What is Coal Bed Methane (CBM) ?

• CBM is the natural gas found in most coal deposits.

• It is used as a fuel in exactly the same way as conventional gas.

• Coal seams can hold large quantities of gas (six to seven times more than the equivalent volume of rock in a conventional gas reservoir).

• Gas is stored within the molecular structure of the coal, on the surface and in natural fractures (cleats).  Typically water pressure keeps the gas trapped.

• When the water pressure is released, the gas flows through the fractures into a well bore where it can be collected.

CBM is an unconventional resource because coal is the source, reservoir, trap and seal. Gas is generated from organic matter in swamps during the coalification process that converts peat into coal. Gas is absorbed onto the internal surfaces of the coal in a layer one molecule thick. Hydrostatic pressure of the water trapped within the coal holds the gas in place. In a CBM well, often large volumes of water are initially produced until the reservoir pressure is reduced sufficiently to allow the gas to desorb from the coal. Consequently, the gas rate increases through time until a peak rate is reached.

Coals are good reservoirs because they can store more gas, for any given volume of reservoir, than can conventional sandstone reservoirs, at relatively low pressures and shallow depths. Most coal basins have already been mapped, and older wells that have penetrated the coals provide data on depth, thickness and continuity of the coal seams. Because of the shallow depths, CBM wells are relatively inexpensive to drill and can provide very good economics. Modelling of CBM reservoirs suggests that productive lives may be as long as 40 years.

CBM is produced by drilling into a coal seam, lowering the local pressure and collecting the gas that is released through naturally occurring fractures (cleats) or mechanically induced fracturing. The gas extraction process does not detrimentally affect the physical properties of the coal or prejudice it being worked at some later date by conventional mining methods. The drilling techniques applicable to CBM extraction (including horizontal in-seam drilling) are similar to those used in conventional gas extraction although the precise techniques applied vary depending upon the particular attributes of the CBM field.

Coal is a very complex mixture of organic and inorganic compounds and differs from other sedimentary reservoirs as the gas is absorbed within the matrix of the rock rather than compressed in pore spaces. A typical one-foot thickness of coal six hundred feet deep is capable of containing as much gas as a typical sandstone reservoir five thousand feet deep. Another unique characteristic of coalbed production is its production behaviour. In most cases, initial production of gas is quite low while water production may be high. As the water is withdrawn, and the bottom-hole pressure decreases in the reservoir near the well bore, gas production gradually increases. During the first few producing weeks, months or years the water production rate will continue to decrease accompanied by an increase in the gas production rate, until a pseudo-steady sate occurs for both phases.

The two necessary ingredients for commercial gas production from a coalbed are a sufficient quantity of gas in the reservoir, and adequate permeability within the coal to accommodate commercial gas deliverability. Coal is a dual-porosity reservoir- gas is retained in both the fractures and the matrix. Through improvements in drilling and development techniques adopted by a number of world renowned companies, CBM is now a competitive source of gas. Within the last few years this technology has been used to drill millions of feet within the seams of deep low permeability coals leading to commercial CBM production from coals analogous to those in the UK.

In the US, CBM accounted for 9.9 per cent of the total gas production in 2005 and witnessed over 40 asset and corporate transactions since the beginning of 2000 valued at over US$5.7 billion. In 2007, approximately 5 per cent of Canadian gas production is expected to come from CBM. In Queensland and New South Wales in Australia, CBM accounted for 25 per cent and 3 per cent of the respective gas production in each area.