Coalbed Methane: An Unconventional Energy Solution
As Asia struggles to cope with rising natural gas prices, many producers are shifting their attention to unconventional gas resources.
One of the main areas of interest in the hunt for more affordable energy is coalbed methane. CBM, called coal seam gas in some parts of the world, is a naturally occurring methane gas with characteristics similar to those of conventional natural gas.
Coal mine degasification and safety techniques were first developed in the United States during the 1970s. Since then, the CBM sector has become commercially established, with ongoing advancements in extraction and production techniques allowing successful CBM production to be recorded across a wide range of coal types, ages and geological settings.That said, the sector's success depends on certain criteria, namely: favorable geologic conditions (good coal thickness, gas content/saturation, permeability); low capital and operating costs; and favorable gas markets and sales prices. How is CBM created? When plant material, such as roots, bark and wood, is deposited in swamps or swampy lakes, it undergoes bacterial and chemical changes and eventually forms a peat deposit. Over millions of years, as the peat is buried deeper under layers of sand and mud, it develops into brown coal, then bituminous coal and eventually hard, anthracite coal. This sequence is known as the coalification process. As this coal is formed, the decomposing organic material produces methane gas, as well as nitrogen, carbon dioxide and other gases. The burial process puts pressure on the coal, which keeps much of the gas contained. It is this production process that makes CBM an unconventional gas: it is contained in difficult-to-produce reservoirs that require special completion, stimulation and/or production techniques to achieve economically viable production.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV