas wells. And the many, very shallow wells are difficult to statistically control. Reserves vary widely depending on year, source and definition. CBM technology itself is obviously just coming into its own, despite its proven contribution and increased value at today’s gas prices.

As reported to World Oil by US state agencies, Table 1, there were 5,337 US CBM wells drilled in 2004, and that number could drop to 4,799 in 2005, although CBM permitting is expected to increase to a record 11,124 wells in 2005. Shown in Fig. 1, as reported by the Energy Information Administration (EIA), US CBM production leveled off at 1,600 Bcf/year in 2002 and 2003, or 4,380 MMcfd – about 8.5% of total US gas production. A slight production increase to 1,650 Bcf (4,520 MMcfd) is estimated for 2004.

Fig. 1. US coalbed methane production.

The leading producing region in the US is the San Juan basin area overlapping Colorado and New Mexico, which contains 85 Tcf reserves and produces some 2,500 MMcfd (EIA, 2003) from 3,600 producers.² The next largest area is the Powder River basin of Wyoming (primarily), overlapping into SE Montana, with 39 Tcf reserves, and 1,000 MMcfd production from 11,000 producers.²

As reported in World Oil’s 2004 unconventional gas resources review,¹ environmental issues have slowed CBM development, particularly the necessary procedure of dewatering the coalbed to free the methane gas, then disposing of the formation water. And CBM coal seams are often so shallow (500 to 800 ft) that the water is actually part of the surface water aquifer. Nevertheless, CBM-well-water disposal remains a major concern. EPA, USGS and other agencies continue to study the environmental impact of water disposal techniques; but the issues remain contentious and “stand at the heart of a legal and regulatory battle in Wyoming and Montana.”⁴

The Powder River basin has received the most publicity for water problems due to its large number of wells on federal land and related federal mineral rights contributing to public land problems with well water runoff and potential aquifer contamination. And San Juan basin environmental problems continue from earlier gas well development.

Canada. The primary Canadian CBM area of major interest is the Western Canadian Sedimentary Basin (WCSB), located primarily in Southern Alberta, with a total CBM reserve potential estimated at 182 to 553 Tcf, with recoverable estimates of 43 to 130 Tcf.² At year-end 2004, the Alberta Energy and Utilities Board (EUB) pegged total CBM wells in Alberta at 3,575, including all wells completed in coals, plus CBM licensed wells drilled by year-end.⁵ These wells include both new locations and a few recompletions of conventional wells.

From year-end 2004 to mid-year 2005, EUB estimates that nearly 1,600 CBM wells had been drilled in Alberta, and 1,262 CBM well licenses (permits) had been issued. EUB notes that only 1,735 of the above total 3,575 wells had produced or were producing by year-end 2004. CBM production volume was minimal during 2004, with EUB’s 600 MMm³ annular volume equaling 58 MMcfd, or less than 0.5% of Alberta’s total gas production.

Over 90% of Alberta’s CBM wells are completed in the generally dry Horseshoe Canyon zone, with about 7% in the Mannville coals, which produce significant volumes of saline water. The Horseshoe Canyon CBM gas pool is the WCSB’s primary gas producer, currently up to 150 MMcfd, expected to increase to 200 MMcfd by year-end 2005. Small contributions come from various other blocks.² After several years of drilling, no company has announced commercial success in the Mannville coal. Produced water is a concern in some deeper zones outside the Horseshoe Canyon area.

An important technology is under study by the Alberta Research Council (ARC) to apply injected CO₂ into Alberta’s vast, deep coalbeds to release trapped methane.⁶ This process, called Enhanced Gas Recovery (EGR) is similar to the present industry practice of injecting CO₂ to enhance oil production. In the closed process, waste CO₂ from coal- or methane-burning power plants is injected, establishing a geological sink and eliminating CO₂ release to the atmosphere. Burlington Resources has used the process successfully in the US San Juan basin.

So far, ARC has completed Phase III, the third “go/no-go” project, and has proceeded to Phase IV (2003 to 2005), with expanded research to include coalbed reservoir response to added H₂S sulfur gases. The first multi-well CO₂-enhanced coalbed methane (ECBM) pilot is operated by Suncor Energy with ARC in charge of the research component. 

 LITERATURE CITED

  ¹  Fischer, P.A., “Unconventional gas resources fill the gap in future supplies,” World Oil, August 2004, pp. 41 – 44.

  ²  Allan, D.K., “CBM development in the WCSB: From concept to reality,” Presented at the AAPG Annual Convention, June 21, 2005, Calgary, Alberta.

  ³  Canadian Association of Petroleum Producers (CAPP), “Canadian oil and natural gas update and outlook,” Calgary, Alberta, 2005.

  ⁴  Pinsker, L.M., “Coalbed methane: The future of U.S. natural gas?” Geotimes, November 2002.

  ⁵  Alberta Energy and Utilities Board (EUB), “Alberta coalbed methane activity summary and well locations,” Bulletin 2005-15: 2004, June 23, 2005.

  ⁶  Alberta Research Council, “Alberta field pilot to test CO₂ enhanced coalbed methane recovery,” www.arc.ab.ca/energy/coalbed-pilot.asp.