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Coalbed Methane Operational FAQ’s

Coal Facts

What is the difference between ‘conventional’ and ‘unconventional’ natural gas production?

In the next 10 to 15 years, unconventional gas such as coalbed methane (CBM) is expected to make up half of Canada’s gas supply.

The term ‘unconventional gas’ refers to three main types of natural gas: coalbed methane, shale gas and tight gas. Conventional and unconventional gases differ, not so much by their chemical compositions, but by the geological characteristics of their reservoir rock.

Most coalbed methane is stored (adsorbed) within the molecular structure of the coal and is held in place by the pressure of the overlying rock. Decline rates are low with reserve life in the 25 to 30 year range. In contrast, conventional gas is often found trapped within spaces found naturally within the rock formation itself. Conventional gas production tends to have large initial production rates which decline very quickly with reserve life of less than a decade.

Most of the large reserves of conventional natural gas in North America have been found and are in a stage of declining production. CBM is seen as playing an important role in reducing the gap between future demands and declining conventional production.

Why focus on coalbed methane production?

Unconventional gas resources such as CBM are becoming increasingly important. Canada’s conventional natural gas production peaked in 2000 with Western Canada’s conventional gas pools maturing and accelerating in their decline.

The Alberta Geological Survey estimates there may be up to 500 trillion cubic feet of natural gas in Alberta’s coals. Unconventional gas resources like coalbed methane will fill current and future generations’ energy needs.

What are some of the advantages of CBM as a source of natural gas?

Coalbed methane is a low-cost, long-life natural gas resource. It has an advantage of being a self-sourcing reservoir where most of the gas is adsorbed on the surface of the coal where the reservoir itself acts as an excellent “storage medium”. Unlike most unconventional gas resources which use powerful fracking techniques, coalbed methane natural gas wells require minimal stimulation. Coalbed methane migrates through naturally occurring fractures in the coal called ‘cleats’ flowing direct to surface under low pressure.

Conventional gas wells start out with high production rates, but decline rapidly over a period of about 6 to 10 years. Comparatively, Ember’s Horseshoe Canyon CBM wells have a much smoother decline rate. Wells reach peak production soon after drilling and decline modestly in the early years, with lower declines in later life with wells typically producing for 25 to 30 years.

Is CBM competitive with shale gas plays?

While new technologies are unlocking significant new gas supplies from shale gas resource plays, our Horseshoe Canyon CBM assets in Alberta are amongst the lowest unconventional gas plays in North America.

To ensure success in the current business environment, we have cost structures competitive with these new sources of supply. Ember estimates a break-even supply cost of $3.00 to $4.00/mcf for a typical CBM drilling well, which includes both capital, operating and royalty costs.

How does coalbed methane drilling compare with conventional drilling?

Drilling for coalbed methane is shallow with drill depths of only 650 – 1,200 metres. Drilling is quick, efficient and has minimal land disturbance. It takes only an average of two drilling days from spud to rig release.