Harnessing the Natural Gas
May 2005 GeoDrillIng International
Tapping coal deposits
to extract methane is becoming big business. GDI examines
the methods and current trends on a country-by-country basis
"Wyoming is another
hot spot. Galaxy Energy raised $20 million last year from institutional
investors to fund CBM development programme in the Powder River
Basin of Wyoming."
In all coal deposits, methane
is found as a by-product of the coal formation process. Historically
considered a safety hazard and purposely vented to the atmosphere,
companies more recently have begun to capture the methane found in
coal mines, as well as recover it from coalbed deposits too deep to
mine.
Coalbed methane (CBM) wells are drilled
with techniques similar to those used for conventional wells. Where
coalbeds are shallow, smaller, less expensive rigs, such as modified
water-well drilling rigs, can be used, rather than expensive, specialised
oil and gas rigs.
Higher initial gas rates are possible in
a horizontal well than a single-bed vertical well by drilling at
a high angle (perpendicular to oblique) to the face cleat to drain
a larger area. Vertical CBM wells exhibit an elliptical drainage
pattern as a result of the directional (anisotropic) permeability
of the cleat. Horizontal CBM wells are completed open-hole.
As with conventional gas wells, hydraulic
fracturing is used as a primary means of stimulating gas flow in
CBM wells. Another gas stimulation technique, unique to CBM wells,
is known as cavitation in which air or foam is pumped into the well
to increase pressure in the reservoir, after which it is released
and the well violently blows out.
Water removed from coalbeds is known as
produced water. The amount of water produced from most CBM wells
is relatively high compared to conventional gas wells because coalbeds
are composed of many fractures and pores that can contain and move
largevolumes of water. Removing water can create several problems:
•
Water may be depleted from nearby aquifers.
•
Removing water from coal beds creates the potential for underground
coal fires.
•
Vast quantities of water that are saline or contaminated with drilling
fluids can contaminate soil, surface water and groundwater.
CANADA
The Geological Survey of Canada estimates that a staggering 553
trillion ft 3 (TCF) of natural gas resides in Canada ’s coalbeds,
60% of that in Alberta . Only a fraction is recoverable, however,
perhaps between 20 and 100TCF.
In Canada, CBM activity is heating up, according to the Canadian
Society for Unconventional Gas. The top target, a geological formation
known as the Horseshoe Canyon Coals, runs in a broad band across
central Alberta between Edmonton and Calgary. About 1,000 CBM wells
have been drilled in Alberta since the late 1990s but, so far, most
have been trial runs and commercial production is just beginning.
The Petroleum Services Association of Canada predicts an all-time
record total Canadian count of 24,075 wells drilled this year. This
8% jump in wells drilled over 2004 is due to a jump in CBM activity.
‘Without the increase in CBM activity, the well count for
2005 would be much the same as 2004,” said Roger Soucy, PSAC
president. In 2005, he expects to see around 3,000 CBM wells, primarily
in central and southeast Alberta .
However, the British Columbia government’s scheme for massive
CBM extraction in the Rocky Mountains suffered a minor setback late
last year with the announcement that Encana is backing away from
its exploratory five-year pilot project north of Elkford, pending
recruitment of a financial and technology partner.
Only one of its 17 wells produced commercial flows of methane and
the company considers horizontal drilling may be the answer to extracting
commercial quantities of gas. One diagonal hole would send spurs
horizontally into the layered coalbeds. At press time, Encana told
GDI that the pilot is still ‘shut-In; adding:
“Evaluation
is ongoing and we continue to look for partners who can bring additional
technical expertise.”
MGV Energy, active in southern Alberta, said in the ‘dry’
Horsehoe Canyon coals, keeping liquids off the coal is important.
J Michael Gatens, MGV chairman and CEO, told GDI The basic approach
is to drill through with a simple ’floc’ water and cement
with low leak-off cements using either fit-for-purpose shallow drilling
singles or coiled tubing rigs. Average drilling time is less than
one day at 400-750 m. Some companies are using a more sophisticated
mud system to minimise leak-off and one major player is air drilling.
