Natural Gas Facts

What is natural gas from coal?

As its name implies, natural gas from coal (NGC) is natural gas that is formed and remains trapped in coal beds. NGC is also known as coalbed methane, coalbed gas, coal seam gas and coal mine methane. Compositionally, NGC is usually more than 95 per cent methane, the principal component of conventional natural gas. While the other constituents of both conventional and unconventional natural gas vary from basin to basin and reservoir to reservoir, NGC typically lacks components such as hydrogen sulphide, natural gas liquids and certain solids that are often present and problematic in conventional natural gas. Like processed conventional natural gas, sales grade NGC is the cleanest burning fossil fuel.

The following table is a typical gas analysis from a well at Horseshoe Canyon in Alberta.

Component

Southern Alberta
Coalbed Methane

Southern Alberta
Sweet Shallow Gas

Methane (CH4) 97.19 95.31
Nitrogen (N2) 2.20 3.76
Ethane (C2H6) 0.35 0.44
Carbon dioxide(CO2) 0.11 0.18
Hydrogen (H2) 0.09 0.01
Propane (C3H8) 0.04 0.08
Helium (He) 0.01 0.12
IC4 0.01 0.03
Hydrogen Sulphide(H2S) 0.00 0.00
NC4 0.00 0.02
IC5 0.00 0.02
NC5 0.00 0.01
C6+ 0.00 0.04
     
Total 100.00 100.02

Source: EnCana Corporation

How is natural gas from coal formed?

Like conventional natural gas, NGC is the result of heat and pressure acting on organic matter. In the case of NGC, however, natural gas generation is part of the coalification process and the natural gas thus created remains stored within the coal, instead of migrating to other reservoir quality rocks such as sandstone.
Coal originates from the transformation of terrestrial plants into carbon through burial. As trees and other plants growing in ancient forests and swamps died and decayed, their remains formed peat bogs. Over time, the bogs were buried by sediments, and as the depth of burial increased, the peat was subjected to increasing temperature and pressure. This resulted in a decrease in moisture content and an increase in the relative proportion of carbon. By-products of this process include water, carbon dioxide, nitrogen and methane. The organic matter was transformed sequentially through the different stages or ranks of coal - lignite, sub-bituminous, bituminous and anthracite. The higher the rank, the lower the water content, and higher the proportion of pure carbon. The rank of coal is therefore a function of time, temperature and pressure. Deeper coals will generally contain higher amounts of methane.

NGC is adsorbed on the internal surfaces and also stored in pores and fissures in coal under pressure from overlying sediments and fluids. Because of the complex nature of the internal surface structure of coal, coal beds can store up to seven times the amount of natural gas that can be stored in a similar volume of conventional reservoir rock. In the case of wet coals, the gas may be held in place by the pressure of the water in the coal. In this event, it is necessary to dewater the coal to release the pressure so that the gas can flow to the surface.

NGC play types in Canada

NGC play types in Canada fall into three general categories.

"Dry" coal with insignificant produced water In the case of dry coals, the geological history has created an "under-pressured" NGC reservoir that has pressures lower than expected for sediments at the target depth in a "normal" hydrostatic setting and with little or no mobile water. The coal seams themselves do not contain significant water volumes, either saline or fresh, in most areas where they are sufficiently deep to contain commercial quantities of gas. Consequently, any small quantities of water produced with the NGC are likely to have condensed from the gas. Dry coal reservoirs do not require dewatering to reduce the reservoir pressure and release the gas and allow it to flow. These "naturally" dewatered coals contain free gas upon discovery, although at a lower pressure than normal. Because producing pressures are typically very low in NGC reservoirs, compression is often required from the outset to optimize production.

Coals that produce unusable brine In the case of coals that produce unusable brine, this saline water within the coal seams must be produced to dewater the coals, reducing reservoir pressure to initiate NGC desorption and production. Often, wells drilled into such reservoirs produce mostly water at the onset of production, with NGC production building over time and water production decreasing. The produced saline water is reinjected into deeper zones not connected with shallower fresh water aquifers, in accordance with regulations already in place that govern conventional gas production. Coals that produce unusable brines have been found in moderately deep coals in central Alberta.

