&EPA
United States
Environmental Protection
Agency
Air and Radiation EPA 430-R-96-005
6202J July 1996
REDUCING METHANE EMISSIONS
FROM COAL MINES IN CHINA: The
Potential for Coalbed Methane
Development
Public Review Draft
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Reducing Methane Emissions From Coal Mines in China:
The Potential for Coalbed Methane Development
Public Review Draft
JULY 1996
ATMOSPHERIC POLLUTION PREVENTION DIVISION
U.S. ENVIRONMENTAL PROTECTION AGENCY
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Disclaimer
This document has been reviewed in accordance with the U.S. Environmental Protection
Agency's and the Office of Management and Budget's peer and administrative review policies
and approved for publication. Mention of trade names or commercial products does not
constitute endorsement or recommendation.
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ACKNOWLEDGMENTS
The U.S. EPA acknowledges Raven Ridge Resources, Incorporated, the Coalbed Methane
Clearinghouse at the China Ministry of Coal Industry, and the Research Division at the China
Coal Information Institute for authoring this report. The U.S. EPA also acknowledges members
of the Fushun Branch of the Central Coal Mining Research Institute for their important
contributions to the report.
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TABLE OF CONTENTS
Acknowledgments i
List of Figures vi
List of Tables vii
List of Boxes vii
Abbreviations and Acronyms viii
CHAPTER 1 - COALBED METHANE IN THE ENERGY ECONOMY OF CHINA
1.1 INTRODUCTION 1-1
1.2 THE ENERGY SECTOR IN CHINA 1-2
1.2.1 OVERVIEW 1-2
1.2.1.1 Economic Growth 1-2
1.2.1.2 Energy Production and Consumption 1-3
1.2.1.3 Sectoral Energy Consumption in China 1-5
1.2.2 PRIMARY ENERGY SOURCES OF CHINA 1-7
1.2.2.1 Coal 1-7
1.2.2.2 Oil 1-11
1.2.2.3 Conventional Natural Gas 1-14
1.2.2.4 Hydroelectric Power 1-15
1.2.2.5 Other Energy Sources 1-17
1.2.3 CHINA'S CURRENT ENERGY STRATEGY 1-17
1.2.4 GOVERNMENT ORGANIZATION OF CHINA'S ENERGY SECTOR 1-20
1.3 THE ROLE OF COALBED METHANE 1-22
1.3.1 HISTORICAL PRODUCTION WORLDWIDE 1-23
1.3.2 COALBED METHANE RESOURCES AND POTENTIAL FOR DEVELOPMENT 1-26
1.3.3 CHINA UNITED COALBED METHANE COMPANY, LTD. AND ORGANIZATION
OF THE COALBED METHANE SECTOR 1-28
1.3.4 MULTIPLE BENEFITS: ENVIRONMENT, ENERGY, SAFETY 1-29
1.3.5 FOREIGN INVESTMENT IN CHINA: IMPLICATIONS FOR COALBED
METHANE PROJECTS 1-31
1.3.6 SOURCES OF ADDITIONAL INFORMATION 1-31
CHAPTER 2 - COALBED METHANE RESOURCES OF CHINA 2-1
2.1 INTRODUCTION 2-1
2.2 TECTONIC FRAMEWORK OF CHINA'S COAL BASINS 2-1
2.3 COAL RESOURCES 2-6
2.3.1 INTRODUCTION 2-6
2.3.2 NORTHEAST REGION 2-11
2.3.3 NORTH REGION 2-13
2.3.4 SOUTH REGION 2-15
2.3.5 NORTHWEST REGION 2-17
2.4 COALBED METHANE RESOURCE AND EMISSIONS ESTIMATES 2-17
2.5 OVERVIEW OF FACTORS AFFECTING RESOURCE RECOVERABILITY IN CHINA 2-20
CHAPTER 3 - POTENTIAL FOR INCREASING COALBED METHANE RECOVERY AND USE
IN CHINA 3-1
3.1 INTRODUCTION 3-1
3.2 METHANE ACCIDENTS IN CHINA'S COAL MINES 3-2
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TABLE OF CONTENTS (CONTINUED)
3.3 COALBED METHANE RECOVERY 3-2
3.3.1 TRENDS IN METHANE DRAINAGE IN CHINA 3-2
3.3.2 METHANE DRAINAGE METHODS 3-4
3.3.3 OPTIONS FOR INCREASED RECOVERY 3-10
3.4 COALBED METHANE USE 3-12
3.4.1 DIRECT INDUSTRIAL AND RESIDENTIAL USE OPTIONS 3-13
3.4.2 NATURAL GAS PIPELINE SYSTEMS 3-14
3.4.3 POWER GENERATION OPTIONS 3-14
3.4.4 VENTILATION AIR USE OPTIONS 3-17
3.4.5 IMPROVING GAS QUALITY 3-18
3.4.6 GAS STORAGE 3-20
3.4.7 NATURAL GAS VEHICLES 3-21
3.5 CHINESE ACHIEVEMENTS IN COALBED METHANE RECOVERY AND USE 3-23
CHAPTER 4 - PROFILES: SELECTED REGIONS WITH STRONG COALBED METHANE
POTENTIAL 4-1
4.1 INTRODUCTION 4-1
4.1.1 SELECTION CRITERIA FOR PROFILES 4-1
4.1.2 CMA PROFILES USER'S GUIDE 4-2
4.2 FUSHUN CMA 4-3
4.2.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-3
4.2.2 METHANE LIBERATION, VENTILATION, RECOVERY AND RESERVES 4-4
4.2.3 PRESENT AND PLANNED USE OF MINE METHANE 4-4
4.3 TIEFA CMA 4-5
4.3.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-5
4.3.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-5
4.3.3 PRESENT AND PLANNED USE OF MINE METHANE 4-7
4.4 HEBI CMA 4-7
4.4.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-7
4.4.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-7
4.4.3 PRESENT AND PLANNED USE OF MINE METHANE 4-8
4.5 JINCHENG CMA 4-8
4.5.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-8
4.5.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-8
4.5.3 PRESENT AND PLANNED USE OF MINE METHANE 4-9
4.6 KAILUAN CMA 4-9
4.6.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-9
4.6.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-9
4.6.3 PRESENT AND PLANNED USE OF MINE METHANE 4-10
4.7 PINGDINGSHAN CMA 4-11
4.7.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-11
4.7.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-11
4.7.3 PRESENT AND PLANNED USE OF MINE METHANE 4-12
4.8 YANGQUAN CMA 4-12
4.8.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-12
4.8.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-12
4.8.3 PRESENT AND PLANNED USE OF MINE METHANE 4-13
in
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TABLE OF CONTENTS (CONTINUED)
4.9 HUAIBEI CMA 4-13
4.9.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-13
4.9.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-13
4.9.3 PRESENT AND PLANNED USE OF MINE METHANE 4-15
4.10 HUAINAN CMA 4-15
4.10.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-15
4.10.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-15
4.10.3 PRESENT AND PLANNED USE OF MINE METHANE 4-15
4.11 SONGZAO CMA 4-16
4.11.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-16
4.11.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-17
4.11.3 PRESENT AND PLANNED USE OF MINE METHANE 4-18
4.12 HEDONG COAL BASIN 4-19
4.12.1 COAL GEOLOGY, RESERVES, AND PRODUCTION 4-19
4.12.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES 4-20
4.12.3 PRESENT AND PLANNED USE OF METHANE 4-20
CHAPTER 5 - SUGGESTED APPLICATIONS OF TECHNOLOGY AND ISSUES
RELATED TO PROJECT DEVELOPMENT 5-1
5.1 CRITERIA FOR SELECTION OF APPROPRIATE TECHNOLOGY 5-1
5.1.1 APPLICATIONS OF TECHNOLOGY SUITABLE FOR GEOLOGIC AND MINING
CONDITIONS IN CHINA 5-1
5.1.2 SUGGESTED APPLICATIONS OF NEWTECHNOLOGY FOR IN-MINE
RECOVERY 5-1
5.1.3 SUGGESTED APPLICATIONS OF NEWTECHNOLOGY FOR RECOVERY
USING SURFACE WELLS 5-2
5.1.4 MARKETS FOR METHANE 5-3
5.2 ISSUES RELATED TO PROJECT DEVELOPMENT 5-3
5.2.1 PROJECT IDENTIFICATION AND DEVELOPMENT THROUGH STRATEGIC
TEAMING 5-3
5.2.2 DISCUSSION OF KEY INVESTMENT, PERMITTING AND TAX ISSUES 5-4
5.2.3 GUIDELINES FOR POTENTIAL JOINT VENTURE PARTNERS 5-6
5.2.4 A HYPOTHETICAL COALBED METHANE PROJECT 5-7
CHAPTER 6 - POLICIES TO ENCOURAGE COALBED METHANE DEVELOPMENT
IN CHINA 6-1
6.1 DISCUSSION OF INTERNATIONAL POLICIES 6-1
6.1.1 INCENTIVES 6-1
6.1.2 LEGAL NEEDS 6-4
6.2 FOREIGN SUPPORT AND INVESTMENT IN CHINA'S COALBED METHANE 6-5
6.2.1 UNITED NATIONS GLOBAL ENVIRONMENT FUNDS (GEF) 6-5
6.2.2 US ENVIRONMENTAL PROTECTION AGENCY (USEPA) 6-6
6.2.3 US DEPARTMENT OF ENERGY (USDOE) 6-6
6.2.4 US INITIATIVE ON JOINT IMPLEMENTATION (USIJI) 6-7
6.3 POLICY OPTIONS FOR CHINA 6-7
6.3.1 REVIEWOF CHINA'S POLICIES ON RECOVERY AND USE OF METHANE 6-7
6.3.2 THE COAL INFORMATION INSTITUTE'S POLICY SUGGESTIONS TO
PROMOTE DEVELOPMENT OF COALBED METHANE IN CHINA 6-10
IV
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TABLE OF CONTENTS (CONTINUED)
CHAPTER 7 - CONCLUSIONS AND RECOMMENDATIONS FOR FURTHER ACTION 7-1
7.1 OVERVIEW 7-1
7.2 FOLLOW -UP TECHNICAL ACTIVITIES 7-1
7.2.1 FEASIBILITY ASSESSMENTS 7-1
7.2.2 TRAINING 7-2
7.3 OUTREACH: THE COALBED METHANE CLEARINGHOUSE 7-3
7.4 DEMONSTRATION PROJECTS 7-4
7.5 INVESTMENT CONSIDERATIONS 7-4
7.6 CONCLUSIONS AND RECOMMENDATIONS BY THE CHINA COALBED
METHANE CLEARINGHOUSE 7-5
REFERENCES CITED REF-1
APPENDIX A: LIST OF CONTACTS A-1
APPENDIX B: EXPLANATION OF CHINESE COAL AND COALBED METHANE RESOURCE
CLASSIFICATION SYSTEMS B-1
APPENDIX C: METHANE EMISSIONS DATA C-1
APPENDIX D: PROVISIONAL REGULATIONS AND RULES FOR MANAGEMENT OF
EXPLORATION AND DEVELOPMENT OF COALBED METHANE D-1
APPENDIX E: FOR MORE INFORMATION E-1
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TABLE OF CONTENTS (CONTINUED)
LIST OF FIGURES
Figure 1. Energy Consumption and Gross Domestic Product, 1980-1993 1-3
Figure 2. Fuel Mix of Selected Countries, 1993 1-4
Figure 3. Energy Demand by Sector, 1992 1-5
Figure 4. Industrial Sector Energy Sources in China, 1992 1-5
Figure 5. Domestic Sector Energy Sources in China, 1992 1-6
Figure 6. Transportation Sector Energy Sources, 1992 1-6
Figure 7. Map of China Showing 1993 Coal Production From Major Coal Producing
Provinces 1-9
Figure 8. Oil and Gas Deposits, Refineries and Petrochemical Complexes 1-13
Figure 9. Existing and Planned Hydroelectric Stations in China 1-16
Figure 10. Organizational Structure of China's Energy Industry 1-21
Figure 11. U.S. Coalbed Methane Production (In Million Cubic Meters) 1-23
Figure 12. Principal Coal-Bearing Basins of the U.S. and Estimates of In-Place Coalbed
Methane Resources 1-25
Figure 13. Tectonic Framework map of China 2-2
Figure 14. China's Coal Basins and Estimated Methane Resources 2-5
Figure 15. Stratigraphic Correlation Chart 2-7
Figure 16. Location of the Four Coal Regions 2-8
Figure 17. Location of Coal Mining Administrations in the Northeast Region 2-12
Figure 18. Location of Coal Mining Administrations in the North Region 2-14
Figure 19. Location of Coal Mining Administrations in the South Region 2-16
Figure 20. Location of Coal Mining Administrations in the Northwest Region 2-18
Figure 21. Increase in Methane Emissions at State-Run Coal Mines 2-19
Figure 22. Location of High-Gas Coal Mining Administrations 2-22
Figure 23. Coalbed Methane Generation Potential and Storage Capacity 2-23
Figure 24. Annual Methane Recovery from CMAs 3-4
Figure 25. Location of Coal Mining Administrations that Recover Methane 3-5
Figure 26. Placement of Boreholes Within Coal Seam in the Xie No. 2 Mine 3-7
Figure 27. Placement of Cross-Measure Boreholes for Methane Recovery 3-7
Figure 28. Impact of Mining on Overlying Strata 3-8
Figure 29. Cross Section of Longwall Roof and Floor Strata 3-8
Figure 30. Borehole Placement for Recovery From Adjacent Seams 3-9
Figure 31. Borehole Placement for Recovery From Gob Areas 3-9
Figure 32. Location of Coalbed Methane Projects in China 3-24
Figure 33. Plan View of Borehole Placement for Methane Recovery From Gob Areas 4-6
Figure 34. Borehole Placement for Recovery From Adjacent Seams 4-10
Figure 35. Methane Drained and Vented 1981 -1990 (Songzao CMA) 4-17
Figure 36. Effect of Increasing Competition on Natural Gas Prices 6-2
Figure B-1. Correlation of Chinese, German, and US Coal Classification Systems B-2
VI
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TABLE OF CONTENTS (CONTINUED)
LIST OF TABLES
Table 1. Coal Production and Consumption in China 1-8
Table 2. Crude Oil Production and Consumption in China 1-12
Table 3. Natural Gas Production and Consumption in China 1-15
Table 4. Summary of 1994 U.S. Coalbed Methane Production For Use 1-24
Table 5. Worldwide Coal Production, Estimated Methane Resources, and Estimated
Emissions from Coal Mining (1990) 1-26
Table 6. Summary of Major Coal-Producing Areas of China (1993) 2-9
Table 7. Summary of 1994 Methane Emission Data 2-19
Table 8. Key Data for High-Gas Mines 2-21
Table 9. Gas Explosions and Outburst Fatalities at Key State-Run Coal Mines 3-2
Table 10. Methane Recovery at Coal Mining Administrations 3-3
Table 11. Summary of Options for Reducing Methane Emissions from Coal Mining 3-6
Table 12. Recovery Efficiencies at Chinese Mines 3-7
Table 13. Status of Coalbed Methane Projects in China 3-25
Table 14. Estimated Coalbed Methane Resources Contained in Profiled Areas 4-3
Table 15. Methane Drainage at the Songzao CMA 4-18
Table 16. Coalbed Methane Use at the Songzao CMA 4-19
Table 17. Section 29 Coalbed Methane Production Tax Credit 6-3
Table B-1. Relation Between Coalbed Methane and Coal Resource Classification
Systems in China B-3
Table B-2. Predicted Gas Contents for Coal Seams at Depths >1,000 M B-4
Table C-1. 1992 Methane Emissions from China's Key State-Run Mines, By Province C-1
Table C-2. 1994 Methane Emissions from China's Key State-Run Mines, By Province C-4
Table C-3. 1993 Specific Emissions of Local Mining Areas (High Gas) C-7
Table C-4. High Gas CMAs in China and their Respective Specific Emissions C-8
LIST OF BOXES
Box 1. Summary of Oil and Gas Development in Major Chinese Basins 1-12
Box 2. China's Increased Focus on Coalbed Methane Recovery and Use 3-12
Box 3. Industrial Use of Coalbed Methane in China 3-13
Box 4. Generation of Electrical and Thermal Energy for Mine Use: Ukraine 3-15
Box 5. Cofiring of Methane at the Zofiowka CHP Plant, Poland 3-16
Box 6. Gas Turbine at Fushun CMA, China 3-17
Box 7. Incentives in the U.S. for Increased Use of Natural Gas Vehicles 3-21
Box 8. Methane Recovery From Working Seams at the Laohutai Mine 4-4
Box 9. TheXiaonan Mine: Methane Recoveryfrom Gob Areas 4-6
Box 10. Enhancing Permeability at the Hebi CMA No. 2 Mine 4-7
Box 11. Zhaogzhuang Mine: Recovery From Adjacent Seams 4-10
Box 12. Surface Recovery of Methane at the Taoyuan Mine 4-14
Box 13. Providing Assistance to Foreign Companies: A Clearinghouse Activity 7-3
VII
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ABBREVIATIONS AND ACRONYMS
Weights and Measures: All units are metric system (S.I.)
cm centimeter- = 10"2 meter
GJ gigajoules = 109 Joules
GW gigawatts = billion Watts = 109 Watts
EJ exajoule = 1018 Joules
kg kilogram = 103 grams
kJ kilojoules = 103 Joules
km kilometer = 103 meter
km2 square kilometer
kt kilotons = 103tons
kW kilowatt = 103 Watts
kWh kilowatt hours = 103 Watt hours
m meter
m3 cubic meter
md millidarcies = 10"6Darcies
MJ megajoules = 106 Joules
mm millimeter = 10"3 meter
MPa megapascals = 106 Pascals
Mt megatons = 106 tons
Mtoe million tons oil equivalent = 106 tons oil equivalent
MW megawatts = 106 Watts
MWh megawatt hours = 106 Watt hours
megawatts of electricity
MWhth megawatts of thermal energy
t ton = metric ton = 103 kg
Acronyms
BMP bottom hole pressure
EOT build-operate-transfer
CAAA Clean Air Act Amendments
CBM Coalbed Methane
CCAO Central China Administration of Oilfields
CM China Coal Information Institute
CCMRI Central Coal Mining Research Institute
CMA Coal Mining Administration
CNAGC China National Administration for Coal Geology
CNCC China National Coal Corporation
CNG compressed natural gas
CNOOC China National Offshore Oil Company
CNPGC China National Petroleum and Gas Corporation
DCPU Department of Coal Processing and Utilization
VIII
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Acronyms (Continued)
DRCCU Department of Resource Conservation and Comprehensive
Utilization
EIA Energy Information Administration
EIC Energy Information Center
EIU Economist Intelligence Unit
ERNGC Eastern Regional Natural Gas Center
FYP Five Year Plan
GDP Gross Domestic Product
GEF Global Environment Facility
GRI Gas Research Institute
1C Internal Combustion
IEA International Energy Agency
IPCC International Panel on Climate Change
LMA Local Mining Area
MEPI Ministry of the Electric Power Industry
MGMR Ministry of Geology and Mineral Resources
MOCI Ministry of Coal Industry
MSHA US Mine Safety and Health Administration
NCPBG North China Bureau of Petroleum Geology
NGV natural gas vehicle
PPP purchase power parity
PSA pressure swing adsorption
REI Resource Enterprises, Incorporated
RMB Renminbi (yuan)
UK United Kingdom
UNDP United Nations Development Program
USDOE United States Department of Energy
USEPA United States Environmental Protection Agency
IX
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CHAPTER 1
COALBED METHANE IN THE ENERGY ECONOMY OF CHINA
1.1 INTRODUCTION
The Peoples Republic of China (China) produces and consumes the largest quantity of coal in
the world. In 1992, an estimated 12.5 to 19.4 billion cubic meters (8.4 - 13 teragrams) of
methane were emitted to the atmosphere from coal mining activities in China, contributing one-
third of the world's total from this source (USEPA, 1993). Not only is China the largest coal
producer in the world; it is unique in that underground mines produce over 95 percent of the
nation's coal. Underground mines tend to have higher methane emissions. Coal mines are
located throughout China, with the greatest number of large mines located in the north and
northeast.
Methane is a major greenhouse gas, second in global impact only to carbon dioxide (CO2). It
tends to increase tropospheric ozone and smog formation, and may contribute to stratospheric
ozone depletion. Increasing methane emissions are associated with population growth and
human activities that release methane to the atmosphere. Major human-related sources of
methane include rice cultivation, livestock, biomass burning, coal mining, oil and natural gas
operations, and landfills. It is estimated that coal mining accounts for about 10 percent of the
total human related methane emissions (Kruger, 1993).
The production and consumption of over one billion tons of hard coal annually in China has
serious environmental impacts. The resulting emissions of methane and CO2 are of global
significance. China also suffers from severe local air pollution problems due to intense coal
use, characterized by high levels of SO2, NOX and particulate emissions. In 1993, the total
amount of SO2 emitted was 17.95 million tons, of which coal combustion caused an estimated
90 percent (DRCCU, 1994). Chinese cities, such as Shenyang and Chongqing, have some of
the highest particulate and SO2 concentrations in the world. Acid rain is another serious
environmental problem resulting from the intense coal use.
Coalbed methane, a natural gas, is detrimental to the environment if vented to the
atmosphere, but is a remarkably clean fuel when burned. Natural gas combustion produces
no SO2 or particulates, and only half of the CO2 associated with coal combustion. In many
countries, methane produced by coal mines has historically been vented and become a
wasted resource. China, on the other hand, has one of the longest histories of using coalbed
1-1
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methane recovered from its mines. Recent experience in the US confirms that coalbed
methane represents a low cost energy source and emission reduction opportunity. Methane
can be recovered either before, during, or after coal mining and used as a fuel for power
generation or consumed directly for industrial and residential energy needs.
In addition to its value as an energy source, drainage and use of methane from coal mines
increases mine safety and productivity. Methane released during underground mining is not
only an environmental concern, but also is a serious safety hazard due to the explosive nature
of methane in relatively low concentrations (5-15 percent in air). In the US and other coal-
producing countries, mines install ventilation systems, supplemented in highly gassy mines by
recovery systems to reduce methane concentration in the mines' workways.
Worldwide, several thousand fatalities have been recorded from underground coal mine
explosions, where methane was a contributing factor. As coal mines deplete shallower coal
reserves, there is a shift to mining deeper, gassier coal beds. In general, underground mines
release more methane than surface mines because methane storage capacity increases with
greater depth and pressure. In China, where underground mines produce over 95 percent of
the coal, and half of the largest state-run mines are considered highly gassy or prone to
outburst, mine ventilation and methane drainage is critical for mine safety. Since the 1980's,
China's coal mines have greatly improved their safety record. From 1980 to 1993, mines
reduced the fatality rate from 8.2 to 4.6 people per 1 million tons of coal mined (DRCCU,
1994). The goal of the "Mine Safety Law", implemented in 1992, is to further increase safety in
the coal mines, especially at township and village mines. The Chinese government recognizes
the importance of mine safety, and plans to increase drainage and recovery of coalbed
methane associated with mineable reserves of coal as a major strategy for the industry.
This report focuses on the potential for expanding recovery and use of coalbed methane in
China. It includes a review of China's primary energy sources, current energy strategy, and an
assessment of the potential role of coalbed methane in meeting China's future energy needs.
The report describes the magnitude and location of coalbed methane resources, and analyzes
factors affecting recoverability of resources, use options, and profiles of specific regions with
high potential for coalbed methane development. Finally, the report identifies actions
necessary to encourage development of coalbed methane in China and overcome existing
barriers. It also recommends follow-up technical assistance activities to help ensure efficient
use of this resource.
1.2 THE ENERGY SECTOR IN CHINA
1.2.1 OVERVIEW
1.2.1.1 Economic Growth
China is currently the fastest growing major economy in the world. In 1993, gross domestic
product (GDP) increased 13 percent over the previous year, reaching 3,138 billion Renminbi
(RMB) yuan ($US 545 billion). For nearly every year since 1982, China has averaged an
economic growth rate of over 10 percent. Even when compared to other fast-growing Asian
economies such as Thailand (averaging 7 percent annual increase in GDP) or Indonesia
(averaging 6 percent), China's economic growth rate is truly impressive.
1-2
-------
As incomes grow, however, so does the use of automobiles, appliances and the need for new
power plants. China's energy sector thus suffers significant shortages, because supply has not
kept pace with economic growth. For example, China's continued reliance on coal requires
that by the year 2000, total coal production will increase by 22 percent over current levels to
1.4 billion tons (according to Ministry of Coal Industry projections). Three-fourths of the nation's
electricity is generated from coal, and with electricity demand growing by 3 percent per annum
(IEA, 1994), large increases in coal production will be required to meet electricity demand
alone. These burgeoning energy demands are creating serious air quality problems in China,
whose efforts to control air emissions have been frustrated by its rising use of coal, as well as
automobiles. Concern is also spreading about China's contribution to global warming. Its
heavy reliance on coal—the fossil fuel with the highest carbon content—makes it the second
largest contributor to rising levels of carbon dioxide. It is also the world's largest contributor to
methane emissions from coal mining.
The following subsections examine China's energy production and consumption trends in more
detail. Section 1.2.3 discusses how coalbed methane can help China meet the challenge of
reducing its dependence on coal, without relying heavily on imported fuels.
1.2.1.2 Energy Production and Consumption
China's energy production and
consumption have increased over the
past several years, and because of its
tremendous economic growth, will
likely continue rising. Until the 1960's,
China was still primarily an agriculture-
based economy. The overall growth
rate of the economy, and especially of
industry, increased following reforms
of the late 1970's. Industry, especially
the collective and private sectors,
experienced the fastest growth rate.
Private companies and township and
village enterprises now produce about
half of China's industrial output. Since
the 1970's, China's energy consumption and economic growth have been steadily increasing.
Figure 1 shows growth in energy consumption and GDP from 1980 through 1993.
Figure 2 shows the 1993 fuel mix for China and other selected countries. Of the countries
shown in Figure 2, China is most similar to India in its primary energy consumption; both
countries receive more that half of their energy from coal. India, however, uses slightly larger
percentages of each of the other primary fuels. The developed countries of Japan, Australia,
and the United States, as well as Russia, differ from China in their much larger reliance on oil
and gas, which account for over half of their primary energy demand. The United States and
Russia consume relatively large amounts of oil and natural gas, and relatively small amounts
of nuclear energy and hydroelectricity. Due to insignificant fossil fuel resources, Japan's fuel
mix differs most from China's, with Japan relying heavily on nuclear energy, imported oil, and
hydroelectricity.
FIGURE 1. ENERGY USE AND GDP, 1980-1993
600 "
— 500
c400 "
o
"i300
0_
Q
CD200 j
,y
GDP jr ^Jm^
^^/^^^
— \r~~* Energy Consumption*
I
•Energy data for years 1981-1984 not available
I
Energy Consumption (EJ)
OT-cM«^ioeoi*-coo>OT-cMeo
00 00 00 00 00 00 00 00 00 00 O) O) O) O)
O) O) O) O) O) O) O) O) O) O) O) O) O) O)
1-3
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Figure 2- FUEL MIX OF SELECTED COUNTRIES, 1993
RUSSIA
HARD
COAL
10%
(B
nA.O—' •—^ 9R%
48%
GAS
11%
JAPAIS^
RD
COAL
UCLEAR
13%
57%
II R DOF/FIA
NUCLEAR
1%
HYDI
8%
LIGNITE
2%
AUSTRALIA
.IGNITE
20%
HYDRO
5%
CHINA
GAS
LIGNl
3%
UNITED STATES
LIGNITE 1%
HYDRO 3%
IUCLEAR
8%
1-4
-------
From 1980 to 1993, China's per capita energy consumption increased more than 34 percent
(USDOE/EIA, 1995). Despite this increase, per capita energy consumption in China is still low
(27.8 GJ/person) compared to that of westernized "neighbors" Japan (160.8 GJ/person) and
Australia (224.7 GJ/person). As economic growth and industrialization continue, however, the
amount of energy consumed per capita in China is likely to continue climbing.
1.2.1.3 Sectoral Energy Consumption in China
China's final energy demand in 1993 was
33 exajoules1 (EJ), up from 31 EJ in 1992
(USDOE/EIA, 1995). Figure 3 shows
1992 sectoral end use divided into three
categories: Industry (includes manufac-
turing, mining, and construction);
Domestic (includes residential, agricul-
ture, and commercial enterprises); and
Transportation (includes rail, road, water,
and air). In 1992, the industrial sector
was the largest consumer at 67 percent
of total demand (DRCCU, 1994); the
domestic sector used 27 percent, and the
transportation sector used 6 percent of
the total energy.
FIGURE 3. ENERGY DEMAND BY SECTOR, 1992
INDUSTRY
67%
DOMESTIC 27%
TRANSPORTATION 6%
FIGURE 4. INDUSTRIAL SECTOR ENERGY
SOURCES IN CHINA, 1992
COAL 60%
China is intensely industrialized. As shown in
Figure 4, coal dominates the industrial sector's
fuel mix (60 percent), followed by electricity (27
percent) and oil and gas (13 percent). The
chemical, metallurgical, smelting, and building
materials sub-sectors represent the largest
industrial end-users. These industries are
centered in northern and northeastern China,
near the largest coal mining complexes.
Industry's share of energy consumption is much
larger than that of any other country, including
the former Soviet Union, on which China's
development was modeled. This is related to
the fact that China's energy intensity is three
times the world average.
Projections indicate that the industrial sector's energy demand will fall from its current share of
67 percent to just over 50 percent by 2010 (IEA, 1994). This decline will reflect the small drop
in the share of industry in GDP, as well as the transport sector's increasing share. The
absolute level of industrial energy demand, however, is expected to grow by 3.3 percent
annually through 2010. Given that industrial output is projected to grow by close to 10 percent
annually through 2010, this implies further declines in industrial energy intensity.
IL AND GAS
13%
ELECTRICITY
27%
1 1 EJ = approximately 1 quadrillion (1015) BTUs = 277.7 terawatts
1-5
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In 1991, over 80 percent of China's electricity was generated from thermal, mostly coal-fired,
plants, while 18.3 percent was hydroelectric. At the end of 1992, power generating capacity in
China was 165 GW and included around 40 GW of hydroelectricity, just under 115 GW of
coal, 9 GW of oil and very little gas. The IEA (1994) projects that by 2010, China's power
generating capacity will be 428 GW; of this, thermal plants will account for 294 GW,
hydroelectric plants for 124 GW, and nuclear plants for less than 11 GW.
FIGURE 5. DOMESTIC SECTOR ENERGY
SOURCES IN CHINA, 1992
COAL 75
The domestic sector is the second largest end-
user of energy in China. As with industry, coal
is the dominant fuel consumed (75 percent);
electricity (much of which is generated using
coal) has recently grown in importance to 15
percent, and oil and gas represent 10 percent of
the total (Figure 5). Of the three components of
the domestic sector (commercial, agricultural,
and residential), residential users comprise by far
the largest share, using twice as much energy as
the commercial and agricultural sub-sectors
combined.
While direct use of coal will remain dominant in
this sector, it will decline, replaced by increased
electricity consumption. Projections show that residential and commercial energy demand is
forecast to increase from 10.2 Mtoe in 1991 to 65.7 Mtoe in 2010 (IEA, 1994). This growth
stems from the increase in appliance use and electrification of rural areas. The share of gas in
the residential and commercial sub-sectors could rise significantly, as new government policies
promote increased use of natural gas. The overall trend for these two sub-sectors is reduced
coal use (IEA, 1994).
I LAND GAS
10%
ELECTRICITY
15%
FIGURE 6. TRANSPORTATION SECTOR
ENERGY SOURCES, 1992
ELECTRICITY
7%
COAL 17%
OIL AND
AS 76%
Oil and gas provide 76 percent of the energy
consumed by the transportation sector. Coal
comprises 17 percent, and electricity the
remaining 7 percent (Figure 6). The rail system
consumes approximately one-third of the
transportation sector's total energy, and most of
its coal and electricity. China's steam
locomotives are rapidly being phased out,
replaced by cleaner and more efficient diesel
and electric locomotives (Sinton, 1996).
Based on the growing economy and associated
increase in road travel, number of vehicles, and
truck freight, projections show energy demand in
the transportation sector increasing substantially
over the next decade. The demand for oil in the transportation sector will increase about 7
percent per annum. By the year 2010, the transportation sector will use only oil products and
some electricity, phasing out coal entirely (IEA, 1994).
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1.2.2 PRIMARY ENERGY SOURCES OF CHINA
1.2.2.1 Coal
Since 1985, China has been the largest producer and consumer of coal in the world. Of the
4.4 billion tons of coal produced worldwide in 1993, China accounted for 1.2 billion tons, or
more than 27 percent (USDOE/EIA, 1995). Of the total coal produced in China, more than 95
percent is hard coal, and the remainder is lignite2. Currently, coal accounts for 74 percent of
China's total primary energy production and 73 percent of its total primary energy consumption
(DRCCU, 1994).
As of 1992, demonstrated reserves of coal in China were 986.3 billion tons, of which proven in-
place reserves, as defined by the World Energy Commission, accounted for 30 percent, or
295.9 billion tons (see Appendix B for further explanation of reserve classification systems).
Recoverable reserves were 114.5 billion tons (DRCCU, 1994). Of the economically minable
reserves, about 75 percent are bituminous (40 percent steam coal and 35 percent coking
coal), 12 percent are anthracite, and 13 percent are lignite. Despite the vast reserves,
production has been impacted by the scarcity of adequate modern mining equipment. While
tunneling, extraction, loading, and conveying are over 95 percent mechanized in most Western
countries, the level of mechanization in China, even in the large, modern, state-run mines, is
only about 50 percent (EIU, 1993).
For the past several years, China's coal production has grown steadily, and it reached 1.15
billion tons in 1993 (Table 1). China exports only a relatively small quantity of coal, since coal
production and consumption are approximately equal. In 1993, China exported 19.8 million
tons of coal, or less than 2 percent of the coal produced. Currently, about 75 percent of the
coal is directly burned; only 25 percent is converted to secondary energy. Demand for
electricity generation is growing rapidly, however, and the IEA (1995) predicts that by 2000,
power stations will account for about half of the total coal demand in China.
Rail is the primary means of coal transport in China. Over sixty percent of the coal produced is
transported by rail, and coal uses 40 percent of China's railway system capacity (Yunzhen,
1991). In 1993, only about 18 percent (230 million tons) of raw coal was washed; nearly all
washed coal is used in coking. Therefore 80 percent of the coal is transported with large
amounts of non-coal material, which not only increases the burden on the rail system, but also
may result in inflated coal production values. Major rail projects are currently underway, which
should improve China's coal distribution and export capacity (IEA, 1995).
Over 95 percent of coal production is from underground mines. Many of the large,
underground mines are located mostly in northern and northeastern China. Figure 7 shows
that in 1993, there were seven provinces whose annual production exceeded 50 million tons:
Shanxi (306.6 Mt); Henan (92.8 Mt); Sichuan (79.4 Mt); Heilongjiang (72.3 Mt); Shandong
(68.0 Mt); Inner Mongolia (55.2 Mt); and Liaoning (52.6 Mt). In 1993, there were a total of 16
large mining areas containing state-owned key coal mines that produced over 10 million tons
of coal each.
2 Lignite is a low rank, low quality soft coal, with generally higher moisture content and lower heating
value (4,240-8,800 kJ/kg) than hard coal. It is intermediate in rank between peat and sub-bituminous
("old brown") coal.
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TABLE 1 - COAL PRODUCTION AND CONSUMPTION IN CHINA *
(IN MILLION TONS)
YEAR
1985
1986
1987
1988
1989
1990
1991
1992
1993
PRODUCTION (By Type of Mine)
State-Run
406.3
413.9
420.2
434.5
476.8
N/A
480.6
482.5
458.0
Local
182.8
181.4
181.1
193.9
205.3
N/A
247.8
251.3
204.0
Township
283.2
298.7
326.8
351.5
365.3
N/A
355.9
380.7
**482.8
TOTAL
872.3
894.0
928.1
979.9
1047.0
1080.0
1084.3
1114.5
**1 149.7
CONSUMPTION
816.0
860.1
928.0
993.5
1031.4
1038.5
1092.0
1092.4
1140.0
* Includes both hard coal and lignite; hard coal accounts for about 95% of total
** 1993 data includes 52.93 Mt of coal that was mined from privately owned small
mines, a category that was not included in previous years
Source: China Coal Industry Yearbook, 1993; USDOE/EIA, 1994; DRCCU, 1994
The remaining 5 percent of coal production is from surface mines. Modern, large-scale open
pit mining methods were introduced to China in the 1980's. The proportion of coal produced
by surface mines is not expected to increase significantly in the future, however, because only
7 percent of China's total coal reserves are suitable for open pit mining.
