Charles M. Boyer II, Jonathan R. Kelafant
Advanced Resources International
Arlington, Va.
Dina Kruger
U.S. Environmental Protection Agency
Washington D.C.
The approaches and incentives for the world's coalbed gas projects are as diverse as the countries themselves. Some countries, such as China, Poland, and the U.K., are major coal producers. Other countries, such as New Zealand and Zimbabwe, have relatively minor coal production.
Most of the current projects fall into one of the following two categories:
- Natural gas projects that attempt to produce coalbed gas from unmined coal seams or basins.
- Mining-related projects with a primary goal to improve mine safety and productivity by draining methane from the coal and mine by vertical, horizontal, and gob (caved area) wells.
The mining projects also have environmental incentives.
By converting wasted gas into a clean-burning fuel, the projects reduce methane (a potent greenhouse gas) emissions to the atmosphere.
This third and final article in the series reviews the current status of worldwide coalbed gas exploration and development within the context of these two categories.
Parts 1 and 2 of the series appeared in OGJ Oct. 5 and Nov. 2.
COMMERCIAL VENTURES
While interest in developing the world's coalbed gas resource has grown considerably over the last 2-3 years, over a decade ago several countries attempted to commercially exploit coalbed gas. These early overseas attempts failed to achieve commercial production for many of the same reasons early U.S. projects failed. A few of these reasons include:
- Limited understanding of the reservoir properties governing the storage and flow of methane in coal seams
- Limited stimulation technology
- Poor production practices.
In the late 1970s and early 1980s, extensive research conducted by the Gas Research Institute (GRI), the U.S. Department of Energy (DOE), and the U.S. Bureau of Mines (USBM) solved many technical problems surrounding coalbed gas development. Their research paved the way, beginning in 1985-1986, for today's growth in coalbed gas development.
Coalbed gas is one of the lowest cost natural gas resources in the U.S. For example, in the heart of the San Juan basin a 2 bcf well has investment/finding costs of between $0.25 and 0.35/Mcf compared to about $0.70/Mcf for a conventional natural gas well with similar reserves. The low finding and investment costs have stimulated a number of both U.S. and overseas companies to explore for coalbed gas internationally.
AUSTRALIA
As early as 1976, Houston Oil, Gas, & Minerals attempted coalbed gas production from three vertical wells near the Moura mine in Queensland, Australia.
Since then, numerous companies have acquired leases and drilled in a number of pilot projects. However, despite the current high level of interest and activity, commercial production has not been achieved. This may soon change after several recently announced projects start.
In Queensland, Mount Isa Mines Holdings (MIM) is evaluating the coalbed gas resources of three, large "authorities to prospect" (ATPS) in the Bowen basin.
For two of these ATPS, MIM has contracted the Commonwealth Scientific & Industrial Research Organization (Csiro) to conduct feasibilitv studies on the potential for developing the coalbed gas resources for several uses including gas-fired power stations, the sale of gas into the Wallumbilla-Gladstone state pipeline, and the conversion of methane into chemical products.
On the third ATP, located in the northern Bowen basin, a joint venture of MIM and MGC Resources Australia Pty. Ltd. (Mgcra) plans to develop coalbed gas for a proposed methanol plant. Mgcra, a subsidiary of Mitsubishi Gas Chemical Co. Inc. of Japan, has a 75% stake in the Queensland project and is the operator.
To the south of Queensland in New South Wales (NSW), a number of companies are looking to coalbed gas as a potential energy resource. Australia Gas Light Co. (AGL) has formed a joint-venture with Amoco Corp. to explore for coalbed gas on two of AGL's petroleum exploration licenses (PELS) in the Newcastle and Southern coalfield areas. Two test wells were recently completed at Narellan and Riverstone.
Amoco has also entered into a joint-venture with Command Petroleum to explore for coalbed gas on PEL 267. One test well has been completed at Singleton. The Singleton-1, continuously cored to 4,262 ft, intercepted the Greta coal measures and numerous coal seams. Coal cores were sent to the U.S. for gas content measurement and laboratory testing.
In addition, Pacific Power Services (formerly the Electricity Commission of New South Wales) is also actively evaluating the coalbed methane potential on its PEL.
A recent paper by the NSW Ministry of Natural Resources projects that the coalbed gas reserves of NSW have the potential to meet the state's gas demand for 60 years.