Coals that produce usable water Coals that produce usable water are similar to those producing brine in that the water must be produced in order for the NGC to flow. The main difference is that the produced water is sufficiently fresh to be potentially used for some practical applications as potable water or returned to the aquifer. To date, this type of NGC play is rare in Canada; however, it is common in the United States. In Wyoming's Powder River Basin it has generated substantial attention due to the vast NGC resource and large numbers of wells drilled to recover the NGC and accompanying produced water volumes. Current Alberta regulations regarding the production and disposal of usable water associated with coal seams are designed to protect the usable water rather than to recover the NGC. Co-production of usable water and NGC on a commercial scale in Alberta will require regulation changes to optimize management of both these valuable resources. British Columbia has established guidelines that allow for such co-production of usable water and NGC within the capacity of local watersheds. The co-production of NGC and usable water holds the potential to recover two valuable resources. Since the coals are found at depths greater then most water wells, the water in these coals would not likely be a source of water without NGC drilling activity. These zones are generally deep enough to be isolated from the shallower aquifers landowners usually use.

How is natural gas from coal found?

Most aspects of NGC exploration are no different from exploration for conventional natural gas. Because of NGC's co-occurrence with coal, however, the targeted coal seam locations and areal extent are typically well known due to coal assessments or well log records obtained from drilling wells targeting conventional reservoirs. As a result, "exploration" for NGC largely involves simply drilling to delineate and evaluate the productivity of known coal deposits.

Where is natural gas from coal found?

NGC is present wherever coal is found, and because coal is found in great quantities throughout the world, NGC may be one of the most abundant energy sources. Currently, the United States is the largest producer of NGC, with production of 49.7 billion cubic metres in 2007. Daily production in the U.S. amounts to 136.1 million cubic metres or about 9.2 per cent of U.S. natural gas production. NGC reserves are estimated at 620 billion cubic metres or approximately 9.2 per cent of total U.S. natural gas reserves. NGC is also produced in Canada and Australia with development projects underway in the United Kingdom, China, Colombia, India and the Ukraine.

NGC potential in Canada

Although NGC exploration has been ongoing in the U.S. since the late 1970s, it did not begin in Canada until the mid 1990s. Exploration and development activity focussed initially on Alberta and British Columbia and, more recently, in Nova Scotia. Significant commercial success was not achieved until late 2001.

In Alberta, coalfields are found in the southern half of the province. The Canadian Society for Unconventional Gas estimates Alberta has up to 14.2 trillion cubic metres of NGC in place, and economic reserves of 24.3 billion cubic metres at year-end 2007. At that time, there were approximately 10,070 wells in Alberta producing a combined total of 20.9 million cubic metres of NGC per day.

The British Columbia Ministry of Energy, Mines and Petroleum Resources estimates British Columbia has 2.8 trillion cubic metres of NGC in place in 14 separate coalfields. As of year-end 2007, 87 test wells had been drilled, but commercial production was not expected until 2009.

Nova Scotia has three major coalfields that may contain more than 46 billion cubic metres of NGC. Some testing has been conducted in two of the basins, but there is no commercial production.
The National Energy Board and TransCanada Pipelines estimate the future production of NGC in Canada will be two billion cubic feet per day in 2014 and three billion cubic feet per day in 2024, or about 12 to 18 per cent of current Canadian natural gas production.

In its publication, Canada's Energy Future - Reference Case and Scenarios to 2030, the National Energy Board presents a reference case and three possible scenarios regarding energy demand, production and trade to 2030. The reference case and the three scenarios, as they pertain to NGC are summarized in the following table.

Case

Forecast

Reference Case

  • characterized by the maintenance of significant trends apparent at the beginning of the outlook period through the forecast
  • rapid economic growth and moderate oil and gas prices
  • energy demand, energy production and GHG emissions growth continue to be high.

After 2015, WCSB conventional gas provides just 60 percent of production, while unconventional production accounts for 22 percent (compared to 79 percent and 12 percent, respectively, for the 2005 to 2015 period).