In 1993, China consumed 1.14 billion tons of coal; of this, approximately 1.10 billion tons were
hard coal and the remaining 40 million tons were lignite. Approximately 32 percent of the total
coal consumed was used for power generation. The outlook for coal consumption in China is
continued growth, approximately 3 percent per year between 1994 and 2010 (IEA, 1994).
Much of the growth will be in the electricity generation sector. Coal will also continue to be
important in the residential sector, replacing traditional rural (biomass) fuels. Constraints to
growth include the existing transportation and distribution networks, which need to be
modernized and expanded to meet current and future demand.
China's overall dependence on coal has actually decreased over the past decades. In the
1950's, 96 percent of China's total energy output was from coal. During the 1960's, this
percent fell to 89 percent, and has stabilized over the past several years at around 75 percent.
However, a steady increase in coal production is expected to continue, with an annual average
increase of 5 percent from 1985 to present. As shown in Table 1, China's coal production has
grown steadily since 1985, with over 1.1 billion tons produced in 1993. The Chinese
government has set 1.4 billion tons of coal as a production target for year 2000.
1-8
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O5138O11
1-9
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Coal Industry Organization
The coal industry of China has recently undergone major reform and restructuring. Prior to
1993, the China National Coal Corporation (CNCC), a company under the Ministry of Energy,
administered the industry in China. Later, several other regional coal companies controlled the
state-run mines in northern and northeastern China. The China National Local Mine
Development Corporation managed China's thousands of small local and provincial mines; its
primary function was enforcing government safety regulations (JP International, 1990).
In March 1993, the Chinese government established the Ministry of Coal Industry (MOCI) with
the intent of restructuring the coal industry. According to the China Coal Industry Yearbook
(1993), the MOCI's main functions are to develop policies for the coal industry related to:
• increasing use of coal resources;
• conducting coal industry science and technological research;
• optimizing production; and
• creating more diversity in coal markets and economic systems to make the industry
more efficient.
The establishment of the MOCI will encourage efficient and cost-effective use of China's coal
resources, and may help eliminate existing barriers to increase coalbed methane development.
Sections 1.2.4 and 1.3.3 of this report discuss the organization of China's energy and coalbed
methane sectors, respectively.
China has three principal types of coal mines, as shown in Table 1: State-run (central
government); Locally-controlled; and Township and Private mines. Through the 1970's, state-
run mines accounted for all coal production in China. Since the 1980's, however, local and
township mines have become increasingly important, and now over one-half of all coal
produced comes from these smaller mines. The fastest growth in production has occurred in
the township mines. In 1993, the production from state-run key coal mines decreased by 5
percent, while total production from township and privately owned mines exceed production
from all of the state-run mines.
State-Run Mines
As of late 1993, there were 105 Coal Mining Administrations (CMAs) operating 626 state-
owned mines, which produced about 40 percent of China's coal (458.0 million tons in 1993, as
shown in Table 1) (DRCCU, 1994). State-run mines employ more than 3.5 million workers.
China established these mines to meet production quotas for coal defined under the central
plan, and placed them under control of the CNCC. In general, state-run mines are larger, more
modern and relatively highly mechanized, many using longwall mining methods. Typical
mechanization includes cutting equipment and hydraulic pumps, and the more modern mines
have power roof supports and mechanized loading equipment. However, many of the state-run
mines still lack mechanization, with extraction by drilling and blasting or pneumatic pick and
shovel. Due to the overall low degree of mechanization, coal production at government mines
averages about 1.4 tons per man shift. Annual production in these mines typically ranges from
100 thousand tons to 5 million tons of coal, with production at the largest state-run CMAs
exceeding 10 million tons per annum.
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Historically, the state allocated all of the coal produced according to the coal distribution plan.
Today, the government allows a considerable amount of coal to be freely traded on markets,
while maintaining some control of sales activity to ensure necessary supplies for key
infrastructural projects.
China removed coal price controls in early 1994 (Dorian, 1995). The price of coal has
increased because of transport shortages, and the government has made great efforts to solve
this infrastructural deficiency. Along with price reform, the government has implemented other
measures, including laying off surplus laborers and developing lucrative businesses, in an
effort to reduce costs and improve efficiency.
Locally-Controlled Mines
There are approximately 1800 locally-controlled mines in China, which include county,
provincial, and prefectural mines. Typically, a local mining area (LMA) contains several of
these mines, and may span an entire coal-producing area between two or more cities. These
LMAs employ more than 1.3 million people. As shown in Table 1, local mines produced 204.0
million tons of coal in 1993, or nearly 18 percent of the total coal produced (DRCCU, 1994).
The larger locally-run mines operate similarly to the non-mechanized government mines and
their annual production ranges from 50 - 100 thousand tons. These mines are financed and
owned by local governments, with a minimum of central government investment. Coal
produced from these mines is used locally, with a portion allocated to the state coal distribution
plan. These mines operate with more local control and options, but are significantly less
mechanized than the state-run mines.
Township (Collective) and Private Mines
In the past several years, the number of township mines has grown tremendously (there are
currently an estimated 79 thousand). In 1993, township mines produced 429.9 million tons of
coal (DRCCU, 1994). These are collective, privately financed and operated mines. There is
essentially no government investment involved. Though the production of coal from township
mines is increasing, they have the lowest level of mechanization, as well as the poorest safety
records. The smallest township and private mines mine coal seasonally by hand pick and
shovel.
Private mines are a recent development in China, with coal production data available only
since 1993. In 1993, privately owned, small coal mines produced 52.9 million tons of coal,
accounting for 5 percent of the total coal produced. These mines may become larger as
reforms within the coal industry create competition in coal markets.
1.2.2.2 ON
China is the world's fifth largest oil producing country, with approximately 2 - 3 percent of
global reserves. Oil production was 20 percent of China's total energy supply in 1993. There
are 151 oil-bearing basins onshore and on the continental shelf of China. Total estimated oil
resources are 40-60 billion barrels, and proven oil reserves are 24 billion barrels (West, 1994).
The first oil production in China was at the Daqing oilfield, Manchuria (now Heilongjiang
Province) in 1959. Another large field, the Shengli field in Shandong Province, also added
significantly to total production in the early 1960's. Although both of these fields showed
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strong growth through the 1970's, their production appears to have peaked. Many other oil
fields have since developed, mainly in the north and northeast (Figure 8; Box 1). Production
reached an initial peak in 1979 at 106 million tons, declined in the early 1980's, then gradually
increased to 145 million tons in 1993 (Table 2).
BOX 1. SUMMARY OF OIL AND GAS DEVELOPMENT IN MAJOR CHINESE BASINS
According to the DRCCU (1994) and West (1994) there are several basins with significant oil and gas
activity underway, and additional exploration and development is planned:
• Tarim Basin, Xinjiang. The Tarim Basin, in southern Xinjiang Ugyur Autonomous Region, is the
most prospective in China. Forty drilling rigs were working in this basin at the end of 1993. The basin
contains eleven oil fields which produced approximately 2.4 Mtoe in 1994. Most of this oil was
produced from five fields in the northern and central portions of the basin.
• Junggar Basin, Xinjiang. The Junggarwas the earliest basin developed in northwestern China. In
the 1990's, several other oil fields were discovered in the central and outer parts of this basin.
• Sichuan Basin. In recent years, there have been some exploration breakthroughs in Chuandong. In
Daianchi, a series of large gas fields have also been found. Gas fields have also been discovered in
Chuanzhong and Chuanxi.
• Ordos Basin. The gas field in the central portion of this basin (sometimes called the Shaan Gan-
Ning Basin) shows strong potential for development to meet the gas needs of large cities.
• Songliao and Bohai Bay Basin. Several undeveloped fields have been found in the Fuyang oil
reservoir in the Liangjiang area, the beaches of Bohai Bay, and the Kailuan Basin and Erlian Basins.
TABLE 2 - CRUDE OIL PRODUCTION AND CONSUMPTION IN CHINA
(IN MILLION TONS)
YEAR
1980
1985
1986
1987
1988
1989
1990
1991
1992
1993
PRODUCTION
105.9
124.9
130.7
134.1
137.1
137.6
138.3
139.6
141.1
145.2
CONSUMPTION
87.6
91.7
97.3
103.1
110.9
118.6
114.7
124.6
131.2
155.2
Source: China Energy Databook, USDOE/EIA, 1994; Oil and Gas
Journal, 1994; USDOE/EIA 1995.
Exploration, development and production of onshore oil and natural gas in China is planned
and managed by the China National Petroleum Corporation (CNPC). It administers 20 oil and
gas enterprises. In the 1980's, China began developing offshore oil with the assistance of
Western companies. To provide incentives for foreign investment, the China National
Offshore Oil Corporation (CNOOC) was established to explore, develop, produce and market
offshore oil. Current activity is near Hainan Island and the Pearl River Mouth Basin.
Exploration is also underway in the Wan'an Bei area (Spratly Islands) of the South China Sea,
although China is disputing ownership of these waters with Vietnam (China Energy Report,
1994).
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EXPLANATION
'
-------
Recent discoveries in the Tarim Basin in northwest China may shift onshore activity westward.
China's largest new discovery, it has proven in-place reserves of 3.6 billion barrels, and has
attracted foreign investment. There are barriers to developing the Tarim Basin, however,
particularly its remote location, lack of infrastructure, and associated developmental costs.
Rapid economic growth has caused a significant increase in the demand for petroleum
products. In 1993, import of crude oil and petroleum products increased sharply, export
decreased, and China became a net importer of crude oil (Table 2) and petroleum products.
This occurred at least two years earlier than most energy analysts had predicted, caused by
substantial increases in the use of motor gasoline, diesel fuel, and fuel oil. Despite domestic
shortfalls, China continues to export crude oil (an estimated 15 million tons in 1995) because
of desperately needed foreign exchange earnings. China imported an estimated 23 million
tons of crude in 1995, primarily from Indonesia, Oman and Malaysia. China also imports
petroleum products from Singapore, South Korea, the US, and several other countries. The
long-term projection for oil demand by year 2000 is 200 million tons (Oil and Gas Journal,
1994), of which China will import 65 million tons (Ryan and Flavin, 1995).
1.2.2.3 Conventional Natural Gas
The earliest significant natural gas production in China was in 1960. Associated gas (gas in
association with oil) was produced at the Daqing oil field in Sichuan Province. Since the
1970's, Sichuan has become the dominant gas-producing region of China, and accounts for
almost one-half of total natural gas production. Recent discoveries in the Tarim Basin of
northwest China and off Hainan Island show great potential.
As shown in Table 3, China produced nearly 16 billion cubic meters of natural gas in 1993. The
Chinese government plans to increase natural gas production, but at present it still represents
little more than 2 percent of China's total energy mix. Industry consumes over 80 percent of
the total natural gas produced. The main end-uses include feedstock and fuel for chemical
fertilizer manufacturing and ammonia plants. A large portion of consumption occurs within the
oil production industry itself. Over the past several years, however, use by the residential
sector has been increasing.
According to recent estimates, China's proven reserves of natural gas may be in excess of 1.5
trillion cubic meters (Dorian, 1995); undiscovered gas resources are estimated at 8.5 trillion
cubic meters (Sinton, 1996). Despite large resources of natural gas, China's gas industry has
received only a fraction of the funds provided to the oil industry. On an oil-equivalent basis,
the ratio of oil to gas production in the United States and the former Soviet Union is roughly
1:1; in China, it is 10:1 (East-West Center, 1993).
From the 1950's to the 1980's, China's natural gas prices were frozen, even though production
costs doubled over this period. As the Chinese government recognized the value of natural
gas resources in the mid-1980's, it adopted some changes in policy that provide incentives to
revitalize the industry. However, natural gas prices are still significantly below operation and
financing costs. Along with reforms affecting the market price of coal, China plans to free
prices of natural gas to provide production incentives. Now the government also promotes the
use of natural gas for residential sector and municipal activities.
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TABLE 3 - NATURAL GAS PRODUCTION AND CONSUMPTION IN CHINA
(IN BILLION CUBIC METERS)
YEAR
1980
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
PRODUCTION
14.4
13.0
13.6
13.9
13.9
14.4
14.4
15.0
15.0
15.9
16.7
CONSUMPTION
14.2
12.9
13.7
14.0
14.2
14.3
14.4
14.9
15.1
15.8
NA
Source: USDOE/EIA, 1995; Dorian, 1995
Principal barriers to increased gas production in China are insufficient pipeline and gathering
systems to transport gas from fields to markets. Pipeline construction peaked in the 1970's,
and most existing pipelines are concentrated in Sichuan Province. Long-distance pipeline
transport is still relatively rare. Chapter 3 (Section 3.4.2) contains additional information
regarding gas pipeline systems in China.
1.2.2.4 Hydroelectric Power
Hydropower accounts for over 5 percent of China's total energy consumption, and about 19
percent of its electricity generation. The nation's hydroelectric potential is the largest in the
world. According to official figures, this potential amounts to 676 gigawatts (GW), of which 380
GW is suitable for exploitation (DRCCU, 1994). The current available capacity is about 40
GW, but official plans project that it will double to 80 GW by 2000. Figure 9 shows the location
of existing and planned hydropower developments.
The majority of existing hydroelectric plants are very small scale. According to the Asian
Development Bank, around 60 percent of the 2000 counties in China have their own mini-
hydroelectric schemes, and over half of them rely solely on hydroelectricity for their power.
Over the period 1980 to 1990, production of hydroelectric power in China more than doubled,
increasing from 58.2 billion kilowatts to 126.4 billion kilowatts. Consumption is keeping up with
production, and demand is expected to increase into the next century.
Approximately one-third of the 60 GW of electricity generation plants in China currently under
construction are hydroelectric (IEA, 1994). About 80 hydroelectric power stations are under
construction, with a total projected capacity of over 20 GW. The majority of large sites are in
southwestern China, which possess two-thirds of the country's generation potential. To provide
auxiliary operation for large thermal power stations and nuclear power stations with peaking
capacity to the power system, a group of pumped storage stations are also under construction.
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Source:
1-16
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Several large hydroelectric projects are planned; of these, the largest is the Three Gorges
project on the Yangtze River. With a capacity of over 17 GW, it could make a significant
contribution to China's electricity demand. The project, however, is not proposed for
completion until 2010. The large hydroelectric projects tend to be in remote areas that are
difficult and expensive to develop. Potential problems include flooding of agricultural lands,
dislocation of villages, and degradation of adjacent lands and deltas. Several medium-scale
hydroelectric projects are also planned, as are small scale, local power stations.
1.2.2.5 Other Energy Sources
Nuclear and biomass energy comprise less than 1 percent of the fuel mix in China. China
possesses nuclear fuel resources, but until 1993, had only one small nuclear plant in
operation. The first phase of the Qinshan Nuclear Power Station (300 MW) in Zhejiang, and
two units of Daya Bay Nuclear Power Station in Guangdong Province are operational. The
second phase of Qinshan Station and a second nuclear power station in Guangdong Province
will be constructed by the year 2000. A number of coastal provinces are conducting feasibility
studies, and other plants may be established in the future (EIU, 1993).
In certain regions of China with intense energy demand, particularly eastern, southern, and
northeastern coastal regions, nuclear power can potentially increase local energy supplies.
Official plans for the year 2000 have targeted 6 GW of available capacity and 6 GW under
construction, to increase to 1.2 GW per annum after 2000 (IEA, 1994). If the installed capacity
after 2000 can grow at this rate, production will reach 15 GW by 2010. These may be
optimistic targets, given the long periods of construction required for nuclear plants, but the
importance of nuclear energy will continue to increase in China.
Biomass, a renewable energy source, is the main source of energy for many rural households;
wood, crop wastes, and dung are the primary fuels. While rural industry uses some of this
energy, the residential sector consumes the majority, primarily for space heating and cooking.
Over the past 10 years, the annual growth rate of energy consumption in rural areas was
about 9 percent, higher than the nationwide energy production growth rate.
Approximately 4.6 million biogas digesters, producing 1 to 1.5 cubic meters of biogas per
digester per day for six to eight months per year, are currently in use, mainly in southwestern
China (Sinton, 1992). There were 5.25 million users of biogas digesters in 1993, producing an
average of 273 m3 per household in rural areas. Most serve individual families, but some
community and factory digesters are also in operation. There are over 600 large scale projects
treating organic sewage from industries and agricultural operations, which can provide biogas
to over 84,000 households in urban areas year around (IEA, 1994).
1.2.3 CHINA'S CURRENT ENERGY STRATEGY
In its drive for modernization, China is confronted with serious challenges in its energy sector.
Energy production is insufficient to meet the needs of its rapidly growing economy, and China
faces population, environmental, and resource pressures, as well as the need for updated
technology. In order to solve these problems, China must undertake a new, non-traditional
development strategy aimed at maintaining sustained development. According to the Coal
Information Institute, China's new development strategy, which will differ from those used in
both developed and developing nations, is basically conceived as follows:
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Energy Conservation: A Priority
Since the early 1990's, China's government has taken various steps toward conserving
energy. Reforms in energy pricing, taxes and financing have improved energy savings. The
government has also invested large amounts of capital in energy conservation programs. Much
remains to be done, however. If China's energy efficiency were increased to the levels of
developed countries, energy consumption could be reduced by at least 30 percent.
Implementation of this strategy is key to maintaining sustained, stable and coordinated
development of China's economy, and is the most economical means of reducing air pollution
and CO2 emissions.
Improvements to the Energy Sector
At present, the main challenges in China's energy sector are:
• heavy dependence on coal;
• under-use of electricity and natural gas;
• low level of conversion of primary energy into electric energy;
• low rate of electric power consumption;
• high rate of industrial sector energy consumption, relative to that of the communication and
transportation sectors;
• heavy dependence (70 percent) on biomass energy consumption in the rural areas;
• lack of coordination between the coal, electricity and transportation industries ;
• inefficient energy industry infrastructure, with too many small-scale coal mines and thermal
power plants;
• lack of coordination between the oil extraction and refining industries;
• a serious imbalance in the distribution of energy from producing regions to consumers;
and,
• excessive export of crude oil, despite a domestic supply shortfall, because of the need for
foreign exchange earnings.
Therefore, China's energy strategy will focus on optimizing resource use and diversifying the
energy mix, using recent scientific and technological advances. This is also a fundamental
means of ensuring that energy and the economic development take place in an
environmentally sound manner. The main features of China's energy strategy include
improvements in:
• coordination of scientific and technological advances to optimize energy use to the greatest
benefit of the economy and society;
• maximizing benefits from the diverse primary and secondary energy types that can be used
in China;
• coordination of energy production with transportation and consumption needs;
• balancing energy development and consumption with preservation of the environment;
• coordination of the pace, magnitude, and sequence of energy development projects;
• optimization of capital distribution;
• use of rational economic policy; and,
• use of appropriate technologies.
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End User-Oriented Principle
The energy strategy proposed by the Chinese government is based on end user consumption.
Energy needs should be determined by the energy value of a given fuel in relation to the
overall cost to produce and distribute that fuel. In most cases, fuel needs can be met by
various forms of energy; it is therefore necessary to select the best fuel both in terms of
technology and economy in order to provide energy services to end users at the lowest cost.
With the current shift from a planned economy to a market economy in China, there exists a
favorable environment for implementing this strategy.
Developing Natural Gas Resources, Including Coalbed Methane
Since the 1960's, the worldwide growth rate of natural gas exploration and production has
been higher than that of petroleum. During the period 1971 to 1990, the annual growth rate of
natural gas production was 3.68 percent, while that of petroleum was only 1.31 percent. The
annual growth rate of proven natural gas reserves was 5.5 percent, compared to a 3 percent
growth rate for petroleum. Natural gas accounts for 25 percent of the world's primary energy
production, and 22 percent of its consumption. In China, however, consumption and
production of natural gas account for only about 2 percent of the nation's total energy mix.
China must place strong emphasis on the development of natural gas, and must adopt pricing,
taxation and investment management policies that will promote development of the natural
gas industry.
Coalbed methane has great potential in the China's future. The United States uses surface
wells to recover coalbed methane from non-mining areas, and a variety of techniques to
recover coalbed methane from mining areas. Production of coalbed methane in the United
States began in 1982 and increased to more than 21 billion cubic meters in 1994, exceeding
the current production of natural gas in China. Given its abundant coal resources, and the
gassy nature of that coal, it is not unrealistic to expect that China could achieve similar coalbed
methane production levels over a comparable time period. This would more than double
China's current natural gas production, and increase the share of natural gas in its fuel mix
from the current level of 2 percent to 4.6 percent. In addition, because coalbed methane
liberated during the mining process is a greenhouse gas, recovery of this methane will help
protect the global environment.
Developing Clean Coal Technology
China's coal consumption accounts for about 24 percent of total world coal consumption. Coal
constitutes 75 percent of China's primary energy consumption, and provides 76 percent of its
electric energy. It also provides 75 percent of the energy required by China's industrial sector,
60 percent of the raw materials for its chemical industry, and 80 percent of the energy used by
the commercial and residential sectors. The predominance of coal in the energy mix is not
expected to change significantly in the near future.
The environmental problems associated with coal combustion are severe, seriously restricting
social and economic development in China. This is particularly true in large cities and in
regions where high sulfur coal is burned. China's neighboring countries have already
expressed their deep concern over emissions of SO2 and NOX resulting from high amounts of
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coal combustion in China. In addition, global warming associated with emissions of CO2 from
coal combustion has become a focal point of the international community.
Even if China is successful in its attempts to diversify its fuel mix, the nation will continue to
consume large quantities of coal. Given that fact, China believes that the most practical way to
address associated pollution problems is to develop clean coal technology, thus reducing
pollutant emissions. MOCI has stated that China must adopt clean coal technology as part of a
mid- to long-term energy strategy.
1.2.4 GOVERNMENT ORGANIZATION OF CHINA'S ENERGY SECTOR
In 1993, China restructured the government organization of its energy sector in order to
expedite the shift from a planned economy to market economy. At the central government
level, China created a National Economic and Trade Commission; dissolved the Ministry of
Energy; and reestablished the Ministry of Coal Industry and the Ministry of the Electric Power
Industry. Concurrently, six specialized investment corporations, including the Energy
Investment Corporation, that were all under the State Planning Commission were merged into
the State Development Bank.
Figure 10 is a schematic of the organizational structure of China's energy industry. The key
components of the industry are discussed below.
State Planning Commission
This commission oversees the Energy and Transportation Department, which is responsible for
formulating national development policy and strategy. The department also formulates annual-
and long-term plans for the energy sector, and reviews and approves key construction
projects.
State Economic and Trade Commission
This commission includes the Department of Resource Conservation and Comprehensive
Utilization (DRCCU), which manages the use of energy and raw materials (including renewable
energy). It will be involved in formulating the national energy development strategy policies and
plans, as well as reviewing and approving key projects for technical modernization in
collaboration with the State Planning Commission. It also oversees the prevention of industrial
pollution.
State Science and Technology Commission
This commission oversees the Department of Science and Technology, which is involved in
the formulation of science and technology development strategies, policies and plans related
to energy sector, in collaboration with the State Economic and Trade Commission and State
Planning Commission. It is also responsible for organizing and coordinating the implementation
of important science and technology programs, with input from various central departments,
local organizations and technical universities. It is in charge of organizing and implementing
the international exchanges and co-operation at the governmental level.
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State Council
Vice Premier in charge of Energy
Industry
Zou Jiahua
Corporations under State
Council
Energy related ministries and
atfiliated corporations
State Planning Commission
Chairman: Chen Jinhua
O5139OO1
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Ministry of Coal Industry (MOCI)
As noted in Section 1.2.2.1, MOCI is the leading organization of China's coal sector, whose
responsibilities include formulating coal industry development strategy, policies, and annual-
and long-term plans. MOCI also formulates regulations and rules for the coal industry; reviews
and approves projects; manages key personnel in the enterprises under its direct control;
supervises of mine safety throughout the country; supervises and manages national assets in
large coal enterprises; develops coal markets; manages science, technology, and education
work within the coal sector; supplies information services; and organizes and manages
governmental and international economic and technical co-operation.
Ministry of Electric Power Industry
In 1993, the Ministry of the Electric Power Industry (MEPI) was established with the dissolution
of the Ministry of Energy. MEPI is an administrative organization that manages the national
electric power sector in China, and its responsibilities are similar to those of MOCI for the
electric power industry. MEPI is charged with direct management of five electric power groups
in Northeast China, North China, East China, Central China and Northwest China; direct
control of electric companies in the six provinces of Shandong, Fujian, Sichuan, Guangxi,
Guizhou and Yunan; and management of Huaneng Group's electric company and South China
Electric Corporation. The Ministry also performs sectoral management of electric power
companies in Guangdong, Hainan and Tibet.
Other Energy Organizations
Several other national corporations perform administrative functions as authorized by the
central government. These ministry-level corporations report directly to the State Council and
are responsible for the business aspects of energy production. They include the China
National Offshore Petroleum Corporation, China National Petroleum and Gas Corporation,
China National Petrochemical Corporation, China Nuclear Industry Corporation, and the China
United Coalbed Methane Company, Ltd. (China CBM). Formed in 1996, China CBM has
exclusive authority for administering coalbed methane development in China. Section 1.3.3
contains additional information on this new company.
1.3 THE ROLE OF COALBED METHANE
As the world's largest coal producer, China has enormous coalbed methane reserves, and
great potential to recover this energy source. Recovery and use of coalbed methane
contained in coal seams in conjunction with mining results in the production of two resources
instead of just one. Coal mine methane drainage and recovery allows increased coal
production and safety in the mine environment. China's vast coal reserves also create an
opportunity for coalbed methane recovery in unmined areas.
This section provides a brief history of coalbed methane production and use worldwide, with a
special focus on recent coalbed methane production in the United States as a potential model
for China.
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1.3.1 HISTORICAL PRODUCTION WORLDWIDE
Historically, methane has been collected and vented from coal mines worldwide, primarily for
safety reasons. The earliest experience with methane drainage is from Europe, where coal
mining has a long history. The first attempts to isolate and pipe gas from a coal mine in Great
Britain occurred as early as 1733. In an explosion at another coal mine in 1844, an
investigation determined that gas accumulations in the gob was the cause. Investigators
recommended that in the future, pipes should drain the gob, carrying gas to the surface. In-
mine, cross measure holes were used in Wales in the late 1800's to drain gas from virgin coal
beds. The first successful large-scale use was in a German colliery in the 1940's (Diamond,
1993). By this time, numerous coal mines worldwide were using various methods of
underground methane drainage methods to remove gas associated with mining.
Only recently has coalbed methane gained attention as a source of competitive, saleable
natural gas. Coalbed methane has been produced in commercial quantities in the United
States since 1981. The industry has evolved to include not only degasification in conjunction
with underground coal mines, but also stand-alone projects for the commercial production of
natural gas. Conventional oil and gas production practices have been modified for coalbed
methane's unique reservoir characteristics and production techniques. These include low
wellhead pressure; separation of gas and water; compression of gas; and procedures to
produce and, in many cases, dispose of large volumes of water. At active coal mines,
strategies for commercial production of methane can be incorporated into existing in-mine and
gob gas drainage systems. At mines worldwide, recovery technologies can be adapted to
employ methane as an energy source, rather than venting it into the atmosphere.
In the United States, coalbed methane production has grown rapidly over the past decade,
particularly in the past several years. Figure 11 illustrates the tremendous increase in coalbed
methane production from 1982 to 1994. Production in 1991 exceeded 9.0 billion cubic meters,
and by 1994 had exceeded 20 billion cubic meters. Over 90 percent of the 1994 production
came from two major coal basins, the San Juan and Black Warrior. Within the past four years,
several other basins have also begun producing commercial quantities of coalbed methane.
Expanded production is projected over the next decade, from currently producing areas as well
as from new basins.
FIGURE 11. U.S. COALBED METHANE PRODUCTION (IN MILLION CUBIC METERS)
25000 - •
20000 - •
15000 - •
10000
5000 - •
n
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
Source: GRI, 1993; Petroleum Information, 1994 and 1995; ERNGC,
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Figure 12 shows the major US coal basins and associated in-place coalbed methane
resources. Table 4 summarizes 1994 US coalbed methane production by state. Most of the
production is from vertical wells, in areas without existing underground coal mining. However,
coal mine methane recovery and use has proven profitable at mines in Alabama, Virginia, Utah
and West Virginia. Collectively, gas production at these mines exceeded 800 million cubic
meters in 1994. Chapter 3 describes current projects for recovering and using coalbed
methane in conjunction with coal mining, in the United States as well as other countries.
TABLE 4 - SUMMARY OF 1994 US COALBED METHANE PRODUCTION FOR USE
STATE
Alabama
New Mexico
Colorado
Virginia
Wyoming
Utah
West Virginia3
TOTAL
NUMBER
OF WELLS
2,956
1,663
1,006
492
136
104
<50
> 6,357
PRODUCTION
(Million m3)
3,155
11,734
5,558
800
71
136
-69-143
>21,523
RECOVERY METHOD
(Type of Well)
Vertical, Gob, Horizontal
Vertical
Vertical
Vertical, Gob, Horizontal
Vertical
Vertical, Horizontal
Gob, Horizontal
SOURCES: GRI Quarterly, 1993 (for data through 1992); Petroleum Information, 1994 and 1995 (for
1993 and 1994 data on western states); Lewis, 1995; USEPA, 1995a; Byrer, 1995; Biggs, 1995 (for data
on West Virginia).
Worldwide, preliminary estimates of coalbed methane resources range from 113 to 255 trillion
m3 (4000-9000 TCP) (USEPA, 1993). Encouraged by the success of the US coalbed methane
industry, activities have increased in several other coal-producing countries, which now have
coalbed methane projects in various stages of development. Countries with strong potential
include Australia, Canada, China, Czech Republic, Germany, India, Poland, Russia, South
Africa and Ukraine. Table 5 lists coal production and estimates of associated methane
resources and methane emissions from mining for the top ten coal-producing countries of the
world; collectively, they account for 90 percent of total global methane emissions from coal
mines. China, the United States, the United Kingdom, and the Former Soviet Union (primarily
Russia and Ukraine) account for approximately 70 percent of global emissions from coal
mining. These countries also contain the greatest potential methane resources.
Historically, relatively few countries have collected detailed coalbed methane emissions data.
The U.S. Bureau of Mines estimates methane emissions using Mine Safety and Health
Administration (MSHA) reports on mine ventilation emissions. However, these estimates
contain assumptions and carry a level of uncertainty, particularly relative to total methane flux.
Emissions data from coal mines in other countries contain these same uncertainties; for many
countries, less data exists. Therefore, the emissions estimates presented in Table 5 are
considered preliminary.
3 West Virginia state agencies do not collect or release coalbed methane production data; numbers
presented here reflect estimates based on personal communication with the sources listed above.
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GREATER
GREEN RIVER
COAL REGION
850 X
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The nature of coalbed methane within seams is complex and accurate resource estimation is
difficult. The estimated coalbed methane resources in Table 5 are based on gross
assumptions concerning the gas contents of different coals and a large amount of geological
data already gathered on coal resources in each country. As more information becomes
available, estimates can be refined.
TABLE 5 - WORLDWIDE COAL PRODUCTION, ESTIMATED METHANE
RESOURCES, AND ESTIMATED EMISSIONS FROM COAL MINING (1990)
COUNTRY
CIS
China
United States
Australia
South Africa
India
Germany
United Kingdom
Poland
Czech Republic
TOTAL TOP 10
WORLD TOTAL
COAL PRODUCTION
(In Million Tons)
UNDERGROUND
393
1,023
385
52
112
109
77
75
154
22
2,401
SURFACE
309
43
548
154
63
129
359
14
58
85
1,762
4,740
EST. METHANE
RESOURCE
(Trillion m3)
LOW
42.5
30.0
HIGH
79.0
35.0
11.3
8.5
14.5
3.9
1.4
2.8
1.7
0.4
.05
102.5
113.2
1.3
0.37
151.3
254.7
EST. METHANE
EMISSIONS
(Billion m3)
LOW
7.1
14.0
5.3
0.7
1.2
0.6
1.5
0.9
0.9
0.4
32.6
36.0
HIGH
8.9
24.5
8.4
1.2
3.4
0.6
1.8
1.3
2.2
0.7
53.0
58.4
Sources: USEPA, 1993; Schraufnagel, 1993; DRCCU, 1994
1.3.2 COALBED METHANE RESOURCES AND THEIR POTENTIAL FOR DEVELOPMENT
China is the largest coal-producing country in the world, producing about 1.2 billion tons in
1994. Coal resources in China are characterized by large reserves, wide distribution, varied
coal ranks and numerous coal seams. Currently, proven reserves of coal amount to 986 billion
tons. CM estimates that coalbed methane reserves to depth of less than 2000 m are 30-35
trillion cubic meters. Section 2.4 in Chapter 2 discusses the coal basins, their geology, and
methane potential in detail.
Estimated in-place coalbed methane resources in China are 30 to 35 trillion cubic meters. This
compares to 11 trillion cubic meters of in-place resources in the United States, or about 1/3 of
China's estimated resources. Without more detailed data, it is not possible to give an accurate
estimate of the time and costs that would be involved in developing China's resources. Once
site-specific coalbed methane projects and markets are identified, estimates of methane
recovery costs could be compared with prices of competing fuels, in order to determine the
break-even costs for each specific project.
A review of the 15 year history of the US coalbed methane industry, including exploration and
development, production trends, and costs, provides useful guidelines for the percentage of in-
place resources that may potentially be recovered in China. In the US, a total of 5,865 wells
were drilled by 1994, producing 21.5 billion cubic meters of methane annually. From 1984 to
1994, coalbed methane production was 77.7 billion cubic meters, less than 1 percent of the
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total US in-place resources (Petroleum Information, 1994 and 1995; ERNGC, 1995). This 10-
year period coincides with aggressive coalbed methane development in the San Juan and
Warrior Basins of the US, which was driven by an energy tax credit. Also during this time,
several US agencies were providing incentives for companies to develop coalbed methane
projects4.
From 1975 to 1992, the Gas Research Institute, Department of Energy, US Bureau of Mines,
and gas producers and service companies provided over $4.6 billion for investment in coalbed
methane research, drilling and production technology, and pipelines (Schraufnagel, 1994).
Significant funds were allocated to improving technologies of vertical well gas recovery, such
as improved hydraulic fracturing technology, optimizing well spacing, and recovering gas from
multiple, rather than single seams. Most of the coalbed gas produced in the US is of pipeline
quality, and a pipeline infrastructure is in place, allowing the sale of methane from major coal
mines directly to nearby pipelines.
The above-described conditions in the US thus provide a ready supply of pipeline quality gas.
The major considerations in determining pipeline project profitability are the quantity and
quality of gas produced, proximity to a pipeline that can purchase gas, and the price at which
the gas can be sold. In China, due to the lack of existing pipeline infrastructure, power
generation projects are an attractive use option for coalbed methane. Methane can be used to
meet on-site electricity needs, as well as sale of any surplus energy to a nearby utility. Primary
factors for profitable power generation projects are the level of electricity that can be
generated, on-site electricity needs of the mine, the price the mine currently pays for electricity,
and the buy-back rate offered by the local utility. Some mines may have the additional use
option of selling methane to nearby industries or institutions with large natural gas needs.
Profitability of a local user option is determined by natural gas needs of the potential user,
distance between the user and the mine, the price at which the gas can be sold, and the cost
of converting an existing fuel system to operate on coalbed methane (USEPA, 1995b).
The area in the United States most analogous to China's coal-producing regions is the Warrior
Basin of Alabama. In the late 1970's to early 1980's, all coalbed methane production from this
basin was from coal mining regions; since then, significant production has come from vertical
wells in unmined regions of the basin. The Warrior is a large coal basin, covering nearly 91
thousand km2, with most of the coal mines occurring at depths ranging from 300 to 500 m.
