3.3. Methane Recovery from Coalbeds Program (1978-1982)

During the natural process of coal formation, methane is generated and trapped in the coal seam as well as the adjacent rock strata. All coal deposits contain methane, although the concentrations vary from seam to seam and within the seam. Estimates of the total magnitude of the U.S. coal-associated methane resource have ranged from less than 100 trillion cubic feet (Tcf) to more than 800 Tcf. Of the 400 Tcf figure cited by most sources, perhaps 100-150 Tcf may be technically recoverable.

The USGS completed assessments in six key Rocky Mountain basins as part of the 1995 National Oil and Gas Assessment and determined that a mean of 44.6 Tcf is technically recoverable from those major sources of what is now commonly called “coalbed methane (CBM).” In 2005, coalbed methane production totaled 1.732 Tcf, or about 10 percent of unassociated gas production in the U.S.

However, before the Methane Recovery from Coalbeds Program (MRCP) was begun in 1978, this resource was either unrecognized or ignored by industry. The shortage of natural gas during the 1970s focused attention on methane from coal seams as one of the potentially significant sources of gas (along with gas from tight sands and Devonian shales) that might be developed to meet growing demand.

Safety considerations in active coal mines had previously led the U.S. Bureau of Mines to begin the development of techniques for methane removal, and with the techniques in practice at the time an estimated 250 MMcfd of methane was being emitted to the atmosphere. The capture of this valuable resource, as well as production of the methane available from “unminable” coalbeds (too deep or too thin), was the ultimate goal of the Methane Recovery from Coalbeds Program (MRCP).

The Natural Gas Policy Act of 1978 provided some economic incentives for commercial exploitation of CBM. There were, however, still many barriers to its extensive recovery and utilization on a commercial basis. The technical, operational, and economic viability of production methods had not yet been sufficiently demonstrated to attract private investment.

The quality of coal-associated gas varied from essentially pure methane for predrained gas, to variable combinations of methane and air for gob gas (gas emitted from the rubblized “gob” created during longwall mining), to extremely diluted methaneair mixtures in ventilation air.

The resource was generally located remotely with respect to demand and individual wells had relatively low production rates. As well, coal operators had a legal right to release methane in the course of mining, and were wary of the legal implications of gas recovery since, generally, natural gas rights are held by others. Because the market value of a ton of coal was on the order of 100 times the value of the methane contained therein, coal mining companies had scant interest in gasderived revenues relative to their primary objective of coal production.

Early work on CBM carried out by the U.S. Bureau of Mines had focused on pre-draining and capturing methane from the active, gassy mines of the Appalachian and Warrior basins. The Bureau of Mines program was assumed by DOE in 1978 and funded for five years. Subsequent R&D related to CBM was conducted chiefly by the Gas Research Institute (GRI) and industry.

The MRCP was aimed mostly at defining the size and recoverability of the resource base and the use of natural gas recovered during active coal mine operations. Several pilot field projects were conducted, including testing the use of vertical wells in deep, unminable coalbeds; testing the use of vertical wells in multiple coalbeds; and combining in-mine, multiple horizontal boreholes and CBM-fueled gas turbines for on-site power generation.

Experiments in hydraulic fracture stimulation, conducted by the Bureau of Mines and later by DOE, demonstrated the utility of this technology in CBM recovery. In addition to DOE’s Fossil Energy program, the DOE Small Business Innovative Research program funded several projects involving strategies for wellsite selection, drilling practices, and well-completion techniques for coal-bed methane production. MRCP funding from 1978 to 1982 totaled about $30 million, nearly all of which was expended during the three-year period of 1979-1981.

Significant cost sharing was obtained from industry for the vertical well pilot project and the hydraulic fracture mineback efforts on the Warrior Basin.

A significant part of the responsibility for the ultimate development of the CBM resource can be attributed to the R&D efforts of GRI (which made CBM research a high priority) and to the industry activity that followed the provision of tax credits as incentives for development of the resource.

The tax credits, together with basic and applied research, were instrumental in establishing an industry that now thrives (without incentives) and that has remained competitive through a period of relatively low natural gas prices (1988- 89 and 1991-92). Nonetheless, DOE played a critical role in recognizing the commercial potential of CBM, in initially assessing the magnitude of the resource, and in carrying out early pilot field tests.