In 2012, nearly all coalbed methane wells are being drilled in the Horseshoe Canyon formation between Calgary and Edmonton. Development in these areas is often less costly, in part due to the dry nature of the coals, which results in no water handling costs. Remaining coalbed methane wells drilled are targeting the deeper Mannville coals, located in the central Alberta Plains. The deep coals (over 1,000 metres) tend to produce highly saline formation water, similar to conventional oil and gas wells at this depth. The water disposal impacts the cost of resource production in this area.
The first commercial coalbed methane project was announced in 2002.
As of December 31, 2012, Alberta had 19, 269 coalbed methane well producing connections. In 2012 there were 433 new connections for CBM and CBM hybrid production; all of them in the Horseshoe Canyon play area. Overall, new CBM and CBM hybrid connections decreased by 58 per cent in 2012 compared to 2011.
The production from coalbed methane connections, which includes commingled production from conventional gas formations, decreased 6.7 per cent in 2012 to 791 million cubic feet from 844 million cubic feet in 2011, representing 6.8 per cent of the total Alberta marketable gas production.
No. Fire normally needs free oxygen which is not available at the depths being targeted for coalbed methane development. While lightning or other natural occurrences may ignite exposed coal seams, there is no evidence of coal fires being started either underground or on the surface through coalbed methane production in Alberta.
The Alberta Energy Regulator regulates the production and disposition of saline water; Directive 51 (in Alberta, defined as groundwater having greater than 4,000 milligrams per litre of total dissolved solids). Both Alberta Environment and Sutainable Resource Development and the Alberta Energy Regulator regulate varying aspects of the production of non-saline water (in Alberta, defined as groundwater with less than or equal to 4,000 milligrams per litre of total dissolved solids).
Fracturing, or ‘fracing’, (the opening up of fractures in the formation to make gas flow more freely) a well is done to increase or initiate commercial production and is conducted in a controlled manner. Fracturing is a standard technique to enhance hydrocarbon recovery that has been used in Alberta’s oil and gas industry for many years.
Royalty is the price that the owner of a natural resource (i.e. the Alberta government) charges for the right to develop the resource. On May 27, 2010, the Alberta government unveiled initiatives to accelerate the implementation of new technologies to encourage the development of the province’s vast unconventional gas resources. The Emerging Resources and Technology Initiative includes a maximum five per cent royalty rate for the first 36 producing months with a volume limit of 750 million cubic feet (MMcf) of equivalent gas production for coalbed methane wells as defined by the Energy Resources Conservation Board.
There are a number of authorizations—approvals, licences, dispositions, permits and registrations— required from Energy, The Alberta Energy Regulator (AER), Environment and Sustainable Resource Development for the development of upstream oil and gas activity, including coalbed methane.
In 2003, a multi-stakeholder advisory committee (the MAC) was established to review existing regulations and policies to ensure continued responsible coalbed methane development. The MAC Final Report submitted to the government contained 44 recommendations on water, surface and air impacts, royalties, tenure, industry best practices, and non-specific coalbed methane issues/broad energy topics. A second multi-stakeholder group (the MAC II) issued three annual update reports in 2007, 2008 and 2009.