Over the past 15 years, a total of 3,000 coalbed methane wells have been drilled, and annual
methane production for 1994 was almost 3.2 billion cubic meters.
1.3.3 CHINA UNITED COALBED METHANE COMPANY, LTD. AND ORGANIZATION
OF THE COALBED METHANE SECTOR
Until recently, three separate organizations administrated coalbed methane development in
China: MOCI, the Ministry of Geology and Mineral Resources (MGMR), and the China
National Petroleum and Gas Corporation (CNPGC). The responsibilities of these three
organizations overlapped to some degree, resulting in confusion and disputes on the extent of
administrative power. In May 1996, therefore, China's highest governing body, the State
4 It is now becoming clear that the coalbed methane industry in the US can stand alone without special
tax breaks (Stevens et al, 1996). While the Section 29 tax credit undoubtedly accelerated investment in
coalbed methane, many coalbed methane "plays" remain profitable without tax incentives. Production,
new well completions, and reserve additions all continued to grow after the tax credit expired.
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Council, established the China United Coalbed Methane Company, Ltd. (China CBM). As a
single, trans-sectoral agency, China CBM is responsible for restructuring the coalbed methane
sector by commercializing the exploration, development, marketing, transportation, and
utilization of coalbed methane.
The State Council has also granted China CBM exclusive rights to undertake the exploration,
development, and production of coalbed methane in cooperation with foreign partners. China
CBM will jointly map out target areas for international cooperation and will conduct invitations
for overseas bidding, negotiation, and signing and execution of contracts for proposed projects
upon approval of the State Planning Commission. In addition to these duties, the new
company will also act as a government watchdog and address some the country's energy-
related environmental problems (China Energy Report, 1996).
Since China CBM will coordinate coalbed methane development work between the coal,
petroleum, and geology and minerals sectors, it is jointly owned by MOCI, MGMR, and
CNPGC. Following is an overview of these three organizations, as well as other groups
involved in coalbed methane development in China.
The Ministry Of Coal Industry
MOCI departments involved with coalbed methane development include:
• Planning and Development Department. Manages coalbed methane activities within
MOCI.
• Science Technology and Education Department. Responsible for identifying key issues
regarding technological aspects of coalbed methane development and use.
• Safety Department. Responsible for general management of underground drainage.
• General Bureau of Coalfield Geology: Responsible for implementing coalbed methane
assessments.
• China Coal Utilization and Energy Conservation Corporation: Responsible for
construction and management of surface facilities for use of coalbed methane.
• China Coal Information Institute: Responsible for management of the China Coalbed
Methane Clearinghouse, collection and exchange of information from China and other
countries, and publication of the journal China Coalbed Methane;
• Star Mining Corp: Helps the planning and development department conduct management
and coordination work relating to coalbed methane; organizes and participates in coalbed
methane development and use projects with other enterprises; responsible for publication
of the Bulletin on Coalbed Methane.
Ministry of Geology and Mineral Resources
The Ministry of Geology and Mineral Resources is responsible for the exploration and
management of national mineral resources. For more than ten years, MGMR's North China
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Bureau of Petroleum Geology (NCBPG) has been involved in coalbed methane exploration
and development projects. In the 1980's, the NCBPG evaluated the coalbed methane
resources of north China and neighboring areas, and carried out preliminary experiments on
coalbed methane exploration and development in Kailuan. In 1991, the NCBPG began
implementing a study on geological evaluation, target area selection, and techniques of
coalbed methane exploration and development. Since 1993, the NCBPG has also been
carrying out the Deep Coalbed Methane Exploration Project funded by the United Nations
Development Programme (UNDP). The immediate objective of the latter project is to acquire
the technologies, methodologies, training and practical experience that will enable MGMR and
others to produce methane from coal seams that are too deep for mining (Sun and Huang,
1995).
China National Petroleum & Gas Corporation
CNPGC established the New Area Exploration Corporation which comprehensively manages
coalbed methane projects of the CNPGC. Its research institutes include the Well Completion
Division of Langfang Branch, the Research Institute of Petroleum Exploration & Development,
and the Well Completion Technology Research Center of Southwest Petroleum Institute. The
CNPGC has participated in the Fengcheng coalbed methane project, the Lengshuijiang
coalbed methane project in Hunan Province, and the Dacheng coalbed methane project.
Other Research Institutes
The research institutes in the coalbed methane sector are the Fushun Branch of the Central
Coal Mining Research Institute (CCMRI), which is engaged in research and development of
coalbed methane drainage techniques; the Xi'an Branch of the CCMRI, which is engaged in
exploration and evaluation of coalbed methane resources, and have personnel trained in the
methodologies and equipment required for coalbed methane testing; and the Gas Geology
Research Institute of the Jiaozuo Mining Institute, which has been working at research on gas
geology.
Other Organizations
In addition, several CMAs, including Songzao, Kailuan, Tiefa, Huaibei, Huainan and
Pingdingshan, have established leading groups for coalbed methane development which have
become decision-making organizations for each coal mining administration. Enterprises
engaged in coalbed methane development include the Jindan Energy Research and
Development Company of the Jincheng CMA, and the Yuneng New Technology Development
Co. of the General Bureau of Coalfield Geology.
1.3.4 MULTIPLE BENEFITS: ENVIRONMENT, ENERGY, SAFETY
Given China's reliance on coal, current plans to construct new mines, and with the trend
towards mining deeper, gassier coal seams, it is likely that emissions of methane from coal
mining will continue to increase. Now more than ever, recovered coalbed methane can greatly
contribute to China's energy sector, economy, and environment. China's attention to this will
lead to the following benefits:
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• An additional natural gas resource
One of the goals of China's energy development strategy is to expand natural gas
production and use. New conventional gas supplies may develop slowly due to the
lack of infrastructure and the remote location of these fields relative to industrial and
population centers. Coalbed methane resources, by contrast, are concentrated in major
coal producing regions, which are also large industrial and population centers. China's
government recognizes the potential contribution of coalbed methane as an energy
resource, and has included plans to increase development as part of its energy
strategy.
• Improved economy
Costly government subsidies are being withdrawn as China's coal mining industry
becomes more market driven, while demand increases for an inexpensive, domestic
energy source. Increased use of coalbed methane could reduce reliance on coal and
costly imported fuels.
• Improved mine safety and profitability
Previously, coal mines have viewed liberation of coalbed methane into the mine
workings as a mine safety hazard, and have vented coal mine methane to the
atmosphere. Mining coal at increasing depths generally means higher methane
concentrations, which increase safety hazards resulting in higher mining costs and the
need for larger ventilation systems. Coalbed methane drainage reduces the potential
for methane explosions and sudden outbursts of coal and gas, thus improving safety
conditions. Methane recovery also increases coal production, increasing mine profits,
because mines can safely produce more coal without delays taken to reduce excess
levels of methane.
• Improved local environmental quality
Coalbed methane is a clean-burning fuel. When burned, methane emits essentially no
sulfur or ash, and only a small percent of the nitrogen oxides, carbon dioxide and
volatiles that are emitted by the burning of coal. Coalbed methane could offset the use
of coal by industrial and residential consumers; improving local air quality. A high
degree of coal combustion is common in China's cities, leading to public health
problems. Adverse environmental impacts associated with atmospheric methane
emissions include depletion of stratospheric ozone and increases in tropospheric
ozone, which contributes to smog formation. Reducing methane emissions near
population centers, lowers tropospheric ozone creation and associated smog.
• Improved global environmental quality
Methane currently accounts for over 15 percent of expected warming from climate
change (USEPA, 1993). It has a sizable contribution to potential future warming
because it is a potent greenhouse gas and because methane's concentration has been
increasing dramatically. Due to methane's high potency and short lifespan, stabilization
of methane emissions will have a rapid impact on mitigating potential climate change.
Higher methane concentrations may also contribute to stratospheric ozone depletion.
China is the world's largest emitter of methane from coal mining, with estimated
emissions of 12.5 to 19.4 billion cubic meters annually, or about one-third of the world's
total emissions from this source. Increased recovery of methane from China's coal
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mines has great potential for reducing global methane emissions. Currently, less than
5 percent of total mine methane emissions are being recovered, with the balance being
emitted to the atmosphere by ventilation systems. Increasing the recovery rate to 40
percent at the state-owned mines alone (some of which liberate as much as 50 cubic
meters of methane per ton of coal mined) would reduce emissions by an estimated 4 to
5 billion cubic meters annually.
1.3.5 FOREIGN INVESTMENT IN CHINA: IMPLICATIONS FOR COALBED METHANE
PROJECTS
For the benefit of US companies considering investment in coalbed methane in China, this
section contains an overview of China's investment potential. More detailed information on
policies to encourage development of coalbed methane is presented in Chapter 6. In addition,
Chapter 5 includes a discussion of issues related to joint venture development. China's
economy is attracting numerous global investors, and because deployment of foreign capital is
a critical component of China's long-term strategic policy for economic development, the
government is making efforts to further encourage foreign investment. In encouraging the
establishment of joint ventures with foreign capital, China gives energy development the
highest priority; and, at present, most foreign capital in this sector is used in oil prospecting
and coal exploitation (Dorian, 1995).
In 1993 China renewed efforts to revise its taxation system as a means of better attracting
foreign investment. Toward this end, six new laws and regulations were adopted during the
year and put into effect January 1, 1994. These laws and regulations included the enterprise
income tax law and the individual income tax law, as well as regulations on the following: a
value-added tax; a consumption tax; a business tax; and a resource tax.
Recognizing the potential benefits of increased coalbed methane development, China's
government is taking an active role in encouraging development of coalbed methane. In order
to provide a regulatory and legal framework for coalbed methane exploration in China, MOCI
issued the "Provisional Regulation and Rules for the Management of Exploration and
Development of Coalbed Methane" in April 1994 (China Coalbed Methane Clearinghouse,
1995). The government's desire to develop this resource, together with a strong desire to
establish joint energy ventures with foreign capital, create a favorable climate for foreign
investment in coalbed methane projects.
1.3.6 SOURCES OF ADDITIONAL INFORMATION
As discussed in Chapter 3, numerous coalbed methane projects are currently underway in
China. Several of these involve joint ventures between large US energy companies and
Chinese mining enterprises. The China Coalbed Methane Clearinghouse has been
instrumental in providing foreign companies with the assistance and information needed to
assess methane development opportunities in key coal mining areas. It has also helped these
companies by explaining the procedures for management of coalbed methane projects in
China, and proposing target areas for coalbed methane development. The China Coalbed
Methane Clearinghouse remains an excellent source of information and assistance for firms
interested in developing coalbed methane in China. Readers may contact the Clearinghouse at
the address listed in Appendix A.
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Potential investors may also wish to read the publication "Investment in China", compiled jointly
by China's Foreign Investment Administration, the China Economic and Trade Consultants
Corp., and the Ministry of Foreign Trade and Economic Cooperation (whose address is listed
in Appendix A). It includes the text of laws on Chinese-foreign contractual joint ventures,
procedures for approving joint ventures, and many other regulations and topics of interest.
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CHAPTER 2
COALBED METHANE RESOURCES OF CHINA
2.1 INTRODUCTION
Throughout China, there are abundant coal resources, and associated coalbed methane
resources. The CM estimates that total coalbed methane resources contained in coal less than
2000 m deep are 30 - 35 trillion cubic meters (Sun and Huang, 1995). The bulk of these
resources are contained in the Ordos, Qinshui, North China, Tu-Ha, and Junggar Basins, and
the Yunnan and Guizhou coal-bearing regions. Each of these basins or regions contain
coalbed methane resources in excess of 1 trillion cubic meters. The following sections of this
chapter present an overview of China's major coal basins, and describe the geologic factors
affecting coalbed methane recovery.
Throughout this chapter, tables containing coal and methane resource data are organized
according to coal field or province rather than by basin, as this is how the data are typically
reported in China. Generalized discussions of coal and methane resources in this chapter,
however, will refer to coal basins where appropriate. Chapter 4 profiles coal mining
administrations considered by the Ministry of Coal Industry (MOCI) to have the greatest
coalbed methane development potential.
2.2 TECTONIC FRAMEWORK OF CHINA'S COAL BASINS
China has undergone a long and complex tectonic history dominated by compressional
deformation, but influenced by episodes of rifting as well. The geologic history of the coal
bearing regions of China is the result of complex overprinting of various tectonic events, one
upon the other. Figure 13 depicts the location and geologic age of the major tectonic elements
that formed the structural framework for the development of the China's sedimentary basins
The unique geologic evolution of basins within a given region affected the deposition of the
coal bearing strata and the associated generation of gas, as well as the subsequent trapping
or dispersal of this gas.
2-1
-------
NORTHEAST
\ CHINA BLOCKS
EXPLANATION
Cenozoic
Mesozoic
Late Paleozoic
Middle Paleozoic
Oceanic Crust
Continental Basement
Major Pault, Suture
Latitudinal and Longitudinal Belts
2-2
-------
The tectonic evolution of northern China differs dramatically from that of southern China. North
and south China were at one time separate microcontinents, or plates, which collided during
Permian time (Liu, 1990). The northern plate acted as a relatively stable platform throughout
the depositional history of the coal-bearing sequences. It is known as the North China Block.
Basins lying in northeastern China produce large, economically important amounts of coal.
These basins were formed during a major rifting event that resulted in a thick and relatively
undeformed marine Paleozoic stratigraphic sequence which accumulated as the rift basin
opened. This thick sequence underlies the coal strata that was deposited in a sequence
dominated by terrigenous rocks.
Back arc basins develop in the region behind interactive tectonic plate margins. This is the
locus of downwarping of the crust that occurred during a compressional period which resulted
from the collision and subduction of oceanic crust under accreting continental crust. The
geologic record suggests that the Tarim, Junggar and Qaidam Basins are back arc basins
situated to the west of the North China block, north of the accretionary terrain that comprises
southern China.
In contrast to northern China, episodic tectonic events and marine transgressions largely
controlled southern China, resulting in frequent disruptions in coal deposition. South China was
not a stable platform, but a composite terrain comprising numerous severely deformed and
folded belts similar in structure to the Alps of Europe or the Appalachians of the US (Hsu,
1989).
Dramatically different tectonic history resulted in unique coal basin geology within the north
and south regions. In the north, clastic sequences dominate sediments of the coal-bearing
sections, and coal seams generally are fewer, thicker, and more laterally continuous. In the
south, where marine influence and tectonic activity prevailed, the coal sequences contain
carbonates and volcanic rocks, and the coals tend to be more numerous, but thinner and
laterally discontinuous.
These differing tectonic histories have several broad implications for coalbed methane
development in China. The North China Block and the sedimentary basins of northeastern
China are the least deformed areas. Southern China, in contrast, has undergone widespread,
complex faulting and folding, which will greatly affect the reservoir characteristics of the gassy
seams found in this region. In some cases, structural complexity may reduce the permeability
of the reservoir; where in others areas it may enhance permeability. It is likely that the
permeability enhancement will be localized, and identification of these higher permeability
zones will be key in achieving high recovery efficiencies. Mining also enhances permeability; in
fact, in some places, the only areas that are likely to produce methane are those where mining
has caused relaxation of the strata, thus acting as massive reservoir stimulation.
The deposition of coal resources is controlled by major tectonic structures recognized by
Chinese geologists as directly affecting the occurrence, development, and distribution of coal
seams. These structures comprise latitudinal and longitudinal tectonic belts. Three major
latitudinal tectonic systems are present in China. From north to south, they are the Yinshan-
Tianshan Tectonic Belt; the Qinling-Kunlun Tectonic Belt; and the Nanling Tectonic Belt
(Figure 13). These belts divide China into major structural elements, which acted at various
times as controls on deposition of the coal-bearing sequences. Coal-bearing sediments
occurring in the Yinshan-Tianshan Tectonic Belt range in age from late Jurassic to early
Cretaceous; those of the Qinling-Kunlun and Yinshan-Tianshan Tectonic Belts are older,
2-3
-------
predominantly Permo-Carboniferous and Jurassic in age. South of the Qinling-Kunlun Belt, the
coal-bearing formations are mainly late Permian in age.
The coal resources in the area north of the Qinling-Kunlun Belt account for 93.6 percent of the
total coal resources in China. The area south of this tectonic belt accounts for only 6.3 percent
of the total coal resources in China. Of these resources, 91 percent are concentrated in
Yunnan, Guizhou and Sichuan Provinces.
The longitudinal tectonic belts are generally compressional systems. The four major north-
south tectonic belts are the West Yunnan Tectonic Belt; the Sichuan-Yunnan Belt; the
Sichuan-Guizhou Belt; and the Helan-Liupan Belt. The Sichuan-Yunnan Belt and Helan-Liupan
Belts are located in central China; these two belts divide China into eastern and western
structural zones, as well as coal producing regions. Tectonic events, primarily Mesozoic and
Cenozoic in age, resulted in a relatively stable platform to the east and a technically active
area to the west. The coal basins contained in the eastern area thus differ dramatically from
those in the west.
In summary, the tectonic history of China creates a framework for understanding the
distribution of coal and associated coalbed methane resources. Figure 14 illustrates the major
sedimentary basins of China. As expected, the major coal mining areas are situated on the
margins of the sedimentary basins. Estimated methane resources are also indicated for select
basins. The sedimentary basins are contained within four large geographic regions -
Northeast, North, South, and Northwest. Each region has unique characteristics that are
directly related to their tectonic history. Figure 14 shows these four regions; their key features
relative to the coal deposits are as follows:
• Northeast: The coals occurring in this region were deposited within a rift basin; coal
seams are thick and laterally continuous. Major coal basins are the Sanjiang-Mulinghe,
Songliao, Donhua-Fushun, and Hongyang-Hunjiang (detailed in Section 2.3.2).
• North: The north is dominated by a stable platform (the North China block) underlain by
continental basement rock, formed as rift and foreland basins. Major coal basins are the
Taixing-Shandou, Qinshui, Daning, Ordos, Hedong, Yuxi, Xuhuai, and Huainan (detailed in
Section 2.3.3).
• South: The south consists of accretionary terrain that comprises a series of fold belts. Coal
seams in this region are thinner; and coal deposits are frequently disrupted relative to
those in the north and northeast. Major coal basins are the Chuannon-Qianbei,
Huayingshan-Yongrong, and Liapanshui (detailed in Section 2.3.4).
• Northwest: This region contains back-arc basins underlain largely by oceanic crust. Major
basins are the Tarim, Qaidam, and Junggar Basins (detailed in Section 2.3.5).
The regions designated in the text above are the basis of organization used to discuss coal
and coalbed methane resources in Sections 2.3 and 2.4, respectively.
2-4
-------
YiU
Wuq^iaYou>er
TalimuB
Songliao Nanyuan
\ ^
Sanjiang-Mulini
/ /
^-Yilan-Yitong
Jiaohe-Liaoyuan
Yanbian
r _ Dunhua-Fushun
'ulfengy.ang"HunJlang
,ixmg Shandou
,Zhundong Pingzhuang
,E. Juneear) Beida\\
,, Qins
Guangw
Huayingshan-Y
-Xunan— Luxinan
rXuhuai
Huainan
—Suzhe-Wanbian
- Changjiang Zhongxia You
(Lower Yangtze River)
Wuganbian
Zheganbian
Pingdong
xYongmei
Chuanwu Xiangbian
\Yuebei
(Old Canton) SCALE
250 500nile
2-5
-------
2.3 COAL RESOURCES
2.3.1 INTRODUCTION
In 1992, China's demonstrated coal resources totaled 986.3 billion tons, with proven in-place
reserves accounting for 30 percent, or 296 billion tons. Recoverable reserves totaled 114.5
billion tons. Appendix B describes the coal reserve and rank classification systems used in
China. The coal deposits are distributed throughout China and vary in age, structural
complexity, and rank. Of the total coal resources, 75 percent are bituminous, 12 percent are
anthracite, and 13 percent are lignite.
The economically important coal seams in China occur in Permian, Carboniferous, Jurassic,
and Tertiary-age sediments. The stratigraphy of China's major coal-bearing groups for the
Northwest, South, North, and Northeast regions is shown on Figure 15; composite stratigraphic
sections are shown for key coal basins within each of the four regions. Northern, northwestern,
and northeastern China contain 84 percent of the total in-place coal reserves; of these, the
provinces of Shanxi, Shaanxi, and Inner Mongolia account for 75 percent. Coal reserves
suitable for open cast mining are comparatively small (7 percent of total); 70 percent of these
surface-mineable reserves are lignite (DRCCU, 1994). Abundant coal reserves occur in
northwestern China; however, a large portion of the reserves are unexplored, infrastructure is
absent, and the region is distant from population centers.
China's coal and coalbed methane resources will be discussed below according to the four
geographic regions designated in Section 2.2. Although there are coal basins in Tibet, these
resources were not evaluated under the scope of this report.
As described in Chapter 1, China's state-run coal mines are divided into Coal Mining
Administrations (CMAs). Currently there are 108 CMAs in China, which manage approximately
650 mines. MOCI has identified major coal-producing areas, which contain large CMAs,
throughout China. Figure 16 shows the four geographic regions, the location of selected
CMAs. Table 6 summarizes 1994 coal production for all CMAs that produced over 500,000
tons per annum.
Included within the following sections is a brief description of the major coal basins found
within each region. Following each section of text describing a particular region is a map of that
region indicating the location, coal production and coal type for major CMAs contained within
the region. Most of the information in the text that follows came from MOCI and articles by Sun
and Huang (1995) and Bai (1995). This overview of coal basins serves as a guide to the size
of basins, age, number of seams, thickness, rank, and depth of seams. Chapter 4 provides
detailed profiles of ten key CMAs within these basins.
2-6
-------
Figure 15. GENERALIZED STRATIGRAPHIC COLUMN
OF MAJOR COAL-BEARING GROUPS
Composite Sections From Key Basins in Northwest, South, North and Northeast China
SYSTEM
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CRETACEOUS
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£>
^3
O
ra
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^
^
5?
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H
DH
CARBONIFEROUS
SERIES
Pliocene
Miocene
Oligocene
Eocene
Paleocene
Upper
Middle
Lower
Upper
Lower
Upper
Middle
Lower
NORTHWEST
Junggar
Basin
Xishanyao
Badaowan
SOUTH
Sichuan—
Guizhou Area
Changxing
Longtan
Tongziyan
Ceshui
(Seshui)
NORTH
Ordos and
North China
Basin
Zhaotong
Shuange
Datong/
Yan'an
Shihezi
Shanxi
Tiayuan
Benxi
NORTHEAST
Shulan, Fushun
Fuxin, Jilin
Shulan/
Fushun
Fuxin/
Wulin
Naizishan
Sources: CII; Xi'an Coal Branch; Liu, 1990; Lee, 1989; Hendrix et al, 1995
05139002
2-7
-------
2-8
-------
TABLE 6. SUMMARY OF 1993 COAL PRODUCTION FOR MAJOR CMAs
CMAs producing over 500,000 tons per annum, in descending order of production
(Locations of CMAs shown on Figures 17-20)
REGION
North
North
North
North
North
Northeast
North
Northeast
North
North
Northeast
North
North
North
North
Northeast
North
Northeast
Northeast
North
North
Northeast
North
North
North
North
North
North
South
North
North
North
North
North
Northeast
North
South
North
Northeast
North
Northeast
Northeast
North
North
North
South
North
Northwest
North
North
South
Northwest
South
North
North
CM A
Datong
Kailuan
Pingdingshan
Huaibei
Xishan
Hegang
Xuzhou
Fuxin
Longkou
Yanzhuo
Jixi
Huainan
Yangquan
Fengfeng
Jincheng
Tiefa
Xinwen
Qitaihe
Shuangyashan
Lu'an
Yima
Fushun
Pingzhuang
Zaozhuang
Shitanjing
Beijing
Zibo
Zhengzhou
Panjiang
Feicheng
Fenxi
Xingtai
Tongchuan
Hebi
Shenyang
Zhalainuoer
Shuicheng
Huozhou
Liaoyuan
Datun Coal
Tonghua
Shulan
Jiaozuo
Wanbei
Huolinhe
Panzhihua
Hancheng
Jingyuan
Dayan
Wuda
Pingxiang
Yaojie
Songzao
Handian
Shizuishan
PROVINCE
Shanxi
Hebei
Henan
Anhui
Shanxi
Heilongjiang
Jiangsu
Liaoning
Shandong
Shandong
Heilongjiang
Anhui
Shanxi
Hebei
Shanxi
Liaoning
Shandong
Heilongjiang
Heilongjiang
Shanxi
Henan
Liaoning
Inner Mongolia
Shandong
Ningxia
Beijing
Shandong
Henan
Guizhou
Shandong
Shanxi
Hebei
Shaanxi
Henan
Liaoning
Inner Mongolia
Guizhou
Shanxi
Jilin
Jiangsu
Jilin
Jilin
Henan
Anhui
Inner Mongolia
Sichuan
Shaanxi
Gansu
Inner Mongolia
Inner Mongolia
Jiangxi
Gansu
Sichuan
Hebei
Ningxia
COAL BASIN
Daning
Jingtang
Yuxi
Xuhuai
Qinshui
Sanjiang-Mulinghe
Xuhuai
Fuxin
Huangye
Luxinan
Sanjiang-Mulinghe
Huainan
Qinshui
Taixing-Shandou
Qinshui
Songliao
Luzhong
Sanjiang-Mulinghe
Sanjiang-Mulinghe
Qinshui
Yuxi
Donhua-Fushun
Pingzhuang
Luxinan
Zhuohe
Jingtang
Guangfang
Qinshui
Liupanshui
Luzhong
Qinshui
Taixing Shandou
Ordos
Taixing-Shandou
Donhua-Fushun
Haila'er
Liupanshui
Qinshui
Jiaohe-Liaoyuan
Luxinan
Hongyang-Hunjiang
Yilin-Yitong
Qinshui
Xuhuai
Shengli-Huolinhe
Dukou-Chuxiong
Hedong
Jingyuan-Jingtai
Haila'er
Ordos
Jiyou
Zhongqilian
Chuannon-Qianbei
Taixing-Shandou
Zhouhe
SPECIFIC
EMISSIONS
21.42
15.82
NA
11.45
12.35
16.17
13.16
29.08
29.84
18.41
25.95
21.28
19.00
12.73
19.18
15.77
10.84
31.58
12.48
14.86
20.42
17.08
15.73
26.18
33.74
16.36
18.25
22.63
19.97
16.48
11.25
30.62
14.49
47.99
14.27
COAL
PRODUCTION (103T)
31,754.6
17,604.8
17,147.8
14,232.1
14,127.7
13,130.7
13,103.1
12,698.7
12,003.1
12,003.1
11,644.2
11,498.5
10,476.9
10,370.0
10,320.6
10,241.0
10,089.0
10,060.1
10,015.5
9,106.4
8,609.6
8,579.4
6,993.3
6,129.2
6,005.8
5,517.0
5,061.7
5,052.3
5,014.0
4,993.3
4,819.0
4,780.0
4,721.6
4,671.5
4,410.5
4,305.1
4,122.2
4,016.8
3,979.0
3,875.8
3,809.3
3,803.8
3,799.6
3,766.0
3,694.2
3,527.2
3,462.8
3,350,8
3,311.9
3,253.3
2,741.4
2,718.1
2,696.4
2,620.0
2,560.8
2-9
-------
TABLE 6. SUMMARY OF 1993 COAL PRODUCTION FOR MAJOR CMAs
(Continued from previous page)
REGION
South
South
South
South
Northeast
Northwest
South
North
South
Northeast
North
North
Northwest
South
South
Northeast
South
South
North
South
North
North
North
North
North
South
South
North
North
South
South
South
South
South
North
South
South
North
South
South
Northwest
South
South
North
South
North
North
South
South
North
South
South
South
North
South
CM A
Furong
Lianshao
Heshan
Nantong
Beipiao
Urumqi
Zixing
Xuangang
Fengcheng
Nanpiao
Baotou
Haibowan
Hami
Baisha
Guangwang
Huichun
Yongrong
Liuzhi
Pubai
Tianfu
Yiminhe
Yinying Mine
Chenghe
Xiaoyu Mine
Jingxing
Quren
Leping
Dongshan Mine
Xinglong
Lindong
Changguang
Yong'an
Dazhu
Meitian
Cuijiagou Mine
Donglou
Hongmao
Linyi
Youjiang
Yongding
Datong
Longyan
Huayingshan
Guzhuang Mine
Siwangzhang
Nanzhuang Mine
Xiahuayuan Mine
Songyi
Zhongliangshan
Yancheng City
Shangjing
Luoshi
Huangshi
Lingwu
Yinggangling
PROVINCE
Sichuan
Hunan
Guangxi
Sichuan
Liaoning
Xinjiang
Hunan
Shanxi
Jiangxi
Liaoning
Inner Mongolia
Inner Mongolia
Xinjiang
Hunan
Sichuan
Jilin
Sichuan
Guizhou
Shaanxi
Sichuan
Inner Mongolia
Shanxi
Shaanxi
Shanxi
Hebei
Guangdong
Jiangxi
Shanxi
Hebei
Guizhou
Zhejiang
Fujian
Sichuan
Guangdong
Shaanxi
Guangxi
Guangxi
Shandong
Guangxi
Fujian
Qinghai
Fujian
Sichuan
Shanxi
Guangdong
Shanxi
Hebei
Hubei
Sichuan
Jiangsu
Fujian
Jiangxi
Hubei
Ningxia
Jiangxi
COAL BASIN
Chuannon-Qianbei
Lianshao
Guizhong
Chuannon-Qianbei
Nanpiao
Junggar
Chenzi
Daning
Pingdong
Nanpiao
Daqingshan
Ordos
Tu'Ha
Chenzi
Guangwang
Yanbian
Huayingshan-Yongrong
Liapanshui
Hedong
Huayingshan-Yongrong
Haila'er
Qinshui
Hedong
Daning
Taixing-Shandou
Yuebei
Pingdong
Qinshui
Chengde
Liapanshui
Suzhe-Wanbian
Yongmei
Huayingshan-Yongrong
Yuebei
Ordos
Nanning
Guizhong
Lunan
Baise
Yongmei
Yongmei
Huayingshan-Yongrong
Qinshui
Yongmei
Taixing-Shandou
Xuanwei
Chuanwu Xiangbian
Chuannon-Qianbei
Lunan
Yongmei
Jiyou
Wuganbian
Ordos
Pingdong
SPECIFIC
EMISSIONS
26.72
37.88
36.83
24.57
16.00
22.04
11.81
28.55
12.29
45.50
23.20
17.04
15.52
37.65
51.31
50.40
NA
16.33
18.86
14.65
27.64
41.83
10.32
24.48
26.07
28.00
58.38
13.97
COAL
PRODUCTION (103T)
2,394.7
2,360.1
2,353.8
2,208.6
2,177.6
2,166.6
2,142.4
2,062.1
2,000.3
1,954.2
1,904.5
1,743.3
1,695.5
1,676.8
1,667.2
1,610.1
1,501.8
1,454.1
1,401.1
1,345.9
1,343.2
1,203.1
1,180.1
1,101.2
1,100.0
1,084.2
1,082.9
1,060.9
1,050.0
1,041.6
1,027.6
1,018.0
1,012.9
920.4
863.1
818.2
810.1
781.3
741.2
722.8
707.0
670.1
669.8
667.2
665.4
651.1
630.0
625.4
613.8
609.4
608.9
604.6
586.5
532.8
505.3
* Average specific emissions listed for high gas mines only (emissions greater that 10 mj/ton)
Source: China Coal Industry Yearbook, 1994; and the CM
2-10
-------
2.3.2 NORTHEAST REGION
The Northeast region contains coal-bearing sediments deposited predominantly during Late Jurassic time, with some
deposited during Permo-Carboniferous and early Tertiary time. The region comprises Jilin and Heilongjiang
Provinces, northern Liaoning Province and the eastern part of Inner Mongolia (Figure 17). The tectonics of the
Mesozoic coalfields are relatively complex, due to the impact of the folding and faulting that occurred after the
formation of the Mesozoic coal basins. A major subsidence zone, the Cathaysian rift system, developed in
Northeast China after the late Mesozoic (Liu, 1986). Many extensional structures, such as horsts and grabens,
formed in the rift system, and the coal-bearing formations are best developed in these fault-defined basins.
Coal seams are generally thick, although the lateral extent within individual coal basins may be relatively small. Coal
rank ranges from lignite to high volatile bituminous coal with some occurrence of medium volatile bituminous coals.
Late Jurassic coal-bearing sediments are well-developed in the eastern part of this region; the Sanjiang-Mulinghe
Basin is located in this region. Grabens also formed during rifting events in the southern part of the region; the
Songliao Basin contains late Jurassic coal-bearing sediments.
Most of the coal in this region is bituminous (much of it gassy), although there are some anthracite and lignite coals
as well. Late Jurassic and early Cretaceous lignite deposits occur in Inner Mongolia, mainly in the area north of the
Yinshan Mountains. The economic hard coal deposits comprise the Tertiary Fushun and Shulan Groups (Figure 15).
Deposits are grouped into four main basins, located in the provinces of Heilongjiang, Liaoning, and Jilin.
• The Sanjiang-Mulinghe Basin is the most economically important coal basin in Heilongjiang Province, with seams
ranging in thickness from 2 to 20 meters. Major CMAs within this basin include Hegang and Shuangyashan. Coal
measures in the Hegang CMA are shallow and gently dipping, and are structurally uncomplicated. These are
high volatile bituminous coals, some of which are suitable for metallurgical coking. The Shuangyashan CMA,
also located in Sanjiang-Mulinghe Basin, possesses high quality coals but is located far from major industrial
centers.
• The Songliao Basin has an area of 513 km2. The basin contains the large Tiefa CMA, which has eight active
underground mines, all of which are gassy. Seam depth ranges from 600 to 800 m. There are 20 coal seams, of
which 12 seams are mineable. The basin's major mineable coal seam, No. 8, has an average thickness of 2-4 m.
Coal rank is high volatile bituminous.
• The Donhua-Fushun Basin is a major coal-producing basin in Liaoning Province. The coal basin has three
workable Eocene seams whose total thickness ranges from 20 to 134 meters. Structurally, this basin is relatively
simple, with laterally continuous high volatile bituminous coal seams that are low in ash and sulfur. The Fushun
CMA, located in the Donhuan-Fushun Basin, recovers and uses coalbed methane. In 1993, Fushun CMA had an
annual gas drainage of 113.36 million cubic meters (Huang L., 1995).
2-11
-------
2-12
-------
• The Hongyang-Hunjiang Basin is located in Jilin Province. Within this basin, the Tonghua CMA has numerous
mineable bituminous coal seams. Some of these Jurassic coal seams are mined for coking coal.
2.3.3 NORTH REGION
The North Region contains the largest quantity of proven coal reserves in the country. It is an important coal-
producing region of China, possessing high quality coal and nearby markets. Flat-lying Paleozoic and Mesozoic
strata occur in a series of basins comprising 800 km2 and extending through Shanxi Province north to Hebei
Province and southwest Inner Mongolia. All twelve of the provinces in this region produce coal, making an important
contribution to national coal production. Rank of these coals is principally bituminous, with occurrences of small
amounts of semi-anthracite and anthracite. Coal basins in the northern region are generally linked by rail to the
domestic markets and ports from which coal is exported. The rail system to coastal markets has recently been
upgraded. The area has been extensively explored, and numerous large underground mines are in operation.
Abundant hard coal reserves occur in Inner Mongolia, which lie in remote areas with access to markets via railway.
The North Region consists of predominately Upper Carboniferous-Permian coal basins, with lesser amounts of coal
reserves contained in Lower and Middle Jurassic sediments (Figure 15). Major CMAs and coal basins in this region
include Kailuan, Fengfeng, Tonghua, Datong, Jiaozuo, Zibo, Yangquan, Huainan, Huaibei, Yuxi, and Hebi (Figure
18). Quality of the Paleozoic coal produced in this region is relatively consistent. With the exception of the anthracite
deposits of the West Beijing coalfield, all other coalfields contain high volatile bituminous coal. In the central part of
this region near Taihang Mountain, coal deposits range in rank from low volatile bituminous coal to anthracite coal.
