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Coalbed Methane--A Non- Conventional Energy Source

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Coalbed Methane--A Non- Conventional Energy Source COALBEDCOALBED METHANEMETHANE----AA NONNON-- CONVENTIONALCONVENTIONAL ENERGYENERGY SOURCESOURCE WHAT IS IT AND WHY IS IT IMPORTANT ROBERT A. LAMARRE LAMARRE GEOLOGICAL ENTERPRISES Fueling The Future 25th Annual North American Conference of the USAEE/IAEE Sept. 20, 2005 Natural Gas Production, Consumption, and Imports, 1970 - 2025 (trillion cubic feet) 35 History Projections 30 Net Imports 25 Consumption 20 Natural Gas Net Imports, 2001 and 2025 (trillion cubic feet) 15 Production 6 5 4 10 3 2025 2 2001 1 5 0 Pipeline Liquefied Natural Gas 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 (EIA) Major Growth in Production from Unconventional Resources 12,000 Tight Gas 10,000 CBM Approx. 42% growth Conventional Gas expected across the 8,000 Rockies 6,000 4,000 2005 - 2010 Gas Production (mmcfd) Production Gas 2,000 CBM offers the greatest potential 0 with 116% volume growth 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 • Tight Gas - 2.3 bcfd in 2004 to 4.1 bcfd in 2010 • CBM - 1.8 bcfd in 2004 to 3.9 bcfd in 2010 • Conventional Gas - 2.5 bcfd in 2004 to 2.3 bcfd in 2010 Wood Mackenzie Woodmac.com Scott Tinker, Director Bureau of Economic Geology August 4, 2003 Why Natural Gas? Efficiency Scott Tinker, Director Bureau of Economic Geology August 4, 2003 QAd1023 NATURAL GAS IS A CLEAN BURNING FUEL PREFERRED ENERGY SOURCE COAL-FUELED ELECTRICITY-GENERATING PLANT AND CBM WELL IN UTAH METHANE GAS PRODUCED FROM UNDERGROUND COAL BEDS COALBEDCOALBED METHANEMETHANE ISIS FORMEDFORMED DURINGDURING THETHE CONVERSIONCONVERSION OFOF PEATPEAT TOTO COALCOAL Coal is formed from peat over time by heat and pressure Expelled By-Products • Water • Methane Pressure It all starts with • Carbon Dioxide (CO2) Organic Debris or • Peat in a Swamp Residual Products • Coal Coal • Methane Heat • CO2 TimeTime PEAT SWAMP ALL Consulting 2/04 PRESERVED TREE TRUNK COAL GAS CONTENTS OF VARIOUS ROCKY MTN. BASINS IDEAL RANK (Scf/t) Natural Resources Law Center 7/02 CBM HAS BECOME AN IMPORTANT SEGMENT OF US GAS PRODUCTION Conventional Natural Gas 74% Tight Gas Sands 14% U.S. CONSUMES 19 TCF OF GAS Coal Bed ANNUALLY Gas Shales Methane 2% 10 % U.S COALBED METHANE PROVED RESERVES, 1989-2003 18.7 TCF ROCKIES BUSINESS UNIT U.S. CONTAINS 703 TCF OF CBM RESOURCES W. WASH 0.7 TCF FOREST CITY/CHEROKEE N. APPAL. 2.4 TCF ILLINOIS 1.6 TCF 11.5 TCF POWDER RIVER CENTRAL APPAL. 