Coal Bed Methane

Coalbed Methane (CBM) is formed by the same processes which transform organic material into coal; generally speaking, the deeper and/or higher the rank of the coal, the higher is its methane content.

Assessing CBM resources is generally a matter of identifying the in situ gas contents of the coal and multiplying this by the coal resource. Determining recoverable reserves, however, is much more involved. Additionally, geo-technical constraints in gas production - most notably low permeability - make much of the worlds resources very difficult to recover.

With natural gas reserves becoming scarcer and prices rising, CBM is an area of intense commercial interest. In the United States and Australia, this resource has a proven track record of growth and there are few uncertainties regarding the application of basic CBM drilling technologies to provide good results. Beyond these countries, there has been heightened focus in China, India, Indonesia and Colombia, to name just a few areas of the world.

The potential is great, although project developers and investors should be aware that some fundamental geotechnical issues might mean that venturing into areas with little field experience poses a number of risks.

While global coalbed methane resource estimates are rough, they indicate between 34 and 261 Tcm, which compares with proven natural gas reserves of 180 Tcm. The experience of the U.S. indicates that, relative to conventional gas reserves, CBM reserves are becoming an ever growing share of total gas reserves. However, global resource estimates for coalbed methane are poor, partly because the resource has only had significant commercial success in the United States, and partly because the data are very limited on gas properties of coal around most of the world.