Key coal basins in the North Region are:
• The economically important coal basin in Hebei Province is Taixing-Shandou, with bituminous coals of Permo-
Carboniferous age. In this basin, there are up to 21 mineable coal seams, some of which are coking quality,
whose maximum thickness is 30 m. In general, coal measures are gently dipping with some local faulting. Major
CMAs in the Taixing-Shandou Basin include Hebi, Jingxing, and Xingtai.
• The Qinshui Basin, located in Shanxi Province, is a major coal-producing basin containing Carboniferous,
Permian, and Jurassic coals (Walker, 1993). Major CMAs in the Qinshui Basin include Yangquan, Xishan,
Jincheng, and Jiaozuo; these CMAs produce bituminous and semianthracitic coals. Methane recovery systems
are used at the Yangquan CMA, and gas drainage in 1992 averaged 90 million cubic meters per annum.
• The Daning Basin, located in northern Shanxi Province, comprises Carboniferous, Permian, and Jurassic coals
(Walker, 1993). It contains the largest CMA in China, the Datong CMA. In 1994, the coal mines of Datong CMA
produced over 31 million tons of coal, primarily subbituminous in rank.
2-13
-------
INNER MONGOLIA
Datong
"Wuda
Shizuishan
Shitanii
Guznuang Mine
/ Lingsnan LMA
HEBEI
Jingxing
Nanzhuang IWine
uangang in
Dongshan Mine-HT
Xisharr
Yinying
SHAANXI VFeroag^8^"8
l_U'a»L-^\^rr^Huozhou
COAL TYPE
GANSU
ijiagou Mine,
-Zibo
SHANDONG
/Tongcpuan
Hancheng
Yima
Pingdingshan
Jiaozuo
Datun Elec. Co.
EXPLANATION
10 >1D million tons per annum
5 >5<10 million tons per annum
1 >1<5 million tons per annum
0.5 >5QO,ODD<1 million tons per annum
0.05 >50,000<50Q,000 tons per annum
na coal type not available
lig mainly lignite production
sub mainly sub-bituminous coal
b moinly bituminous coal
sa mainly semi-anthracite
m.t. mixed types
2-14
-------
• The Ordos Basin is an extensive coal basin, spanning the provinces of Shaanxi, Gansu, Ningxia, and Inner
Mongolia. It contains Carboniferous, Permian, and Jurassic coals (Walker, 1993). Major CMAs contained within
the Ordos Basin include Tongchuan, Wuda, and Cuijiagou, which produce subbituminous and bituminous coals.
• Most of the coal seams in Henan Province are relatively deep, and were deposited in Permo-Carboniferous
time. The Yuxi Basin contains the Pingdingshan and Yima CMAs.
• The Xuhuai Basin, located in northern Anhui Province, contains substantial anthracite and bituminous deposits
of coking coal. It is a large basin, covering 4,000 km2 and containing 12 coal mines, 10 of which are considered
highly gassy mines. Seam depth ranges from 400 to 1,000 m, with 13 to 46 seams, 4 to 13 of which are
mineable in various parts of the basin. The basin contains the large Huaibei CMA. At these mines, seam
thickness ranges from 1 to 19 m. The coal-bearing strata are predominately steeply dipping, but free of intense
structural deformation.
• The Huainan Basin is an important coal basin in southern Anhui and Jiangsu Provinces, covering an area of
2,500 to 3,000 km2 (Yang et al, 1995). Depth to the coal seams is generally less than 1,000 m, with a maximum
depth of 1,700 m. There are 10 to 18 seams considered mineable; four to five major seams are 2 to 6 m thick.
Permo-Carboniferous coal seams range in rank from low to high volatile bituminous, much of which becomes
coking quality with depth. The Huainan Basin is linked by railroad to the ports of Suzhou and Shanghai.
2.3.4 SOUTH REGION
The South Region comprises of Paleozoic and Mesozoic bituminous and anthracite coals, of Paleozoic and
Mesozoic age, with less important coal seams deposited during the late Tertiary. Most of the coal deposits in the
region were deposited in the Permian and late Triassic-early Jurassic (Figure 15). Important deposits of extractable
coal deposits in the eastern part of this region are limited to complex tectonics and thinner seams. These deposits
are scattered throughout the provinces of Hubei, Hunan, Guangxi, Guangdong, Fujian, Zhejiang, Jiangxi, and South
Anhui (Figure 19). Numerous medium and small coal mines are currently operating in this area.
Permian coal deposits in Guizhou, Sichuan, and Yunnan Provinces are more substantial, accounting for about 75
percent of the total coal resources in the South Region. Although the southwestern part of this region lacks the
infrastructure of the North Region, the government is committed to aggressively developing these coal resources.
Some of the key coal basins in the South Region are:
• The Chuannon-Qianbei Basin is located in Sichuan and Guizhou Provinces. It contains thick, bituminous coals
good for coking. There are both semi-anthracite and lignite deposits in Sichuan Province. Major CMAs in this
basin include Songzao, Furong, Nantong, and Zhongliangshan. The Songzao CMA, between Sichuan and
Guizhou Province, recovers and uses coalbed methane from underground methane drainage systems. In 1992,
Songzao drained 67 million cubic meters, or 33 percent of the mine gas liberated.
2-15
-------
COAL TYPE
na coal type not available
lig mainly lignite production
sub mainly sub-bituminous coal
b mainly bituminous coal
sa mainly semi-anthracite
m.t. mixed types
PRODUCTION
1Q >10 million tons per annum
5 >5<1D million tons per annum
1 >1<5 million tons per annum
0.5 >500,000<1 million tons per annum
0.05 >5D,ODQ<500,000 tons per annum
COAL TYPE
Longmenshan
Charigzhou City
Yarong LMA\
Yili LMA
ANHUI
Wutong LMA\
—Dazhu
Zhongliangshan
Xuanjing LM
ZHEJIAKJG
/ Shangrao LMA
\ Songzao
* Tongzi LMA
/ Lindong
Fengcheng
xiang t^Luoshi
Snangjing
Tianhushan
/ Luocnang
1—
Youjiang X Hongmao
?Pingsh(
Heshan J^Xiwan
GUANGXI ^ GUANGDONG \
\ 7 vMeixian
Siwangzhang
v Manning
\ ^ Nalong Mine f /Maoming
Donglou
—Changguang
2-16
-------
• Huayingshan-Yongrong Basin is located in northern Sichuan Province. The basin contains two large CMAs with
high gas mines, the Yongrong and Huayingshan CMAs.
• Guizhou Province contains large coal reserves which have only been recently explored. They consist mainly of
Permian bituminous and anthracite deposits. The Liapanshui coal basin is the most extensively developed coal
basin in the province. The Panjiang, Shuicheng, and Luizhi CMAs are located in this basin.
• There are six gassy mines in Yunnan Province, however, none of these are part of large, state-run CMAs. They
are the Yipinglang, Yangchang, Laibin, Tianba, Houshou, and Enhong mines. Neither coal gas content nor
specific emissions data are available for these mines.
2.3.5 NORTHWEST REGION
The Northwest Region is geologically similar to the North region, containing large resources of mainly Jurassic and
some Permo-Carboniferous deposits of bituminous coal. The deposits are located in the provinces of Xinjiang,
Gansu, and Qinghai (Figure 20). Despite large reserves, coal production is low due to the lack of infrastructure and
the region's distance from heavy industry and population centers.
Xinjiang Province, located in extreme northwest China, contains the largest estimated coal resources of any
province. Jurassic coal deposits range from lignite to bituminous in rank, and are mostly is high volatile bituminous.
Three large basins, the Junggar, Tu-Ha, and Yili Basins, contain numerous thick coal seams, ranging to a maximum
thickness of 200 m. Although current production in this region is limited, it is an area with a great potential for future
coal development.
2.4 COALBED METHANE RESOURCES AND EMISSIONS ESTIMATES
The Xi'an Branch Institute of the Central Coal Mining Research Institute (CCMRI) estimates that China's coalbed
methane resources, at depths less than 2000 meters, total 30 to 35 trillion cubic meters (Sun and Huang, 1995). This
estimate is the product of a special study entitled "Evaluation of Coalbed Methane Resources in China".
High gas or outburst-prone coal mines account for almost half of the key state run mines in China. Table 7
summarizes 1994 methane emission data for high methane mines, low methane mines and open pits. Based on
data from 334 major coal mining areas in China, there are 149 areas with high gas content, and 185 mining areas
with low methane content.
Appendix C lists the 1992 and 1994 emissions data by province for these mines (Tables C-1 and C-2, respectively).
Table C-3 lists 12 local mine areas (LMAs) that are considered by MOCI to be high gas.
2-17
-------
EXPLANATION
PRODUCTION
COAL TYPE
-|Q >10 million tons per annum
5 >5<10 million tons per annum
1 >1<5 million tons per annum
na coal type not available
lig mainly lignite production
sub mainly sub-bituminous coa
b mainly bituminous coal
0.5 >500,000<1 million tons per annum sa majn|y semi-anthracite
0.05 >50,000<500,000 tons per annum
SHAANXI
2-18
-------
According to the CM, the CMAs whose average specific emissions exceed 20 cubic meters per
ton are as follows:
• Northeast China: Fuxin, Yingcheng, Liaoyuan, Qitaihe;
• North China: Xiahuayuan, Beipiao, Baotou, Yangquan; and
• South China: Tianfu, Huayingshan, Nantong, Yongrong, Furong, Liuzhi, Shuicheng, and
Songzao.
TABLE 7 - SUMMARY OF 1994 METHANE EMISSION DATA
CHINA'S KEY STATE-RUN MINES
NUMBER OF MINES:
Total
With Drainage
METHANE VENTED (10b mj)
METHANE DRAINED (10b mj)
TOTAL LIBERATED (10b mj)
DRAINED & USED (10b mj)
DRAINED & VENTED (10b mj)
TOTAL EM ITTED (1 Ob mj)
COAL PRODUCTION (10btons)
ABSOLUTE EMISSIONS (rrrVmin)
SPECIFIC EMISSIONS (mj/t)
LOW METHANE
MINES
351
0
798.6
0.0
798.6
0.0
0.0
798.6
248.1
1519.4
3.22
HIGH METHANE
MINES
318
131
3,863.5
561.3
4,424.8
395.2
166.1
4,029.6
190.5
8418.6
23.23
OPEN PITS
14
0
106.1
0.0
106.1
0.0
0.0
106.1
30.1
201.9
3.52
TOTAL
683
131
4,768.3
561.3
5,329.5
395.2
166.1
4,934.3
468.7
10139.9
11.37
Source: Fushun CCMRI, 1995
In 1994, 318 of the 683 state-run mines
listed, or 46.5 percent, were classified as
high gas or outburst mines. High gas mines
are defined as those mines with specific
emission greater than 10 cubic meters per
ton, and low gas mines are those with
specific emissions less than 10 cubic meters
per ton. As shown in Figure 21, total
emissions of coalbed methane increased
steadily, from 3.12 billion cubic meters in
1985 to 4.48 billion cubic meters in 1993.
Over this 8-year period (from 1985 to 1993),
total emissions increased by an average of
170 million cubic meters per annum.
Underground gas drainage is practiced in
many mines to improve mine safety. In
1994, 131 mines had methane drainage
systems. A total of 4.425 billion cubic meters
of methane was emitted from all mines in
1994. Of this, 561 million cubic meters of
methane were recovered. A total of 395
million cubic meters, or 70 percent, of the
FIGURE 21. INCREASE IN METHANE
EMISSIONS AT STATE RUN COAL MINES
4.
3C .
{/) 1 .
w J
0)
"S
£ 05.
o *A
15
" 2 -
c *
_0
m™ 1 *\ .
•1 .
n e .
0.
S
/
^^
^
+^~
^-^
1985 1987 1989 1991 1993
2-19
-------
recovered methane was used. This represents less than 10 percent of the total methane
liberated from Chinese mines.
Table 8 is a summary of emissions data by province, and indicates the amount of methane
recovered and used by the key state-run mines whose specific emissions are greater than 10
cubic meters per ton of coal mined. Appendix C (Table C-4) lists detailed information on
individual high gas CMAs.
Current methane recovery and methods are discussed in greater detail in Chapter 3. Figure 22
shows the location of these high gas mines. Many of these mines, which are currently
recovering methane, are discussed in detail in Chapters 3 and 4.
Figure 23 shows China's coal basins, along with the coalbed methane generation potential and
storage capacity. The Xi'an branch of CCMRI classifies these prospects as follows:
• Low generation potential and medium storage capacity
• High generation potential and low storage capacity
• High generation potential and high storage capacity
• Variable generation and low storage capacity
These four categories give an indication of the coalbed methane potential for selected Chinese
coal basins; the optimal category for coalbed methane production is high generation potential
and high storage capacity. As Figure 23 shows, the North, Northeast and South regions
contain several coal basins with these characteristics, and many key state-run mines are
located in these basins. One basin in the Northwest Region (the Tarim Basin) is also in this
category.
2.5 OVERVIEW OF FACTORS AFFECTING RESOURCE RECOVERABILITY IN
CHINA
China has abundant coalbed methane, but the development of this resource is limited by many
factors. Regional variations in tectonics can result in over- or underpressured zones, low
permeability, or erratic methane content, adversely affecting development of coalbed methane.
The permeability of many coal seams in China, particularly those that have not undergone
relaxation due to mining, is generally low, often less than 0.1 md; Sun and Huang (1995) cite
low permeability as the single most unfavorable factor affecting the development of coalbed
methane in China. Experience in the US indicates that the optimal permeability for coalbed
methane development is about 3 to 4 md, and that it should be no lower than 1 md.
Underpressured reservoirs are another relatively common problem in China. Based on analysis
of available data and ongoing testing for coalbed methane development, most coal seams in
China have low reservoir pressures, ranging from 0.5 to 3.0 MPa. A small number of mines
operating at depths of 800 to 1000 m have reservoir pressures as high as 5 to 8 MPa. In the
US, by comparison, the Blue Creek Seam of the Warrior Basin has reservoir pressures of 5.6
MPa at a depth of only 600 to 800 m. Coal seams with low permeability or those that are
underpressured may not be effectively stimulated by hydraulic fracturing, and may ultimately
yield low production.
2-20
-------
Table 8: KEY DATA PERTAINING TO METHANE LIBERATION FROM HIGH GAS MINES BY PROVINCE
NO. AVERAGE
MINES
PROVINCE REGIO (1994) SPECIFIC
N
EMISSIONS
(m3/T)
Heilongjiang NE 32 29.5
Jilin NE 18 19.1
Liaoning NE 30 22.5
TOTAL 80 24.6
Hebei N 15 15.9
Shandong N 3 17.9
Jiangsu N 2 11.0
Anhui N 17 13.6
Henan N 29 16.2
Shanxi N 24 21.2
Shaanxi N 10 25.8
Inner N 4 19.4
Mongolia
Ningxia N 6 14.7
TOTAL 110 17.7
Zheijiang S 11 30.9
Jiangxi S 15 29.3
Hunan S 31 30.9
Sichuan S 43 48.3
Guizhou S 19 37.1
Yunnan S 5 19.7
Guangxi S N/A
Guangdong S N/A
TOTAL 124 37.2
Gansu NW 4 37.2
Xinjiang NW 0 N/A
TOTAL 4 37.2
GRAND TOTAL 318
SOURC
TOTAL METHANE
LIBERATED %
(Mm3) CHANGE
1992 1994
390.1 450.1 15%
101.2 112.9 12%
549.7 536.0 -2%
1040.9 1099.0 6%
231.1 196.2 -15%
28.1 32.6 16%
13.8 12.1 -12%
248.7 303.5 22%
302.1 314.6 4%
806.8 795.5 -1%
122.0 161.3 32%
26.4 71.0 169%
73.7 92.6 26%
1852.8 1979.4 7%
31.1 28.0 -10%
123.5 111.6 -10%
104.9 103.2 -2%
644.4 618.7 -4%
389.1 416.6 7%
20.2 35.3 75%
1313.2 1313.3 0%
23.5 33.2 41%
N/A N/A
23.5 33.2 41%
4230.4 4424.9 5%
E: FUSHUN CCMRI (1995); CM (199£
TOTAL METHANE
DRAINED %
(Mm3) CHANG
E
1992 1994
16.3 13.5 -18%
0.3 1 .6 420%
132.9 142.2 7%
149.5 157.2 5%
20.7 19.3 -7%
0.0 0.0
0.0 0.0
9.5 9.8 3%
19.5 23.5 21%
114.5 115.2 1%
3.5 4.7 35%
1.4 0.0 -100%
8.0 13.1 63%
177.1 185.6 5%
0.0 0.0
9.3 1 1 .5 24%
1 .8 2.4 33%
154.1 153.0 -1%
40.6 48.5 19%
0.0 0.0
205.9 215.4 5%
0.0 3.1
0.0 0.0
0.0 3.1
532.5 561.3 5%
0; JP International (1990)
TOTAL METHANE
USED %
(Mm3) CHANG
E
1992 1994
0.0 0.0
0.0 0.0
114.9 126.7 10%
114.9 126.7 10%
10.4 14.2 37%
0.0 0.0
0.0 0.0
6.1 7.4 21%
10.6 13.8 30%
95.6 101.9 7%
0.0 0.0
0.0 0.0
3.4 5.6 65%
126.1 142.9 13%
0.0 0.0
5.1 8.0 57%
1.1 1.9 73%
90.9 101.8 12%
8.1 13.9 72%
0.0 0.0
105.2 125.6 19%
0.0 0.0
0.0 0.0
0.0 0.0
346.2 395.2
2-21
-------
v\ Qitaihe
Shangrao LMA EXPLANATION
2-22
-------
Pingzhuang
eida .
angqmg
Santang Hu
Chaean ..„.
aosha
Zhongjiakou
Daqingshan
Talimu Beiyua
anm; Yanzhu
Tu-Ha
Tadortg"Beiqi Lianzquleng
J
Zhongqiiian
~
_ Qins.
Guangwa
Tumen Ba
Changdu Mangkan
Huayingshan-Y
Chuannan-Qi
Dukou-Ch
Songliao Nanyuan
Sanjiang-Mulinkhe
Yilan-Yitong
Jiaohe-Liaoyuan
Yanbian
Dunhua-Fushun
mgyang-Hun jiang
r^npiao
g Shandou
GuizhonJ
Nannirig /
QuanXuy ,,
Liansr/aL/Chehzl
Guangznou
5guangtangLuzhong
Yubei
Luxinan
Xuhuai
Huainan
—Suzhe-Wanbian
~~ Changjiang Zhongxia You
(Lower Yangtze River)
Wuganbian
xZheganbian
Pingdong
\Yongmei
Chuanwu Xiangbian
v Yuebei
(Old Canton) SCALE
Source: Cll, 1995
2-23
-------
One key to successful coalbed methane exploitation in China will be identification of localized
areas with enhanced permeability. These enhanced zones are caused by either faulting and
folding of the coal bearing strata, or simply by the mining out of adjacent seams, causing
relaxation of the beds. In addition, coalbed methane research work in China should focus on
the development of technologies for producing methane from coalbeds with low permeability
and/or low reservoir pressures (Sun and Huang, 1995).
Underground gas drainage will continue to play an important role in China's coalbed methane
development program. Many Chinese mines are also interested in recovering methane via
surface wells, but currently lack experience in this technology (Sun et al, 1995). Chapter 3
discusses the gas drainage techniques currently used in China, including several ongoing
projects demonstrating state-of-the-art technologies.
2-24
-------
CHAPTER 3
THE POTENTIAL FOR INCREASING COALBED METHANE
RECOVERY AND USE IN CHINA
3.1 INTRODUCTION
While methane drainage has been practiced in China for several decades, tremendous
opportunities exist for increased recovery and use of methane from coal mines. Currently, the
drainage efficiency of existing degasification systems is relatively low, averaging 20 percent
(Sun and Huang, 1995). Significantly more gas could be available for use with an integrated
approach to methane recovery in conjunction with mining operations.
Chinese mines vent to the atmosphere most of the gas they produce. Based on methane
emissions data from 1994, mines in China drained about 564 million cubic meters, which
represents about 10 percent of the total methane liberated. A total of 110 government-run
mines currently have methane drainage systems. Less than one-half of these mines, however,
are set up to distribute and use recovered methane. China's mines use about 73 percent of the
methane they drain, and only about 14 percent of the total methane they liberate. With an
integrated approach to methane recovery in conjunction with mining operations, these mines
could make available significantly more gas that could be used, rather than vented.
Gassy coal mines throughout the world are concerned, for safety reasons, with reducing the
methane concentration in mine ventilation air. As discussed in Section 3.2 below, safety is of
prime concern at Chinese coal mines due to a high number of methane related accidents.
Mines can reduce methane concentrations by increasing ventilation, or by decreasing the
amount of methane liberated into the mine workings from the coal and surrounding strata.
They can increase ventilation by increasing the size of the fans, or adding additional ventilation
shafts. Alternatively, they can reduce the methane concentration in ventilation air by
expanding methane drainage, ultimately reducing ventilation requirements. Methane drainage
can increase profits by improving mining productivity and reducing ventilation requirements. In
addition, mines can often sell the gas they recover.
3-1
-------
3.2 METHANE ACCIDENTS IN CHINA'S COAL MINES
Gas explosions and outbursts are a severe threat to Chinese mines, causing numerous
fatalities and economic loss. MOCI thus gives high priority to efforts related to controlling gas
hazards. Gas and coal dust explosions account for the largest percentage of accidents in
China's mines. Table 9 shows fatalities caused by gas and coal dust explosions in key state-
run mines from 1981 to 1993.
TABLE 9. GAS EXPLOSIONS AND OUTBURST FATALITIES
IN KEY STATE-RUN COAL MINES
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
TOTAL
EXPLOSIONS
Accidents
11
6
11
11
8
6
9
7
4
10
5
3
7
98
Fatalities
270
35
219
65
161
58
81
121
30
149
40
24
108
1361
OUTBURSTS
Accidents
4
6
4
8
7
7
5
10
10
7
6
2
12
88
Fatalities
7
17
15
18
41
16
20
42
42
41
16
12
47
334
TOTAL
Accidents
15
12
15
19
15
13
14
17
14
17
11
5
19
186
Fatalities
227
52
234
83
202
74
101
163
72
190
56
36
155
1695
Local mines face more severe conditions. Between 1983 and 1993, there were 50 accidents at
local mines with more than ten fatalities each, of which 40 accidents were caused by gas
explosions, killing 835 people. The remaining 10 accidents were caused by gas outbursts,
killing 184 people.
Methane drainage is a highly effective means of reducing emissions and preventing gas
explosions and outbursts. The following section describes historical and current trends in
methane drainage in China, as well as the potential for increasing methane recovery.
3.3 COALBED METHANE RECOVERY
3.3.1 TRENDS IN METHANE DRAINAGE IN CHINA
Nationwide, coalbed methane drainage nearly doubled in 14 years, increasing from 294 million
cubic meters in 1980 to 564 million cubic meters in 1994 (Table 10). In 1980, there were five
coal mining administrations (CMAs) whose coalbed methane output exceeded 10 million cubic
meters; in 1993, 13 CMAs met this criteria. Much of the progress during this period can be
attributed to improved technology and the acquisition of additional equipment.
3-2
-------
TABLE 10. METHANE DRAINAGE AT COAL MINING ADMINISTRATIONS
(Million Cubic Meters, in descending order of 1993 volume recovered)
CMA
Fushun
Yangquan
Songzao
Tianfu
Zhonglangshan
Nantong
Liuzhi
Tiefa
Panjiang
Furong
Shuicheng
Jiaozuo
Shitanjing
Fengfeng
Hegang
Fengcheng
Kailuan
Nanzhuang
Beipiao
Hebi
Tongchuan
Huaibei
Huainan
Guzhuang
Guangwang
Yinying Mine*
Jixi
Jingyuan
Lianshao
Xishan
Yongrong
Pingxiang
Hangcheng
Pingdingshan
Shenyang
Yaojie
Yinggangling
Baisha
Benxi
Jingjing
Leping
Xuangang
Baotou
Fuxin
Liaoyuan
Shizuishan
TOTAL
PROVINCE
Liaoning
Shanxi
Sichuan
Sichuan
Sichuan
Sichuan
Guizhou
Liaoning
Guizhou
Sichuan
Guizhou
Henan
Ningxia
Hebei
Heilongjiang
Jiangxi
Hebei
Shanxi
Liaoning
Henan
Shaanxi
Anhui
Anhui
Shanxi
Sichuan
Shanxi
Heilongjiang
Gansu
Hunan
Shanxi
Sichuan
Jiangxi
Shaanxi
Henan
Liaoning
Gansu
Jiangxi
Hunan
Liaoning
Hebei
Jiangxi
Shanxi
Inner Mongolia
Liaoning
Jilin
Ningxia
1980
99.88
85.78
10.70
5.44
18.56
1.70
1.94
2.52
0.08
0.58
1.93
2.27
0.00
4.49
3.22
9.77
3.08
0.00
3.59
5.21
0.00
1.69
2.47
0.00
0.00
3.48
2.47
0.00
0.31
0.86
0.00
0.18
0.00
0.00
0.00
0.00
0.00
0.25
0.39
0.57
0.35
0.01
16.44
1.17
2.39
0.00
293.77
1985
102.12
89.52
34.09
12.91
18.83
7.18
4.66
1.80
0.01
1.24
1.64
3.86
0.00
6.25
1.10
4.67
4.44
0.00
2.09
6.91
0.00
4.25
4.74
1.28
0.00
1.16
7.34
0.00
1.60
NA
0.00
0.89
0.00
0.00
0.04
0.00
0.20
NA
NA
NA
NA
0.00
4.20
NA
1.25
0.00
330.27
1990
108.63
76.91
59.23
22.59
21.50
22.00
11.00
10.17
5.64
12.43
5.35
10.26
0.15
7.62
3.95
8.01
8.35
0.00
5.93
7.12
0.00
3.16
4.06
3.68
0.00
3.54
5.42
0.00
1.40
1.50
0.00
0.44
0.00
0.00
0.17
0.00
0.06
0.04
NA
NA
NA
0.00
4.66
NA
0.37
0.00
435.34
1992
109.73
106.11
60.70
26.59
24.31
26.03
18.35
16.80
8.16
13.87
14.11
11.66
7.99
11.97
9.04
7.90
8.69
3.24
6.21
8.02
3.50
4.72
4.78
3.77
1.17
3.60
7.30
1.41
1.70
1.05
0.79
1.20
1.00
0.13
0.11
NA
0.16
0.13
0.00
0.00
0.00
0.00
NA
NA
0.33
0.02
536.35
1993
113.36
90.53
76.31
25.10
22.07
20.27
18.41
16.26
15.00
14.10
12.75
12.27
11.04
9.89
9.88
8.27
8.07
7.83
6.57
6.48
5.05
4.66
4.20
3.75
3.70
3.70
3.37
2.00
1.67
1.47
1.44
1.28
1.09
0.65
0.22
0.20
0.13
0.00
0.00
0.00
0.00
0.00
NA
NA
NA
NA
543.04
Note: 1994 drainage totaled 564 million m3; a breakdown by CMA was not available
* Yinying Mine is not associated with a CMA; it is under the jurisdiction of the Shanxi
Province Coal Administration
Shaded CMA's are profiled in Chapter 4 SOURCE: CM, 1995 and Huang, 1995
3-3
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FIGURE 24. ANNUAL METHANE
DRAINAGE FROM CMAs
600
o
= 100
1980
1985
1990
1993
Figure 24 shows the annual methane
drainage from CMAs. During the period
1980-1993, the Fushun and Yangquan
CMAs consistently recovered more
methane than all of the remaining CMAs
combined. In 1993, the Fushun, Yangquan,
and Songzao mines accounted for 52
percent of the total methane drainage from
Chinese mines. Figure 25 shows the
locations of the 46 CMAs1 that drain
methane. The greatest increase in methane
drainage since 1980 occurred at the
following CMAs: Songzao, Nantong,
Zhongliangshan and Furong in Sichuan
Province; Tiefa in Liaoning Province; Liuzhi in Guizhou Province; Jiaozuo in Henan Province;
and Hegang in Helongjiang Province. The CM considers these CMA's as key areas for future
coalbed methane development.
3.3.2 METHANE DRAINAGE METHODS
Underground coal mines can employ several different techniques to recover methane. The
most attractive option for a specific mine depends on site specific conditions, including:
• development and topography of the surface;
• the thickness and depth of the targeted seam;
• the amount of methane contained in the coals;
• the mining method used;
• the number of mined seams;
• the efficiency of the ventilation system;
• equipment availability; and,
• local experience.
The principal drainage methods used worldwide are pre-mining and in-mine degasification,
enhanced gob well drainage, and, in some instances, an integrated approach that combines
these techniques. Table 11 lists methane recovery and use options along with support
technologies needed to apply these methods.
Drainage efficiencies and the amount of methane drained per ton of coal mined indicate the
effectiveness of a drainage system. Table 12 summarizes these data for 98 Chinese mines.
One of these, the Yingying Mine, is not associated with any CMA; it is under the jurisdiction of the
Shanxi Province Coal Administration
3-4
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3-5
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TABLE 11. SUMMARY OF OPTIONS FOR REDUCING METHANE EMISSIONS FROM COAL MINING
Technology or
Parameter
Recovery Techniques
Support Technologies
Gas Quality
Use Options
Availability
Capital Requirements
Technical Complexity
Applicability
Methane Reduction*
Gas Recovered from
Gob Wells
• In-Mine Boreholes
• Vertical Gob Wells
• In-Mine Drills and/or
Basic Surface Rigs
• Compressors,
Pumps, and other
support facilities
• Medium Quality
(11-29MJ/m3)
(300-800 Btu/cf)
(approx. 30-80%
CH4)
• On-Site Power
Generation
• Gas Distribution
Systems
• Industrial Use
• Currently Available
• Low
• Low
• Widely Applicable
• Site Dependent
• Up to 50%
Gas Recovered in
Advance of Mining
• Vertical Wells
• In-Mine Boreholes
• In-Mine Drills and/or
Advanced Surface Rigs
• Compressors, Pumps,
and other support
facilities
• High Quality
(32-37 MJ/m3)
(900-1 000 Btu/cf)
(above 90% CH4)
• Chemical Feedstocks
in addition to those
uses listed for
medium quality gas
• Currently Available
• Medium/High
• Medium/High
• Technology, Finance,
and Site Dependent
• Up to 70%
Gas Recovered from
Ventilation Air
• Fans
• Surface Fans and Ducting
• Low Quality
(<1% CH4; usually below
0.5%)
• Combustion Air for On-
Site / Nearby Turbines
and Boilers
• Requires Demonstration
• Low/Medium
• Medium/High
• Nearby Utilization
• Site Dependent
• 1 0-90% recovery
Gas Recovered from All Sources
• All Techniques
• All Technologies
• Ability to Optimize Degasification
using Combined Strategies
• All Qualities
• All Uses
• Currently Available
• Medium/High
•High
• Technology, Finance, and Site
Dependent
• 80-90% recovery
* These reductions are achievable at specific sites or systems
After USEPA, 1993
3-6
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TABLE 12. DRAINAGE EFFICIENCIES AT CHINESE MINES
Number of Mines
59
15
24
TOTAL 98
Drainage Efficiency
<10%
>15%
>20
Amount Drained (m3/ton)
>20
>10
The following portions of this section describes methane drainage methods typically used in
China.
Drainage from Working Seams
In the case of a single seam, boreholes are
drilled from the haulage roadway into the
seam, in a parallel or fan-shaped pattern
(Figure 26). Quality of gas will vary greatly
depending on local geology, coal rank, and
the efficiency of the drainage system.
Typically, medium quality gas (11-30 MJ/m3)
will be recovered. The advantage of this
method is that it is inexpensive and can be
implemented out relatively quickly. The
drainage efficiency is low, however, usually
about 20 percent. In general, the drainage
efficiency can be increased by using longer
parallel holes with larger diameter (up to 300
mm), and lengths ranging from 70 to 80
percent of face length.
FIGURE 26. PLACEMENT OF BOREHOLES
WITHIN COAL SEAM, XIE NO. 2 MINE(Plan View)
Haulage roadway
FIGURE 27. PLACEMENT OF CROSS-
MEASURE BOREHOLE FOR METHANE
DRAINAGE (Side View)
Coal Seam
Borehole Rock
roadway
In the case of very thick, dipping seams or
multiple seams, cross-measure boreholes are
drilled for pre-drainage (Figure 27). The drilling
station is set up in a rock heading beneath the
seam. Boreholes cross the seams and
adjacent strata, intercepting the bedding
planes and cross-cutting features through
which liberated methane flows into boreholes.
Therefore, with cross-measure boreholes the
drainage efficiency is much higher than with
parallel boreholes drilled within seams.
3-7
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Drainage From Adjacent Seams
FIGURE 28. IMPACT OF MINING ON
OVERLYING STRATA
After a seam is mined, the overlying or
underlying strata will be relaxed, deformed
and fractured, liberating methane into the
working face through these fractures
(Figure 28). In order to reduce these
methane emissions, it is necessary to drain
gas from these strata during mining. The
degree of relaxation, and consequent
volume of methane liberated, depends on
the competence of the adjacent strata.
Figure 29 shows the gas release and
relaxation zone boundaries. It also shows
where to place boreholes within these
relaxation zones so as to optimize methane
drainage.
FIGURE 29. CROSS-SECTION OF LONGWALL ROOF AND FLOOR STRATA
Gas release and
relaxation zone
boundaries
^ Coal seams
\ in the floor
Cross-measure
holes in the floor
After Lunarzewski et al, 1995
3-8
-------
FIGURE 30. BOREHOLE PLACEMENT FOR
DRAINAGE FROM ADJACENT SEAMS
Borehole
Seam
In most cases, drilling sites are set up in a
development entry (Figure 30). Boreholes
are drilled into adjacent seams, and should
be located within the fracture zones that
open during mining, and accompanying
strata relaxation. Boreholes may be 20-50
m apart, with a diameter of 70-150 mm.
Methane drainage begins after the working
face advances about 10-30 m past the
drainage borehole, and stops when the
working face is 100-200 m past the
borehole. The gas is generally of medium
quality, similar to that recovered from
working seams, as described previously.
Drainage From Gob Areas
According to information from about 60 mines, methane liberated from gob areas typically
accounts for 25-30 percent of total emissions from a given mine, and can be as high as 50
percent in some mines. In order to reduce methane emissions from gob areas into ventilation
roadways, gob gas drainage has been implemented in some mines. Since the 1950's, mines of
the Fushun CMA have recovered 600 million cubic meters of methane from gob areas.
„ ,., ,. Development
Ventilation entry
entry
FIGURE 31. BOREHOLE PLACEMENT
FOR DRAINAGE FROM GOB AREAS
Borehole
n x j Ventlation
Cavad roadway
material
In general, gob gas is accumulated at the upper area
of the roof cavity. Therefore, an effective approach
is to drill boreholes from the ventilation roadway into
the upper area of the cavity (Figure 31). The most
efficient number and spacing of vertical gob
boreholes per panel depends on underground
conditions. The concentration of methane drained
gob areas can be as high as 60-80 percent, and flow
rates can reach 3-4 cubic meters per minute.
Drainage Using Surface Wells
Methane drainage using surface wells is new to China's coal mines. Compared with
conventional natural gas production in China, coalbed methane reservoirs have poor
permeability and furthermore tend to be underpressured. Therefore, it may be necessary to
fracture or otherwise stimulate coal seams. Surface wells are used in order to increase
methane production.
The State Science and Technology Commission approved China's first surface well methane
drainage demonstration project in 1989. The project, located at the Kailuan mine, set out to
3-9
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develop key technologies for well-drilling, fracturing and production of coalbed methane from
surface wells. Participation of US coalbed methane consulting firms provided the introduction
of modern equipment. In 1992, the Kailuan project was included in a Global Environmental
Facility (GEF) project, executed by the United Nations Development Programme (UNDP), titled
"Development of Coalbed Methane Resources in China". Now, more than 20 projects involving
surface drainage from vertical surface wells are underway in China. Of these, several CMAs
have surface wells that are now producing methane, including: Fengcheng in Jiangxi Province;
Dacheng in Hebei Province; Jincheng in Shanxi Province; and Tiefa in Liaoning Province.
