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Jumpstarting coalbed methane Test coalbed methane well planned at Chignik this year; in addition to gas, DGGS, USGS looking at small-scale GTL plants to provide rural energy Kristen Nelson PNA Editor-in-Chief
State and federal agencies have been trying to jumpstart coalbed methane as a source of local energy in rural Alaska and plan to drill a well near Chignik Lake on the Alaska Peninsula this summer to test coals for gas content.
But long-term possibilities for rural energy are not necessarily limited to methane, Charlie Barker, a senior research geologist with the U.S. Geological Survey and Jim Clough, a geologist with the Alaska Department of Natural Resources’ Division of Geological and Geophysical Surveys, told PNA May 21.
Gas-to-liquids technology, converting natural gas into clean diesel, has been proposed for large stranded gas accumulations such as that on Alaska’s North Slope.
Large-scale GTL is, with very limited exceptions, still in the technology development stage. BP’s pilot GTL plant at Nikiski, for example, will produce 70 barrels of diesel a day.
That pilot is a test for technologies that could be scaled up.
But what about scaling down and putting something much smaller in Alaska villages?
“There are now plans to take 200,000 cubic feet of gas per day and convert it to 10 barrels of diesel, which is 420 gallons, more or less, of diesel,” Barker said. Solves gas storage problem It isn’t a technology that can be bought off the shelf, but if it became available commercially it would provide diesel in areas that now have to ship it in — and solve a technical natural gas production problem.
With a GTL plant running year round, using existing diesel storage facilities, “you’re able to get over the problem we’ve always had: there’s no natural gas storage and so you’d have to have a lot of wells to assure production in mid-winter,” Barker said.
Clough said Fort Yukon, with about 700 people, uses roughly 500,000 gallons of diesel a year, about half for electricity and about half for home heating.
“And in Btu equivalent that translates to 34.5 million cubic feet of gas per year. And that comes out to, rounding the numbers, about 94,000 cubic feet per day.
“That’s really low volume,” Clough said.
Because of cold ground temperatures and some moisture in the gas, you would have freezing problems in the pipeline.
With a small-scale GTL plant, you not only have the advantage of the diesel produced, but the volume of gas needed to provide feedstock for the plant would help keep the gas flowing, he said. Economics crucial What would it all need to cost?
Fort Yukon contracts for the 500,000 gallons of diesel it uses at about a dollar a gallon, Barker said, so the goal is to reduce that half a million dollar a year cost. The life of a coalbed methane well is about 15 years, “so if we’re looking at a productive life of 15 years to displace half a million dollars per year for fuel, that gives you an operating budget of about $7-$8 million.”
Replacing existing diesel purchases, “gives you the outer dimensions of what everything could cost and be reasonable, economically reasonable. That’s the whole key to this,” Barker said, “keeping the costs down.”
GTL could also extend the local market, he said, because if gas production and the GTL plants were in larger rural communities like Fort Yukon, the diesel could be provided to smaller villages in the area.
There would also be jobs in the community for local people.
“Instead of exporting a net export of half a million dollars per year to pay for the diesel,” Barker said, “you’re keeping it locally. And so you’re going to have that leverage effect in terms of jobs.”
Between rural experience with diesel engines and local electric plants, and workers trained for the North Slope oil fields, there is applicable experience available locally, he said. First core test in 1994 But before you can turn coalbed methane into diesel, or even use it for local power, you have to develop the gas — and that’s the immediate focus.
DNR’s DGGS, the USGS and the U.S. Bureau of Land Management are part of a long-term coalbed methane development project which saw a state test well drilled and cored in 1994 in the Matanuska-Susitna Borough by a USGS rig in the state to drill a climate test at Fort Yukon and seismic shot at Fort Yukon after DGGS cut a cooperative research agreement with the Kansas Geological Survey in 2000 for a shallow seismic study to evaluate the extent and thickness of coal beneath the community.
Fort Yukon, Chignik and Wainwright are the rural areas identified for coalbed methane test drilling.
The current project, a test well at Chignik Lake (see map) is possible because a Native health consortium water drilling rig is in the area to drill a water well and because the Bristol Bay Native Corp. has shared well log data from 1970s test holes. Coal long known in Chignik area The goal of the project is alternative energy sources, Barker said, and while “a lot of villages … have coal, only a few have it in the right position relative to the village to use it easily.”
The local village of Chignik Lake is “strongly behind this project,” he said, “because they would like to be able to have locally produced energy” and the coal is close enough to the village that a pipeline could be economic.
Coal was mined at Chignik in the early 1900s for steamship use, and early records show that the coal was gassy, Clough said.