CANADA
Alberta possesses the bulk of Canada's potentially enormous coalbed gas resources. A recent study by the Alberta Geological Survey estimates that 2,600 tcf of gas in place are distributed throughout the mountains, foothills, and plains regions of Alberta.
British Columbia also appears to have a considerable coalbed gas resource base, estimated to be 146 tcf by the Ministry of Energy, Mines, & Petroleum Resources.
In Alberta, coalbed gas activity began in the early 1980s when Nova Corp. International drilled and tested three wells.
Also in the early 1980s, Canadian Hunter Exploration Ltd. drilled a deep, 8,000 + ft, gas well in the Elmworth field of northwestern Alberta. The well encountered deep, gassy coal seams. The coal seams were cored and tested and limited production testing was attempted.
Since these early attempts at coalbed gas production, little additional activity has occurred. Recently, several companies have started geologic evaluation, of prospects. Some drilling is planned for early 1993.
CHINA
The Shenyang Gas Corp. (SYG) has explored for coalbed gas in northeast China since 1989. Initial exploration began in the Hongyang coalfield, about 6 miles south of the industrial city of Shenyang.
three wells were drilled in the Hengyang coalfield, ranging in depth from 2,060 to 2,620 ft. All three wells encountered multiple, gassy coal seams with methane contents averaging about 400 cu ft/ton.
While methane contents were high, well tests revealed high horizontal stress and low permeability, less than 0.1 md. Therefore, the wells were plugged and abandoned.
Because of the unfavorable reservoir characteristics in the Hengyang coalfield, SYG expanded the exploration to include the Shenbei and Tiefa coalfields.
The Shenbei basin contains one principal thick, 100-120 ft, sub-bituminous to high volatile C bituminous coal seam. Gas content measurements yield values of 100-200 cu ft/ton.
Drilling began in Shenbei in August 1991. To date, five wells have been drilled and cased. Production testing is planned after the first hydraulic stimulation, scheduled for early November 1992.
SYG's second exploration area is in the Daxing mine area of the Tiefa coalfield. The Tiefa coalfield contains numerous thick (25 ft) coal seams.
Coal rank is medium-volatile bituminous with gas contents ranging from 450 to 800 cu ft/ton. One core well was drilled to 2,410 ft and production tested.
The drilling of several production wells is slated for early 1993.
CZECHOSLOVAKIA
The Czechoslovak government awarded four concession areas to four Czechoslovakian companies.
The concessions are in the Ostrava-Karvina area, the southern extension of the Upper Silesian basin of Poland. The four companies are planning the first wells for late 1992 or early 1993.
FRANCE
Union Texas International Corp., a subsidiary of Union Texas Petroleum Holdings, has been awarded a 130,500 acre exploration lease for both coalbed gas and conventional oil and gas in France.
The 5-year exploration lease is in the Pon-A-Mousson area in northeastern France and requires a minimum expenditure of $1.7 million.
There are no announced plans for drilling.
HUNGARY
The primary area for coalbed gas development in Hungary is situated in the southeastern portion of the county,v near the city of Pecs. The area, about 300 sq km (74,000 acres), was offered as a single concession during the summer of 1992 by the Hungarian government.
The concession has been awarded but the successful bidder has not yet been announced.
NEW ZEALAND
One of the first coalbed gas projects outside of the U.S. was initiated in 1984 on New Zealand's South Island in the Ohai coalfield by South Gas, a New Zealand company.
To date, four wells have been drilled and tested. Currently no activity is occurring.
POLAND
The Polish Bureau of Geologic Concessions, an arm of the Ministry of Environment, Natural Resources & Forestry, is managing the leasing process for coalbed methane exploration concessions in the nonmining areas of the Upper Silesian Coal basin (USCB).
The first bidding round closed in October 1992, and concessions should be awarded over the next few months.
Approximately half of the basin's coal reserves were included in this round. Several U.S. and foreign companies have bid on the 12 separate concessions.
SPAIN
Union Texas Espana Inc. (UTE), a subsidiary of Union Texas Petroleum Holdings, has taken the lead in exploring the coal gas resources of Spain.
In 1991, UTE was awarded a 94,000 acre lease in Leon Province and in 1992 was awarded a second exploration permit in the Principality of Asturias, covering about 92,000 acres.
UTE has a 100% working interest in the Leon prospect and a 72% working interest in the Asturias prospect. Empresa Nacional Hulleras del Norte holds the remaining 29% interest in Asturias.
Both leases call for 6-year exploration programs with total expenditures exceeding $4 million. No results have been released from the initial drilling.
