Coal-Bed Methane in New Mexico
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Goal-bedmethane in NewMexico by NeilH. Whitehead,///, NewMexico Bureau of Mines& MineralResources, Socorro, NM 87801 What is coal-bedmethane? Why is coal-bed methane important to 1989 for all reservoirs in the New Mexico Coal-bed methane or coal-seamgas is New Mexico? part of the San Juan Basin was approxi- natural gas found associated with coal The coal-bedmethane resourcebase for mately 15.3 TCF. In 1988, the first year beds. The gas is a product of the coalifi- the San Juan Basin of New Mexico and production recordsfor the BasinFruitland cation process whereby, through time, Colorado is estimated to be between 65 pool were kept, coal-bed methane pro- peat-like muck is converted to coal by the and 83 trillion ft3 (TCF) for the Fruitland duction from the San Juan Basin of New application of heat and pressure.After the and MenefeeFormations. The Raton Ba- Mexico was 14 billion ff (BCF, : 0.014 energy crisis of t973, geologistsbegan to sin of New Mexico and Colorado is esti- TCH from a vear-end total of 77 wells. look seriously at coal-bed methane, not mated to contain between 8 and 18 TCF Annual production in 1989 inceased to just as an explosive gas to be vented from of gas in the Raton and Vermejo Forma- 55 BCF from 323 wells and in 1990 was coal mines but as an enormous resource tions. The combinedresource base for these 131BCF from 734wells. In December1990, of high-quality, pipeline gas. In the last two basins is between 73 and 101 TCF. Fruitland coal-bed methane production five vears, vast amounts of methane have The percentageof gas produced from a made up aboul 3l% of the monthly gas been developed by drilling hundreds of well is called the recovery factor. This fac- production from the San Juan Basin and wells in coal beds too deep to mine in the tor for coal-bed methane is not well es- 1Zn of the monthly gas production from San fuan Basin and the Raton Basin of tablished becauseof the unconventional New Mexico. By the end of March 1991, New Mexico (Fig. 1). nature of these reservoirs.Assuming a 831 wells were producing from the Basin In conventionalgas reservoirs,gas oc- conservative recovery factor of 50Va,be- Fruitland pool. Production during that curs in interconnectedvoids (pores)in the tween 36.5 and 50.5 TCF of gas will be month made up about 38%of the gasPro- rock. Coal-bedmethane is an unconven- produced from these coal beds over the duction from the SanJuan Basin and22Va tional gas in that the methane is adsorbed next 20 to 40 years. of the total gas (associatedand nonasso- or attached to internal surfaceswithin the To place these amounts in perspective, ciated) production from New Mexico. coal. As the reservoir pressureof the coal natural gas consumption in the United Many additional wells are waiting to be is decreasedby removing water or gas, States in 1989 was 19 TCF. The annual connected to pipelines. Thus, the deliv- more gas desorbs from the coal and is production from New Mexico in 1990was erability of coal-bed methane is expected available to flow to the well bore. 0.95 TCF. Cumulative production through to increase. 107' 105' Walsenburg | . lff:) lgnacio COLORADOF o ! 37" - - .---= -NE 370 c"_o3l-a.#-Hin_{ierd -Btancounir ";" '. _ tj- t;ool Farmington Bloomfield .\ I I SAN JUAN BASIN ,J ) l-_ ;Y ,l- I SANDoVAL I ,o*JUAN 36' 36" MCKINLEY Crownpoint a a Gallup Thoreau SANTA FE SAN MIGUEL a ---J1 - l, BERNALTLLo 0 10 20 3omi I craoLn \- t- - l-r# I oGrants 1 \ Albuquerque I 0 10 30 50km 107' 105' FIGURE l-Index map showing that part of the San Juan Basin underlain by the Fruitland Formation (Dane and Bachman, 1965) and the Raton Basin underlain by the Vermeio Formation (Dane and Bachman, 7965;Tweto,7979). November 7991. Nrw Mexico Geology Nonconventional fuel tax credit in sandstones. Additionally, strong gas TABLE l-Operators of producing Fruitland coal-bed methane wells as -An important force in the exploitation shows were encountered in areas where of March 31, 1997 of coal-bedmethane in New Mefucois the there were large volumes of water in the (New Mexico Oil Conservation Commission, 197). *, San producing nonconventional fuel tax credit. This tax coal. In conventional gas reservoirs, high Juan properties sold to Conoco,Inc., April 30,7997. credit, enactedby Congressas part of the water production indicates the reservoir Crude Oil Windfall Profit Tax Act of 1980, is watered out or depleted,another rea- rewards producers faced with high initial son for ignoring the coal-bed reservoirs. Company Wells The first costs in developing unconventional en- well specifically for coal-bed Meridian Oil Inc. 365 ergy sources, such as oil from shale and methane in New Mexico was drilled in Nassau Resources,Inc. 62 tar sand and gas from geopressuredbrine 1977by Amoco Production Co. in the Ce- Blackwood & Nichols Co. 62 and Devonian shale. Coal-bedmethane dar Hill field northeast of Aztec. The