Coal Bed Methane Emerging from the Shadow of Unconventional Natural Gas

Location: New York

Date: 2013-02-27

Shale gas is getting a lot of ink. So does liquefied natural gas, or LNG. But a third member of the unconventional natural gas family is coal bed methane, which has not gotten as much attention. Its promise, though, could be as great as that of its cousins, although it too faces stiff environmental opposition.

Regulators are sensitive to all concerns. Nationally, the parties agree that if more drilling sites are permitted then better monitoring is essential. To start, hundreds of millions of gallons of water are used to extract coal bed methane -- something that critics say results in contaminated groundwater. At the same time, regulators are concerned with limiting the drilling footprint and any subsequent methane releases once production has begun. The goal is to harness a much-needed natural resource while limiting any ecological harm.

Indeed, coal-bed methane can be developed faster and cheaper than traditional sources of natural gas that can be found both on land and off-shore. And rising natural gas prices are giving developers the incentive they need to explore for new sources of energy. Roughly 13 percent of the land in the lower 48 states has coal in the ground. Practically all of that has methane in it.

Coal-bed methane is a form of natural gas that is embedded beneath coal reserves and held in place by water pressure. When the gas is removed, sodium and other salty substances contained in the water must be released. And while there are some promising technologies to purify or isolate the dirty water, it now goes mostly into rivers. That's' harmful to farmers and ranchers who are now at odds with producers over the matter.

The United States has one of the largest supplies of coal on earth and an estimated 700 trillion cubic feet (tcf) of coal-bed natural gas, although only about 100 tcf is now economically recoverable. Coal-bed methane accounts for about 7.5 percent of U.S. natural gas production, the U.S. Geological Survey says. The Rocky Mountains, the San Juan Basin of New Mexico and Colorado and the Powder River Basin in Wyoming are rich with coal-bed methane resources.

Better Business

Consider Ciris Energy: A profile of the company in the San Diego Union Tribune says that it hopes to improve the technology performance to a point where it would add 1,000 tcf of coal bed methane to the mix. The article says that company introduces “nutrients” into the coal that make it easier to extract the methane. That would require less water.

Over the next two decades, coal bed methane is expected to comprise a quarter of all natural gas use. It “could be a big as shale fracturing,” says Jay Short, founder of Ciris.

But several protests tied to the drilling of coal-bed methane wells are causing regulators and the courts to take notice. Wyoming's Red Desert, for example, is home to a wealth of oil, gas and coal-bed methane wells. Green groups, however, are staunchly opposed to increasing development. When wells are explored, it requires thousands of miles of new roads, not to mention the accompanying infrastructure such as power lines and pipelines, all in areas with red soil and wild horses.

In Montana, there is strict oversight as it relates to monitoring and the compensation of landowners and water right holders for any damage caused during the development of coal-bed methane. They must also treat the spoiled water before discharging it.

But oil and gas companies in Montana’s neighboring states are saying that access is too restrictive, which inhibits the development of coal-bed methane. They say that their processes have no affect on local surface waters and they are unfairly targeted. Generally speaking, many companies are working with the affected communities to resolve their concerns while the businesses are also investing in new technologies to make their processes safer.

“We see unconventional gas exploding,” says Cathy Conner, chief executive ofUniversal Wellsite Solutions in Fort Collins, Colo., who spoke previously with this writer. “Traditional wells may have a four-year lifespan. But an unconventional one may have a life of 50 years and very rarely is there a dry hole. New forms of automation also mean there is a much smaller footprint.”

All that is true. But if coal bed methane, along with shale gas and LNG, are to meet expectations, developers must form stronger ties with the community groups as well as the farmers and ranchers. It's about ensuring that producers are protecting local water supplies and minimizing their ecological impressions.

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