Triple E

  • balance of economic, environmental, and energy (Triple E) objectives
  • characterized by well-functioning global energy markets, cooperative international agreements and effective environmental policies
  • energy demand growth flattens and GHG emissions decline

NGC development stabilizes at just over 28 million cubic metres per day from 2010 to 2019 and then gradually declines by half over the remainder of the projection.

Fortified Islands

  • national energy security concerns are emphasized. Characterized by geopolitical unrest, a lack of international cooperation and trust, and protectionist government policies
  • reflects the lowest Canadian economic growth and the highest oil and gas prices, ensuring lower energy demand growth and lower GHG emissions growth than the Continuing Trends Scenario
  • results in the strongest domestic oil and gas production scenario.

Coalbed methane production reaches 57 million cubic metres per day in 2014 and stabilizes at 99 million cubic metres per day from 2020 to 2030.

Source: national Energy Board, Canada's Energy Future - Reference Case and Scenarios to 2030

How is natural gas from coal produced?

Drilling and testing an NGC (coalbed methane) well is not significantly different than drilling and testing a conventional natural gas well. The drilling rig, testing and safety equipment, and surface facilities are identical, as are the regulations. Economically producible NGC reservoirs tend to be relatively shallow, so drilling, completing and testing an NGC well generally takes less time than deeper conventional wells. Once completed, a typical well pad measures four metres by four metres for "dry" coals, but can be bigger for wells that require pumping equipment. Because of their unusual storage mechanism and producing pressures that are lower than conventional reservoirs, higher compression may be required to maximize gas desorption and recovery.

As with conventional wells, optimal well density for NGC wells is determined based upon the resource in place and the reservoir flow capacity. In Canada thus far, optimal well densities are expected to range from two to eight wells per section. In comparison, conventional oil and gas fields have well densities from one well per section to as high as 16 per section or more.

Stages of NGC development

If the results are favorable, a pilot project, including extensive production tests, is conducted to validate the exploration well results. Pilot projects typically consist of five to nine closely spaced wells drilled to allow for constructive interference and local depressurizing of the coal seams to initiate gas production.

Natural gas from coal history

NGC development in the United States began in the 1970s, about 20 years before NGC activities in Canada. Early NGC wells in the United States were drilled primarily to release natural gas as a safety measure for coal mining operations. However, the increase in natural gas prices in the late 1970s, along with intensive research efforts and federal tax incentives, spurred NGC, tight sands and shale gas exploration and development to produce unconventional gas for profit. Approximately $500 million was invested in U.S. NGC research and development before the first significant commercial production began.

Annual NGC production in the United States has risen from none in the late 1970s to approximately 1.68 trillion cubic feet (47 billion cubic metres). Daily production in the United States amounts to 4.6 billion cubic feet (129 million cubic metres) or about 8.1 per cent of U.S natural gas production. The U.S Energy Information

Administration estimates U.S. NGC reserves at 17.5 Tcf (496 billion cubic metres), or approximately 10 per cent of proved U.S. natural gas reserves. The total resource is approximately 725 trillion cubic feet.

The NGC produced in the United States comes from at least 12 different basins across the country, each with unique producing characteristics. While some issues have been raised about the production and disposal of water that is sometimes co-produced with NGC, its development continues and as a whole has proceeded with little controversy in the majority of the basins.

Between 1997 and 1999, approximately 140 test wells were drilled in Canada to evaluate NGC potential without commercial success. Since 2000, more than 2,500 wells have been drilled and commercial production has been established. Current projects range from exploration and experimental schemes to pilot projects to full-scale development. More than 1,400 wells were drilled in Alberta in the first nine months of 2004 and production was estimated at over 100 million cubic feet per day going into the last quarter of the year. The National Energy Board estimates Canadian NGC production could reach two billion cubic feet per day in 2014 and three billion cubic feet per day in 2024 and will result in recoverable gas of 75 trillion cubic feet. This exceeds current conventional proved gas reserves of 59.8 trillion cubic feet (1.69 trillion cubic metres.)