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CBM stumbles in Alberta Government sets new standards to protect water; rural landowners unhappy Gary Park For Petroleum News
Just as coalbed methane activity is emerging as the “next big thing” in Alberta, opposition and obstacles are surfacing.
Faced with warnings that the province is rapidly heading for a crippling shortage of water, the provincial government and rural landowners are taking steps to prevent coalbed methane drilling from polluting water wells.
Environment Minister Guy Boutilier, pledging to do everything he can to protect water supplies, has set some new standards for coalbed methane drillers starting May 1.
Companies wanting to drill above the base of groundwater will be required to test any active water well within 600 meters of the site.
The test will measure the well’s production and quality and whether there is any gas in the well.
Farmers vs. EnCana Meanwhile, farmers are locking horns with EnCana, as the big independent pushes ahead with plans to spend C$4.5 billion over five years on 7,500 coalbed methane wells in hopes of unlocking 2 trillion cubic feet of gas.
They went head-to-head with EnCana during the first coalbed methane public hearing conducted by the Alberta Energy and Utilities Board, disputing the company’s plans to drill 15 wells. A ruling is expected this summer.
Although they do not have conclusive proof, the farmers say there have been reports of water wells going dry or producing black water after coalbed methane drilling.
EnCana Vice President Pat Welsh assured the hearing his company was “serious about protecting groundwater.”
He said hydraulic fracturing is only permitted at 200 meters, far below the typical depth of water wells.
EnCana has promised, as part of an agreement with landowners, to test all wells within 400 meters, as well as 11 wells outside the contested area.
Boutilier’s department is investigating about 20 complaints but has yet to establish a direct link between CBM drilling and contaminated water.
Increased drilling expected The urgency of finding answers is contained in a research report by FirstEnergy Capital that projects an increase in coalbed methane wells to 3,600 this year and 4,700 in 2007 from about 3,000 last year, with EnCana accounting for about 1,000 wells per year, and capital spending predicted to grow from C$1.38 billion in 2005 to C$3.4 billion by 2010.
Coalbed methane volumes were estimated at 300 million cubic feet per day entering 2006 and projected by the energy board to rise from 21 billion cubic feet in all of 2004 to 540 bcf feet in 2014.
Total gas in place estimates put coalbed methane at more than 500 trillion cubic feet in Alberta, compared with remaining conventional gas in place of 101 tcf.
Figuring out how much will actually be recovered is a subject of growing debate, with Bettina Pierre-Gilles, chief economist at Calgary-based Phasis Consulting, forecasting that output from the two primary coalbed methane zones in the province could yield as much as 176 tcf over the next few decades.
But that optimism may face its greatest test in the next five years when drilling programs by Apache, MGV Energy, ConocoPhillips, EnCana, CDX Canada, Trident Exploration and others could tally C$9.1 billion provided the regulations and public concerns don’t undermine the industry ambitions.
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