Production rates from the No. 1 test well of the Dacheng project reached 6,000 cubic meters
per day. MOCI plans to select several coal basins for intensive development based on a
nationwide evaluation of coalbed methane resources. As noted in Section 3.5, the Xi'An
branch of the CCMRI is conducting this resource evaluation, which is funded by the GEF
project. MOCI expects to build two to four coalbed methane production centers by year 2000.
3.3.3 OPTIONS FOR INCREASED RECOVERY
Significant opportunities exist to increase the quality and quantity of gas recovered in China.
Chinese mines currently rely on in-mine degasification from the working and adjacent seams,
and in-mine gob drainage. Drainage efficiencies could increase significantly with updated
technologies, including: vertical pre-mine drainage from surface wells; in-mine pre-mine
drainage employing hydraulic fracturing and possibly horizontal longhole drilling, techniques;
and drainage of methane from gob areas using surface boreholes.
The effectiveness of degasification systems at all mines must be assessed on a site-specific
basis, and will depend on factors such as:
• methane content of the coal;
• volume and rate of methane liberated;
• type and age of the mine;
• time available for degasification before the coal is mined; and,
• geologic conditions such as faulting, fracturing, and characteristics of adjacent strata.
Commonly, recovered methane is vented during periods of low gas demand, such as during
the night (when few people are cooking) and during the summer months. Due to recent reform
of China's energy policy, however, there is newly found interest in expanding methane use,
both regionally and locally. Many regions face serious coal shortages, and need additional
local sources of energy. Coal used for cooking and heating is a major source of local air
pollution and has contributed to a greater interest in developing clean-burning natural gas
resources. For this reason, municipalities often pursue coalbed methane projects most
aggressively.
In the near term, basic improvements to existing technology could increase the quality and
quantity of gas recovered. Typically, Chinese mines now drain gas with methane
concentrations from 40 to 60 percent. Mines could improve their recovery systems by
monitoring gas quality; regulating quality by stopping leaks in the in-mine and surface gas
gathering systems; and modifying drilling and completion techniques (such as hydraulic
fracturing and more optimal placement of drainage wells). In the longer term, an integrated
approach to mine drainage could maximize the recovery of methane and improve mine
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profitability and safety. This could include recovery of methane before, during, and after
mining, both from the surface and within the mine.
Methane drainage efficiency at China's coal mines averages less than 20 percent. A primary
cause of this low efficiency is the low permeability of coal seams in many mines. Outdated
drilling and drainage equipment is also a problem at least 30 percent of the coal mines with
existing drainage systems. As discussed below, drainage efficiencies could increase
significantly with modern equipment and updated technologies, including fracturing seams to
enhance permeability, and using integrated drainage methods.
Enhancing Fracture Conductivity
Enhancing fracture conductivity would lead to significant increases in methane recovery during
single-seam pre-drainage efforts. Several mines have tested methods for enhancing fracture
conductivity. The No. 2 mine at the Hebi CMA (see Chapter 4 for details) and the Liwangmiao
Mine in Hunan Province tested the use of high-pressure water jets to cut slots in their coal
seams. The No. 1 Mine at the Yangquan CMA, Longfeng Mine at the Fushun CMA, and
Zhongmacun Mine at the Jiaozuo CMA tested hydraulic fracturing using clear water and sand.
The tests showed that the fracture lengths reached 100 m with water pressures of 10 to 20
MPa and flow rates of 0.5 to 2 m3/min. As a result, methane flow from a borehole increased to
0.5 to 2 m3/min., about 100 times the rate prior to fracturing.
Integrated Recovery Methods
At some sites, drainage efficiencies can increase to over 75 percent using a combination of
pre-mining, during mining, and post-mining techniques. Experience from many mines shows
that the drainage rate could increase significantly by taking advantage of strata relaxation,
enhancing permeability; this holds true for both single-seam and multiple-seam mining. In
addition, more and more mines in China are recognizing the importance of methane recovery
from gob areas, now that the significance of coalbed methane as an economic resource is
being recognized.
Use of Updated Technology
In order to achieve high drainage efficiencies, it can be effective to drill horizontal longholes
from an adjacent haulage way into the fractured zone above the gob. In this case, in-mine
directional drilling may be the best option. Recently, the Tiefa Coal Mining Administration
imported directional drills for a methane drainage project that is part of the GEF-funded project
mentioned in Section 3.3.2. Other improvements that would increase methane recovery
include:
• improvement of gas collection systems, including more efficient moisture
separation;
• equipment for grouting standpipes under pressure to ensure a bond to the rock;
• effective use of modern drilling and monitoring equipment; and,
• enforcement of safety standards and practices.
3-11
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Methane Drainage Using Surface Wells
Experiences with methane production in the US show that surface wells can recover up to 70
percent of the methane in place. Surface well demonstration projects are currently underway in
the Kailuan, Huainan, Jincheng and Tiefa CMAs, and in unmined areas of the Dacheng Basin
in the Tianjin region southeast of Beijing. The preliminary results of these projects are
promising. Recent testing of three vertical gob wells at Tiefa has been encouraging, as noted
in Section 3.5.
3.4 COALBED METHANE USE
Increased methane recovery will only be economically and environmentally feasible if it is
accompanied by increased use. Because most of China's coal mining areas are distant from
integrated pipeline networks, opportunities for large-scale, off-site use of methane are limited.
In contrast, many opportunities exist for on-site uses for the gas, because of the large volume
and close proximity of potential industrial and residential users.
Based on 1993 data, China already uses about 395 million cubic meters (approximately 73
percent) of the 543 million cubic meters of methane recovered from its coal mines annually,
mainly in the residential and industrial energy sectors. Forty of China's 110 coal mines
recovered their methane. While this is a commendable use rate compared to many countries,
the remaining 148 million cubic meters that they
vented to the atmosphere presents a large
volume of wasted methane that can be
recovered and used. Less that one-half of the
mines with drainage systems use any of the
drained methane. China's recent reforms in the
coal industry have increased the focus on
coalbed methane use, as exemplified in Box 2.
The best options for the use of mine methane
will vary regionally, depending on the quality and
quantity of gas, and local energy markets. Any
additional use of coalbed methane for
commercial and residential heating that would
displace the current dependence on coal could
significantly improve local and regional air
BOX 2. CHINA'S INCREASED
FOCUS ON COALBED METHANE
RECOVERY AND USE
Since 1982, MOCI's Department of
Coal Processing and Utilization
(DCPU) has included gas use in its
energy strategy. Using state allocated
funds, such as the coal-substitute-oil
fund, and various preferential loans,
DCPU has completed over 50 gas use
projects. These include installation of
gas storage facilities with a volume
capacity of 650,000 cubic meters, and
construction of 620 km of gas
pipelines to provide 220,000
households with coalbed methane
(Sun and Huang, 1995).
quality. In addition, mines can be potentially
increase profitability by expanding their use of methane on site, and/or by selling it to nearby
industries.
The following sections discuss various options for using methane recovered from coal mines.
The most viable options include on-site heating of water and air; cofiring methane with coal in
mine boilers; use in gas turbines; and domestic (residential) uses, such as heating and
cooking.
3-12
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3.4.1 DIRECT INDUSTRIAL AND RESIDENTIAL USE OPTIONS
As discussed in Chapter 1, industry consumes two-thirds of the total energy produced in
China. One of the key opportunities for expanded coalbed methane use is substitution for coal
at mines and in nearby industries. Specific uses depend on conditions at specific mines, but
include:
• on-site heating of water and air;
• thermal coal drying;
• heating of ventilation air; and,
• substitution for coke gas, coal or gas in local industries.
Combined heat and power generation facilities located at mine sites often use low-quality coal
as the main fuel source. Often this coal has low heating values, and a high ash and sulfur
content, resulting in low energy efficiency and decreased air quality. During winter months,
when heat and electrical requirements are high and atmospheric inversions occur, air pollution
generated by these facilities severely impacts the local communities. Coalbed methane could
readily displace the use of coal at mine sites, providing increased energy efficiency while
improving the local environment. Availability of coalbed methane may permit conversion of
existing coal-fired boilers to co-fire with gas.
As an alternative fuel, coalbed methane can replace lignite, hard coal and coke oven gas, and
conventional natural gas. Coalbed methane is an environmentally sound fuel and has high
thermal efficiency. The heating value of methane is 8000-9000 calories per cubic meter; 1000
cubic meters of methane is equal to about 1 ton of coal equivalent. Currently, the use of
coalbed methane in China includes on-site heating of water and air, heating of ventilation air,
and on-site coal drying. In addition, relatively small amounts of coalbed methane are used for
production of chemical products. For example, the Songzao Coal Mining Administration has
built a chemical plant with a capacity of 600 tons of carbon black annually.
Box 3 describes several uses of coalbed methane in China by industries that would otherwise
employ coal.
BOX 3. INDUSTRIAL USE OF COALBED METHANE IN CHINA
In China, coalbed methane has numerous applications in industry. Potential users of CBM are the
many on-site or nearby industries operated by the coal mines. China already uses coalbed methane
locally, and the potential to expand use is significant. Examples of local use opportunities include the
carbon black plants near the large state-run mines.2 The first factory producing carbon black was built
in 1952 at the Longfeng Coal Mine in the Fushun CMA (see the Fushun profile in Chapter 4 for
additional details). Now there are carbon black plants at several of the larger CMAs. In 1970, a
formaldehyde factory with an annual production of 500t was built at West Opencast Mine at the
Fushun CMA, although due to decreased demand for formaldehyde it is not longer in operation. Other
users include powder, plastic, and glass factories at the Fushun CMA (Huang L, 1995). In Hebei
Province, there is a ceramics operation at the Kailuan CMA, which could readily use CBM for its daily
operations.
2 Carbon black is an amorphous form of carbon produced commercially by thermal or oxidative
decomposition of hydrocarbons. It is used primarily in rubber goods, pigments, and printer's ink.
3-13
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There are also many opportunities for increasing use of coalbed methane in the residential
sector. These residential uses include cooking and heating at mine residences as well as
dining, child care, and school facilities. Town gas (gas manufactured from coal) is sometimes
employed for these purposes, but coalbed methane requires less investment and provides
higher benefits, because it does not require construction of a gas supply plant. Coal mine gas
supplied for residential use normally contains 35-40 percent methane, but no harmful
impurities arise from the distillation process, therefore a complex cleaning system is not
required. As a result, residential use of coalbed methane is becoming widespread throughout
the mining regions.
3.4.2 NATURAL GAS PIPELINE SYSTEMS
Recovered coal mine gas can be compressed and transported by natural gas pipeline
systems. According to the CM, the gas must meet the following requirements: (1) Methane
content of the gas transported in the pipelines must be greater than 95%; and (2) pressure
must be between 23.8 and 37.4 atm.
In 1993, China produced nearly 17 billion cubic meters of gas from 79 fields. Currently, there
are only 5,902 km of pipelines in China, mainly in Sichuan, Guangdong, and Hebei Provinces
(the main gas pipeline system is shown in Figure 8 of Chapter 2). In addition, a 900 km
pipeline channeling natural gas from Yan'an (in Shaanxi Province) to Beijing is under
construction. For the purpose of coalbed methane development, the pipeline diameter has
been redesigned from 500 mm to 600 mm. There currently exists no large, integrated pipeline
infrastructure in China, and additional capital costs are required in order to upgrade and
increase China's pipeline system.
In general, most of the high-gas mining areas lack complete natural gas pipeline systems. At
present, a short-distance gas pipeline can be used to supply coalbed methane to nearby
users; currently, the Tangshan Mine of the Kailuan CMA injects coalbed methane into its city
gas system. Because of the proximity of many of China's CMAs to residential and industrial
areas, they are ideally suited for construction of a local pipeline network to these users. Before
initiating pipeline projects however, several issues must be carefully considered, including
transmission costs, distances from production sites to gas markets, and the productive life of
the resource.
3.4.3 POWER GENERATION OPTIONS
Electricity used by China's coal mines is provided mostly by coal-fired power stations, with
waste-fired stations providing only small amounts of power. Coal is also the dominant fuel
used for heat at mine facilities. Replacing coal with coalbed methane for power generation and
heating would not only reduce environmental pollution, but would likely increase thermal
efficiency. Numerous opportunities exist for the generation of electricity and steam at mine
power plants, since all coal mines consume electric power. Mines currently generate most of
their electricity and steam from coal. Coalbed methane could displace the use of coal in power
generation, which causes severe air pollution and is in short supply. Following is a discussion
of several power generation options that may apply well to China.
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Cofiring With Natural Gas
Cofiring is the combustion of natural gas with coal in the primary combustion zone of a coal-
fired boiler. The gas input may vary from less than 10 percent to up to 100 percent of total fuel
input depending on boiler design and the needs of the boiler operator. Intermittent gas use
may be attractive to larger power plants in the event that there is insufficient coalbed methane
to meet year-round needs. This would allow the power plant to take advantage of low summer
prices for methane, while maintaining the flexibility of burning coal when gas is either
unavailable or more expensive. Box 4 describes seasonal use of methane at mines in Ukraine.
BOX 4. GENERATION OF ELECTRICAL AND THERMAL ENERGY FOR MINE USE: UKRAINE
The Donetskugol Production Association in the Donetsk Coal Basin of southern Ukraine contains several
mines that use coalbed methane as fuel in their boiler plants. The boilers use methane when it is
available and switch to low quality coal when the quantity or quality of the gas is insufficient. There are,
however, other mines in the Coal Production Association that do not use the methane they recover, due
primarily to lack of capital for investment in the required surface facilities to collect, process, and
transport the gas to the boiler (USEPA, 1994a).
Similar situations exist at Chinese coal mines. There is a need for on-site water heating for space heating
and bathhouses. In addition, it is necessary to heat mine ventilation air during the winter months in
many northern and northeastern mines. Installation of improved methane drainage systems to recover
gas of reliable quantity and quality, and availability of capital necessary to invest in surface equipment,
would allow increased methane use.
Cofiring can yield a broad range of operational, economic, and environmental benefits,
including reduced sulfur, particulate, carbon, and NOx emissions, lower maintenance costs,
greater fuel flexibility, improved plant capacity factor, and production of salable fly ash. While
many of these benefits are site-specific, most plants will achieve at least some of them.
Cofiring can be accomplished at very low capital costs and with no technological risk; if for any
reason natural gas is no longer available, the boiler could continue to operate entirely on coal.
At some power plants in the U.S., cofiring has reduced operating costs by millions of dollars
per year (Vejtasa et al, 1991; CNG, 1987).
The only modifications required to the boiler are the addition of gas supply piping, gas igniters,
and warmup guns. In the US, the costs for minor modifications such as replacing igniters is on
the order of $US 3-7 per kW. The cost to modify burners to add dual firing capacity is on the
order of $US 10-20 per kW (GRI, 1995).
Equipping a unit to fire 100 percent gas or cofire high percentages of gas commonly includes
installation of a side-wall mounted gas burner equipped with a combustion air fan. Based on
the large diameter of such a burner, tube wall modifications are required. A conventional side-
wall mounted ring-type gas burner capable of firing the average available methane should be
rated at about 4.8 Gcal/hr.
An alternative to the side-wall mounted gas burner is to insert gas injectors between boiler
tubes along the side walls. This approach could be used to fire at least 25-35 percent of the
boiler heat input without the need for an additional combustion air supply. Greater heat input
using this approach may be possible, but would require further evaluation.
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Box 5 describes a power plant in
Poland that cofires methane along
with pulverized coal; the plant
operates more efficiently and cost
effectively.
Internal Combustion Engines
Internal combustion (1C) engines
include spark-ignited four-stroke
and diesel dual-fuel engines. They
can generate electrical power with
medium to high-quality coalbed
methane. Typical capacities of 1C
engines range from several
kilowatts (kW) to several megawatts
(MW). These sizes are much
smaller than gas turbines and
would be more compatible with the
production of coalbed methane
from a single well. As an example,
a 1 MW 1C engine would require
approximately 10,000 cubic meters
gas (30 - 80 percent methane) such
BOX 5. COFIRING OF METHANE AT THE
ZOFIOWKA CHP PLANT, POLAND
The Zofiowka mine in
Upper Silesian Basin
the Rybnik-Jastrzebie area of the
of Poland cofires methane and
pulverized coal at its CHP plant, whose capacity is 64 MWei +
320 Mwth. The plant supplies heat and power to the mine and
the town of Jastrzebie. About 10 percent of the fuel energy
consumed by the power plant is delivered in gas. During the
first half of 1994, 20.8 million cubic meters of gas, with a
methane concentration of 46.5 percent, were consumed by
the plant.
Methane is combusted in the startup burners and the backup
combustion supporting burners. Each 1000 cubic meters of
methane yields 12.9 MWh of steam, which produces 3.1
MWh of electricity, 4.7 MWh of heat energy, and 5.1 MWh of
regeneration feedwater. Use of coalbed methane in the CHP
plant is cost effective, due largely to the low price of coalbed
methane (each cubic meter of methane produces $0.08 US
worth of electricity and $0.03 US worth of heat). Using
conventional natural gas to cofire with the coal would cost
four to five times as much (USEPA, 1995c).
of methane per day. 1C engines can use medium quality
as that produced by surface gob drainage.
1C engines are modular in design and require little specialized expertise to install and maintain.
Due to their small sizes, they can be relocated easily if the gas supply is depleted. They tend,
however, to require high capital investment and maintenance costs. Previously, variations in
gas quality caused some problems with the use of mine gas in 1C engines, but with modern
integrated control systems it now appears possible to accommodate these fluctuations.
Gas Turbines
Gas turbines are more efficient than coal-fired generators, cost less to install, and are available
in a wide range of sizes. This allows utilities to add smaller increments of capacity to handle
peak consumption, rather than investing in larger, capital intensive coal-fired units that would
be underutilized. In addition, gas turbine exhaust is a source of waste heat, which can be used
to generate steam in a heat recovery boiler. Three systems which improve the thermal
efficiency of the system are: 1) Use of steam for process or district heating, known as
cogeneration; 2) Use of steam in a turbine generator for additional electrical power
production, known as a combined cycle, and 3) Use of steam injected into the hot gases
flowing to the thermal turbine, known as a steam injected turbine (STIG).
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BOX 6. GAS TURBINE AT THE FUSHUN CMA
In 1990, the Laohutai Mine of the Fushun CMA built a
coalbed methane-fired power plant that utilizes
surplus methane saved during low periods of methane
use in the summer months. The rated capacity of the
generating unit is 1,500 kW. Research indicates that
when the methane concentration reaches 40 percent,
the gas flow rate needed for generating 1,200 kWh
electricity is 35 m3/minute, and the efficiency of the
unit can exceed 80 percent.
The success achieved in using methane to generate
electricity has created additional use and conversion
opportunities. The coalbed methane-fired power plant
has an annual generating capacity of 2.8 MWh, and
can supply 1.8 MWh electricity into the electric
network (Huang L, 1995). It runs only during the
summer, however (May to September).
Gas turbines can use coalbed methane
directly from a high pressure pipeline, or
from an external coalbed methane
compressor. Box 6 describes a gas
turbine at the Fushun CMA. In most of
these cases, waste heat is recovered
from the turbine stack for use in an
auxiliary thermal process. These turbines,
which range in size from 3 to 20 MW, can
frequently supply a significant portion of a
mine's electrical needs.
The working efficiency of a gas turbine is
about 30 percent. The Raston TB5000
gas turbine, manufactured in the UK,
provides nearly complete combustion of
coalbed methane. The large amount of
waste heat in gas turbine exhaust can be
recovered by waste heat boilers and used
for heating. Gas turbines requires high-pressure fuel input (above 18 atm), and the methane
concentration of the gas must be greater than 40 percent.
Compared with other power generating technology options, steam turbines have low thermal
efficiency, but they operate reliably and have a long service life. Under normal conditions,
where a standard boiler is used to combust coalbed methane for steam generation, boilers can
use medium- to high-quality gas.
The combined cycle method is one of the most efficient methods to convert gas energy into
thermal power. Gas turbine exhaust has a high temperature and rich oxygen content, and can
be transported to waste heat boilers to generate steam for driving a turbine. Thermal efficiency
of the system can reach 45 percent.
In 1990, the Laohutai Mine of the Fushun CMA built the first coalbed methane-fired power
station in China. The power station has an installed capacity of 1200 kW, and the methane
concentration of the gas exceeds 40 percent.
3.4.4 VENTILATION AIR USE OPTIONS
Because nearly five billion cubic meters of methane are emitted annually from ventilation
systems at China's key state-owned mines alone, use of this ventilation air, if feasible, would
be highly desirable. Numerous studies have examined options for purifying this gas, but the
expense is prohibitive using existing available technology. However, as technology
progresses, it may become economically feasible to enrich the gas contained in mine
ventilation air using some of the methods discussed in Section 3.4.5 below.
At present, the best option for use of ventilation air is as part of the fuel mixture in steam
boilers, gas turbine generators, or gas engines. This has been successfully achieved at the
Appin and Tower Collieries in Australia, where ventilation air is used to help fuel a set of gas
engines, increasing overall output of the plant by 7-10 percent (IEA, 1996). Where feasible, the
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use of ventilation air should be part of an integrated methane drainage program. In general,
the targeted generation facility should be within approximately 2 km of the ventilation air
source for this option to be economic.
3.4.5 IMPROVING GAS QUALITY
Much of the 1.7 billion cubic meters of gas that mine drainage systems recover but vent to the
atmosphere each year have methane concentrations ranging from 30 to 50 percent.
Developing uses for this methane would be aided by producing the highest quality gas
possible and by ensuring that quality (concentration) variations are minimized.
In the short term, there are several relatively inexpensive, low technology methods of
improving the quality of recovered mine gas in China. These include shutting in old wells (in-
mine); reducing leaks in the in-mine and surface gas gathering systems (pipelines); and
improving grouting of standpipes. In the longer term, there are several methods for improving
gas quality which require some investment and higher technology. The three primary means
of improving the quality of gas recovered from coal mines are improved monitoring and control,
increased pre-mining drainage, and gas enrichment.
Improved Monitoring and Control
One of the most economical methods to improve the quality of gas is to reduce air entrapment
in the gas stream during the production process. This can only be accomplished by finding the
equilibrium production rate of the well, i.e., the rate at which the ratio of methane liberation in
the coal equals the rate of production at the well head.
Since the rate of methane liberation generally declines with time it is necessary to adjust
critical production parameters frequently in order to control the bottom hole pressure (BMP)
and maintain a high methane concentration in the product gas. Continuous monitoring of the
oxygen content at the well head in conjunction with adjusting the production rate to maintain a
desired gas quality is a production control technique that automatically maintains the BMP at
the required level without needing to determine its actual value. Since the mine ventilation
system and the wellbore are in communication, it is customary (and advisable for safety
reasons) to also monitor the mine ventilation system at appropriate check points.
Increased Pre-Mining Drainage
Gas drained in advance of mining usually has a higher methane content than that drained from
working faces or gob areas. Advanced pre-mining drainage techniques include:
• Use of vertical wells drilled from the surface. Chinese mines do not widely employ
this technique at present, but it has been highly successful in the US (Diamond et
al, 1989).
• Use of more numerous, and more strategically placed, cross-measure boreholes
drilled in advance of mining. Predictive techniques can be used to maximize
recovery (Lunarzewski, 1994).
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Gas Enrichment
Gas quality can be improved by enriching gas through removal of one or more of the following
contaminants: nitrogen, oxygen, carbon dioxide, and moisture. Cryogenic processes for
separating nitrogen and air for methane have been successful for large-scale conventional
natural gas operations, but require high capital investment and are economic only for very
large gas flows (millions of cubic meters per day). At present, this method would not be
economical for coal mines, which produce smaller volumes of gas.
There are a number of enrichment processes that are at various stages of research and
development, and that may in the near future be economic for small-scale plants processing
gas volumes under 300 thousand cubic meters per day, such as would be produced by the
typical coal mine.
Nitrotec Engineering, UOP, and BOC Group have each developed pressure swing adsorption
(PSA) processes that use carbon molecular sieves to adsorb methane from nitrogen and
oxygen. This type of PSA process has been proven in the laboratory and appears to be ready
for full-scale commercial operation. Costs of this process are reportedly in the range of $US 26
to $US 48 per thousand cubic meters for gas volumes between 57 and 283 thousand cubic
meters per day, and mixtures ranging from 75 to 92 percent methane (D'Amico and Reinhold,
1993).
Gas Separation Technology uses natural zeolites in a PSA process to adsorb nitrogen and
oxygen from methane mixtures. They report costs, based on laboratory tests, in the range of
$US 4 to $US 16 per thousand cubic meters for mixtures ranging from 40 to 90 percent
methane and volumes between 28 and 142 thousand cubic meters per day. This process has
not been tested in the field (Gas Separation Technology, 1995).
The Mehra process uses hydrocarbon solvents for nitrogen rejection. It has been successfully
demonstrated in the field with respect to nitrogen and moisture removal. If the process can be
proven to handle oxygen, it may be economic for volumes of 4,200 to 8,500 cubic meters per
day of mildly diluted methane (Mehra and Wood, 1993).
Bend Research uses a transition metal-based liquid adsorbent to remove nitrogen from
methane. Based on laboratory research they report costs of $US 19 per thousand cubic
meters for an unspecified mixture and volume, and expect to lower the cost to $US 11 per
thousand cubic meters (Shoemaker, 1994). This process is still in the laboratory research
phase.
Membrane Technology and Research, along with several other firms, has extensively
researched membrane separation of nitrogen and methane, which would be very attractive
because of the simplicity of membrane separations and their applicability in small plants. To
date, however, this is process is only conceptual, and there have been no reports of success
in developing a membrane of sufficient selectivity between nitrogen and methane that will
enable an efficient separation (Baker, Pinnau, and Wijmans, 1993).
None of the above methods can be said to be both proven and commercially available. It
seems likely, however, that in the near future one or more processes will prove to be
economically attractive for enriching medium-quality coal mine gas to pipeline quality.
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3.4.6 GAS STORAGE
Coal mines should consider gas storage an integral part of any coalbed methane use strategy.
With storage facilities, gas can be used as demand dictates. For example, gas that mines
produce when demand is low (such as during the summer) can be stored and used during
periods of higher demand.
The primary means of coalbed methane storage in China is surface storage tanks using the
Higgins floating lid design. Coalbed methane drained from underground mines is transported
to the storage tanks, and then supplied to nearby households, schools, and other consumers
via pressure adjustment stations and pipelines. So far, there are two sizes of storage tanks
available, one with a capacity of 5,000 cubic meters and the other with a capacity of 10,000
cubic meters. At present, China's total gas storage capacity is about 680 thousand cubic
meters, and the total length of the main pipelines exceeds 655.6 km. This is insufficient to
meet China's storage needs. To expand coalbed methane development, gas storage must be
available at or near the mines themselves, as they are a primary user. Gas storage facilities
exist at several of the larger CMAs, such as Tiefa, Fushun, and Hebi; however, mines still vent
much of the gas because of a lack of storage facilities. Construction of additional facilities is
planned, and will play a major role in expanding methane recovery and use.
In areas where a CMA has several large coal mines within a relatively small area, construction
of local pipelines and storage tanks could link the individual mines, allowing optimal gas use by
local industry and residential districts. A CMA such as Songzao, which currently has several
large mines with some pipeline infrastructure and gas storage facilities, would benefit from
such a combined option.
In many gas producing areas of the world, underground storage is the most common means of
storing gas to meet peak seasonal market demands. Although the initial cost may be
prohibitive, underground storage systems can handle much larger capacities than surface
storage. Preferred sites are porous subsurface reservoirs, including depleted oil and gas fields
as well as aqueous reservoirs. Other sites used for storage are natural and man-made salt
and rock caverns. Underground gas storage was first utilized in the United States in 1916, and
currently there are over 400 storage fields with a total capacity of more than 228 billion cubic
meters of gas. This is equivalent to almost half the annual U.S. gas consumption. In addition,
the use of underground gas storage can allow capitalization of spot gas market purchases,
and better supports management of marketing and production by producers (Thompson,
1991).
In addition to conventional storage facilities, another available option is gas storage in
abandoned coal mines. Since the early 1980's, two abandoned mines in Belgium have stored
imported natural gas (Moerman, 1982). In China, abandoned coal mines or inactive shafts of
operating mines are potential locations for gas storage. A thorough evaluation of the geologic
and hydrologic conditions at these mines is, of course, necessary to determine economic
feasibility and mine safety.
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3.4.7 NATURAL GAS VEHICLES
Vehicles are a major contributor of air pollution worldwide, emitting carbon monoxide, reactive
hydrocarbons, and nitrogen oxides. Diesel vehicles also emit particulate matter. With an
increasing number of vehicles in China, the availability of oil as the main fuel source becomes
less desirable in the future. Natural gas is environmentally preferable because its use would
reduce emission of all of the major vehicle pollutants. The economic and environmental
benefits of using methane as a fuel source are significant, especially considering the large
amount of methane vented from coal mines each year in China, and the current shortage of
vehicle fuel.
Compressed natural gas (CNG) provides a low cost, efficient, clean burning and abundant fuel
source that any internal combustion engine can use. Current natural gas vehicle technology
possesses energy efficiency ratings that are equal to or greater than gasoline and other
alternative fuels. According to the American Gas Association (1993), 2830 cubic meters (100
Mcf) of CNG is equivalent to 3785 liters (1000 gallons) of gasoline. Countries which currently
use CNG vehicles include Ukraine, Canada, New Zealand, Mexico, Spain, and the United
States (see Box 7 for a discussion of incentives in the US). One of the most common uses of
CNG vehicles is for urban fleets such as taxis, trucks, delivery vans, and buses. CNG is a
well established technology; it is proven reliable, safe, and economical, and is clean burning.
BOX 7. INCENTIVES IN THE US FOR INCREASED USE OF NATURAL GAS VEHICLES
Natural gas vehicle technology has accelerated in the US since passage of the Clean Air Act
Amendments (CAAA) in 1990. The CAAA is promoting alternate fuel vehicles by requiring areas that
have not adopted a Federal Ozone Program to convert a certain percentage of their fleet vehicles to
clean-fuel vehicles by 1998. Also, the CAAA requires attainment of national ambient air quality
standards. If metropolitan areas do not attain ozone, CO, and particulate matter standards, they face
rigid non-compliance penalties. Transit authorities can convert about 55 percent of public transit buses
to natural gas consumption.
Fleet vehicles are excellent targets for conversion to natural gas, because fleets consume a large
portion of the motor fuel in the US, are centrally fueled, and release large quantities of pollutants. The
Energy Policy Act of 1992 mandates that a percentage of fleet vehicles must be powered by clean fuels
in the future. Conversion to natural gas fueled vehicles is happening nationwide, primarily in major
private fleets, public utility fleets, transit bus fleets, and school buses. Total range of a natural gas
vehicle depends on the amount of natural gas stored in the vehicle. Converted and bi-fuel vehicles
actually have an extended range, since the driver has access to two fuels—the normal gasoline range
and the added natural gas range. Dedicated vehicles have a range of about 330 km (Natural Fuels
Corporation, 1994).
Because natural gas is cheaper than gasoline, fleet owners often see a payback of the initial cost in
three years or less, depending upon annual mileage and vehicle type. With tax and rebate incentives,
the payback period can be substantially shortened. According to the Energy Policy Act of 1992,
businesses and individuals are entitled to a tax deduction of up to $2,000 for cars, and $5,000 to
$50,000 for trucks and vans (depending on vehicle weight), for conversion and/or use of alternative
fueled vehicles (AFVs). A deduction of up to $100,000 is also offered for the cost of establishing an
AFV refueling station (Natural Fuels Corporation, 1995). In addition, several states, including California,
Colorado, Oklahoma and Texas, also offer financial incentives for AFVs, such as investment tax credits
or fuel tax exemptions.
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In order to use CNG as vehicle fuel, its methane concentration should reach 90-100 percent,
and the concentration of paraffin should not exceed ethane by more than 6.5 percent. As
methane is the primary component of coal mine gas, after enrichment, the methane
concentration could be increased to 95 percent, while the ratio of paraffin to ethane is
minimally increased. Therefore, coalbed methane is highly suited for production of CNG for
vehicle fuel.
Currently, there are over seven million vehicles in China, and the number of vehicles increases
13 percent annually. Most of these have inefficient engines and high fuel consumption, which
create major problems with the domestic energy supply and local air quality. As the number of
vehicles increases dramatically in the next several years, a key issue in China's energy and
environmental policy is to increase efficiency and satisfy emission standards. One solution is
the technological development of alternative fuel for transportation, including increased use of
natural gas, methanol, and ethanol. During the 1960's, a shortage of conventional fuel in
China spurred the use of natural gas vehicles, which were most successful in areas with
natural gas resources and infrastructure. As discussed in Section 1.2.3, recent energy
strategies emphasize increased development and use of natural gas. As the government
reduces price controls and the economy becomes more market-driven, the price of oil and
natural gas should rise to current market levels. The CMAs, which have their own fleets and
municipal buses, could benefit greatly by using CNG vehicles.
A barrier in China, as with most countries, is that there is no high-pressure natural gas vehicle
refueling infrastructure, so vehicles must be refueled directly from the pipeline. The paradox is
that the lack of refueling stations limits the development of natural gas vehicles, and the small
number of natural gas vehicles limits the development of a refueling infrastructure. Refueling
stations have been imported from Canada, U.S. and New Zealand; however, due to equipment
and vehicle problems, the stations have not been efficiently maintained (EIC, 1994).
Another use for CNG with potential applications in China has been developed in the U.S. This
technology, developed by a Texas-based company, was designed specifically to recover and
use gas produced from marginal wells, or wells isolated from existing pipelines. Gas is
compressed at the source, a specially-designed CNG trailer is connected, and the gas is
loaded into steel tubes. Gas can then be transported to an end user, where it is off-loaded.
Although designed for conventional gas, this technology could be applied to coalbed methane.
In China the most likely applications would be at the larger CMAs, where the methane
produced from underground mines is of sufficient quantity and quality to economically collect
and use locally.
Compressed natural gas may also serve to supply households with a cleaner source of fuel
than coal for cooking and heating. This use could improve local air quality and create a market
for coalbed methane where construction of a pipeline may not be economic. This could
develop a market for coalbed methane incrementally, which means up-front capital costs
would be lower and the market could develop until a pipeline project became economic.
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3.5 CHINESE ACHIEVEMENTS IN COALBED METHANE RECOVERY AND
USE
China's coal industry has accumulated enormous experience in recovering coalbed methane
using in-mine methods. In the early 1990's, China began in-mine drainage projects to improve
safety and production conditions in the mines. Use of this methane, however, is in its initial
developmental stages. Recent reforms in the energy sector have promoted increased use of
natural gas, and MOCI is now committed to develop coalbed methane as a key strategy for the
coal industry.
Forty Chinese mines are currently set up to distribute the recovered methane. CMAs supply
methane to employees for residential cooking at very low costs, as a form of social welfare.
Coalbed methane is also sold as a commodity to urban residents outside the CMAs. The
current principal industrial uses for coalbed methane are for small carbon black plants run by
the CMAs, and a small gas turbine generator at Fushun. Industrial use and gas turbines are
described in Section 3.4.1 (Box 3) and 3.4.3 (Box 6), respectively. Increased methane
recovery, and a concomitant increase in use, could displace the use of coal for cooking and
heating in the growing residential sector. Underground gob gas drainage systems, and
surface gas storage facilities are in place and operating in many CMAs. Since many of
China's mining operations are relatively close to population centers, a wide range of use
options exist, including the deployment of waste heat from turbines for district heating.
In addition to methane recovery from mines, coalbed methane exploration and development in
China's unmined areas is increasing as well. According to preliminary statistics, MOCI, the
China National Petroleum and Gas Corp. (CNPGC), the Ministry of Geology and Mineral
Resources, and local governments drilled 39 boreholes for methane resource evaluation and
production tests during the period 1990-1994. These boreholes were drilled in both mined and
unmined areas, and were financed using domestic as well as foreign capital.
Following is a summary of coalbed methane projects planned or recently undertaken3 in China
(China Coalbed Methane Clearinghouse, 1995; Wang and Li, 1995; Sun, 1995). Figure 32
shows the locations of these projects. Table 13 summarizes the projects, their locations, and
status as of December 1995.
Anhui Province
1. Huainan CMA - Enron Exploration Co. drilled four wells in this CMA, two at the Xieli mine
and two at the Panji mine. Testing indicated that permeability was low. Chapter 4 contains
additional information about the Huainan CMA.
