CBM BACKGROUND
CBM development has its roots in the coal mining industry. Attempts to develop marketable CBM began in the United States in the 1970s, as a result of the U.S. Bureau of Mines' efforts to improve mine safety by
extracting methane in advance of mining operations. As recently as 1982, CBM production in the United States was practically non-existent. In 1983, the Gas Research Institute commenced field investigations that motivated the expansion of CBM recovery. At the end of 1983, annual CBM production was nearly 6 Bcf (billion cubic feet) from about 165 wells. By 1994, it had grown to 85.1 Bcf from more than 6,000 wells, and by 1999, there were 14,000 wells producing roughly 1,252 Bcf.
In 1980, Congress enacted a tax credit to promote domestic production from alternative sources, including CBM. Known as the Section 29 tax credit (section 29 of the 1980 Crude Oil Windfall Profit Tax Act), the requirement has two limits: the gas needs to be sold to an unconnected group, and the tax credit can only be applied to wells brought on line before Dec 31, 1992. The credit, valued at $3 barrel of oil or Btu equivalent, ended on December 31, 2000, however the tax credit was modified and extended in both the House and Senate energy bills that the two chambers passed in 2001 and 2002, respectively. The greatest increase in development, however, didn't begin until approximately 1988. This was due to the 1980 tax incentives being put in place by the Congress coupled with improved production techniques.
Currently, there are thousands of CBM wells in the United States, and active exploration, development, and/or production is being carried out in Alabama, Alaska, Arkansas, Arizona, Colorado, Illinois, Indiana, Kansas, Kentucky, Louisiana, Montana, Nebraska, New York, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, Virginia, Washington, West Virginia and Wyoming. To date almost 88 percent of the United States total CBM production is from the Rocky Mountain region encompassing Colorado, Montana, New Mexico, Utah and Wyoming (EIA 2001)
The San Juan Basin in Northern New Mexico and Southern Colorado has contributed the most to CBM production and is the most extensively developed basin in the region. Exploration and development began in the late 1980s and quickly grew throughout the 1990s. Production is nearing its peak in the basin, but companies are trying to maintain recovery with new production enhancement methods and reduced well spacing.
The Powder River Basin in eastern Wyoming and southeastern Montana is currently the fastest growing
basin for CBM development. In 1997 there were 360 wells producing 54 million cubic feet (MMcf) of gas/day, by the end of 2002, 935 MMcf/day was being produced from 10,991 wells. During the past 12 months an additional 5400 Applications for Permit to
Drill (APDs) have been submitted (http://wdogcc.state.wy.us April 2003). Significant CBM resources in the Rocky Mountains have also been identified in the Raton Basin in central Colorado, the Piceance Basin in northwestern Colorado, the Unita Basin in Eastern Utah, Kaiparowits Plateau Basin in Southern Utah, Hanna-Carbon Basin in south-central Wyoming and the Greater Green River Basin in southwestern Wyoming.
It has been estimated that the Rocky Mountain basins contain as much as 595 Trillion cubic feet (Tcf) of CBM, (GT1 2000). The technically recoverable amount
CBM Wellbore Diagram--Open-hole Completion
Example from Powder River Basin may currentlycurrently be less than one quarter of that volume, but with improved methods and enhanced recovery techniques CBM in the Rocky Mountains will remain an important source of natural gas.
CBM production continues to advance across North America as operators develop new techniques for drilling and producing coal seams of different rank and quality. It is anticipated that production will only increase as the demand for natural gas continues to increase.
HOW IS CBM PRODUCED?
CBM wells are completed in several ways, depending upon the type of coal in the basin and fluid content. Each type of coal (sub-bituminous to bituminous) offers production options that are different due to the inherent natural fracturing and competency of the coal seams. The sub-bituminous coals are softer and less competent than the higher rank low-volatile bituminous coals, and therefore are typically completed and produced using more conventional vertical well bores. The more competent higher rank coals lend themselves to completions using horizontal as well as vertical well bores.
