Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 15, 1990 TAG: 9004140010
SECTION: VIRGINIA PAGE: A9 EDITION: METRO
SOURCE: The Washington Post
DATELINE: OAK GROVE, ALA. LENGTH: Long
Here they think of it as an asset. The same may happen in Southwest Virginia.
All across Alabama's Black Warrior basin, and in vast regions of the West, a new energy industry has sprung up in the past five years: collecting and selling methane from coal fields. Industry experts predict a similar burst of development this year in Southwest Virginia. Major energy companies are investing hundreds of millions of dollars to build a production and distribution network for a gas that in the past literally has been blown away.
About 95 trillion cubic feet of coal-bed methane is "economically recoverable with current technology," according to a study by the Colorado School of Mines. Industry estimates put the total resource at more than 400 trillion cubic feet - enough to supply the entire country for more than 20 years at the current consumption rate, 19 trillion cubic feet a year.
Methane is virtually identical to the natural gas produced at conventional wells. Once gathered and compressed, it can be sent into any commercial gas pipeline. But only recently have technology and economics combined to make it commercially marketable. The economics includes a federal tax credit - due to expire at the end of this year - that the industry, supported by coal-state senators and the Environmental Protection Agency, is lobbying hard to extend.
"From EPA's perspective, this is a win-win situation," said Dina Kruger, a methane specialist in the Global Climate Change division. "The coal companies make money and we protect the environment" by capturing and selling methane - believed to be a significant contributor to "greenhouse" planetary warming - that would otherwise be expelled into the atmosphere by mine ventilators.
In Virginia, development was held up by a state law that made it unclear who owned the gas, according to John Randolph, director of the Center for Coal and Energy Research at Virginia Tech. A bill passed by the legislature this year and signed last month by Gov. Douglas Wilder cleared up some of the legal questions and opened the way for a rush of drilling, he said.
"In Virginia there are real gassy seams," Randolph said. "Many feel the biggest potential is in Buchanan County, on Island Creek Coal Co. property. They would like to get in 125 wells by the end of the year, but they have a lot to do before they can achieve that."
"Ten years ago nobody cared about coal-seam methane," said Richard A. McBane, technology project manager for the industry's Gas Research Institute. "But we had a workshop on it out in Denver a couple of weeks ago and over 400 people signed up. We had oil companies, gas companies, academics, even people from Japan and China."
Here in Alabama's Black Warrior Basin, methane production is much more than an abstraction discussed at workshops. Amoco Corp. alone is investing $90 million in a network of wells, pipes and compressors that covers thousands of rugged, deep pine acres in Jefferson County. A few miles southwest, near Tuscaloosa, the Black Warrior Methane Corp. subsidiary Jim Walter Resources Inc. is drilling 25 to 50 wells a year to bring the methane up from its subterranean coal mines, according to president Jerry Sanders.
"As you mine coal, you liberate methane, and it has to be handled" before workers can enter, Sanders said. "The primary method is dilution with fresh air. That's an expensive process. You have these 14,000-horsepower electric motors for the ventilators - you can imagine the power costs. We were spending more than half a million dollars a month just for ventilation." The gas that comes up through vertical wells, he said, "is pipeline quality, so we're able to sell it" to a natural-gas pipeline company that has a line nearby.
Gathering vented gas from underground mines, however, is still relatively rare, according to the National Coal Association. More typical is the Amoco operation here, which is drilling into coal seams for the gas, but not producing any coal. The coal lies relatively close to the surface and would be strip-mined if the field were active. In a field such as this, the production company is drawing gas for the money, not for reasons of safety or the environment. The gas would remain below ground if Amoco were not extracting it.
"This is relatively inexpensive drilling because the wells are much shallower than conventional gas wells," said production supervisor Bob Raper. "We go down 1,200 to 2,500 feet. A gas well in Texas might go down 20,000 feet." Once the wells are operating and "you get it all hooked up" to a compressor and commercial pipeline, he said, "it's a relatively simple gas field to manage."
But development of a methane field such as this still requires a major investment.
"We've put in 100 miles of road and nearly 200 miles of pipe" to develop a 160-well field, Raper said. Output of each well is monitored by a little solar-powered computer that feeds data to his office. Only a big company such as Amoco can afford such an investment, he said, because the wells, once drilled, may take as much as six months to start producing marketable gas.
by CNB