U.K.
Coal mines in the U.K. have a long history of using methane produced from mining operations. However, production from vertical wells has been attempted only during the past year.
To date, the U.K. Department of Energy has awarded coalbed gas exploration licenses to seven companies. The most active operator has been Evergreen Resources (U.K.) Ltd., a wholly owned subsidiary of Evergreen Resources Inc. of Denver.
In the spring of 1992, Evergreen completed a well just south of Liverpool. The well, 1 Sealand, was drilled to a total depth of 3,525 ft and accessed 74 ft of coal through perforations.
The well was hydraulically fractured and placed on pump. Production testing and evaluation is continuing. No results have been released.
Kirkland Resources (Holdings) Pty., the U.K. subsidiary of Kirkland AS, Norway, was granted a 235 sq mile (150,000 acre) license covering most of the South Wales coal basin.
Kirkland has a 55% stake in the project, with J. Makowski (CBM) Ltd. maintaining a 30% interest. The remaining 15% is divided among four smaller companies.
Recent announcements indicate that exploration drilling will begin in early 1993.
ZIMBABWE
Trotter Exploration Ltd., a subsidiary of Afpenn Resources (U.K.), has been exploring for coalbed gas in the Sabi River Valley near Chiredzi.
Three continuous core holes have been drilled to depths of up to 1,550 ft.
Measured gas content from 10 core samples averaged nearly 400 cu ft/ton. Coal rank of the core samples ranged from low volatile to anthracite with the high rank of the coal attributed to igneous activity in the area.
Trotter Exploration was recently awarded four additional leases totaling 8,500 sq miles (5.44 million acres) in the northwestern portion of the country.
Other companies actively seeking to develop coalbed gas in Zimbabwe include Shangani Energy Exploration (which recently completed a coring program near the Shangani River), Terra Firma Zambesia (Pvt.) Ltd., and T.A. Holdings.
SOUTH AFRICA
The South African National Energy Council (NEC) recently released a study of the coalbed gas potential of South Africa.
Two highly potential areas were identified in the study: the Waterberg basin, located along the Botswanian border in northern South Africa, and the Paardekop-Amersfoort area in the southeastern Transvaal.
Potential coalbed gas has attracted several major coal mining houses, including Rand Mines, Genmin, Johannesburg Consolidated Investments OCI), and Shell Minerals S.A.
Gas desorption work conducted by several of the mining houses and the Chamber of Mines Research Organization yielded measurement in the range of 300 cu ft/ton for coal seams at depths of 1,000-1,200 ft.
OTHER COUNTRIES
The projects discussed in the preceding 12 countries are only a part of the worldwide coalbed activity. Other projects exist in some of these 12 countries and other countries in Europe, Asia, and Africa. No information is being released on these projects, and operators are maintaining strict confidentiality.
MINING RELATED
The history of coal mining has recorded thousands of methane-initiated mine explosions. Even with recent advances in methane detection, ventilation, and extraction, methane continues to be a serious threat to coal mining. In 1992, tragic methane-initiated explosions occurred in the U.S., Turkey, Canada, and the Ukraine.
Because of safety considerations, methane has been recovered in conjunction with active mining operations in some countries for many years.
Methane is explosive in concentrations of 3-15% in air. Therefore, methane must be diluted or removed from the mine to minimize the risk of explosion.
Underground mines throughout the world use ventilation to dilute methane to concentrations below the explosive limit. In gassy coal mines, however, ventilation systems are often incapable of safely and economically handling the methane influx.
In such situations, additional mine degasification technologies must be employed to predrain or vent the methane from the coal seams and surrounding strata.
Because methane is mixed with mine air, the gas produced from the majority of these methane extraction systems is often of low quality, 50-60% methane.
Many mining operations vent this produced gas to the atmosphere although some mines use the gas for on site power generation, and space or water heating.
In situations where the methane concentration can be maintained above 90%, or as pipeline-quality natural gas, the methane may be placed into a gathering and pipeline system.
Mine degasification techniques can recover methane before, during, and after mining. The techniques can be either employed from inside the mine or from the surface.
The choice of mine degasification methods will depend on several factors, including coal characteristics, geological conditions, mining methods, and surface conditions.
The four principal methods of mine degasification are surface premining drainage, in-mine drainage, surface gob recovery, crossmeasure boreholes.
The surface premining drainage technique uses wells drilled from the surface. The wells are hydraulically stimulated and degasify coal seams several years in advance of mining.