ma- Amoco Production Co. 6l development projects in the north-central jor push for coal-bed methane Phillips Petroleum Co. ffi part of the Sanfuan Basinhave been com- development wells began in the mid- Union Oil Company of Califomia 48 pared to offshore venfures in terms of in- 1980's.The prime benefactorsof the boom Southland Royalty Co. (Meridian) 38 itially high capital requirements (e.g., are the original and successorcompanies Giant Exploration & Prod. Co. 26 Marathon pumping units, that drilled wells as much as 30 or 40 years Oil Co. t1 water storageand settling McKenzie Methane tanks, ago and establishedproduction 9 separatorsand other surfaceequip- irom Hallwood Petroleum Inc. 8 ment, gathering lines for both gas and deeper horizons beneath the Fruitland Mesa Operating Limited produced brine, and deep brine-disposal coals. The two largest players by acreage Partnership NW* 7 wells) and long lead times involving plan- are Amoco Production Co., an original Arco Oil & Gas Co. 6 ning, design, and regulatory agenty ap- company/ and Meridian Oil Inc. (a wholly Robert L. Bayless 6 proval. owned subsidiary of Burlington Re- Richmond Petroleum Inc. 6 The nonconventional fuel tax credit had sources), which purchased El Paso Nat- TexacoInc. 6 been scheduledto expire ural Gas in 1983 and Southland Rovaltv Dugan Production Corp. 5 January1,1990, Merrion but was extended in 1985.Amoco's Oil and Gas Corp. 5 to January L, 1991,and position was strength- D. Simmonset al. ened in late J. 5 f9!9ntly was extended again to fanuary 1, 1988when it acquiredfor 9900 BHP Petroleum 4 million 1993.The tax credit for 1990was 90.855/ the Rocky Mountain properties JoeI B. Burr, Jr. 4 MMBTU (million British Thermal Units, (90Voof which are in the San fuan Basin) Northwest Pipeline Corp. approximately1 MCF (thousandft3 of gas)) of Tenneco Exploration and Production. Union TexasPeholeum Corp. 4 as determined by the inflation adjustment In mid-1990 Meridian acquired for 9399 Falcon SeaboardGas Co. factor_andreference price for calendaryear million all the producing leasesof Unicon Maralex Resources,Inc. J 1990(Intemal RevenueService, 1991). The Producing Co. (Union TexasPetroleum), Morgan-RichardsonOperating Co. 2 tax credit will apply to gas produced most of which are in the San Basin. Simmons Engr. & Consulting Co. 2 until |uan Orville l, 20f'3 Table1 listscompanies S. Slaughter,Jr. 2 January from wells drilled before and Fruitlandcoal- Basin Minerals, Inc. |anuary 1,, 7993.The credit is subhacted bed methanewells in operationas of March Conoco, Inc. from the tax liability and must be taken 31, 1991. Other companieswith coal-bed Great Western Drilling Co. in the year of production. The average methane drilling activity in New Mexico Curtis J. Little New Mexico well-head price in 1990wis include: BasinFuel Ltd., BonnevilleFuels, Manana Gas Inc. $1.7344CFof gas (NewMexico Taxation Caulkins Oil Co., Columbus Energy,Fair- |erome P. McHugh and RevenueDepartment, 1991),so al- play Oil & GasCo., Incline Reserves,Koch Total 830 lowing for the costsof lifting gas from the Exploration, Mitchell Energy Corp., Par- well, producers will net by-the tax credit ker & Parsley Petroleum Co., and Quin- a significant part of thefuincome from coal- oco Petroleum Inc. in BCF/mi'z(after Ayers and Ambrose, 1990, bed methane properties. fig. 27) shows the highest values in the Gas in the Fruitland Formation northem part of the basin, reflecting the Fruitland gas: a thirty-year-old Volumetric determination of gas in place presenceof thick coal beds, high thermal discovery is rediscovered in the Fruitland Formation involves mak- maturity, and high reservoir pressures The Fruitland Formation gasplay is un- ing a map of coal thicknessfrom well logs, (which allow more gas to be adsorbedper usual in that this immensereservoir was determining drillable acres,obtaining coal unit of coal). The northwest-southeast "found" about thirty yearsbefore the plav density (tons/acre-foot)values frorn well elongation of gas-in-placecontours (Fig. was "discovered."fhe first thorough, f3'- logs, and measuringthe gas content (ft3l 2) reflects the trend of thick coals that sin-wide subsurface study of thtFruit- ton of coal)from desorptionof coal sam- tended to form shoreward (southwest) of land Formation published n1-9Zt contains ples.These values are multiplied to arrive the northwest-southeast-trending shore- theseprophetif passages: at a gas-in-place(ft3) value. The parameter line sands of the Pictured Cliffs Forma- tion, which underlies the Fruitland Gasshows in theKirtland most difficult to determine accurately is andFruitland Formation and intertongues to the north- are ignoredduring mostdrilling gas content (fPlton). The best procedure in the eastwith the Fruitland (Fassett SanJuan Basin. In partsof thd basin. is to-placewell core,as soonas itis brought and Hinds, however,it has becomecustomarv foi to the surface, in a desorption canister r97r\.