2. Huaibei CMA - The Huaibei CMA completed a 540 m surface well at the Taoyuan Mine,
which is producing about 500-1000 cubic meters of methane per day from gob areas of
Seams 7, 8, and 10 (Li D. et al, 1995). Two coalbed methane assessment wells are being
drilled as part of a GEF National Assessment sub-project. Chapter 4 contains additional
information about the Huaibei CMA.
3 Relatively long-established coalbed methane projects, such as the recovery and use of methane at the
Fushun CMA, are not included here.
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18.Sanjiao Projects,
20. Hedong Project
. Shenyang CMA
^~3. Kailuan CMA
17. Liulin Projects,
\
15. Binchang Projects x
— 19. Yangquan CMA
—16. Jincheng CMA
5. Jiaozuo CMA
7. Yingyang Project
10. Fengcheng CMA
EXPLANATION
9. Lengshuijiang Project
. Lianshao CMA
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TABLE 13. STATUS OF COALBED METHANE PROJECTS IN CHINA
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
15
16
17
17
18
18
19
20
20
21
Coal Basin
Huainan
Xuhai
Jingtang
Lubei
Qinshui
Yuxi
Yuxi
Lianshao
Lianshao
Pingdong
Songliao
Fuxin
Dunhua-
Fushun
Various
Ordos
Ordos
Qinshui
Hedong
Hedong
Hedong
Hedong
Qinshui
Hedong
Hedong
Chuannan-
Qianbei
Participants
MOCI, Enron
Huaibei CMA
GEF, Kailuan CMA, GAI
CNPGC
Jiaozuo CMA, CCAO
Pingdingshan CMA, CNAGC, Enron
Zhengzhou City Gas Co.;Zhengzhou
City Coal Dept.;Sino-American Energy
Central China Admin. Petroleum Geol.
CNPGC, Hunan Prov. Planning Comm.
Jiangxi Province, CNPGC
GEF, Tiefa CMA, REI
Fuxin CMA, Juxin Planning Comm.,
Xi'an Branch CCMRI, USCBM Energy
Shenyang Planning Commission,
Advanced Resources International
GEF/UNDP, Xi'an Branch CCMRI
MOCI, CNPGC, Amoco
MGMR, Shanxi Planning Comm., Shell
Oil Co., Lowell Petroleum Pty. Ltd.
Jingcheng CMA, Sino-American Energy
NCBPG, UNDP
NCBPG, Lowell Petroleum Pty. Ltd.
Enron, Huajin Coking Coal Corp.
Shanxi Province Planning Commission,
US CBM Energy Corp.
Yangquan CMA
MGMR, Enron
MGMR, Amoco
GEF, Songzao CMA, REI
CMA / Mines Involved
HUAINAN /Xieli, Panji
HUAIBEI /Taoyuan
KAILUAN /Tangshan
None
JIAOZUO /not specified
PINGDINGSHAN /No. 8
None
LIANSHAO / Hongshandian
None
FENGCHENG/none
TIEFA /Xenon, Daxin
FUXIN / Wangjiaying
Guchengzi lignite coal field
Various
None
None
JINCHENG/Panzhuang
None
None
Sanjiao mining area
Sanjiao mining area
YANGQUAN / Hanzhuan
None
None
SONGZAO / Shihao, Datong
No. 1
STATUS (December, 1995)
Completed four wells
Completed a surface well
Drilling now underway
1 well completed and producing
Negotiating to drill a test well
Drilled 1 well
No. G1 well completed at 460 m
Drilled 2 wells to depth of 500 m
Drilled well to 600 m
Completing Quijian No. 1 well
Drilled 3 vertical gob wells; will
also drill 3 horizontal wells
Completed one test well
Completed and tested 2 wells
Collected data on mining areas
Feasibility study in progress
Lowell has drilled two wells, will
drill a third well
Completed 4 test wells; three
additional wells to be drilled
Producing/evaluating
Drilling/evaluating
Production testing 2 wells
Ready to sign agreement
Negotiating proposed project
Drilled two wells to date
Preparing to drill first well
Reservoir testing completed,
directional drilling to begin
Production
(m3/day)
N/A
500-1,000
6,000
N/A
N/A
N/A
600
21,600
N/A
1,800
(initially)
N/A
tested 3,000
to 5,000
500
N/A
N/A
Numbers in Column 1 correspond to locations in Figure 32. The acronyms list at the beginning of this report includes acronyms in this table.
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Hebei Province
3. Kailuan CMA - This project, located at the Tangshan mine, includes drilling surface wells to
drain methane in advance of mining; designing an optimal methane drainage system and
strategy; and building compression, treatment and transportation facilities. The Kailuan
CMA is cooperating with GAI Co., a U.S. contractor, on this GEF-sponsored project. They
have completed the project design and drilling of five coalbed methane boreholes is now
underway. Chapter 4 contains additional information about the Huaibei CMA.
4. Dacheng Project - The CNPGC is conducting this project in an unmined area. The Dacan
No. 1 well is 1,100 m deep; it has been completed and fractured and produces 6,000 cubic
meters per day. CNPGC is making a decision on investing in the drilling of 1 or 2 more
wells.
Henan Province
5. Jiaozuo CMA - The Central China Administration of Oilfields will cooperate with the Jiaozuo
CMA on this project. They plan to drill and complete a coalbed methane test well.
Negotiations are underway.
6. Pingdingshan CMA - In 1993, Enron Oil and Gas International and the China National
Administration of Coal Geology (CNACG) drilled a borehole at the Pingdingshan CMA
specifically designed to obtain coalbed methane reservoir parameters. Testing indicated
low permeability. Chapter 4 contains additional information about the Pingdingshan CMA.
7. Yingvang Project - The Zhengzhou City Gas Department, the city's Coal Department, and
the Sino-American Energy Corporation have jointly invested 2 million RMB yuan in this
methane recovery project. The No. G1 well was drilled to 460 m by the Central China
Administration of Oilfields.
Hunan Province
8. Lianshao CMA - The Central China Administration of Petroleum Geology has drilled two
wells to a depth of 500 m at the Hongshandian mine.
9. Lengshuijiang Project - The NPGC and the Planning Commission of Hunan Province are
cooperating on this project. A well has been drilled to 600 m, and production testing yielded
600 cubic meters of methane per day.
10. Fengcheng CMA - In 1994, Jiangxi Province and the CNPGC cooperated in drilling a trial
coalbed methane well, the Quijiang No. 1, at the Quijiang coal field. Unfortunately, the coal
seam was damaged during the drilling process. Attempts to successfully complete the well
are underway (Zheng, 1995).
Liaoning Province
11. Tiefa CMA - This project, funded by the GEF and administered by UNDP, has been
undertaken by the Tiefa Coal Mining Administration and Resource Enterprises Incorporated
(REI), a US consulting firm. The primary objectives of the project are to demonstrate the
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effectiveness of surface vertical gob wells, and to remove gas from the working seam via
directionally-drilled in-mine horizontal gob boreholes (Schwoebel et al, 1995).
Three vertical gob wells have been drilled, cased and completed at the Daxing Mine, and
results are encouraging. The three wells are producing a total of about 15 cubic meters of
methane per minute. Late in 1995, the Tiefa CMA began drilling the horizontal gob
boreholes, also at the Daxing Mine. This entails directionally drilling three long (-1000 m)
in-mine boreholes above the working coal seam. Chapter 4 contains additional information
about the Tiefa CMA.
12. Fuxin CMA - The Fuxin CMA, the Fuxin Municipal Planning Commission, Xi'An Branch of
the CCMRI, and US CBM Energy Corporation are cooperating in the development of
coalbed methane in this area. The No. 9420 testing well at the Wangjiaying Mine was
completed in 1994. The permeability of the upper coalbeds was measured at 3 to 4 md.
The concentration of methane in the gas is 90 percent. Due to unspecified difficulties,
drilling had to be suspended before reaching the lower seams.
13. Shenyang Project - The Planning Commission of Shenyang City and Advanced Resources
International, a US firm, are cooperating on this project. Two wells were drilled at the
Guchengzi lignite coal field in the northern part of the city. The wells produced 1800 cubic
meters per day after fracturing at the initial stage.
Shaanxi Province
14. GEF/UNDP Project with the Xi'an Branch of the CCMRI (in various provinces and basins) -
This project will include a detailed evaluation of China's coalbed methane resources,
production potential, and use methods. The Xi'an branch will also conduct detailed
analyses on coalbed methane investment and market prospects. They have collected data
pertaining to the coalbed methane resources of 17 mining areas. They will drill at least ten
test boreholes in eight different mining regions, including the Huainan, Huaibei, and
Jiaozuo CMAs, to further evaluate their coalbed methane resources. To date, the Xi'an
branch has drilled boreholes at the Huainan and Huaibei CMAs, and other test boreholes
will be completed soon.
Shanxi Province
15. Bingchang Projects - MOCI, the China National Petroleum and Gas Corp. (CNPGC), and
Amoco USA are cooperating on a project that will take place in the unmined Bingchang
area. A feasibility study is in progress.
Elsewhere in the region, under an agreement with the Ministry of Geology and Mineral
Resources (MGMR) Lowell Petroleum Pty. of Australia has drilled two wells, financed by
Shell Oil. They are preparing to drill a third well.
16. Jincheng CMA - The Jincheng CMA and Sino-American Energy Co. are cooperating in this
demonstration project at the Panzhuang mine. To date they have completed four of seven
proposed wells. One of the completed wells, Pan No. 2, has produced 3000-5000 cubic
meters per day. Production tests of the Pan No. 3 and Pan No. 4 wells yielded water and
gas (Sun et al, 1996). Chapter 4 contains additional information about the Jincheng CMA.
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17. Liulin Projects - Since 1991, the North China Bureau of Petroleum Geology (under the
MGMR) has drilled six coalbed methane test wells, in the unmined Liulin Pilot Area of the
Hedong Basin, with UNDP assistance. Well depths range from 350 to 400 m. In October,
1994 these wells began producing an average of 500 cubic meters per day. The Bureau
has conducted reservoir evaluation and permeability studies (Quan et al, 1995; Chen et al,
1995). The Bureau has also conducted twelve large-scale hydraulic fracturing treatments
on the six wells (Li Z. et al, 1995).
Another project is underway at the Liulin Contract Area. This area encompasses 218 km2 and
is the first joint venture coalbed methane exploration area authorized by the Chinese
government (Zhao et al, 1995). The North China Bureau of Petroleum Geology and Lowell
Petroleum Pty. Ltd. are participating in the venture. To date, they have drilled two of three
planned exploration wells; production testing, reservoir simulation, economic analysis, and
a detailed assessment will follow.
18. Sanjiao Projects - Since 1992, Enron Oil and Gas International has been cooperating with
the Huajin Coking Coal Corporation by conducting in-depth exploration and evaluation for
coalbed methane resources in the Sanjiao mining area of the Hedong Basin (Fisher, 1995).
They are presently production testing two wells in Sanjiao, and preliminary results suggest
that the potential for coalbed methane production in the area is excellent.
The Shanxi Province planning commission has organized another project in the northern
Sanjiao mining area, involving six partners, including the Lulian Subprovince Planning
Commission, Huaxiang Corp., the Geological Exploration Corp., Huatai Corp., and US
CBM Energy Corp. The Administration of Geology and Mineral Resources has approved
the license for exploration, and the partners are ready to sign an agreement on the project.
19. Yangquan CMA - The Yangquan CMA plans to develop coalbed methane at the
Hanzhuang mining area of the Qinshui Basin. This exploration project would include
methane drainage in advance of mining, and would be synchronized with development of
the Yangquan mining area (Dong, 1995). CBM Associates has drilled two wells at
Yangquan CMA. Chapter 4 contains additional information about the CMA.
20. Hedong Projects - Enron Exploration Corp. negotiated a project with the MGMR to explore
for methane in unmined areas of shallow coal deposits in southern Liulin County in the
Hedong Basin. They have drilled two wells to date.
Amoco has negotiated with the MGMR for development of coalbed methane in deep deposits.
They are preparing to drill a well.
Sichuan Province
21. Songzao CMA - This project takes place at the Shihao and Datong No. 1 mines. The GEF
is funding the project, UNDP is administering it, and REI of the US is providing technical
direction. The primary objective of the project is to demonstrate the applicability of
directional drilling for improved methane drainage (Jianling et al, 1995). In addition, the
project includes: reservoir testing and computer simulation to optimize borehole spacing;
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in-mine hydraulic fracturing; improving surface and underground gas collection systems;
and, improving current ongoing drilling and gas collection techniques.
To date, all major equipment design, reservoir testing, and sorption testing have been
completed. Permeability is low, and the coal seam appears to be undersaturated.
Directional drilling is expected to start during the first quarter of 1996, and hydraulic
fracturing will follow. Chapter 4 contains additional information on the Songzao CMA.
In summary, China has seen much progress in coalbed methane development in recent years,
both in mined and unmined areas. Coal mines have been improving their underground
drainage systems, and are beginning to recover methane from surface wells. Major energy
companies are proposing several methane exploration and development projects in unmined
areas.
Certain technical barriers to widespread coalbed methane development in China still remain.
These include the lack of a widespread pipeline network, and relatively low permeability of the
coal seams. With increased capital investment and ongoing research efforts, China can likely
overcome these problems.
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CHAPTER 4
PROFILES: SELECTED REGIONS WITH STRONG COALBED
METHANE POTENTIAL
4.1 INTRODUCTION
4.1.1 SELECTION CRITERIA FOR PROFILES
As Chapter 1 discussed, there are currently 108 Coal Mining Administrations (CMAs) in China,
which manage approximately 650 mines. In addition to the CMAs, there are numerous gassy
local, township, and private mines that cumulatively produce over one-half of China's coal.
Varying physical and geologic criteria (including type of basin, age, depth, rank, reserves,
annual production, and life of mine) cause some coal mining regions to have higher coalbed
methane development potential than others. Mines located near industrial and population
centers, for example, are more conducive to near-term recovery and use options, as recovery
is most economical for mines with ready gas markets nearby.
This chapter profiles ten CMAs and one coal basin. Each of the profiled areas meets most or
all of the following criteria:
• Depth of coal seam burial between 300 to 1000 m;
• Minimum seam thickness of 2 m;
• Coal rank ranging from low to medium volatile bituminous; vitrinite reflectance 0.5 to 2.0
percent;
• Minimum gas content of 9 cubic meters/ton (based on desorption testing);
• Coal seam permeability of 1 md or greater;
• Well-developed local industrial infrastructure, nearby markets or population centers, and
high demand for natural gas.
Chapter 5 uses the information provided in the CMA profiles, with the recovery and use options
described in Chapter 3, to provide criteria for selecting the technologies appropriate to specific
conditions. Chapter 5 also contains guidelines for the development of coalbed methane
projects.
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4.1.2 CMA PROFILES USER'S GUIDE
This chapter profiles the following ten CMAs with high project potential, the locations of which
are shown in Figure 22 (Chapter 2).
NORTHEAST REGION
• 4.2 Fushun CMA - Liaoning Province
• 4.3 Tiefa CMA - Liaoning Province
NORTH REGION
• 4.4 Hebi CMA - Henan Province
• 4.5 Jincheng CMA - Shanxi Province
• 4.6 Kailuan CMA - Hebei Province
• 4.7 Pingdingshan CMA - Henan Province
• 4.8 Yangquan CMA - Shanxi Province
SOUTH REGION
• 4.9 Huaibei CMA - Anhui Province
• 4.10 Huainan CMA - Anhui Province
• 4.11 Songzao CMA - Sichuan Province
Section 4.12 profiles the Hedong Coal Basin, whose location is shown in Figure 14 (Chapter
2). It is in the North Region in Shanxi and Shaanxi Provinces on the eastern edge of the
Ordos Basin. As noted in Section 3.5, the Hedong Basin, like most of the CMAs listed above,
is an area where coalbed methane projects are planned or currently underway. The source of
information for the Fushun CMA profile is Huang L. (1995) and JP International (1991); the
majority of data for the remaining profiles were provided by the CM. Additional sources are
cited within the individual mine profiles.
There are five appendices at the end of the report that may be useful to companies interested
in pursuing methane projects in China. Appendix A lists contacts that potential foreign
investors may find useful. Appendix B explains Chinese terminology regarding resources, coal
rank, and other frequently used terminology pertaining to coal and coalbed methane. To avoid
repetition, Appendix B contains information which is not included in the individual mine profiles.
Appendix C consists of selected summary tables compiled on the individual CMAs. Appendix D
consists of provisional rules and regulations for coalbed methane development in China.
Appendix E contains more information about USEPA publications and programs related to
coalbed methane.
Individual CMA profiles include the following types of data (to the extent these data were
available):
• Coal geology, reserves and production; includes geologic setting, coal reserves and rank,
coal production and quality;
• Methane liberation, ventilation, recovery, and resources;
• Present and planned use of mine methane; and,
• Mining economics.
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Specific mining economics data for individual CMAs are not readily available. CM data from
sixteen coal mining regions throughout China, however, indicate that coal sale prices during
September, 1995 ranged from 125 to 310 yuan for bituminous coal (average 215 yuan, or
approximately $US 26.18), and from 130 to 356 yuan for anthracite (average 225 yuan, or
approximately $US 27.40) per ton. No coalbed methane cost recovery data are available for
individual CMAs or mines. According to the CM, estimated average costs for methane drainage
in China are 30 yuan ($US 3.65) per thousand cubic meter for underground drainage and 400
yuan ($US 48.70) for vertical (surface) wells, respectively.
In selecting regions for coalbed methane development, it will be necessary to further evaluate
resource conditions, market demand, and local infrastructure. Based on a preliminary
evaluation of methane resources (Table 14), however, it appears that the mining areas profiled
in this chapter have great potential for future development.
TABLE 14. ESTIMATED COALBED METHANE RESOURCES
CONTAINED IN AREAS PROFILED IN CHAPTER 4
CMA or Coal Basin
Huainan
Yangquan**
Hedong Coal Basin
Huaibei **
Kailuan
Tiefa
Jincheng
Songzao **
Pingdingshan**
Hebi
Fushun **
METHANE RESOURCES
(Billion cubic meters)
500.0
290.0
220.0
158.4
30.0
28.3
24.0
22.7
17.2
10.6
*3.1
1994 COAL PRODUCTION
(Million Tons)
11.5
10.5
N/A
14.2
18.0
11.0
10.3
2.7
17.1
4.7
8.6
* The Fushun estimate is for recoverable methane resources only.
** 1993 Production listed for these CMAs
Resource estimates were provided by CM (1995) and Huang L. (1995); details on
resource estimation methodology were not available.
4.2 FUSHUN CMA
The Fushun CMA is located in eastern Liaoning Province (Figure 22) in the city of Fushun, an
industrial center. Coal mining operations began in the area in 1907. The CMA is situated in the
Dunhua-Fushun Basin and consists of three underground coal mines and one surface mine.
4.2.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
Structurally, the Fushun Basin is a large, asymmetrical syncline. In addition to coal, there are
significant quantities of oil-bearing shale and mudstone in the basin. Coal is mined from a
group of Eocene age coal seams whose thickness totals 8 m in the western portion of the
basin and 130 m in the east; average recoverable thickness is 50 m. In 1993, the mine
produced 8.6 million tons of coal. The coal is high volatile bituminous in rank, and is low in
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sulfur, phosphorous, and ash. Large quantities of gas are associated with this coal, primarily in
the Laohutai Mine, Shengli Mine, and Longfeng Mine.
4.2.2 METHANE LIBERATION, VENTILATION, RECOVERY AND RESERVES
The Fushun CMA began recovering methane in
the early 1950's. Total drainage volume from
1952 to 1994 is 3.7 billion cubic meters (Xu,
1995). Since 1980, the CMA has drained more
methane annually than any other CMA,
recovering 113 million cubic meters in 1993.
The CMA recovers methane underground, in
advance of, during and after mining (gob
recovery). Box 8 is an example of methane
recovery from working seams at the Laohutai
Mine.
Currently there are eight methane drainage
systems in the Fushun CMA, 0.48 million
meters of gas supply pipeline, and six gas
storage tanks. There are also six ventilation
systems discharging low-methane gas into the
atmosphere. The CMA, in cooperation with
CCMRI, has conducted several hydraulic
fracturing tests using vertical (surface) wells at
the Longfeng Mine (Xu, 1995).
Key methane characteristics of the three
underground mines at the Fushun CMA are as
follows:
BOX 8. METHANE RECOVERY FROM
WORKING SEAMS AT THE LAOHUTAI MINE
The Laohutai Mine is located in the center of the
Dunhua-Fushun basin, currently mining at a
depth of about 600 m. Total seam thickness
averages 43.0 m thick, and dip is 21° to 25°.
Coal rank is high volatile bituminous B (gas
coal), and volatile content is 45.8 percent.
Methane content averages 13.2 cubic meters
per ton, and permeability ranges from 2.9 to
3.1 md.
The natural flow of methane from boreholes is
only 3.5 to 4.0 m3/min (per 100 m of borehole).
In contrast, when vacuum pumps are used to
drain methane from the seam, the flow rates
reach 120 cubic meters per minute. Boreholes
are 75 to 127 mm in diameter and are drilled
upward or downward into the seam. Recovery
efficiency is as high as 54.5 percent.
The No. 502 mining district, in which they are
mining from 5 active faces, is a typical
example. One drilling site is set up at each face.
At each drilling site, five boreholes were drilled
downward at a dip of 5 to 15°.
Mine
Laohutai
Longfeng
Shengli
Coal Methane Content
26.5 m3/ton
34.8 m3/ton
34.8 m3/ton
CH4 Concentration in the Gas*
58 percent
33 percent
33 percent
* Presumably, this refers to gas recovered from the mines' drainage systems
According to Huang L. (1995), methane reserves of the three mines are about 14.4 billion
cubic meters; of this, an estimated 3.1 billion cubic meters of methane could be recovered.
4.2.3 PRESENT AND PLANNED USE OF METHANE
About 75 percent of the methane recovered at Fushun mines is used for domestic purposes;
20 percent by the chemical industry, and 5 percent is used for power generation. In 1990,
there were 160,000 households in Fushun using coalbed methane as fuel, for cooking and
heating; of these, 47,000, or 30 percent, were part of the mining complex. By 2000, there will
be an estimated 300,000 households in the city using coalbed methane.
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Methane consumption at the Fushun CMA fluctuates daily and seasonally. When meals are
not being prepared, and during the summer months, there is a surplus of methane, and large
quantities are vented to the atmosphere, while at mealtimes and during the winter months,
there are methane shortages. Thus, it is necessary to increase gas storage capacity in the
region. There are presently 188,000 cubic meters of storage capacity at the CMA, and two new
surface tanks are under construction; when completed, the new facilities will provide an
additional 20,000 cubic meters of storage.
The chemical industry at Fushun uses methane for making carbon black. Because of its low
sulfide content, methane is the ideal feedstock for carbon black production. One cubic meter of
methane can produce between 120 and 150 grams of carbon black. The Fushun Glass
Factory, a local plastic factory, and a local gun powder factory also use coalbed methane.
As discussed in Box 6 of Chapter 3, the Laohutai Mine built a coalbed methane-fired turbine
power plant that uses surplus methane recovered during the summer months. At a methane
concentration of 40 percent, the plant uses 35 cubic meters of methane per minute.
4.3 TIEFACMA
The Tiefa CMA is located in northern Liaoning Province, 90 km north of the city of Shenyang,
in the southern Songliao coal-bearing area (Figure 22). The CMA was established in 1958, and
covers an area of 613 km2. There are currently eight active underground mines, with an
additional mine to begin production in 1996. All mines in the CMA are connected with the
national railroad network.
4.3.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
Coal deposits of the Tiefa CMA are contained in Upper and Middle Jurassic sediments. There
are a total of 20 seams contained in the coal bearing section, 10 of which are considered
recoverable. Major mineable coal seams are contained in an upper and lower coal bearing
section, with the lower section coals being slightly higher rank. Depth of burial of these seams
range from 30 to 1000 m. The overlying strata consist primarily of sandy mudstone.
Coal rank is predominantly low, sulfur, high volatile bituminous with seam thicknesses ranging
from 1 to 3 m. The CMA has 2.25 billion tons of proven coal reserves. The CMA consists of
eight active mines with a producing capacity of 15.15 million tons per annum. Raw coal
production in 1994 totaled 11 million tons.
4.3.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Recovery of coalbed methane at the Tiefa CMA began in 1974. In 1994, ten gas drainage
systems were in place with an annual recovery of 16 million cubic meters, primarily from gob
areas. Coalbed methane recovery volumes for the CMA have increased from approximately 2
million cubic meters in 1985 to over 16 million cubic meters in 1993 (CM, 1995).
Drainage methods at the Tiefa CMA include overlying adjacent seam borehole drainage, in-
seam drainage, and gob drainage. Gob gas is drained using horizontal long holes and strike-
oriented roadways in the roof strata. The CMA's Xiaonan Mine drains gob gas using roof
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boreholes, as described in Box 9 and Figure 32. The average drainage rate at this mine is 3.37
cubic meters per minute and the recovery efficiency is 73.1 percent.
BOX 9. THE XIAONAN MINE: METHANE RECOVERY FROM GOB AREAS
The Xiaonan Mine of the Tiefa CMA produces 2.1 million tons of coal annually from Jurassic age
sediments. The depth of the first mining level is 385 m. The primary seam is the No. 7, with an average
thickness of 2.9 m. The methane content of this seam ranges from 7 to 8 cubic meters per ton. The No.
4 seam is partly recoverable with an averaged thickness of 1.6 m. The methane content ranges from 13
to 14 cubic meters per ton. Rank is high volatile bituminous C, with a volatile content of 36 percent.
Horizontal long boreholes are drilled in roof strata at the S1-722 face for methane recovery from gob
areas. Nine drilling sites are set up at intervals of 130 to 140 m in the ventilation roadway (Figure 33). At
each drilling site, 3 to 4 boreholes are drilled; they are 117 mm in diameter, and range in length from 150
to 255 m. A total of 34 boreholes are drilled.
FIGURE 33. PLAN VIEW OF BOREHOLE PLACEMENT FOR METHANE
RECOVERY FROM GOB AREAS
51 9
Ventilation roadway
7654 321
Borehole.
No. 4
INo. 7
Ventilation roadway
Xiaonan Mine imported a modern drill from Acker, a US drill vendor, which uses a 95 mm and 117 mm
roller bit. In order to achieve high drainage efficiencies, boreholes should be drilled into the fracture zone
above the gob cavity. The mine used directional drilling technology and improved the drill steel, in order
to maintain the desired drilling path.
During mining of the S1-722 coal face, methane flow from a single borehole averages 0.95 cubic meters
per minute, with a maximum rate of 3.48 cubic meters per minute. During a 426-day period a total of
2.07 million cubic meters (3.37 cubic meters per minute) were recovered, with an efficiency of 73.1
percent.
The Daxin Mine is the gassiest coal mine in the Tiefa CMA. Specific emissions range from 11
to 15 cubic meters per ton for the upper seams and 16 to 22 cubic meters per ton for the lower
seams. The estimated methane reserves contained in the Daxin Mine workable seams are
11.5 billion cubic meters (Schwoebel et al, 1995).
The CM estimates that the Tiefa CMA contains 28.3 billion cubic meters of coalbed methane
reserves. Of these, 23.5 billion cubic meters are contained in the Tiefa coal basin, and 15.3
billion cubic meters are recoverable. The gas content of mineable coal seams is high, ranging
from 11.05 to 24.23 m3/t for current mining depths. Coal seam permeability in the region is
relatively low.
As discussed in Section 3.5, there is a GEF-funded project for surface (vertical well) gob gas
recovery at the Tiefa CMA. To date, three wells have been drilled with the cooperation of the
Tiefa CMA and the US company REI.
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4.3.3 PRESENT AND PLANNED USE OF MINE METHANE
The Tiefa CMA first used coalbed methane in 1975, initially for dining facility uses such as
boiling water. Residential use of coalbed methane began in 1985. Concentration of methane
in the gas mixture ranges from 30 to 90 percent. Methane use by local residents and industry
is limited, averaging 25 percent, with the remaining 75 percent vented to the atmosphere
(Schwoebel etal, 1995).
In 1992, the CMA built three gas storage tanks in the region. Total storage capacity is 25,000
cubic meters, supplying gas for 9,000 households. In 1992, Tiefa CMA coal sold for 78 yuan
per ton, and the price of coalbed methane was 0.15 to 0.50 yuan per cubic meter. Gas
consumption per household averaged 1.36 cubic meters per day in 1992.
4.4 HEBICMA
Hebi CMA is located in northern Henan Province (Figure 22). It covers an area of 15.5 km2,
and was founded in 1957. It mines coal from the Hebi Coal Basin.
4.4.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
The Hebi CMA mines Permo-Carboniferous age coals. Burial depth is less than 1,000 m.
There are up to 17 coal seams; 4 to 6 of these seams are mineable, with a cumulative
thickness of 10 m. Coal rank in Hebi CMA is primarily low volatile bituminous and anthracite.
Coal reserves within the Hebi CMA total 1.77 billion tons. The designed annual production
capacity is 4.20 million tons, and 1994 raw coal production was 4.67 million tons.
Since 1970, the Hebi CMA has had five
mines with gas drainage systems. As of
1992, a total of 132 million cubic meters
of methane have been recovered.
Drainage borehole lengths totaled 9.9
km, and the drainage rate was 15.26
cubic meters per minute. Recovery
efficiency was 14.2 percent. In 1993,
the Hebi CMA recovered 6.5 million
BOX 10: ENHANCING PERMEABILITY AT
THE HEBI CMA NO. 2 MINE
The No. 2 mine at the Hebi CMA has tested the use of
high-pressure water jets to cut slots in their coal seams.
Slots with a depth of 0.4 to 0.8 m and a width of 0.2 m
were cut at both sides of the borehole using a jet with a
pressure of 8 to 18 MPa. This resulted in a release of
pressure from the coal seams, as well as fracturing. After
.. . , .. o ^n cutting the slots, methane flow from boreholes increased
cubic meters of methane. Box 10 dramatica||y
discusses successful efforts to increase ' L
recovery at the CMA's No. 2 mine.
4.4.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Methane content in the Hebi CMA averages 13.76 cubic meters. Coalbed methane reserves in
1992 were about 10.6 billion cubic meters and recoverable reserves were 2.2 billion cubic
meters.
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4.4.3 PRESENT AND PLANNED USE OF MINE METHANE
Coalbed methane concentrations range from 30 to 40 percent, with a heating value of 11 to 18
MJ per cubic meter. Gas of this quality is used as residential fuel without being processed.
Currently the region has five gas storage tanks with a total capacity of 40 thousand cubic
meters, and 48 km of gas pipeline. About 60 thousand cubic meters of gas are consumed
each day; of this, residential consumers use 87 percent, and mine facilities use 13 percent.
The use ratio of coalbed methane in the region is 90.6 percent.
Residential areas with an existing transportation infrastructure are nearby, making the Hebi
CMA an attractive area for coalbed methane development. Advanced surface recovery
technology could recover significant quantities of coalbed methane, providing a long-term,
stable gas supply for residential users, as well as developing additional industrial use options.
4.5 JINCHENG CMA
Jincheng CMA is located in southeastern Shanxi Province (Figure 22), covering an area of
3,680 km2. Currently Jincheng CMA has three active mines; all three mine coal from within the
Qinshui Basin. The Tai-Jiao Railway crosses the eastern part of the region.
4.5.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
Coal-bearing formations in the Jincheng CMA are of Permo-Carboniferous age, within the
Taiyuan and Shanxi Formations. They contain up to 15 coal seams, three of which are
mineable seams (Seams No. 3, 9, and 15). Individual seam thicknesses range from 1.7 to 6.0
m; cumulative coal thickness averages 13.8 m. Coal rank is predominately anthracite, with ash
content ranging from 14 to 19 percent, and volatile matter from 6 to 9 percent.
The Panzhuang Mine has three mineable anthracite seams with an average thickness of 10 m
and gentle dip. Overburden thickness ranges from 300 to 600 m, and seam thickness exceeds
1.5m.
Coal reserves in the region are 11.6 billion tons. Associated methane reserves to a depth of
1,000 meters are estimated at 6.3 billion cubic meters. In 1994, raw coal production was 10.32
million tons.
4.5.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Currently, there is no underground methane recovery at the Jincheng CMA (and therefore, it is
not listed in Table 10). However, since 1991 the Jincheng CMA has been cooperating with
Sino-American Energy Corp. at the Panzhuang Mine to develop coalbed methane resources
via surface wells. As discussed in Section 3.5, four of seven proposed wells have been
completed and production tests at one well yielded 3000 - 5000 cubic meters of methane per
day.
Total methane reserves for the three mineable seams in the region are 24 billion cubic meters.
The majority of these resources occur at the Panzhuang Mine. Average gas content is 19
cubic meters per ton, with a maximum gas content of 40 cubic meters per ton (Wang Y. et al,
1995). The methane concentration of this gas exceeds 85 percent.
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4.5.3 PRESENT AND PLANNED USE OF MINE METHANE
There is a small residential area of 6,000 households and some public facilities five km from
the mine. Use of coalbed methane as a fuel source would eliminate the need for construction
of a coal gas plant, estimated to cost of 40 million yuan. Other potential uses for coalbed
methane at the Jincheng CMA are supplying methane to a thermal power station, as a source
of vehicle fuel, methanol factories, and as a chemical feedstock.
4.6 KAILUANCMA
The Kailuan CMA is located in the city of Tangshan in eastern Hebei Province (Figure 22). The
CMA was built in 1978, and currently consists of ten mines. The CMA covers an area of 890
km2. The Jingshan and Daqing railways cross the region.
4.6.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
Kailuan CMA lies with the Kailuan Syncline, Jinggezhuang Basin, Chezhoushan Basin, and the
Jiyu Basin. The Kaiping Syncline, which covers an area of 670 km2, is the main structural
feature in the Kailuan Basin. Coal reserves to a depth of 2000 m are 13.2 billion tons.
Kailuan Coal Basin contains Permo-Carboniferous coals. There are 30 coal seams, nine of
which are mineable; seam thickness ranges from 1 to 4 m. Ash content is 12 to 20 percent,
and volatile matter ranges from 34 to 40 percent. Coal rank is primarily high volatile
bituminous.
The designed production capacity of the region is 19 million tons annually. For the past
several years, raw coal production has averaged 18 million tons per annum. Kailuan is the
largest coking coal producing region in China.
4.6.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
The axis of the Kaiping Syncline divides the area into two sub-basins with two distinct reservoir
characteristics. Gas contents south of the axis are low (less than 9 cubic meters per ton), and
gas contents north of the axis are high (9 to 15 cubic meters per ton with a maximum of 20
cubic meters per ton). Based on research by the Xi'an Branch of the Central Coal Mining
Research Institute, coalbed methane reserves to a depth of 2,000 m are 30 billion cubic
meters in the Kaiping Coal Basin. Cumulative thickness of the No. 8 and No. 9 seams in the
Kailuan CMA is 9.50 m. Injection permeability and drop permeability are 18.0 md and 0.8 md,
respectively. The No. 8 and No. 9 seams are the primary targets for coalbed methane
development.
Gas drainage at the Kailuan CMA began in 1973. The primary methods used are surface
borehole pre-mine and gob drainage. For several years, gas drainage has averaged 8 to 9
million cubic meters per annum. Box 11 and Figure 33 describe methane recovery from the
CMA's Zhaogezhuang mine. Currently, under a UNDP-funded project, the Tangshan Mine of
the Kailuan CMA has completed initial stages of construction for two vertical production wells.
This is described in more detail in Section 3.5.
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4.6.3 PRESENT AND PLANNED USE OF MINE METHANE
The Kailuan CMA is located within the city of Tangshan, providing an on-site gas market.
Coalbed methane recovered from Kailuan CMA is used for residential and mine facilities. In
1992, the coalbed methane supply was 66 thousand cubic meters per day, meeting the
demand of 20 thousand households. The CMA's Tangshan Mine injects coalbed methane
directly into the city gas system. Currently, the Kailuan CMA has six gas storage tanks with a
total capacity of 40 thousand cubic meters. The region uses 90 percent of the methane
recovered from the mines.
