Coal Bed Methane: In Depth

METHANE EXTRACTION: IN DEPTH

Coal bed methane (CBM) is a byproduct of the coalification process, and can be found wherever coal is found. During coalification, buried plant material is converted to methane, water, nitrogen, and carbon dioxide by heat and chemical processes. Methane is held on the surface of the coal by water pressure. To release the methane, developers drill down to underground coal seam aquifers. Then, with a submersible water pump, they pump out groundwater. This lowers the water table and releases the methane gas. The methane rises to the surface and is collected and piped to compressor stations, where is compressed and shipped to market.

Historically, CBM has been considered a nuisance and a safety threat to underground coal miners. Because of these safety threats, the federal government has invested in CBM studies for decades. Until recently, commercial development has not been viable.

However, rising natural gas prices and improved extraction technologies have fueled a strong interest in CBM development, particularly in the Powder River Basin (PRB), which spans north-central Wyoming and southeastern Montana. The Powder River Basin is estimated to contain 30 to 40 trillion cubic feet of coal bed methane.

U.S. consumption of natural gas is 22 trillion cubic feet per year. The PRB would fuel U.S. consumption for approximately 22 months.

Projected level of development

Projections for development in Montana start at 9,950 wells (a May 2000 industry projection based on a price of $1.80 per million cubic feet (mcf). The Bureau of Land Management's (BLM) more recent reasonably foreseeable development scenario predicts 10,000 to 26,000 wells in Montana in the next two decades. In Wyoming, the BLM is predicting 51,000 wells by 2010. Based on BLM estimates, the entire Powder River Basin could see as many as 76,000 wells in just 20 years.

Development in Montana

CBM development began in Montana in 1997. By 2000, the Montana Board of Oil and Gas Conservation (BOGC) had issued hundreds of permits to drill, and Fidelity Exploration and Production Company (then Redstone Gas Partners), a subsidiary of Montana-Dakota Utilities, had begun full-scale development of the CX Field in southeastern Montana, just south of Decker. Despite this rush of development, neither the state of Montana nor the federal government had completed a single environmental review of coal bed methane development in Montana. FEPCO was discharging millions of gallons of poor quality coal bed methane wastewater into the Tongue River and its tributaries without any state or federal oversight. Area landowners, many of whom belong to Northern Plains Resource Council, became concerned that the discharges would degrade the quality of the Tongue River, which is essential to the region's agricultural economy.