Wells can be drilled anywhere from 2 to 15 years in advance of mining.
The effectiveness of methane recovery depends on the productive life of the wells and geologic conditions. Recovery may reach as high as 80%.
Among the advantages of the degasification techniques are:
- Independence from active mining operations.
- Production of pipeline quality gas. Although this technique is currently only used in the U.S., there is strong interest in introducing it to other countries as well.
In areas where surface conditions or land-use patterns make methane recovery from the surface impractical or where immediate methane drainage is required for mining operations, in-mine horizontal boreholes can be used.
In this technique, boreholes of several hundred to over 5,000 ft in length can be drilled into the coal seam in mine-development areas. These boreholes can be drilled several years in advance of mining and can recover large quantities of pipeline-quality natural gas.
They are connected to an in-mine piping system which operates under negative pressure, effectively removing the produced gas from the mine.
Surface gob wells are used to recover methane from the caved areas (gob or goaf) which are created after a coal seam is mined.
These wells are drilled to within a few feet of the coal seam top and begin producing gas after mining passes underneath. Although not producing methane from the mined-coal seam, the caving-induced fractures provide an enhanced permeability zone that contacts other coal seams adjacent to the mined seam.
These wells often produce large quantities of methane. However, in many cases this gas is not pipeline quality because it is contaminated with mine air.
In many countries besides the U.S., cross-measure boreholes drilled from within the mine workings are the principal method of recovering methane from gob areas.
These boreholes range from tens to hundreds of feet in length and are angled into the strata above or below the coal seam being mined.
These boreholes generally do not produce pipeline-quality methane because of contamination with mine air. Like other in-mine recovery methods, the boreholes are connected to in-mine piping systems that transport the recovered methane out of the mine.
DEGASIFICATION EXAMPLES
Table 1 overviews degasification system emissions for seven of the leading coal producing countries. Degasification activity in some of the major coal producing areas is summarized as follows:
- Australia-In the Sydney basin of New South Wales, the Appin and Tower collieries currently have extensive in-mine horizontal and cross-measure and surface gob degasification systems in place. They are using the produced gas for on-site power generation. The Moura Mine in the Bowen basin of Queensland has a similar methane drainage and utilization program in place.
- Canada-The coal mines of the Sydney coalfield in eastern Nova Scotia have been recovering and utilizing methane produced from in-mine degasification systems for many years. Because the mining activity is located offshore under the North Atlantic, surface systems cannot be employed.
- Czechoslovakia-There are currently 15 underground bituminous coal mines in Czechoslovakia. Coal production is about 20 million tons/year.
These mines, which are located in the extension of the Upper Silesian basin (Ostrava-Karvina basin) near the city of Ostrava, are deep and gassy. All have mine degasification systems.
None of the mines are currently using surface methane recovery techniques, although projects to recover coalbed methane in areas of coal mining are under discussion. About 90% of the produced gas, which usually is a methane-air mixture, is used by the mines and local industries.
- France-Gaz de France is producing methane from abandoned mine workings in northern France in the Pas De Calais basin. Daily production is about 4 MMcfd with ultimate recoveries of 30 bcf expected over the life of the project.
- China-China has more than 600 state-owned coal mines, and over 300 of them are considered gassy. More than 100 of these mines have mine degasification systems in place. All use in-mine methane recovery methods.
In 1991, the Chinese Ministry of Energy and the Kailuan Coal Mining Administration initiated a pilot project to determine the feasibility of using vertical, stimulated wells to predrain methane from the gassy Tangshan mine. Two wells were drilled and tested. Provided that adequate permeability is found, the wells will be hydraulically stimulated and placed on production.
- Poland-About 18 of Poland's 65 underground hard coal mines use mine degasification systems. Most of these mines are located in the Upper Silesian basin, near the city of Katowice.
The mines tend to be deep and gassy. Coalbed methane resources are believed to be very large.
The principal mine degasification technique is crossmeasure boreholes to recover methane from gob areas.
Currently, no mines use surface drainage, although several mines have expressed interest in surface premining drainage and gob wells.
- U.K.-Since 1776 when an Englishman, Carlisle Spedding, drove a pipe into a "blower" at the Salton mine and piped the gas to a local laboratory for use in a methane-burning furnace, the English have pioneered methane extraction and utilization.