BOX 11. ZHAOGEZHUANG MINE: RECOVERY FROM ADJACENT SEAMS
The Zhaogezhuang Mine of the Kailuan Coal Mining Administration is located 30 km to the northeast of
the city of Tangshan. The mine has been producing coal for approximately 100 years, and currently
produces 1.8 million tons annually. Present mining depth is 1002 m.
The Zhaogezhuang Mine has been recovering methane from coal seams since the 1970's. The No. 9
and 12 seams, with a total thickness of 13 m, are the primary targets for methane recovery. The No. 9
seam has a methane content of 7.5 cubic meters per ton, and a permeability of 0.001 md. Gas and coal
outbursts have occurred during mining of this seam. Methane content of the No. 12 seam is 7.3 cubic
meters per ton, and the permeability is 0.0013 md. Three additional seams, Nos. 5, 7, and 11, also have
potential for methane production.
Since 1987, the peak flow of methane reached 1.5 cubic meters per minute. At several locations along
the No. 11 seam cross-cut, methane concentration is 30-40 percent. The average amount of methane
recovered from adjacent seams totals about 450 thousand cubic meters, accounting for 37 percent of the
total methane recovered from the mine.
In recent years, the Zhaogezhuang Mine has experimented with pre-drainage of methane from adjacent
seams. Figure 34 shows the placement of boreholes for methane recovery from adjacent seams. Drilling
sites are located in ventilation roadways at 30 m intervals, from which boreholes are drilled upward into
seams that underlie the target No. 11 seam. The seam is mined first to allow underlying strata to relax.
FIGURE 34. BOREHOLE PLACEMENT FOR RECOVERY
FROM ADJACENT SEAMS AT ZHAOGEZHUANG MINE
•ehole
.ventilation
roadway
Methane flow from the No. 12 seam, or other seams underlying the No. 11 seam, increased rapidly as
the working face of the No. 11 seam passes by the borehole. A maximum flow rate from a single
borehole reached 0.365 cubic meters per minute as the face passed 30 m past the borehole. The flow
stabilized at 0.113 cubic meters per minute after completion of mining operations. Recovery efficiency
was estimated at 36 percent.
The experience with methane recovery at the Zhaogezhuang Mine indicates that pressure from adjacent
seams was released and permeability increased as a seam of multi-seams was mined out first. This
4-10
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adjacent-seam drainage technique is considered the best option for methane recovery at the
Zhaogezhuang Mine.
4.7 PINGDINGSHAN CMA
The Pingdingshan CMA is located in the North Region of central Henan Province (Figure 22),
an important bituminous coal region. The CMA contains 14 mines which mine coal from the
Pingdingshan and Hanliang Coal Basins, covering areas of 650 km2 and 61 km2, respectively.
The Pingdingshan CMA is an important coal center in China, with a long history of coal
production.
4.7.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
The coals are found within seven Permo-Carboniferous coal groups. The Shanxi Formation is
the major economic coal-bearing section. One seam within the Shanxi Formation is the
primary target for coal mining, accounting for over 60 percent of the total coal resources in the
CMA. Total thickness of the coal-bearing package is 800 m. There are 10 mineable seams,
whose thickness totals 13 to 30 m. In 1994, coal reserves of Pingdingshan Coal Basin were
estimated at 7.41 billion tons. In 1994, fourteen coal mines produced 18.5 million tons of coal
(Wang H. etal, 1995).
The Pingdingshan Coal Basin contains numerous coal seams, which are mainly high volatile
bituminous, with some medium and low volatile bituminous in rank. Volatile matter ranges from
20 to 23.4 percent. Most seams have well-developed cleating, and permeability averages 1
md.
The thickness of the mineable seams generally exceeds 2 m, and they are laterally continuous
throughout the basin. Dip of the coal-bearing sediments ranges from 5° to 15°. Strata
overlying the coal seams in the Pingdingshan Coal Basin are primarily mudstones and sandy
mudstones.
4.7.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Methane drainage increased from 0.13 million cubic meters in 1992 to 0.65 million cubic
meters in 1993. Coalbed methane resources of the Pingdingshan CMA, to a depth of 1000 m,
are estimated at 17.2 billion cubic meters. Gas contents tend to be fairly high. Average
methane content in coal seams of the Permian Shanxi Formation exceeds 8 cubic meters per
ton, with a maximum of 16 cubic meters per ton (Wang H. et al, 1995).
Data from gas contained in coals at depths less than 600 m indicate that methane
concentrations exceed 80 percent and carbon dioxide content is less than 10 percent.
Coalbed methane content increases with increased depth of burial. Desorption studies show
that coals from this region tend to desorb rapidly and completely, with little residual gas
remaining in the coal.
As described in Section 3.5, Enron Oil and Gas drilled a coalbed methane test well at the
Pingdingshan CMA. The coalbeds penetrated by this well had low permeability.
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4.7.3 PRESENT AND PLANNED USE OF MINE METHANE
The Pingdingshan CMA currently has 11 mines, including two mines classified as gassy mines
and four outburst mines. If newer surface recovery technology is used to increase the drainage
efficiency to 50 percent, coalbed methane could become an important energy source in the
region.
Within 200 km, there are five large to medium sized cities, and transportation is convenient,
providing a significant market for coalbed methane. There are over 80,000 households in the
city of Pingdingshan. Based on currently available demand, and a methane drainage
efficiency of 25 percent, the Pingdingshan CMA could extract its coalbed methane resources
to a depth of 1,000 m for 100 years.
4.8 YANGQUAN CMA
The Yangquan CMA is located in central Shanxi Province in the Qinshui Coal Basin. It is near
the cities of Yangquan and Taiyuan (Figure 22) and is connected to markets via several
railways. It is an important production base for anthracite coal in China, and covers an area of
3,300 km2. Currently, the Yangquan CMA has 8 active coal mines that are connected to
markets via several railways.
4.8.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
Geologic structure in the Yangquan region is relatively simple, with coalbeds dipping up to 10°.
Depth of cover to the primary coal seams ranges from 300 to 1200 m. The Permo-
Carboniferous Taiyuan and Shanxi formations have an average cumulative thickness of 180
m. Within the Shanxi Formation, the No. 8 and No. 9 Seams are the primary mineable seams.
The entire region has up to 7 mineable seams. Total coal seam thickness ranges from 2.3 to
37 m; individual seam thickness ranges from 0.6 to 6.5 m.
Coal reserves are mainly anthracite, with some low volatile bituminous. Available coal reserves
of the Yangquan CMA are 19.3 billion tons. In 1994, raw coal production totaled 13.5 million
tons. Design capacity for the CMA is 15.85 million tons per annum (Qie and Lu, 1995).
4.8.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Coalbed methane resources of the Yangquan CMA are estimated at 290 million cubic meters
to a depth of 800 m. Coal gas content is relatively high, ranging from 17.1 to 45.7 cubic
meters per ton. Many of the mines are considered to be high gas, and several are outburst
mines. However, coalbed permeability is relatively low, generally less and 1 Md.
Since 1954, the CMA has drained gas from adjacent seams to increase mine safety. Methods
include cross-measure boreholes, drainage of roof strata via development roadways, and
vertical boreholes. The Yangquan CMA also drills boreholes within the mined seam to drain
coalbed methane contained in adjacent limestone. In 1994, total emissions from the Yangquan
CMA were 398 million cubic meters. Estimated cumulative methane emissions total 2 billion
4-12
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cubic meters since 1954 (Qie and Lu, 1995). As discussed in Section 3.5, the Yangquan CMA
plans further coalbed methane development at the Hanzhuang mining area of the Qinshui
basin. CBM Associates has drilled two coalbed methane wells at the CMA.
4.8.3 PRESENT AND PLANNED USE OF MINE METHANE
Significant volumes of coalbed methane are drained from the Yangquan CMA annually. In
1993, annual drainage was 90.53 million cubic meters. The drained methane supplies gas to
about 60,000 households in the city of Yangquan (Qie and Lu, 1995).
4.9 HUAIBEI CMA
The Huaibei CMA is located in northern Anhui Province in central-eastern China (Figure 22),
covering an area of 9,600 km2, with the coal-bearing region covering an area of 6,912 km2. It is
a major coal and industrial center for China, with well developed transportation and
infrastructure, but very high demand for energy relative to supply.
4.9.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
The topography of the region is relatively flat, but the structure is complex, and the coal-
bearing section is contained in several synclinal basins. The Huaibei Basin is one of several
synclinal basins that contains Permo-Carboniferous coal-bearing intervals. The 1200 m thick
coal-bearing interval occurring in this basin comprises the Shanxi and Shihezi Formations. The
total thickness of the coal-bearing strata is about 1,200 m. Within these strata are up to 25
seams, with thicknesses ranging from 7.1 to 22.0 m. Of these, 2 to 12 seams are mineable,
their total thickness ranging from 3.0 to 20.9 m.
The basin is divided into four mining regions: Suixiao, Suxian, Linhuan and Woyang. The
basin contains 35.46 billion tons of coal reserves, to a depth of 2,000 m. There are currently 21
active mines and three additional mines under construction. In 1993, these mines produced
14.2 million tons of coal.
Coals in the region are relatively thick and the rank is predominately low volatile bituminous,
semi-anthracite, and anthracite. Coals in the northern part of the region underwent a high
degree of metamorphism and are thus of higher rank, while the southern region is dominated
by high volatile bituminous coal. The overburden thickness is about 100 m in the north and 200
to 300 m in the south.
4.9.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
In general, the coal gas content exceeds 8 cubic meters per ton throughout Huaibei CMA. The
CM considers 13 of the 21 active mines to be high gas. Coalbed methane reserves of the
Huaibei Coal Basin are distributed over the Suxian and Linhuan mining regions. Gas content
of the coals in the Suxian mining region ranges from 6.9 to 25.5 cubic meters per ton; the
concentration of methane contained in this gas is 79 to 98.5 percent. Gas content of the coals
in the Linhuan mining region ranges from 6.1 to 14.6 cubic meters per ton; the methane
concentration in the gas is 75 to 91 percent.
Currently there are two underground gas drainage systems; the first was established at the
Luling Mine in 1973. In-seam, roof, and floor boreholes are used for gas drainage. Drainage
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efficiency is about 15 percent, yet in 1993, the mine drained 4.7 million cubic meters (Li et al,
1995). Box 12 discusses a recently-initiated surface well methane recovery project at the
CMA's Taoyuan mine. As noted in Section 3.5, two coalbed methane wells are being drilled at
the Huaibei CMA as part of a GEF National Assessment sub-project.
An estimated 158.4 billion cubic meters of methane are contained in the CMA, with a gas
distribution of 95 million cubic meters per km2 (Li et al, 1995). Of this total, 36.77 billion cubic
meters are in the Suxian mining region and 86.33 billion cubic meters are in the Linhuan
mining region.
BOX 12. SURFACE RECOVERY OF METHANE AT THE HUAIBEI CMA'S TAOYUAN MINE
The Taoyuan Mine is located 13 km south of Suzhou City, northwest of the Sunan Syncline. The syncline
covers an area of 32 km2, with a strike length of 15 km, and a width ranging from 1.5 to 3.5 km. Seams
are divided into three different groups: the upper, middle, and lower groups. The main workable seam,
No. 3, is in the upper group; Seam Nos. 7, 8 and 9 are in the middle group; and the No. 10 Seam falls
into the lower group. Cumulative coal seam thickness is 12.9 m. All seams are high volatile bituminous
A and B. Ash content is average, sulfur content is low, and gas content is high. Vitrinite reflectance is
0.74% to 0.88%.
There are eight coal seams in the area of panel 1018 in which the surface well was drilled. The distance
between the No. 10 seam and the overlying No. 9 seam is more than 80 meters, as shown in the table
below. In the middle group, the gas pressure is 5 to 10 MPa, while the gas content ranges from 4 to 7
cubic meters per ton; the methane concentration in this gas is 95 percent. The depth of the gas depletion
zone (weathering zone of gas) ranges from 300 to 340 m. Within the zone where it is necessary to
relieve pressure (pressure relief zone), the economic coal reserves of Seam Nos. 7, 8, and 9 reach 293
thousand tons, and methane reserves total 1.7 million cubic meters.
CHARACTERISTICS OF TAOYUAN MINE COAL SEAMS
COAL
SEAM
7,
72
73
8
9
10
TOTAL
LEVEL
(m)
-346
-352
-355
-368
-390
AVERAGE
THICKNESS
(m)
3.11
0.48
0.25
0.55
0.47
1.01
DISTANCE
FROM
OVERLYING
SEAM (m)
18
9
20
33
80
GAS
PRES-
SURE
(kPa)
71.8
77.9
79.7
87.9
2.7
COAL
RESERVES
(103TON)
121
42
63
49
17
292
GAS
RESERVES
(103 m3)
674
249
59
301
118
1,701
Methane Drainage Activities
A surface well, located in the middle and lower sections of panel 1018, was drilled to the No. 10 Seam, at
a depth of 506 m. Coal Seam Nos. 52 and 62 are found within the weathering zone, and have been
sealed. Therefore, only Nos. 71 73, and 9 are considered suitable for methane drainage within the
pressure relief zone. Total thickness of the three coal seams is 1.66 m. The well was completed in
November, 1994. Methane began to blow out from the well with 12 m still to drill before reaching the
targeted depth. Gas flowed from the well at 0.2 to 0.3 cubic meters/minute, with methane concentrations
of 95.2 percent, and a wellhead pressure of 830 kPa.
A two-month recovery test, completed at the end of February, 1995, yielded 55,000 cubic meters of
methane. As of July, 1995, the well continues to produce over 1,000 m3 per day of gas, with a methane
concentration of 94.5 percent. Preliminary calculations indicate the methane reserves in coal Seam Nos.
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7, and 9, within the pressure relief zone at panel 1018, to be 1.7 million cubic meters. Assuming a 50
percent recovery factor, 850,000 cubic meters could be recovered.
4.9.3 PRESENT AND PLANNED USE OF MINE METHANE
Gas recovered from the Luling Mine is supplied to about 4,000 households; there are,
however, many other opportunities for methane use at the Huaibei CMA. The CMA is situated
near dense population centers and associated gas markets. The nearby city of Huaibei has a
population of approximately 500,000, and the region is located only 70 km from the city of
Xuzhou and 80 km from the city of Bengbu. The local economy is well-developed and demand
for energy exceeds supply. Therefore, there is strong market potential for this resource.
4.10 HUAINANCMA
The Huainan CMA is located in the South Region of central Anhui Province (Figure 22). The
region covers 2,365 km2. It is an important energy base for eastern China and has over 80
years of mining history. It has a well developed railway, highway, and waterway network.
4.10.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
The Huainan Coal Basin contains Permo-Carboniferous coals covered by Cenozoic sediments.
The maximum burial depth of the coal seams is 2,000 m. Geologic structure in the basin is
relatively complex, and continuity of coals is controlled by numerous folds and faults.
Thickness of the portion of the coal-bearing section which contains mineable seams is about
350 m. This section consists of 9 to 18 mineable coal seams, with a cumulative thickness of 22
to 34 m. Coal rank is bituminous, with volatile matter ranging from 33 to 42 percent. Vitrinite
reflectance ranges from 0.8 to 1.1 percent (Yang et al, 1995).
The coal bearing area of the basin area covers 3000 km2, and estimated coal reserves are
about 80 billion tons. In 1994, Huainan CMA produced 11.50 million tons of raw coal; annual
coal production by the year 2000 is projected to be 40 million tons.
4.10.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Typical gas content of the coal seams ranges from 4 to 12 cubic meters per ton, reaching a
maximum of 20 cubic meters per ton (Yang et al, 1995). Gas contents of the coals increase
with increasing burial depth; for each 100 meters of depth, gas content increases by 1.4 to 2.8
cubic meters per ton. Based on this gradient, coalbed methane reserves exceed 900 billion
cubic meters, of which an estimated 500 to 600 billion cubic meters are recoverable.
There are currently 20 coalbed methane wells in the Huainan CMA, which recovered
approximately 4.2 million cubic meters in 1994. Since 1985, the Huainan CMA has consistently
recovered over 4 million cubic meters of methane annually (Table 9). As noted in Section 3.5,
Enron Exploration Co. has drilled four coalbed methane test wells at this CMA.
4.10.3 PRESENT AND PLANNED USE OF MINE METHANE
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Currently, coalbed methane recovered from Huainan CMA is used primarily as residential fuel.
The region uses 20,000 cubic meters of coalbed methane daily, meeting the demand of 7,235
households. Seven gas storage tanks have a total capacity of 150,000 cubic meters.
Electricity generation is a large potential gas market for the CMA; available electricity supply
does not currently meet the demands of economic development. By the end of this century,
Huainan CMA will require over 4,000 MW of installed capacity. Meeting these power
generation needs will require 10 billion cubic meters of coalbed methane annually; based on a
market price of 0.8 yuan per cubic meter, the potential economic value of coalbed methane
resources in the Huainan CMA may exceed 500 billion yuan.
4.11 SONGZAO COAL MINING ADMINISTRATION
The Songzao CMA is located in Sichuan Province, approximately 175 km south of Chongqing
and 300 km from Guizhou Province (Figure 22). All of its six large underground mines produce
coal from the Songzao Basin. Coal mining in the basin began in 1958, although large-scale
production did not begin until the 1960's.
4.11.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
Geologic Setting
The Songzao Basin is a northeast-southwest trending anticlinorium approximately 140 km2 in
size. Within this broad feature lie several smaller-scale anticlines and synclines resulting in
local steeply dipping coal measures. The overall structure is relatively simple, with localized
faulting and folding. More than 300 faults, both normal and reverse, have been identified within
the basin (JP International, 1991 b), and they form the boundaries of many of the mines. Faults
are generally less than 3000 m in length, and displacement ranges from 10 to 55 m. These
faults are well documented within the mine boundaries.
Anthracite coal occurs in the Permian Longtan Series, where the coal-bearing interval ranges
from 50 to 100 m thick. Within this interval, 14 seams are present, of which 5 are of mineable
thickness (0.7 to 3.0 m thick). The main mineable seam is the No. 8, with an average thickness
of 2-4 m. The No. 8 seam represents 60 percent of the basin's coal reserves, and is 300 to
400 m deep at most of the basin's major mines. Although dips of beds vary locally from 3° to
13°, the average regional dip is 12°. Present mining depth is 250 - 450 m.
Coal Reserves
Total coal resources are estimated at 900 million tons; reserves in the balance category total
688 million tons (Appendix B contains an explanation of Chinese resource classification
terminology used in this report). Within the balance reserves are 592 million tons classified as
industrial reserves. These are defined as that portion of the Class A, B, and C reserves which
are slated for extraction. The remaining resources are Class D (predicted, or possible
resources) which total 97 million tons.
Coal Production and Quality
Currently, there are six mines operating within the CMA: Songzao 1 and 2; Datong 1 and 2;
Shihao; and Fengchun. All of these active underground mines use the longwall method; three
of the mines have varying degrees of mechanization, ranging from 50 percent (Datong 2 and
Shihao) to 100 percent (Datong 1). Annual production capacity for the six mines totals 3.2
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FIGURE 35. METHANE DRAINED AND VENTED 1981 -1990
million tons. For the past several years, production has averaged 3 million tons per annum;
raw coal production in 1994 was 2.70 million tons. By the year 2000, the CMA estimates that
seven mines will be operating with an annual production of 5.4 million tons.
In 1991, there were 23 operating longwalls with a total development length of 57.5 km. By the
year 2000, four additional longwall systems will be in operation for a total of 27, and the length
of development headings will increase to 100 km, nearly double the present length.
In the mineable No. 8 seam, volatile matter ranges from 8 to 9 percent, ash averages 19
percent, and sulfur content is high, generally over 4 percent. Heating values range from 17,600
to 26,400 kJ/kg. Overall, ash and sulfur content increase from north to south, with a
corresponding decrease in volatile content.
Most of the coal is shipped by rail and sold for power generation in coal-fired power plants in
Chongqing. The Chongqing Power Company operates two power generating stations, which
were designed specifically to use coal that has the same characteristics as Songzao Basin
coal.
4.11.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Methane Liberation
Figure 35 shows trends in
methane ventilation, drain-
age, and total liberation from
1981 through 1990. In the
Songzao CMA, the current
methane recovery efficiency
is only 30 to 40 percent of
the total gas released to the
underground workings.
While this rate remains
relatively constant, both the
volumes of methane drained
and vented have increased
over the past 10 years. Mine
management plans to
increase methane recovery.
The CMA forecasts that their methane production will increase to over 100 million cubic meters
per annum by year 2000.
Gas content of the mined coal averages 17.3 cubic meters per ton, but locally varies from 17
to 29 cubic meters per ton. Specific emissions range from 56.7 to 88.4 cubic meters per ton,
and absolute emission rates range from 15 to 45 cubic meters per minute. Permeability of the
seams ranges from 1.36 to 7.59 X 10"4darcies, which can be increased to 0.1 md by mining
the methane-liberating seam to release pressure for adjacent seams.
Methane Ventilation
Eleven large air shafts and 15 electrically driven fans provide ventilation for the mine complex.
Collectively, these fans can consume 5.3 MW of electrical power, although current
1981
1985
1986
1987
1988
1989
1990
4-17
-------
consumption is only 2.2 MW. The mines experience relatively frequent occurrences of
elevated methane concentrations, resulting from insufficient ventilation air movement
underground. This problem is exacerbated by an occasional power outage, due to the fact that
the mine lies at the end of the power transmission facility.
Methane Recovery
The Songzao CMA installed the first recovery system in 1967, and now all six mines have
systems in place. Drainage personnel remove methane in advance of or during mining
operations, via tunnels in the underlying rock. They drill boreholes in a fan-shaped array
upward into the roof to drain the working and overlying seams. Drilling stations are located in
the rock tunnels at intervals of 15 to 150 m. Currently, there are eight recovery stations
operating in the six mines, with a total of 27 vacuum pumps. The quality of the recovered
methane ranges from 40 to 70 percent, and averages 50 percent.
In 1990, the Songzao CMA drained a total of 59.2 million cubic meters of methane via its
degasification systems. By 1994, drainage had increased to more than 90 million cubic meters.
While historical data on the amount of methane used and vented from the Songzao CMA are
unavailable, recovery efficiency averages 36 percent. Table 15 shows past and projected
methane recovery at each of the Songzao CMA mines.
TABLE 15. METHANE DRAINAGE AT THE SONGZAO CMA
MINE
Songzao No. 1
Songzao No. 2
Datong No. 1
Datong No. 2
Shihao No. 1
Fengchun
TOTAL
1991
8.32
2.66
16.20
13.71
17.35
3.90
62.14
1992
9.33
3.09
18.82
15.01
21.41
4.05
71.71
1993
10.46
3.92
20.96
17.26
22.61
5.60
80.81
1994
11.87
4.61
24.02
18.17
24.61
7.25
90.53
1995*
13.17
5.61
27.77
20.69
25.87
9.0
102.11
2000*
13.17
5.61
37.87
28.65
30.18
9.00
124.48
* Projected
1993 total differs from data in Table 10; reason for discrepancy unknown
In 1992, Songzao's coalbed methane development project was included in the GEF's
"Development of Coalbed Methane Resources in China", in which directional long borehole
drilling and fracturing technology are to be introduced from the US. Section 3.5 discusses the
status of this project at the Songzao CMA.
Methane Resources
Based on a report prepared by the Central Coal Mining Research Institute, the Songzao CMA
contains an estimated 22.7 billion cubic meters of methane, of which 11.4 billion cubic meters
are recoverable. No further details concerning the methodology used in these estimates are
available.
4.11.3 PRESENT AND PLANNED USE OF MINE METHANE
Of the 59. 2 million cubic meters of methane recovered in 1990, only 23.5 million cubic meters
(40 percent) were used, mainly by households for cooking and heating, and by the nearby
carbon black plant. Songzao mines vented the remaining 35.7 million cubic meters (60
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percent) to the atmosphere. By 1992, methane use had increased; more than 30 million cubic
meters (about 49 percent) of the methane recovered from the Songzao mine were used that
year, mostly by mine facilities, residences, businesses, and farms, as shown in Table 17. This
methane was used for cooking, heating, and industrial steam generation. A 600 ton-capacity
carbon black production plant, located at the CMA, is one of the primary industrial users.
Coalbed methane supplies about 75 percent of the plant's fuel needs.
TABLE 16. COALBED METHANE USE AT THE SONGZAO CMA
1992 Consumption
Million cubic meters
Percent
Mine Facilities*
14.3
47
Residences
10.5
35
Other Industry
4.1
13
Other
1.5
5
Total
30.3
100
* Includes such facilities as cafeterias, bath houses, and worker housing.
Methane concentration = 100 percent.
In the future, a new on-site machinery factory and additional residential customers will increase
demand for mine methane in the area, and the CM projects that by 2000, annual coalbed
methane recovery from the Songzao CMA will be 100 million cubic meters. Future use options
include power generation, transportation (vehicle fuel) and production of chemical products.
The largest growth market for this gas appears to be for power generation. The mines need
increased power generation capacity; currently, there are electricity shortages that often lead
to power outages and resulting losses in coal production. This mine area is located on the
outskirts of the transmission grid and experiences frequent low voltage conditions, straining the
ventilation fans. According to a report detailing results of a GEF/UNDP mission to Songzao
(Lunarzewski et al, 1992), by year 2000 the amount of methane required by the domestic and
commercial sectors of the CMA will be about 30 percent of the total amount recovered, leaving
an adequate and dedicated supply of methane to fuel a 25.2 MW power plant.
As of 1993, four of the six mining districts had gas storage tanks, with a total capacity of
30,000 cubic meters. The CMA is building additional gas storage facilities and expects to
double this capacity. The addition of these facilities will create an integrated network between
the mines, and allow the six-mine complex to coordinate their methane supplies.
Another potential future use for the recovered methane is chemical feedstock production.
Currently, there is not a feedstock plant in the area.
4.12 HEDONG COAL BASIN
The Hedong Coal Basin is located at the eastern edge of the Ordos Basin (Figures 14 and 23)
covering an area of 12,000 km2. It is contained in portions of Shaanxi and Shanxi Provinces,
and the Inner Mongolian Autonomous Region. Coalbed methane activity in this basin occurs
outside the boundaries of coal mining administrations or other mining areas.
4.12.1 COAL GEOLOGY, RESERVES, AND PRODUCTION
Coal-bearing strata in the Hedong Basin belong to the Permo-Carboniferous Shanxi
Formation. The basin contains 17 coal seams with a total thickness of 19 m. Of these, nine
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seams are mineable and four seams are primary targets for mining. Seam thickness ranges
from 0.1 to 9.3 m, but mined seams are generally 1.6 to 3.9 m thick. Coal rank is primarily
medium volatile bituminous, with a small percentage of low volatile bituminous and semi-
anthracite coal.
4.12.2 METHANE LIBERATION, VENTILATION, RECOVERY, AND RESOURCES
Based on desorption tests, gas contents in the Hedong Basin range from 3 to 20 cubic meters
per ton. Coalbed methane resources within a depth of 1,000 meters are estimated at 220
billion cubic meters.
In 1991, the Huaibei Petroleum Geology Bureau of the Ministry of Geology and Mineral
Resources drilled six test wells in the Liulin area. Gas production for the wells ranged from 500
to 3,000 cubic meters. Currently, the Chinese company Huajin Coking Coal Corp. and the US
company Enron Corp. are cooperating to conduct a preliminary evaluation of coalbed methane
in Sanjiao mining region. Data obtained from these boreholes indicate that the permeability is
high. Section 3.5 briefly discusses the status of this project.
4.12.3 PRESENT AND PLANNED USE OF METHANE
The geology of the Hedong Basin is comparable to that of the Black Warrior Basin of the US.
MOCI considers it an optimal region for surface recovery of coalbed methane. However, in
terms of economic factors, the region has less industrial development, infrastructure, and
demand for coalbed methane, so near-term use options may be somewhat limited.
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CHAPTER 5
SUGGESTED APPLICATIONS OF TECHNOLOGY AND ISSUES
RELATED TO PROJECT DEVELOPMENT
5.1 CRITERIA FOR SELECTION OF APPROPRIATE TECHNOLOGY
5.1.1 APPLICATIONS OF TECHNOLOGY SUITABLE FOR GEOLOGIC AND MINING
CONDITIONS IN CHINA
Mines seeking appropriate technology for methane recovery should consider the following:
• geologic conditions;
• mining conditions; and,
• source and quantity of methane emissions.
The various recovery methods that may be employed in China, and the circumstances under
which they are used, are as follows:
• If methane is emitted primarily from the working seam, then drainage efforts should be
directed toward the working seam; similarly, if it is emitted primarily from adjacent seams,
then recovery efforts should focus on the adjacent seams.
• If significant quantities of methane accumulates in gob areas, then it should be drained and
recovered from gob areas via surface gob wells or in-mine horizontal longholes.
• If methane is difficult to drain because of low coal seam permeability, then measures to
relieve seam pressure should be taken; most commonly this is done by mining an overlying
seam, causing relaxation of the seam in need of drainage.
• Recovery of methane via surface wells is feasible when topography will allow access for
drilling and gathering, and coal seams have a high methane content, sufficient
permeability, and are between 300 and 1000 m deep.
5.1.2 SUGGESTED APPLICATIONS OF NEW TECHNOLOGY FOR IN-MINE RECOVERY
China has been using in-mine recovery systems for several decades. In-mine recovery will
maintain an important place in the ongoing development of coalbed methane recovery in
China. Chapter 3 lists the CMAs that currently recover large amounts of methane; these CMAs,
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with their large methane reserves and well-established recovery systems, will remain important
contributors to China's coal mine methane industry.
Of the total methane that Chinese mines drain, more than 42 percent is from working seams.
In most cases, the recovery efficiency is low. Under optimal conditions, such as thick coal
seams with good permeability (as is the case at the Fushun CMA) mines achieve higher
recovery efficiencies.
Multi-seam recovery technology is used in many CMAs in China, such as Songzao, Tiefa and
Yangquan. Therefore, many mines currently use in-mine degasification from adjacent seams,
accounting for nearly 53 percent of the methane drained in China. Mining relieves the
pressure of adjacent seams, resulting in improved permeability. Mines can also use the
adjacent seam degasification boreholes for in-mine pre-drainage and gob drainage, creating
an integrated drainage approach that can recover up to 80 percent of the gas in place.
Gob drainage significantly adds to the recovered quantities of methane, and is gaining more
attention in China. In some areas it may be feasible to use horizontal longhole drilling
technology to combine in-mine degasification from adjacent seams with pre-drainage and gob
drainage efforts.
The US and Germany have developed horizontal and directional drilling technology, and the
Tiefa and Songzao CMAs have imported horizontal and directional drills from the US.
Unfortunately, these types of technology remain unaffordable for many Chinese mines.
However, changing market conditions for methane may improve the economic conditions and
provide incentives for investment in such capital-intensive technology.
5.1.3 SUGGESTED APPLICATIONS OF NEW TECHNOLOGY FOR RECOVERY USING
SURFACE WELLS
The Ministry of Coal Industry considers the development of coalbed methane to be an
important strategy for the coal industry. It recognizes that the progress of China's coalbed
methane industry will depend largely on recovering methane from surface wells. In recent
years, China has initiated more than 20 coalbed methane projects (discussed in Chapter 3);
some of these have begun to produce methane, but their output is low at present.
Many of the geological characteristics of China's gassy mines differ from those of other
countries. The most obvious of these are the complex tectonic setting of China's gassy mines,
the occurrence of methane under high pressure with little or no water, and low permeability.
Enhancing the permeability of coal seams at Chinese mines is of utmost importance. China
has already begun to experiment, on a limited basis, with various methods of increasing
access to in-situ permeability. Generally, good results have been achieved through the use of
hydraulic fracturing. At least one CMA has attempted an open-hole cavity well completion,
however the soft, non-cohesive nature of the mudstone comprising the roof and floor strata
caused problems.
Of the existing coalbed methane projects in China, about one-half are operated in cooperation
with foreign companies. At this preliminary stage of coalbed methane development, China
needs advanced technology and training, as discussed in Section 5.2.3 below.
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5.1.4 MARKETS FOR METHANE
Near-Mine Residential or Industrial Users
Medium quality gas can be used in the vicinity of CMAs, eliminating the need for costly gas
treatment or compression, and providing an affordable fuel source for residential users and
small industry. Near-mine uses of recovered medium quality gas include: residential or
commercial space heating; use in boilers for central heating, steam production or power
generation; cooking; and industrial uses that do not require high heating value gases.
Methane for Power Generation
The sale of electricity generated from coal mine methane offers opportunities at various scales
determined by the quantity and quality of methane produced. Smaller (1.5 up to 15 MW)
turbine electric power generation sets can be used as a supplementary power supply to the
mine or nearby industrial consumers, and as peak load supply in areas where seasonal
brownouts are prevalent. These turbines offer the advantage of single units with the option of
additional units that can be added as development proceeds.
Mines may install larger units (25 MW and greater) in remote regions to augment or replace
the electricity supplied by the regional power grid. In Australia, a mine and power company are
presently installing methane-fueled turbine generation sets with even greater generation
capacity. Revenues captured from the sale of the generated electricity will make a welcome
contribution to the mine's cash flow stream. Installation of larger power generation facilities is
more likely to be economic where gas supply is assured and production rates can exceed 100
cubic meters of methane per minute.
Injection of High Quality Methane Into Local or Regional Transmission Pipelines
Development of coalbed methane resources from unmined coal seams, and recovery of gas
from sealed gob areas, can offer the opportunity to exploit those markets open to high heating
value natural gas. Because the heating value of the gas developed from these sources is
relatively high, mines can offer it as a substitute for conventional natural gas. Potential
consumers are local industries and commercial enterprises, as well as more distant consumers
that can receive natural gas delivery via regional transmission pipelines.
5.2 ISSUES RELATED TO PROJECT DEVELOPMENT
5.2.1 PROJECT IDENTIFICATION AND DEVELOPMENT THROUGH STRATEGIC TEAMING
Consumers are segregated by location into two groups: those consumers near the gas-
producing mines, and those consumers located in more distant cities or industrial centers.
Each market group possesses unique characteristics and challenges for the methane
producer, requiring an appropriate match of technical expertise, technology, and economic
goals.
The ability to match expertise to the technical challenges of a coal mine methane recovery
project is generally dictated by the technology that is to be employed by the project. Simply
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increasing methane recovery using existing technology and techniques requires little or no
additional expertise; whereas a major utilization project, such as generating electricity with a
gas turbine, will require specialized knowledge of the equipment to be employed. If
specialized expertise is not available to the mining partner, it may require outside help to
identify the most appropriate experts. The mining partner must assess its long term needs for
knowledge and advice, and have assurance that the expertise will be available to meet those
needs.
The structure of the joint venture will affect the mix of money, technology, and manpower each
of the participants must bring to the venture so that they may enjoy equitable benefits and
return on their investment. As an example, treatment of personnel costs can differ depending
on the structure of a joint venture. In China, if the partnership is a Contractual Joint Venture,
the cost will be expensed and shared according to the distribution of profits; but if the
partnership is an Equity Joint Venture the cost of supplying the experts and training Chinese
counterparts can be considered as part of the capitalization of the new entity. Joint venture
formation is encouraged in China, and laws regarding the formation of these entities are
written so that these joint ventures are treated as equally and fairly as wholly-owned Chinese
entities. The best joint venture option for a given development project depends on the details
of the project; partners should design and plan in a way that best emphasizes each of their
strengths.
Developing a team that will be able to meet the needs of the market and effectively compete in
the marketplace is the greatest challenge facing the joint venture. Project developers must
consider the following economic parameters when preparing for discussions regarding the
market and the best way to compete:
• the size of the project, in terms of the amount of gas that will be produced and the amount
of capital needed for its development;
• the length of time over which the project is likely to produce revenues;
• the desired monetary return on the investment, and the time required for that return.
5.2.2 DISCUSSION OF KEY INVESTMENT, PERMITTING AND TAX ISSUES
Forms of Business Enterprises
The principal forms of foreign investment enterprises in China are as follows (Price
Waterhouse, 1995):
• Equity joint ventures. An equity joint venture is a separate legal entity and takes the
form of a limited liability company registered in China. The partners have joint
management of the company, and they distribute profits and losses according to the
ratio of each partner's capital contribution.
