Coalbed methane has become an increasingly important
part of America's energy picture over the past two decades, with
an estimated 669 trillion cubic feet of CBM in place in the lower
That number may be growing soon, thanks to some additions from
the land to the north.
According to a paper that will be presented at the AAPG annual
meeting in Denver, the amount of CBM in Alaska is estimated to be
as high as 1,037 trillion cubic feet.
If only 10 percent of this gas is economically recoverable, that
would triple the current proven conventional gas reserves in Alaska.
The authors of the paper are James G. Clough, geologist and chief
of Energy Resource Section, Alaska Division of Geological &
Geophysical Surveys, Fairbanks, Alaska; Charles E. Barker, research
geologist, U.S. Geological Survey, Denver; and Andrew Scott, president,
Altuda Geological Consulting, Austin, Texas, and also president-elect
of the Energy Minerals Division of AAPG.
CBM's appeal, according to the authors, is largely a bottom-line
attraction: Compared to what it takes for conventional oil and gas
drilling, it is a relatively inexpensive pursuit -- so much so that
independent producers can readily join the game of exploring for
it and drilling.
In some cases, the drill rigs can be as small as those for water
The current interest in CBM in Alaska got its start in 1994 when
Tom Smith, with the state of Alaska's Division of Oil and Gas, evaluated
coalbed gas content in a test well in the Wasilla area near Anchorage.
This led to three entities -- the State of Alaska, the U.S. Geological
Survey and U.S. Bureau of Land Management -- becoming interested
in the resource, for a variety of sometimes different, but complementary
The high coalbed gas content data reported by Smith resulted in
a Unocal exploration program designed to drill and produce gas from
coal in the northern Cook Inlet basin.
Scott recalls that, with the University of Texas, he had been
using a CBM exploration model, that was used to seek out suitable
locations in Alaska. The six different factors that need to be present
in the right manner to make CBM exploration viable, he said, are:
- The coal depositional system.
- Coal rank and gas generation.
- The structural setting.
- Gas content.
Barker describes one of his key roles as analyzing the gases through
canister absorption. A piece of coal core is placed in a pressure
type container that measures gas volume over time, and provides
estimates of the gas content in the coal. The gases are isotopically
analyzed to determine origin and wetness.
The exploration of CBM has many different but overlapping strands
of interest, Clough explained. This interest comes from both national
and state concerns, as well as opportunities perceived by both state
government and energy companies, the giant energy companies and
small independents, and city and rural areas.
For all, CBM is viewed as both energy for export and as a public
service benefit to help various Alaskan communities more economically
Let's Make a Deal
Anchorage is facing potential gas needs in the near future. Because
of the initiative of David Lappi, who has his own exploration company
in Lapp Resources, Anchorage legislators put together a shallow
gas leasing program in 1999, approved by the state division of oil
Prior to this, anyone looking for CBM had to follow the expensive
bonding, environmental and other requirements designed for the large
producers. This effort was designed to make exploration both possible
and appealing to smaller independents.
Those leasing post a bond of $25,000, as opposed to the usual
$1 million. The application fee is only $500, with annual rent payments
of 50 cents per acre.
Lease terms are limited to three years, but can be renewed for
as long as there is production. A single lease is available for
up to 5,760 acres, and no one company can hold more than 46,080
acres -- the size of about two townships.
Interest in this exploration is so great, Clough said, that the
Division of Oil and Gas has been "overwhelmed with applications,"
which will take awhile to get processed.
Meanwhile CBM is being actively pursued as an energy source for
rural areas of Alaska, with about 25 communities situated right
on top of or adjacent to potential CBM beds. The special interest
is for those communities without roads, and so isolated they can
be reached only by plane or boat.
The state is interested in this project since it expends up to
$20 million annually attempting to equalize energy costs throughout
Next Up: Tests
Naturally, some communities do better than others, but typically,
a large city will pay six to nine cents per kilowatt hour for electricity,
whereas the same will run 20-35 cents in the rural areas. The big
expense is diesel fuel, which has to be boated or flown into these
An average medium-sized community in rural Alaska has a population
of 600 or more. A community of 700 uses about 250,000 gallons of
diesel fuel per year, which could be replaced by 34.5 million cubic
feet of gas per year. The diesel fuel is now used about 50/50 for
electricity and home heating.
More is needed for heavy equipment, which is why there is not
much in the way of small industry in those areas, and why unemployment
can run as high as 25-50 percent, at least during some seasons.
The development of the gas could make these communities much more
self-sufficient, provide a small industry in itself, and also provide
the potential for other jobs.
The three areas chosen for a test demonstration project are:
- Wainwright, on the northwest Arctic coast.
- Fort Yukon, in the interior.
- Chignik, on the peninsula, which actually is three small communities
that have two fish processors among them, with high electrical
demands during the summer.
The three areas have been chosen because they have the most geological
data supporting the presence of CBM.
Also, they represent a wide geological spectrum, from a high arctic
setting at Wainwright, with permafrost up to 800 feet thick near
the coast, to an interior river setting at Fort Yukon with permafrost
discontinuous up to 150 feet, and Chignik, a coastal no-permafrost