All are still setting pipe and cementing to surface. Due to surface
access or landowner concems, some wells are being drilled directionally
from a single pad.
He added that in the deeper (800-1,200 m) Mannville coals, which
produce brine, vertical wells and directional pad wells have not
yielded great results, adding: ”A number of different horizontal
strategies are being deployed by different companies and there has
been some encouraging results, but Information is still pretty tight.”
UNITED STATES
According to the CBM Association of Alabama, 13% of the land in
the lower4s United States has some coal under it. But two decades
ago, CBM was not a highly profitable source of natural gas. By 2000,
however, CBM accounted for about 7.5% of natural gas production
In the US.
More than 1,400 wells in Oklahoma alone have been drilled exclusively
for CBM since 1988, in part for the IRS Section 29 tax credit, to
encourage production of domestic energy from non-conventional
sources.
Wyoming is another hot spot. Galaxy Energy raised $20 million last
year from institutional investors to fund its CBM development programme
in the Powder River Basin of Wyoming, to drill 108 new wells and
to complete and connect these and 75 existing wells.
Cecil Gritz, Galaxy chief operating officer, told GDI the
company expects to drill another 500-600 wells in Powder River Basin
over the next three to four years. He noted that, as a lot of the
rigs are drilling to shallow depths, the majority are ‘hand-made’,
although many are manufactured by Ingersoll-Rand. Mr Gritz said
the most common barrier the firm is experiencing to further expansion
in the Basin is from lengthy negotiations with landowners to gain
surface access to reserves on which it has leases.
The issue is a common problem for drillers seeking to exploit CBM.
BPI Industries has drilled 22 new CBM wells and reworked two existing
wells at its Delta Project operations in the Illinois Basin. But
in late January the new owners of a portion of the surface rights
at Delta disputed BPI’s right to layflow lines across their
surface. Current Illinois law gives a mineral rights owner the right
to drill wells on surface rights owners’ lands but does not
address the ability to layflow lines. BPI ceased drilling and filed
suit but in April reached a mediated settlement with Delta Mine
Holding and Peabody Coal that provides for immediate resumption
of operations.
BPI is negotiating to secure three rigs for development wells
at Delta to get it on trackto have 100 production wells by year-end.
FORMER SOVIET UNION
As the world’s third-largest source of coal mine methane,
the former Soviet Union has great potential for methane utilisation
projects. In recent years, CIS countries ( Russia , Ukraine , Kazakhstan
) have developed an enhanced concern towards CBM recovery; mainly
to find alternative energy sources to domestic coal.
Basic coal mining in the former Soviet Union was concentrated in
four coal basins: Kuznetsk in southcentral Russia and Pechora in
northwest Russia, Donetsk the hub of the Donbass coal region sited
in Ukraine and Russia, and Karaganda, in Kazakhstan. USSR coal output
in 1989 was 730 Mt, 25.5% of which belonged to Donetslç 20.8%
to Kuznetslc 7% to Karaganda and 4% to Pechora.
By the estimation of the All-Russian Scientific Research Institute
on Natural Gas and Gas technologies, the potential CBM resources
within the boundaries of assessed coal reserves (down to 1,800 m
depth) for the four leading coal basins account for 16.7 trillion
m3 (TCM), with the vast majority in Kuznetsk (13.1 TCM). Coal seams
degasification in the coal basins of CIS countries was initiated
in the 1950s but, due to an overall coal yield reduction, recovered
CBM volume dropped as well. Traditionally, CIS countries have never
used degasification for commercial CBM recovery, although isolated
efforts to drill such wells are being undertaken in the southwestern
part of the Kuznetsk basin .
Methane recovery also displays potential in Don-bass, where the
Coal Ministry of Ukraine (as well as the US Environmental Protection
Agency) has fonded its investigation.
Kuzbass, in western Siberia, is another area ripe with potential.
In 1998, two pilot core holes were drilled to depths of 1,350 m,
revealing a high potential of stripped coal bearing strata for CBM
recovery: if full-scale commercial exploitation proceeds, 500 wells
will be drilled.
