Doubt still clouds the scale that will be attained, but development of coalbed methane shows signs of beginning in earnest in Canada as natural gas producers seek substitutes for aging conventional supplies.

While some analysts say there is no evidence of Canadian fields equal to the San Juan and Powder River basins in the United States, others point out they have just begun to look. Among the initiatives:

At a well-attended fourth annual convention on the subject in the Canadian gas capital of Calgary, a new organization stepped forward, the Canadian Society for Unconventional Gas. The association set out to replace a loose, private group known as the Canadian coalbed methane forum with a full-grown representative to promote work on the resource.

The founding executive committee included representatives from EnCana, MGV, Spirit Energy Corp., Suncor Energy Inc., Calver, ChevronTexaco, Nexen Inc. and CFER Technologies, an arm of the Alberta Research Council. At the convention, aspiring coalbed methane producers learned that the industry establishment continues to regard them as a risky prospect — but also an improving one.

The technical frontier of gas production is an infant in Canada, and predicting its performance is still more of an art than a science, said Kenneth Logan, chief of long-range forecasting at TransCanada PipeLines Ltd. Logan said the current best educated guess, using forecast techniques devised by TransCanada’s Nova grid in Alberta, pegs the amount of western Canadian coal-seam gas liable to be produced economically at 25-50 Tcf. Calling the projection only “a view,” he said the TransCanada-Nova charts show coalbed methane production attaining about 1.5 Bcf/d as of 2015, or in the range of 8% of total Canadian gas output.

“There is a wide degree of uncertainty about this forecast,” Logan added. The numbers could be either too small or too big. He said too little information is available on key technical issues — especially the “permeability” or natural capacity of Canadian coal deposits to let the gas spread through them flow.

Logan, a forecaster with Nova prior to its 1998 takeover by TransCanada, reported gas pipeline planners have been trying to assess coalbed methane for about a dozen years. He said no one has yet found Canadian counterparts to the rich coal-seam deposits that account for about 3 Bcf/d or 6-7% of gas production in the United States.

So far, Canadian seams have turned out to be thinner and less permeable than the mainstays of coal-gas output in the U.S.: the San Juan Basin of New Mexico and Colorado, Black Warrior Basin in Alabama and Mississippi, and the Powder River Basin in Wyoming. Until production trials and further exploration provide reliable information otherwise, Logan said there is only a “pretty low probability” that there is a Canadian counterpart to the top U.S. coalbed methane source, the San Juan area.

But he did not rule discovering the elusive mother load, because the gas potential of Canadian coal deposits remains little explored. Prospecting is only beginning in British Columbia, where the mountainous interior harbors vast seams and the provincial government is offering incentives for work to tap them for gas. In the better known but still mostly untried deposits of Alberta, gas producers are out to generate knowledge and technology that will establish the methane productivity of Canadian coal seams.

MGV said it expects to complete 50 wells by the end of the year into coal seams in a southern Alberta property known as West Palliser. The activity follows 30- to 180-day tests of 100 pilot wells drilled in partnership with EnCana Corp. Work is underway on other coal-gas prospects with EnCana and NCE Petrofund Corp. MGV also formed a new coal-gas joint venture with Murphy Canada. Exploration drilling is scheduled to start in central Alberta this year.

MGV reported the West Palliser operation had 14 pilot wells producing gas into sales pipelines to perform extended tests. The plains area is already studded with conventional gas facilities. MGV predicted the West Palliser wells will each yield 200-250 Mcf/d. The site is rated as a good place to start coal-gas production because the seams are not full of water to flood wells or require costly separation. MGV predicted that proved reserves will eventually work out to 1-2 Bcf of gas per section or square mile. It has not helped forecasters that much coalbed methane activity is kept confidential because information about the geology, technology and results is often regarded as competitive in Canada.

But it is known that interest and expenditures have risen to the point where it is material enough to make publicly-traded Canadian gas producers disclose at least the level of commitments. A survey by FirstEnergy Capital Corp. found that Canadian coalbed methane spending on about 30 programs will reach at least C$100 million (US$64 million) this year and possibly top C$150 million (US$96 million), taking the field well beyond its former status as a science project.

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