Overview of the industry
Coal Bed Methane (CBM) is methane gas that is trapped in a coal body. The gas trapped in the coal seams is thought to be of biogenic origin, (from bacteria generating gas), and has created tremendous supplies of methane gas within the coals over time. It’s estimated that Wyoming’s Powder River Basin (WPRB) contains approximately 25 TCF (Trillion Cubic Feet) of recoverable methane gas. As of October 2005 only 876 Million MCF (MMCF) had been produced, less than 10 percent of the total estimated reserves, leaving huge reserves of recoverable CBM still in place. The coal bed methane play in the Powder River Coal Field is currently the most active gas play in the United States. Future production in the Powder River Coal Field is expected to increase even more. Recent completion of several new pipelines has added nearly a billion cubic feet per day of new capacity out of the basin.
The Powder River Basin is an asymmetrical structure and sedimentary basin bounded by the Bighorn and Black Hills uplift and the Casper Arch. The Paleocene Fort Union formation crops out along the basin margin and is overlain by the Eocene Wasatch formation in the central and western part of the basin. The Wasatch and Fort Union formations contain numerous coal beds, some of which approach 250 feet in total thickness. The Fort Union formation is divided, in ascending stratigraphic order, into the Tullock, Lebo, and Tongue River members, with the majority of coal and CBM production being produced from the Tongue River member.
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The majority of Powder River Basin CBM reserves are found in the Fort Union formation. Extensive drilling in the Fort Union formation (over 25,000 drilled well bores) has provided supporting data indicating that this formation contains numerous coal beds which are generally continuous, extremely permeable and are relatively shallow (less than 1,000 feet deep) and low in rank (geologic maturity) compared to other coals in the Rocky Mountains. This information significantly reduces our dry hole risk.
Water Production and Management
Water production and disposal is a key issue in CBM development. CBM-produced water in Wyoming and Montana must have a beneficial use, which is generally defined as using the water for agricultural, irrigation, commercial, domestic, industrial, municipal, mining, hydropower production, recreational, stock watering and fisheries, wildlife and wetlands maintenance purposes or dust suppression. Currently, the management of CBM-produced water depends on the quality of the produced water. The water produced in CBM operations can vary from very high quality (meeting state and federal drinking standards) to very low quality (having a very high concentration of dissolved solids, making it unsuitable for reuse). Testing of the produced water determines the disposal method.
Produced water is handled by utilizing one or several of the following regulatory approved methods:
• surface discharge;
• containment in reservoirs;
• irrigation of surface lands;
• injection to shallow sand formations, or deep injection into sand/water formations;
• enhanced evaporation systems;
• treatment through ion exchange or reverse osmosis; and/or