The Bristol Bay Native Corp. is also behind the project, and has shared confidential logs from wells drilled in the area in the 1970s by a mining company evaluating the area as a coal mine, Barker said. “They found very spotty coal occurrences,” but because of the data from the 1970s drilling, he said, “we know exactly where to drill and hit the coal and at what depth because they have the logs from those wells.” Coal visible at the river Coal beds in the Chignik area are discontinuous, Barker said.
“But fortunately this one pod of coal cuts across the Chignik River, which is just below the village of Chignik Lake … and that’s where we’re planning to drill.”
The outcrop at the river has bands of volcanic ash and relatively pure coal bands and also shales, he said: “But overall this is a 15-foot thick coalbed.”
The beds dip probably 20 degrees to the east in the outcrop.
“And that forms our prospect. So we’re trying to pick this coal up down and river and drill it at about 500-feet depth,” Barker said, so it can be tested for gas content.
In addition to the early records indicating gassy coal, tests from another coal in the area indicate that, “at the depth we’re going to be drilling, we’re going to be looking at coals that are capable of holding about 200-300 standard cubic feet per ton of gas, methane, which is comparable to several producing basins in the Lower 48,” he said.
Rig makes project possible Data on the well is one thing that makes testing Chignik coal this year possible.
The other is the presence of a water drilling rig capable of going to 500 or 600 feet.
The rig belongs to the Alaska Native Tribal Health Consortium, Clough said, and is used to drill water wells in the area. The rig is barged back and forth, he said, to drill in Perryville, Chignik Lagoon, Chignik Lake, and will go elsewhere when they finish this project.
Clough said he and Barker and Art Clark of the USGS spotted the water well rig when they were at Chignik Bay looking at coal. Clough got in touch with the health consortium and there were plans to use the rig two and a half or three years ago, but then it broke down.
“So they refurbished the whole thing and they’re ready to go again,” Clough said.
The state is able to transfer some monies to the village safe water program so that the rig can be used to drill the coal test.
Clough said he also looked at getting a mineral rig out to Chignik, but the transportation costs were just too high and “ideally we would want to helicopter lift a rig right onto one of the better spots.”
The better spots are actually off the road system at Chignik, Barker said, but the access problems and the fact that the water drilling rig is not portable by helicopter limits drilling to the road system. USGS special equipment The USGS, Barker said, will supply the core barrel and the core desorption canister equipment. “And then we take if from there and do further coal analyses to measure ash content and the gas consumption,” he said.
They’ll be drilling carefully. “When we get close to where we think the coal is, we’ll drill maybe one or two feet and then circulate until we get coal cuttings up and then we’ll pull out, put the core barrel on and go down and core that coal and bring that up.
“Then you break up the coal core into one-foot pieces and put then in … core canisters.” Project economics Taking advantage of the rig on site saves mobilization fees on the order of $20,000 to $40,000, and allows the rig to be drilled “sort of on a shoestring,” Barker said.
Clough estimated that drilling the Chignik well would probably be in the range of $75,000, compared to a cost of about $150,000 to drill at Chignik with a mineral rig that had to be brought in.
Drilling costs will be significant in making coalbed methane economic to develop as a rural energy source.
While the water well rig at Chignik provides an opportunity to test coal for gas content, this project really needs a better rig, one that can be transported by air, and, Clough said, money to get a drill rig to the other prospects — Fort Yukon and Wainwright.
A slim hole mineral rig would be ideal. It is inexpensive and lightweight and can drill several thousand feet with minimal surface disturbance, Barker said: “We observed it operating at the Red Dog mine where it’s evaluating the shale prospect.”
It would be less expensive to transport and far less expensive to operate, he said, and would reduce the cost of a well from on the order of a million dollars per well to a few hundred thousand dollars. What’s next? The casing for the USGS well at Fort Yukon is still in place, Barker said, “and we want to re-enter that well with one of these light-weight slim-hole rigs that we Herc up on a regular shipping run into Fort Yukon.”
They’d drill back down to the lignite the USGS rig encountered and get it into canisters so the gas content can be measured.
“When they drilled it before, they had no canisters, unfortunately, and so they weren’t able to measure the gas content,” Barker said.
Other tests, he said, suggest the coal at Fort Yukon would have a capacity of about 100 standard cubic feet per tons, good capacity for a lignite coal, compared to developed Powder River coals, which average about 50 standard cubic feet per ton.
But, Barker said, “Wainright’s the jewel of the coalbed methane game.”
Because of wells drilled there by the navy, 100 feet plus of coal is known in the Wainwright area. And the coals are known to be gassy because there were gas kicks on the mud logs.
“We think we can drill the entire coal-bearing section of the Nanushuk (formation) within 2,000 feet below Wainwright, which is the ideal coalbed methane range,” Barker said.
“And we’re going to hit a thick net coal section underneath the village.”
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