25 TCF 3 TCF WIND RIVER 0.4 TCF GRN. RIVER PICEANCE 3.9 TCF 7.5 TCF BLACK WARRIOR RATON 1.8 TCF PRODUCING UINTA 3.2 TCF EMERGING PLAYS SAN JUAN ARKOMA 7.5 TCF 2.6 TCF IDENTIFIED POTENTIAL GRI U.S. CBM RESOURCES • Greater Green River Basin 314 Tcf • Piceance Basin 99 Tcf • San Juan Basin 50 Tcf • Powder River Basin 30 Tcf • Uinta Basin 10 Tcf • Raton Basin 10 Tcf TOTAL 513 TCF Meissner CBM IN U. S. LOWER 48 STATES • 13 TCF PRODUCED • 18.7 TCF PROVED RESERVES • 42.3 TCF ECONOMICALLY RECOVERABLE • 101.2 TCF UNDISCOVERED • 703 TCF TOTAL RESOURCE ESTIMATE • >14,000 WELLS • 1.6 TCF PRODUCED IN 2003 • >10% OF U.S. NATURAL GAS PRODUCTION Data as of 12/03 Gas Molecule ADVANTAGES OF COALS AS RESERVOIRS 5 Large gas storage capacity 5 Shallow depths 5 Relatively low cost 5 Very good economics 5 Most coal basins have been mapped 5 Abundant data from logs of older wells PRODUCTIVE STAGES OF A COALBED METHANE WELL (2) STABLE (1) PRODUCTION (3) DEWATERING STAGE DECLINE STAGE STAGE VOLUME TIME TYPICAL PUMPING UNIT ON A CBM WELL Exh. # 9 COMPARISON OF GAS PRODUCTION CURVES GAS PRODUCTION CURVES FOR CBM & SANDSTONE Schwochow, Oil & Gas Investor Supplement Coalbed Methane, Dec. 2003, page CBM-11 EXAMPLEEXAMPLE OFOF SUCCESSFULSUCCESSFUL DRUNKARDDRUNKARD’’SS WASHWASH CBMCBM PROJECTPROJECT 1200 200 Water Gas # Wells MEANS MORE $$ 180 1000 NOTE INCREASING 160 GAS RATES 140 PER WELL 800 120 NOTE DECREASING 600 WATER RATES 100 MEANS LOWER # Wells 80 MCFD, BPD OPERATING COSTS 400 60 40 200 20 0 0 0 1020304050607080 PRODUCTION MONTH 6666 MCFD From Sproule NUMBER OF WELLS AND DAILY PRODUCTION VERSUS TIME IN POWDER RIVER BASIN 365 BCF/YR No. of Wells vs Time MMcfd vs Time www.eia.doe.gov/ CBM PRODUCTION IN UTAH MCF 120,000,000 102.2 Bcf 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 1995 1997 1999 2001 2003 04 Thru April RYER, 1988 INTERIOR CRETACEOUS SEAWAY CBM PROJECTS IN THE ROCKIES THE CRETACEOUS SEAWAY CONTAINS THE TYPICAL COAL DEPOSITIONAL ENVIRONMENT FOR CRETACEOUS ROCKS IN THE ROCKIES Swamp/Lagoon Coal Shoreline Sandstones Marine Horne, RMAG 2003 POTENTIAL FUTURE COAL BEDS AND CBM MAJOR COAL-BEARING BASINS IN THE ROCKIES Natural Resources Law Center 7/02 OVERTHRUST COALS PP NN OO www.wsgsweb.uwyo.edu/ COAL-BEARING AREAS IN THE FOUR CORNERS REGION FERRON PLAY PICEANCE BASIN CBM POTENTIAL IN SAN JUAN BASIN BLACK MESA BASIN (No Tests) USGS PP1625B, 1999 Kirschbaum et al COAL-BEARING CRETACEOUS FORMATIONS 10,000 FEET Horne, RMAG 2003 COAL PRODUCTIVE COAL SEAMS IN THE VERY SUCCESSFUL FERRON CBM PLAY OF EAST-CENTRAL UTAH Ryer, T. SCHEMATIC CROSS SECTION MESAVERDE DEPOSITIONAL SEQUENCE AN IDEAL “GAS MACHINE” Top Seal COALS Source & Reservoir Bottom SANDSTONE Seal Reservoir Meissner THE FUTURE LOOKS BRIGHT FOR CBM ANCIENT SWAMPS COAL COALBED METHANE ENERGY SUPPLY AND.
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