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Canadian Coalbed Methane Frontier

By SUSAN R. EATON
EXPLORER Correspondent

Tools of the Trade

 

Western Canadian Sedimentary Basin (WCSB)

Site photos

Stacked Coal Seams Previously Overlooked

Coalbed Gas Frontier Being Tapped

It is truly a great North American coalbed methane frontier.

Alberta’s Western Canadian Sedimentary Basin (WCSB) is underlain by numerous, stacked coal seams permeated with methane, and contains twice the amount of gas in place than all of the CBM basins in the continental United States combined.

In 2005, the Canadian Gas Potential Committee estimated that coalbed methane resources for the WCSB and several small, isolated sedimentary basins in British Columbia represented a staggering 528 trillion cubic feet of original gas in place, with marketable volumes of between 11-45 trillion cubic feet.

Lessons from a 25-year history of CBM exploration and production in the United States are being adapted by Canada’s nascent unconventional gas industry, creating a made-in-Canada technological road map for the WCSB to extract CBM riches.

Horseshoe Innovations

At AAPG’s recent international conference in Perth, Australia, AAPG member Paul Gagnon presented a paper titled “Latest Learnings from the World’s Largest ‘Dry’ Coalbed Methane Play: Horseshoe Canyon Coal and Rock Package, Southern Alberta.”

“Canadians have been a very quick study on what their American counterparts have been doing in this unconventional play -- not only in employing but improving the technologies,” said lead author Gagnon, an American geologist who splits his time between Denver and Calgary, Canada.

Canadian E&P firms and service companies have tackled the CBM challenge, he said, by pioneering innovative nitrogen hydraulic fracturing processes and constructing special-purpose-built drilling rigs and coil tubing units.

In an industry where each geological basin experiences its own unique R&D learning curve -- and in an industry that’s secretive about technological developments -- Gagnon and his Canadian co-authors from Western Gas Resources Canada Co. and BOE Solutions described how they’ve developed an E&P tool kit for the Horseshoe Canyon Formation, successfully integrating geological and engineering practices to unlock the unconventional play.

They assert that their learnings from the WCSB can be applied globally in the exploration for analogous coals.

Gagnon views the Horseshoe Canyon as a coal and rock package comprised of stacked tight gas sands, shales, silts and coals. The rock package contains between five to 30 coal seams, distributed throughout the 600- to 1,300-foot-thick stratigraphic section. The coal seams are generally discontinuous, making geological correlations across the basin challenging.

He believes that the adjacent sands and shales also contribute to overall natural gas production from wellbores.

“Here’s an area very much like the Powder River Basin,” he said. “Folks have drilled through the Horseshoe Canyon for decades, and everyone missed its potential.

“Technical innovation has altered perception,” he continued.

“A number of unconventional reservoirs are coming out of this very mature basin, and the Horseshoe Canyon is one of them.”

Facts and Figures

Canada’s CBM industry is not even a decade old -- the first experimental wells were drilled during the late 1990s.

On Dec. 31, 2005, the Alberta Energy and Utilities Board reported:

• There were 7,764 CBM wells in Alberta.
• In 2005 alone, 54 percent (or 4,189) of the province’s total CBM wells were drilled -- this count includes both new drills and previously drilled conventional wells that were recompleted in coals.
• At Dec. 31, the total cumulative gas production from coals was 74 billion cubic feet.

More than 95 percent of Alberta’s CBM wells have been completed in the Late Cretaceous, dry Horseshoe Canyon and Belly River coals. Wells targeting the stacked Horseshoe Canyon and underlying Belly River coals are drilled vertically to depths between 300 to 2,400 feet.

CBM production from Alberta’s Horseshoe Canyon is approaching 500 million cubic feet per day -- and the Canadian Society for Unconventional Gas (CSUG) predicts Horseshoe Canyon production to climb to 700 million cubic feet per day sometime next year. According to CSUG, the Horseshoe Canyon resource is estimated at 66 trillion cubic feet, making it the largest dry CBM play in the world.

To date, just 4 percent of the Alberta’s CBM wells have been completed in Early Cretaceous Mannville coals, ranging in drilling depth from 2,300 to 4,300 feet. The Mannville wells -- several commercial projects have been recently announced -- are drilled horizontally through the coal seams, with horizontal reaches of up to a mile.

Analogous to “conventional” CBM reservoirs in the Lower 49, the Mannville coals produce significant volumes of saline water before flowing natural gas. The saline water is reinjected into deeper geological formations, often taking advantage of nearby dry holes.

CSUG estimates that coals in the Mannville contain a natural gas resource of 300 trillion cubic feet.

The remaining 1 percent of Alberta’s CBM wells has been completed in shallow (2,000-foot drill depth) Late Cretaceous Ardley coals, which produce fresh water. CSUG estimates that the Ardley Coal’s resource potential at 53 trillion cubic feet. Exploration in the Ardley is in its earliest evaluation stage.

Gagnon and his co-authors estimate that CBM production in Western Canada could reach 16 percent of the total Canadian gas production. With 3,000 new wells forecasted annually, the ultimate potential development could include 30,000 wells, yielding a potential of 15 trillion cubic feet of marketable natural gas from a play fairway encompassing about 12,000 square miles.

On average, Horseshoe Canyon wells produce between 100 to 150 thousand cubic feet of natural gas per day. Based upon a well density of four wells per section, Gagnon estimates recoverable reserves of between one to two billion cubic feet per section.

Storm Clouds Forming?

Resource plays like CBM -- with their associated long-life reserves -- have the potential to change the oil and gas industry in Western Canada, offsetting current and projected declines in conventional natural gas production.

Growing resistance from surface landowners, however, combined with escalating costs at public land auctions, increased drilling and completion costs, a four-year low in gas prices and public calls for a moratorium on CBM activity have prompted Canada’s unconventional explorers to inhale deeply.

Indeed, during the past six months many CBM operators have stepped back and are re-evaluating their options ­ -- and cutting back their drilling programs.

“As we move through the pilot E&P phase, we’ve entered into the ‘soft’ technology innovations,” said Gagnon, a volunteer vice president with CSUG.

The Society’s mandate, he explained, is the factual and collaborative exchange of knowledge on unconventional gas amongst government, industry and all public stakeholders.

Rural landowners are focused on two main issues:

• Protecting their shallow aquifers and water wells from damage during drilling and completion operations.
• The environmental footprint from CBM development -- including well density, road access, cumulative impacts and noise emitted from compressors.

A parallel path of hard and soft technology is required to ensure that the CBM industry is widely accepted in Western Canada, Gagnon said.

“The unconventional industry must be proactive in consultation and community involvement.”