CHINA
Far East Energy Corporation expects to begin drilling horizontal
wells in China by late June. The company has requested bids from
China’s leading drilling companies for the drilling of its
first two in Shouyang, Shanxi Province. Contracts are expected to
be signed in early May; the first two wells are anticipated to be
spudded by late June.Taking 35-60 days to drill, to about 550 m,
laterals will then be drilled inside the coal seam with a goal of
completing over 4,000 m of horizontal drilling for each well.
The Chinese crew supervised by expats will use Chinese-built surface
equipment and a 1,000 hp Chinese rig equipped with gamma-ray directional
steering tools from a Western manufacturer.
The choice of this manufacturer is subject to a bid process, but
Schlumberger, Baker Hughes Intec and Black Max are in the running,
said Mike McElwrath, CEO of Far East. He declined to name the Chinese
rig manufacturer but said equipment from China is up to Western
standards.”
Mr. McElwrath added that a third well will be drilled in south China.
He said: “We are committed to applying advanced underbalanced
horizontal drilling technology to our China projects because the
coals there are analogous to those found in the Arkoma and Appalachian
Basins of North America, where horizontal drilling has produced
impressive results.”
Separately, the Asian Development Bank will help develop a 120MW
power plant, by 2008, to harness the methane produced from coal
mining in the southern part of Shanxi Province . It is estimated
that China’s coal mines released about 6 billion m3 of methane
into the atmosphere in 2003. China is the world’s largest
coal producer, coal consumer, and emitter of coal mine methane.
China has experienced numerous problems with deadly mine explosions,
and recent legislation has required that all gassy mines practise
methane drainage.
EUROPE
Geoff Swann, senior geologist at the UK Department of Trade &
Industry, said many companies previously active in extracting CBM
in the UK have curtailed operations because of technical and economic
uncertainties.
A few firms such as Ireland Gas (formerly Strata Gas) and Green
Park, remain involved, while Aberdeen-based Composite Energy drilled
a well in the Midland Valley in Scotland earlier this year.
The DTI classifies the most historically productive UK basins as
Wessez Weald, West Lancashire , Cleveland, the East Midlands oil
province and the Midland Valley of Scotland.
However, Galaxy Energy plans to start up CBM operations this summer
on properties bought in continental Europe.
Galaxy has a concession agreement in Romania covering more than
21,000 acres for a 30-year term.
It has also secured a nearly 150,000-acre exploration permit
in Germany .
SOME
OF THE RIGS USED IN COALBED METHANE
 Atlas
Copco
Atlas Copco Construction & Mining Canada said It recently held
discussions on the Issues of CBM withcustomers and initial thoughts
were that, depending on depth, its highly-mobile RD2O and TH60 rigs
are suited for CBM work. In addition, German coal mines are using
Atlas Copco’s COP 1838 rock drill for drilling long suction
holes to drain methane gas.
Boart Longyear
In large gas wells, BL’s Denis Despres, vice-president of
drilling services for US/Peru, said BL uses a specially-built Lang
LM14O angle rig to drill long-angle holes with down-the-hole motors.
GEFCO
GEFCO said its models 150K and 185K are heavily involved in methane
extraction throughout the southeastern and northeastern areas of
the US. The Black Warrior Basin in the southeast has several of
its drills reaching depths of 4,000-7,000 ft in some instances,
turning horizontal using high-tech MWD equipment Contractors such
as Gasco, Warren and Union Drilling currently use the K series.
GEFCO said CBM industries in China, Turkey and South America are
also requesting information.
Technicoil
Drilling wells in Canada using coil tubing rigs is still a relatively
young technology, having progressed from the pilot phase 10 years
ago to a mainstream service with custom-built rigs. The main advantage
of coil tubing hybrid rigs lies in the speed of drilling by eliminating
the need for multiple tubing connections. Typically a CBM well in
Technicoil’s area of operation will be from 550-850 m depth.
However, coiled tube drilling requires additional surface equipment,
which could be costly for a one-off side track when mobilisation
and hire costs are considered.
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