Presently, a number of mines in the U.K. extract and use methane. One with a long history is the Point of Ayr mine in North Wales. Since the 1950s the mine has generated all of its electric power using methane from the mine. In 1978 the mine installed a 1,350 kva gas turbine-driven alternator, and waste heat was used for space heating and hot water baths.
- C.I.S.-Many mines in Russia, the Ukraine, and Kazakhstan are very gassy and must use degasification systems to mine coal safely. As in Eastern Europe, the principle recovery methods are in-mine, cross-measure boreholes. An estimated 50 bcf of methane are produced annually from 209 mines.
- Other countries-Most other coal mining countries, such as Mexico, Japan, North and South Korea, and Turkey, use some form of mine degasification. The produced gas is often used locally.
ENVIRONMENTAL BENEFITS
Methane produced from mine degasification can provide a clean-burning fuel that has several environmental advantages over other fossil fuels.
SO2, NOx and particulate emissions associated with the natural gas combustion are lower than for coal. Also CO2 emissions are lower. And in many applications natural gas is a more efficient energy source than coal.
In China, for example, coal is used extensively for residential cooking and heating because gas supplies are limited. But in many mining areas, methane recovered by mine degasification is displacing coal in the residential sector. This improves both the environmental quality and the allocation of energy resources.
In recent years, mine degasification has become more important because of the concern over emissions of methane, a potent greenhouse gas.
Coal mining is one of several human-related sources of methane. It is estimated to account for 7-10% of global methane emissions.
Most liberated methane from coal mining is emitted in the major coal producing countries of China, U.S., C.I.S, and Poland. Together, these countries are estimated to be the source for 75% of the global coal mining methane emissions.
Increasing methane recovery and use is technically feasible and in many countries could be economically attractive.
However, project development will require a shift in the traditional perception of coal companies and government authorities toward mine degasification. Historically, the goal of mine degasification has been simply to ensure safe mining conditions. The development of uses for the gas recovered has occurred as an afterthought.
Now, with the increased emphasis on reducing emissions of greenhouse gases and the need to use energy supplies more efficiently, projects are being developed to reduce emissions into the atmosphere.
Facilitating the development of projects to expand methane recovery and use at the world's gassy underground coal mines will require an aggressive program of information exchange, technical assistance, and technology transfer.
Because many environmentally beneficial projects in this area will be cost-effective, project development should proceed rapidly once initial barriers are removed and key technologies are demonstrated in major countries.
Table 2 summarizes the major barriers that must be overcome to encourage expanded methane recovery and use at underground coal mines and highlights the types of programs and activities that could remove these barriers.
Of course, the conditions in particular countries and coal mines will be unique, and thus programs and projects will need to be customized to address the relevant situations.
Programs have already been initiated by the U.S. Environmental Protection Agency (EPA), the United Nations Development Program (UNDP), and others.
- UNDP-The UNDP is currently implementing a project to demonstrate additional mine degasification strategies in China. The project will include demonstration of vertical predrainage and in-mine recovery methods, as well as preparation of a detailed national assessment of China's coalbed methane resources.
The project is designed to assist China in expanding methane recovery at its many gassy coal mines and is being funded by the United Nations Global Environmental Facility Fund.
- U.S. EPA-The U.S. EPA is actively promoting expanded methane recovery and use from coal mines in several countries, including China, Czechoslovakia, Poland, Russia, and the Ukraine.
EPA's activities to date have included preparing coalbed methane resource assessments in Poland Czechoslovakia, Russia, and the Ukraine; establishing a coalbed methane information center in Katowice, Poland; preparing detailed profiles of several of Poland's gassiest coal mines; and establishing a U.S.-Poland working group to encourage starting projects for reducing methane emissions from coal mines.
It is anticipated that information centers will also be established in China, Russia, and the Ukraine, and that expanded programs will be implemented in these countries as well.
- Other programs-The development of environmental projects could be furthered through additional programs to demonstrate improved methane recovery technologies in Eastern Europe and the former Soviet Union.
In addition, these countries may need technical assistance to help them recognize coalbed methane's potential and manage its development. Private sector involvement will be critical to the successful development of this resource.
Finally, efforts should be directed toward raising the awareness of project managers in international development agencies, such as the World Bank, the International Finance Corp., and the Asian Development Bank.
The potential for coalbed gas to contribute to domestic energy supplies and the environmental benefits of projects to expand methane recovery and use at coal mines should be recognized as environmental and energy sector loans and developed for countries in the former Soviet Union, Eastern Europe, and Asia.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
