Solid growth predicted for Alberta CBM

Canada’s anchor coalbed methane play in the Horseshoe Canyon formation, which sprawls over southeastern Alberta, has an estimated 30 trillion cubic feet of developable gas resource, according to a new study by the Canadian Energy Research Institute.

The findings include a judgment by the study’s steering committee that only gas concentrations of greater than 500 million cubic feet per section (640 acres) would be rated as economically developable under current conditions.

As a result the “developable” Horseshoe Canyon trend was shrunk by more than half to 14,500 sections, or 9.28 million acres.

Coalbed methane production in Alberta was estimated at 500 million cubic feet per day in September, coming almost exclusively from Horseshoe Canyon.

The institute report said that although future volumes are difficult to calculate because many coalbed methane wells commingle with other shallow gas zones, growth has been “great and is expected to continue over the next 20 years.”

Production of 1.4 bcf-1.9 bcf per day predicted

The study projects capital spending in Horseshoe Canyon will run to C$9 billion from 2006 to 2026, yielding production revenue of C$80 billion-$106 billion.

Over 58 years from 2006, development of the region is expected to contribute up to C$123 billion (in 2004 dollars) to Alberta’s gross domestic product and another C$7 billion-$12 billion to GDP outside Alberta.

The Mannville formation is viewed as easily the largest coalbed methane resource in Alberta at about 260 tcf, but the deeper coals are posing challenges that are slowing development.

Talisman Energy Chief Executive Officer Jim Buckee said earlier in November that his company is cutting planned spending in the Mannville formation because the chances of unlocking major resources are “pretty low.”

—Gary Park