The Ministry of Foreign Trade and Economic Cooperation has overall responsibility for
approving equity joint ventures and for issuing the approval certificates. The equity joint
venture law requires that the foreign partner to the venture contribute at least 25
percent of the registered capital. In general, the Chinese partner will contribute cash,
land development or clearance fees and land use rights, while the foreign partner will
contribute cash, construction materials, equipment, and machinery. The profits and
losses of an equity joint venture are distributed according to the ratio of each partner's
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investment. During the life of an equity joint venture, the foreign partner's equity
contribution cannot be repaid.
• Cooperative/contractual joint ventures. A cooperative venture may operate under a
structure similar to that of a Western-style partnership with unlimited liability, or the
parties to the venture may apply for approval to have the company structured as a
separate legal entity with limited liability. The profit and loss distribution ratio is defined
in the contract and can vary over the contract term.
To establish a cooperative joint venture, the Chinese and foreign partners must submit
such documents as the signed agreement, contract, and articles of association to the
department in charge of foreign economic relations and trade or the relevant local
government authority for examination and approval. If it is agreed in the cooperative
joint venture contract that all of the venture's fixed assets will belong to the Chinese
party after the venture's operating period has expired, then the parties to the venture
may also state in the contract that the foreign party can recover its investment during
the contract period.
• Unincorporated joint ventures. Joint ventures that are established by two or more
parties for a particular project and dissolved upon the completion of the project are
generally structured as unincorporated joint ventures. Many of these projects are
engaged in coproduction of offshore oil and other minerals. The foreign venturer in the
coproduction project is taxed in its own name on the basis of its own operating profit,
computed by deducting its share of the exploration, production and development
expenses from its hare of the oil or mineral production from the coproduction.
• Wholly foreign-owned enterprises. Wholly foreign-owned enterprises are established
exclusively with the foreign investor's capital. They are limited liability companies, the
profits and losses of which are borne solely by the foreign investor. The law specifies
that wholly foreign-owned enterprises are to be "conducive to the development of
China's national economy."
There are more restrictions on approval of wholly foreign-owned enterprises than on
joint ventures. Another disadvantage is the absence of a local partner to assist in such
areas as labor recruitment and obtaining access to marketing and distribution channels.
Regulatory and Permitting Issues
Prior approval is required for the establishment of all foreign business ventures, and
registration with the appropriate government authorities is mandatory. The Ministry of Foreign
Trade and Economic Cooperation is responsible for the approval of foreign investment
projects. Many of the key aspects of permitting, however, take place on the local level. Those
seeking to develop coalbed methane projects must therefore become familiar with local and
regional, as well as national, government requirements. Potential investors should make
contact with local and regional authorities in the early stages of project conception.
Tax Issues
On the national level, the principal taxes applicable to foreigners, foreign investment
enterprises, and foreign corporations doing business in China are:
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• income taxes;
• taxes on transactions;
• property taxes; and,
• other taxes, including customs duties, stamp taxes, vehicle taxes, and resources taxes.
In addition to these national taxes, businesses may be subject to various local taxes. These
taxes are set by local authorities and are often negotiable. The CMA or other Chinese partner
can be of assistance in such negotiations.
Special tax incentives are offered to enterprises operating in Special Economic Zones,
Economic and Technological Development Zones, and Old Urban Districts of the 14 coastal
cities, as well as other special open zones. Subject to certain conditions, enterprises with
foreign investment established in the Special Economic Zones and engaged in the service
industries may be eligible for tax exemption from the first profit-making year, followed by a two-
year 50 percent reduction period.
Additional information on China's tax system is available from Price-Waterhouse (1995); and in
the publication "Investment in China", compiled jointly by the China Foreign Investment
Administration, the China Economic and Trade Consultants Corporation, and the Ministry of
Foreign Trade and Economic Cooperation.
5.2.3 GUIDELINES FOR POTENTIAL JOINT VENTURE PARTNERS
This section provides information that should be useful to potential joint venture partners
interested in developing coalbed methane projects in China. The purpose of this section is to
help foreign partner understand the Chinese business environment and the need for expertise,
technology, and investment; and to aid the Chinese partner in understanding the potential
needs and expectations of the foreign investor with regard to regulations, policies, incentives,
and return on investment.
Needs of the Chinese Partner
The exploration, development, and production technologies and methodologies associated
with coalbed methane and conventional energy fuels are constantly advancing. In order to
effectively execute coalbed methane projects, Chinese partners need state-of-the-science
expertise and training in the following areas:
• Exploration Technology. Several developments in geophysical technology in the past
decade have boosted the ability to evaluate coalbed methane potential. Three-dimensional
seismic surveying has evolved rapidly in recent years and is an important tool for defining
subsurface structural and stratigraphic trends. In addition, modern borehole logging and
imaging techniques provide data that were previously unavailable to geologists and
engineers attempting to evaluate methane resources. Much of this technology has not
been available to Chinese partners, who could benefit from expertise gained elsewhere.
• Development Technology. Advanced drilling techniques, including horizontal, directional
and longhole drilling, can be important to the success of coal mine methane projects. In
many cases, hydraulic fracturing, cavity completions and other stimulation techniques will
be required to overcome problems with low permeability in Chinese coals. It will be
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necessary to train Chinese engineers in the use of these techniques, and methodology for
selecting technology appropriate to specific project conditions.
• Production Technology. There are currently some innovative trends in the US and Australia
in solid-state monitoring and control of methane drainage. These methods are used to
reduce air entrainment in the gas stream during the production process, thereby improving
the quality of the gas.
Chinese partners may need assistance in developing expertise in project development and
management. In particular, foreign experts can assist with feasibility and market studies,
implementation of accounting and reporting systems and procedures that are required by most
lending institutions or foreign partners, and new and efficient strategies for managing
personnel and equipment needs.
Needs of the Foreign Partner
Before entering into a joint venture, foreign partners must feel confident that they are investing
under reliable and clearly defined circumstances. In particular, foreign investors will require:
• Clearly Documented Regulations. Foreign partners want clear documentation and
understanding of all rules and regulations related to business formation and resource
licensing. They need to thoroughly understand all national and local government policies
that may affect their investment, including those related to business structure, taxes, and
repatriation of profits.
• Equal /Access to Markets. Foreign investors need assurance that they will be at no
competitive disadvantage in selling their product, and that pricing will be fair and
unregulated. It may be necessary to establish a mutually agreed-upon market price.
• Incentives for Coalbed Methane Development. Foreign investment in coalbed methane
projects could be substantially increased if China creates incentives for coalbed methane
development and use. Such incentives could, for example, take the form of tax credits for
companies that use coalbed methane (or electricity generated by coalbed methane). These
incentives could be temporary, in place just long enough to give this emerging industry a
boost, and stimulate the use of methane.
• A Firm Basis for Economic Projections. Investors need a sound basis for estimating
revenues, taxes, production costs, and the rate of return that can be expected. They also
need reliable data that will help them determine the size of the project, the size of the
investment, the life of the investment, and the time required for return on the investment.
5.2.4 A HYPOTHETICAL COALBED METHANE PROJECT
This section describes and discusses a hypothetical power generation project, with a Chinese
coal mining administration and American power generation firm as partners. The American firm
is experienced in methane resource development, and includes a team of power generation
installation experts. The intent of this hypothetical project is to use coalbed methane from the
CMA to produce electrical power via the use of a combined cycle gas turbine generation
facility. The joint venture would thus earn revenues from the sale of this electricity.
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In addition to contributing money to the project, the CMA and the American firm would each
contribute other essential, yet unique, resources. The CMA would, obviously, provide the
methane resource itself; in addition, it would contribute an understanding of the laws and
regulations related to the project. These regulations would encompass a wide range of
matters, from taxation issues to environmental concerns. The CMA would also provide skilled
manpower for the project. The CMA would be responsible for monitoring and maintaining the
methane concentration in the gas to be used, and for managing gas storage facilities so that a
reliable quantity of gas is available at all times.
The American firm, on the other hand, would provide the resource development expertise and
some of the capital, as well as technology and technical know-how related to gas turbine
electricity generation. The firm would use its experience in assessing the quantity and quality
of the methane resource, and estimating the potential life of the project based on resource
availability. It would also play a key role in evaluating the economics of the project. In addition,
the American firm would be responsible for securing the turbines, compressors, water
treatment equipment and other necessary components of the generation system. It would
provide experts who have had first-hand experience in installing gas turbine systems that can
use low or medium quality mine gas fuel to generate electricity. It would also contribute
understanding and experience in the areas of business development and management, as
well as electricity markets and marketing.
There are four primary steps involved in executing a project of this type: 1) a preliminary
evaluation; 2) a detailed evaluation; 3) project design; and 4) project implementation.
1. Preliminary evaluation. The partners should first work together to determine basic
information, including the scope of the project, the market for the electricity, and the role
each partner will play. The Chinese partner should investigate permitting and licensing
requirements.
2. Detailed evaluation. If the project appears prospective based on the preliminary evaluation,
further evaluation is in order. This would typically include:
• a review of existing data and information related to the methane resource, including
geologic maps and mine plans, and data related to coal production and methane
liberation;
• a review of data related to the market potential for the electricity, including current
and forecast energy supply and demand, and current electricity contracts in place;
• an analysis of engineering factors, including the efficiency of the current methane
drainage system, projected methane production decline rates, estimated recovery
factor, and optimum power plant capacity; and,
• an economic analysis, including gas transmission and power plant capital and
operating costs over the life of the project at various discount rates, cost savings
attributed to the project, and overall cash flow analysis.
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3. Project Design. If the detailed evaluation indicates project feasibility, the design phase can
begin. In this example, the American firm would design the gas drainage and power
generation systems based on the layout of the existing drainage system (including
borehole layout), amount of gas available, and demand for the electricity. All engineering
details of the project would be included. Project design should be sufficiently flexible to
allow for changes in electricity demand or gas availability; e.g., there should be avenues for
future expansion of the facility if desired.
4. Project Implementation. After all parties have agreed on the project design, implementation
can begin. Progress should be monitored closely and re-evaluated on a regular basis. The
American partner would provide Western-style project management know-how that
includes tracking progress, results, costs, savings, and project benefits. This would allow
the project design to be optimized based on project results.
The above outlined project is but one example of many possible types of joint coalbed
methane ventures between Chinese and foreign partners. Each partner would make an
important contribution to the venture, with the benefits from the sales of the gas and increased
efficiency enjoyed by each. In addition, they would have the satisfaction of knowing that their
project is increasing mine safety, and helping reduce methane emissions to the atmosphere.
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CHAPTER 6
POLICIES TO ENCOURAGE COALBED METHANE
DEVELOPMENT IN CHINA
Numerous barriers currently prevent China from achieving economic methane recovery from
coal mining to its full potential. Critical barriers include the lack of an appropriate policy
framework, limited capital for project investments and equipment, and the need for additional
information and experience with technologies. Artificially low gas prices, and difficulty with
repatriation of profits, create barriers to the development of foreign investment in joint ventures
for production of domestic energy resources (USEPA, 1993).
Coalbed methane policies in the US have focused on incentives for recovery of coalbed
methane from vertical wells in unmined areas. As discussed in previous chapters, China has
tremendous opportunities for increased recovery and use in its large, gassy underground
mines. If China is to take full advantage of these opportunities, however, government-provided
incentives for coal mine methane use will likely be necessary. Incentives that focus on use of
methane will inherently encourage its recovery. These incentives could be eliminated once
coal mine methane becomes competitive with conventional natural gas and coal.
Section 6.1 below discusses policies that have been proposed or adopted internationally to
promote coalbed methane recovery. Sections 6.2 and 6.3 discuss existing foreign support and
investments in Chinese coalbed methane projects and policy options for China, respectively.
6.1 DISCUSSION OF INTERNATIONAL POLICIES
6.1.1 INCENTIVES
US Gas Industry: Market Forces and Policy Change
The US is the world's second largest gas producer, accounting for 24 percent of the total gas
produced worldwide. US policies and regulations influence coalbed methane development, as
the coalbed methane produced is distributed into the natural gas pipeline system. An overview
of gas policy and regulations practiced in the US may be relevant to China's developing
coalbed methane industry.
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Since the late 1970's, major policy changes within the US gas industry have stimulated
increased competition and had a significant effect on wellhead prices. Figure 36 illustrates
annual natural gas wellhead prices, supply and demand for 1978 through 1993. Prior to 1978,
gas prices were very low, due to a single ceiling rate (regulated prices) for all US production
resulting in lower rates of investment in gas exploration and production. This resulted in
increased demand for gas and widespread gas shortages. From 1978 to 1984 deregulated
wellhead prices and gas exploration and production dramatically increased; as the market was
saturated, demand fell. Since then, wellhead prices have stabilized, achieving a dynamic
balance between gas supply and demand.
FIGURE 36. EFFECT OF INCREASING COMPETITION ON NATURAL GAS PRICES
$3.00 -i
H—Wellhead Price
•—Annual Demand
Annual Supply
$0.00
1978
1980
1982
1984
1986
1988
1990
1992
1993
mcf = 103 cubic feet
Mmcf = 106 cubic feet
Tax Credits: US Section 29 Tax Credit
The Crude Oil Windfall Profits Act of 1980 provided an incentive for production of
unconventional fuels. The intent was to create a production tax credit for those times when
low oil prices restrict the competitiveness of unconventional gas, including coalbed methane.
The original tax credit has been revised several times and extended twice (1989 and 1990).
Even though the Energy Policy Act of 1992 extended credits for other types of unconventional
gas production, it expired for coalbed methane at the end of 1992. However, qualified
companies whose gas production facilities qualified before 1992 will receive the credit until the
year 2002. To be eligible for the credit, wells must have been drilled between 1980 and 1992
(Lemons and Nemirow, 1989).
The tax credit is calculated as follows (Soot, 1991):
TC = (US $3/BOE) x IAF x PH
Where:
TC = Tax credit in US S/MMBTU;
BOE = Barrel of oil equivalent, 5.88 MMBTU;
IAF = Inflation adjustment factor (Based on GNP implicit price deflator);
PH = Phase out factor (Ph<1); PH = 1-(Domestic oil price - US $23.50/bbl x IAF)/
(US$6/bbl x IAF).
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Table 17 shows historical and projected increases in the coalbed methane production tax
credit, based on a 4 percent inflation rate.
TABLE 17. SECTION 29 COALBED METHANE PRODUCTION TAX CREDIT
YEAR
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
INFLATION ADJUSTMENT
FACTOR (IAF)
1.8095
1.8819
1.9572
2.0355
2.1169
2.2016
2.2896
2.3812
2.4764
2.5755
2.6785
PRODUCTION TAX CREDIT
$US/Million(106)BTU
0.936
0.973
1.012
1.053
1.095
1.139
1.184
1.232
1.281
1.332
1.385
(Data for years 1995-2002 are projected)
The tax credit stimulated tremendous growth of the coalbed methane industry in the United
States throughout the 1980's. Producers applied it primarily to vertical wells in unmined areas.
Annual coalbed methane production increased from 708 million cubic meters in 1983 to 20.7
trillion cubic meters in 1993. However, a study by ICF Resources Inc. (Oil and Gas Journal,
1992) concluded that, as of 1992, most gas production claiming Section 29 credits had been
developed using conventional technology in the most geologically favorable eligible areas, and
that the credit contributed to low wellhead prices during a period of surplus supply. Unlike the
US in 1992, however, China faces gas shortages, rather than a surplus.
As discussed in Section 6.3 below, China should develop tax credit policies that will help
stimulate its coalbed methane industry. The Section 29 tax credit could serve as one model for
these policies, although some variations on this approach may be more appropriate to China's
taxation system.
Incentives to sell coalbed methane to nearby power plants or utilities
Use of coal mine methane to generate electricity has benefits beyond immediate market
incentives. The Chinese government may want to consider an approach similar to that
described below, as a means of favoring power projects that using methane that otherwise
would have been wasted.
The US Public Utility Regulatory Policies Act of 1978 (PURPA) was designed to promote
conservation of energy and energy security by removing barriers to the development of
cogeneration facilities and facilities that employ waste or renewable fuels. Such facilities are
called qualifying facilities, or QFs. Under PURPA, utilities are required to purchase electricity
from QFs at each utility's avoided cost of generating power. An electricity generation facility at
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a coal mine methane project may be granted QF status if the coal mine methane meets the
definition of "waste" fuel.
In the past, at least one US coal mine methane facility applied for and obtained QF status
(USEPA, 1995d). This project involved generation of 19.8 MW of electricity. The coal
company was able to justify that the gob gas had no other commercial uses. In particular, long
pipeline distances, low natural gas prices, and high upgrading costs rendered a pipeline
project uneconomic. The gas would have been vented and, therefore, wasted, unless it was
used to generate electricity on-site. The mine owners were able to support this argument and
the facility thus obtained QF certification.
Expanding Pipeline and Gas Gathering and Storage Infrastructure
Countries with a fully integrated natural gas pipeline system have an advantage in recovering
and using pipeline-quality coalbed methane. These are countries with a well-developed natural
gas industry, and extensive oil field services, materials, and infrastructure. This natural gas
infrastructure lowers the initial capital costs required for distribution and marketing of natural
gas.
In many countries, the remote location of coal basins with tremendous coalbed methane
potential results in extremely high costs for building pipelines and gathering systems. On-site
use (such as power generation) and local use (co-firing or co-generation) of these energy
resources may be more cost-effective. In a complementary action, government policy could
help expand local and regional gathering systems; for example, in China additional gathering
systems for key state-run CMAs could provide the incentive necessary for increased coalbed
methane use.
6.1.2 LEGAL NEEDS
Coalbed Methane Leasing and Ownership
Unresolved legal issues concerning coalbed methane ownership represent a major barrier to
recovery and use of this resource (USEPA, 1994b). Coalbed methane ownership is a complex
issue because of the nature of the resource itself. The strata containing conventional oil and
gas resources are usually deeper than the strata containing the coal resources. Thus, rights to
mineral reserves located on the same tract of land may be easily segregated, according to
strata, between the owner of the coal rights and the owner of the oil and gas rights. However,
a discrete geologic separation does not exist for coalbed methane. Coalbed methane is a gas
resource located in the same strata as coal reserves, making separation of ownership
problematic.
Until recently, miners considered coalbed methane a hazard to coal mining, not a potential
economic resource. Therefore, leases have not historically included coalbed methane, and the
owners of the coal rights, oil and gas rights, and surface rights may all claim ownership of the
coalbed methane. The situation is particularly complicated in the Appalachian region of the
eastern United States, where there are often multiple mineral resource owners. In the United
States, ownership of coalbed methane is not standardized, and only those states that are
actively exploiting the resource have established clear ownership provisions. In many states,
unclear ownership provisions have constrained coalbed methane development. The US
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Congress passed coalbed methane ownership legislation as part of the Energy Policy Act of
1992. Under this act, states which lack regulatory procedures to address ownership issues had
until October 1995 to enact ownership legislation, or the federal government would impose
legislation administered by the US Bureau of Land Management (EPA, 1994b).
In the United Kingdom, a bill is currently before parliament that would establish a legal
framework for long-term coalbed methane production. There are numerous coalbed methane
exploration licenses in England, Scotland, and Wales, and several US companies have begun
exploration projects. During the recent three rounds of Tenders inviting the licensing of
coalbed methane exploration, 15 British and US companies won the licenses with a total
exploitation area of 9 million acres.
Countries with established oil and gas production have instituted policies for the acquisition of
hydrocarbon leases or concessions. Countries with significant coalbed methane resources, but
no previous oil and gas development, lack this legal framework. In several countries whose
economies are in transition, laws that govern ownership and leasing of mineral resources are
currently unresolved. In Eastern Europe, for example, many US and foreign-based companies
are pursuing exploration and development concessions on vast coalbed methane resources;
but the absence of laws which define the ownership of these lands makes leases difficult to
acquire.
In Poland, the government is establishing policies for the exploration and development of
coalbed methane, based in part on the new Geological and Mining Act guidelines (February
1994). Poland is addressing issues related to exploration concession licenses, and laws which
govern foreign investment, to create opportunities for joint ventures with foreign companies to
develop coalbed methane resources.
6.2 FOREIGN SUPPORT AND INVESTMENT IN CHINA'S COALBED METHANE
Since the 1980's, the global environment has been the focus of international attention. A key
issue concerns greenhouse gases, such as carbon dioxide and methane, their effect on the
atmosphere, and potential long-term impacts on global climate. In June 1992 the United
Nations Environment and Development Conference in Rio de Janeiro passed the Framework
Convention on Climate Change. Over 150 heads of government jointly signed the Convention,
and committed to reducing greenhouse gas emissions in their respective countries.
Methane liberated during coal mining is a greenhouse gas, approximately 24.5 times more
potent than CO2 in terms of the impact on global warming over a 100 year time-frame.
Methane is also a clean and efficient energy source, equivalent in quality to conventional
natural gas. Various international government agencies and non-governmental organizations
encourage coalbed methane recovery and use, as it not only creates a new energy source, but
also protects the environment.
6.2.1 UNITED NATIONS GLOBAL ENVIRONMENT FACILITY (GEF)
Based on USEPA investigations, methane liberated during coal mining from Chinese mines
accounts for one-third of the world's total. The UNDP later built on the findings of these
USEPA studies, and through a definitional mission developed a project to provide incentives
for China to recover and use the coalbed methane liberated during coal mining, improve
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regional and global atmosphere quality, and create an additional energy source. The UNDP
signed a project agreement for development of coalbed methane resources in China with the
former Ministry of Energy in June, 1992. The project is supported by the Global Environment
Fund Facility (GEF) with US $10 million, and includes three coalbed methane development
projects and one coalbed methane resource evaluation project. The goals of these projects
include:
• to define the necessary technologies and organizations for the Chinese government to
establish coalbed methane development strategies;
• to introduce and demonstrate coalbed methane development technologies; and
• to advise Chinese central and local government policy-makers of the potential economic
significance of coalbed methane development.
6.2.2 US ENVIRONMENTAL PROTECTION AGENCY (USEPA)
According to studies undertaken by the USEPA, China has a great opportunity to profitably
recover coalbed methane liberated during coal mining. Coalbed methane could reduce
China's need for coal burning power plants by approximately 25 percent by 2020. One barrier
to project development is the lack of capital and technical expertise that foreign companies
may bring to a project. The development of a coalbed methane industry in China also creates
potential business opportunities for US and international businesses. The USEPA will assist
Chinese and US companies to create partnerships for methane recovery, and to support the
transfer of information and technology necessary to evaluate, develop and manage coalbed
methane projects. As part of the cooperative activities between the United States and China,
the USEPA, the Chinese Ministry of Coal Industry (MOCI), and the China Coal Information
Institute have created the China Coalbed Methane Clearinghouse. Its role is to disseminate
information to Chinese and international experts on coalbed methane technology, markets,
and policies. In addition, the Clearinghouse is involved in activities which promote cooperation
in coalbed methane development between China and international companies.
6.2.3 US DEPARTMENT OF ENERGY (USDOE)
The Deputy Energy Secretary of the USDOE reported to a US Senate Hearing that foreign
investment in all energy sectors, including the coalbed methane industry, is needed for China
and other Asian countries. Development of coalbed methane projects in China would be a
long-term cooperative opportunity for US businesses. On March 5, 1995 in Beijing, the
Chinese Coal Minister and US Energy Secretary signed the Protocol for Cooperation for Fossil
Energy Research and Development between MOCI, China, and USDOE for coalbed methane
recovery and use. The planned cooperative project will include an evaluation of China's
coalbed methane resources and demonstration projects to apply new technologies for coalbed
methane recovery and use.
6.2.4 US INITIATIVE ON JOINT IMPLEMENTATION (USIJI)
At the 1992 Earth Summit in Rio, the United States joined more than 150 countries in signing
the Framework Convention on Climate Change, which explicitly provides for signatories to
meet their obligation to reduce greenhouse gas emissions "jointly with other parties". Thus,
Joint Implementation refers to arrangements between entities in two or more countries, leading
to the implementation of projects that reduce, avoid, or sequester greenhouse gas emissions.
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In October, 1993 the United States established the US Initiative on Joint Implementation
(USIJI). An interagency Secretariat, chaired by the USEPA and the USDOE, administers the
organization, which promotes the development of overseas projects to reduce greenhouse
gas emissions. USIJI's funds come from companies, governments, private banks, trust funds,
and regional development banks.
According to a brochure prepared by the USIJI secretariat, the panel evaluating projects
submitted for inclusion in the USIJI program will consider several issues, including:
• Specific measures to reduce greenhouse gas emissions;
• Appropriateness of methodologies for calculating emissions reductions;
• Non-greenhouse gas environmental impacts of the project;
• Development impacts of the project; and,
• Acceptance by the national or federal government of the host country.
The USIJI's Evaluation Panel will examine project proposals within 90 days of their submission.
So far, the USIJI has not received any project proposals from the Chinese government
agencies. The USIJI encourages MOCI to submit project proposals for projects that reduce
greenhouse gas emissions (including coalbed methane projects).
6.3 POLICY OPTIONS FOR CHINA
6.3.1 REVIEW OF CHINA'S POLICIES ON RECOVERY AND USE OF COALBED METHANE
China is encouraging coal mines to expand recovery and use of coalbed methane through the
following policies.
State Investment Plan for Capital Construction
In 1982, the State Planning Commission began incorporating coalbed methane use into its
plan for capital construction of energy conservation projects. In 1989, the State Council drafted
the "Decision on Current Industry Policies", in which coalbed methane development was
designated one of the key industries to be financed in the Catalogue of Industry Development
Priorities. The State Planning Commission, together with the Ministry of Finance and the
Development Bank, has set aside a certain percentage of low-interest investment loans for
coalbed methane development projects.
Coal Industry Development Program
In 1994, MOCI included coalbed methane development as one of its three strategies for
development of China's coal industry. The "1994-2000 Coal Industry Programme for
Developing Utilization, Economic Diversification and Service Industries", indicated that coalbed
methane development should be given priority. The Programme proposes developing seven
coalbed methane use projects during the next seven years, increasing utilization capacity by
280 million cubic meters, and investment by 1.1 billion yuan. At present, the special low-
interest loans given to MOCI by the State amount to 3 billion yuan, a portion of which can be
used for comprehensive coalbed methane use projects.
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Coal Mine Safety Technology Fund
The Coal Mine Safety Technology Fund was founded in the early 1970's. Its goal is to improve
safety conditions at coal mining areas. Initially, the source of the fund was a portion of MOCI's
Technical Renovation Fund granted by the State Economic Commission. The funding
amounted to approximately 70 to 100 million yuan per year, of which one third was used for
gas drainage projects. In 1988, the then-existing MOCI was dissolved and the National Coal
Corporation, Northeast and Inner Mongolian Corporation, and China Local Mine Corporation
were established. The State no longer provides technical renovation funds to coal mines and
each corporation has to raise its own safety technology funds.
MOCI was later re-established and currently retains a portion of the relief fund of 1 yuan per
ton of coal, which is remitted every year by various coal mines. MOCI uses this fund as a
technology-based safety measure fund. Many coal mines have financial problems and the
budget for coal mine safety is insufficient. Some of the more economic mines fund
technology-based safety measures on their own. For instance, in 1994, the State-owned key
coal mines in Shanxi Province invested 43 million yuan in gas control, an average of 0.7 yuan
per ton. They plan to increase this to 1 yuan per ton in 1995.
Tax-Preferential Policies
In September 1985, the State Council approved the National Economic Commission's
"Catalogue of Comprehensive Utilization of Resources". In this Catalogue, coalbed methane is
classified as a "waste resource"; the recovery of waste resources is eligible for tax reduction
policies. The products of comprehensive use projects created with self-raised funds and
included in the Catalogue of Comprehensive Utilization of Resources will pay no income and
adjustment taxes for the first five years. However, for the products of comprehensive use
projects constructed with government funds, product, income, and adjustment taxes must be
paid in accordance with the National Tax Law.
The document "Provisional Regulations on Comprehensive Utilization of Resources" issued by
the State Economic Commission and the Ministry of Finance in 1986 discusses financing for
utilization projects. Loans for projects at State-run enterprises can be repaid after the project
begins. For those projects financed both internally and by loans, profits should be used first to
pay loans; if the payment period of a project exceeds five years, after paying all loans with the
profits, the tax interest should be paid according to the regulations; those who have paid all
loans within five years will continue enjoying the reduction of income and adjustment tax until
the end of five years, according to the proportion of self raised funds in the total investment.
The periodic reduction and exemption of production taxes shall be examined and approved by
the appropriate tax authorities. The Ministry of Finance is in charge of examination and
approval for the State-run enterprises, whereas the relevant province- or municipality-level
departments or bureaus are in charge of examination and approval for local enterprises. The
reduction and exemption of taxes for introduced technologies and imported equipment for
utilization projects are implemented according to administrative methods applied for renovation
projects using introduced technologies.
According to the State Council's Stipulations on Environment Protection (issued May, 1984),
the profits from pollution control projects will not be paid as government revenue for the first
five years, even once the new tax law is implemented. Products produced by collectively-
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owned enterprises within the coal industry (mainly waste stock, waste gas and waste water)
will not be subject to income tax.
Incentive Policies for Methane-Fired Power Stations
The "Notice on Additional Provisions Concerning Perfection of Existing Comprehensive
Utilization Policies" issued by the State Economic Commission and the Ministry of Finance in
1986 stipulates that the procurement price of electricity produced by power plants connected
to the supply network is determined, in principle, according to the power generation cost plus
the average power generation profits of local large power supply networks. In addition to power
supply costs, line losses, and power supply taxes, only 5 percent commission may be added to
the price of electricity sold via the supply network.
The development of methane-fired power plants and co-generation pants is encouraged. In
1989, the State Planning Commission issued "Provisions on Encouraging the Development of
Small-Scale Cogeneration Plants", which requests local governments to allocate a certain
proportion of collected energy and communication construction funds to be used as the
cogeneration fund. The State would allocate a portion of special loans for energy conservation
and technical renovation, and the loan for capital construction of energy conservation, to
arrange special projects. For small cogeneration plants connected to the supply network, the
electric power authorities will purchase and sell electricity at market prices and charge the
electricity plants only small fees for using the network.
Price Policies
In 1986, the wellhead gas price in most oil fields in China was 0.08 yuan per cubic meter. In
1987, the State Council decided to implement a contract system for constant gas output. There
was no change in the price of contracted gas, while the surplus gas was sold at 0.26 yuan per
cubic meter. The differential income from the market prices and regulated prices could be used
as a special fund for gas exploration and development.
The central government's 1994 wellhead price regulations for different areas are shown below:
REGULATED WELLHEAD GAS PRICES IN 1994 (RMB Yuan per 1000 cubic meters)
Area
Sichuan Province
Others
Fertilizer Manufacture
470
440
Residential
530
460
Industry
490
520
Commercial
670
520
The CNPGC is currently responsible for their contracted amount of 8.8 billion cubic meters per
year, which must be sold at the regulated price. The surplus gas production is permitted to be
sold at market price, but no higher than 900 yuan/1000 cubic meters. Due to artificially low gas
prices, most gas enterprises are uneconomic.
Much of the gas drained from coal mines is used by mining area residents for cooking. As a
social benefit, this gas is free or very inexpensive. This low price makes gas drainage and use
projects uneconomic, seriously hindering coalbed methane development. Some would-be
foreign investors have already encountered this problem.
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Industrial Management
The State Planning Commission clearly stipulated in its "Reply on Management of Exploration
and Development of Coalbed Methane Resources" in February 1994 that the exploration and
development of coalbed methane in mining areas should be approved in advance by legal
representatives of coal mining enterprises and coal authorities; and that the exploration and
development of coalbed methane in mining areas under national planning should obtain
MOCI's advance approval. Accordingly, in April MOCI formulated the "Provisional Regulations
and Rules for the Management of Coalbed Methane Exploration and Development" which
appear in Appendix D of this report.
6.3.2 THE COAL INFORMATION INSTITUTE'S POLICY SUGGESTIONS FOR PROMOTING
DEVELOPMENT OF COALBED METHANE IN CHINA
The CM recommends the following policies to the authorities for use in decision-making, based
on its analysis of the above relevant policies and considering the development and use
potential of coalbed methane in China. The opinions expressed in this section are those of the
CM.
1. Adopt coalbed methane development as one of the national energy strategy
objectives. If the government adopts policies favoring coalbed methane development, its
progress will accelerate markedly and coalbed methane will play a significant role in
China's energy mix. Considering that coalbed methane development has been listed as a
priority for national industry development, this report suggests that the State Planning
Commission incorporate coalbed methane development in its Ninth Five-Year Plan for
energy development, and consider giving it major support while formulating industrial
policies and arranging national energy investment so as to promote its development.
2. Determine a coalbed methane development strategy. The coalbed methane
development strategy should adopt the principle of giving priority to surface recovery, and
secondarily to in-mine drainage. Plans for near-term, medium-term, and long-term goals
should be made. In the near term, emphasis should be placed on successful completion of
existing projects and demonstration projects. In the medium term, several key objectives
should be met, and technical projects should be undertaken. For the long term, compulsory
coalbed methane development in large mining areas, and infrastructure projects, should be
planned. Currently, MOCI is undertaking an assessment of national coalbed methane
resources. Based on this assessment, it plans to select mining areas with favorable
conditions on which to focus coalbed methane development and build two or three coalbed
methane production bases by the end of this century. In the future, coalbed methane will
be considered an important aspect of mine area development.
3. Develop coalbed methane projects by using multiple investment sources. Coalbed
methane development shall be considered as the key State-supported industry for
capital construction. The State Planning Commission and Ministry of Finance and Banks
should arrange for access to a certain proportion of coalbed methane investment loans
with low interest. Since coalbed methane development in China is still in its early stages,
loans and central government-supplied capital input may each contribute to funding for
investment in key coalbed methane projects. Key aspects related to investment are:
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• A portion of capital construction loans for energy conservation can be allocated to
coalbed methane projects.
• Coalbed methane drainage and utilization belong to the category of comprehensive
resource use. When arranging for State financing, the loan for coalbed methane
projects should be factored into the overall arrangement. In addition, a portion of a
low-interest State loan can be used.
• Since coalbed methane recovery can significantly improve mine safety, the CM
suggests using a certain proportion of the safety fund for coalbed methane projects.
• Since recovery of coalbed methane is beneficial to the protection of the
atmosphere, the State should consider coalbed methane projects to be
environmental protection projects.
• As the development and use of coalbed methane can provide gas and electricity to
local areas and create job opportunities, local governments should actively support
coalbed methane projects and take part in investments.
• When possible, enterprises should raise funds themselves for coalbed methane
projects.
• The State should develop policies to encourage foreign investment. Incentive
policies could make foreign investment one of the most important sources of funds
for coalbed methane development.
4. Preferential tax policies. In previous documents issued by the State Planning
Commission and the Ministry of Finance, coalbed methane drainage and use were
classified as waste resource and environmental protection comprehensive use projects.
It is recommended that the government give the following preferential tax policies to
coalbed methane projects:
• place coalbed methane projects in the revised Catalogue of Comprehensive
Resource Use;
• waive income taxes and investment orientation adjustment taxes for five years, or
formulate a tax credit policy similar to that adopted in the US;
• the State has reduced the value added tax (VAT) tax of coal enterprises to about
3.5 percent. Coalbed methane enterprises should enjoy the same preferential VAT
policy, i.e. a 3.5% VAT; and,
• remit the resource compensation cost.
5. Price policy. At present, many urban residents still enjoy financial subsidies for gas use,
particularly in mining areas where recovered methane is considered a social benefit for
miners. As stated in Section 6.3.1, this artificially low price can render coalbed methane
projects uneconomic and cause hesitation among foreign investors. With ongoing
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economic reform and price liberalization in China, the market environment is improving, but
further reform of gas prices is necessary. Local governments in coal mining areas should
try to change the practice of artificially lowering coalbed methane prices and create
favorable market conditions for foreign investors.
6. Improve the coalbed methane infrastructure. Due to the lack of pipelines, surplus gas
must be directly emitted to the atmosphere when there is no demand by local residents. In
order to achieve large-scale production of coalbed methane, marketing problems must first
be solved. To sell coalbed methane to a regional market, a gas pipeline system must be
built. CM recommends that that the government integrate plans for developing and
transporting coalbed methane with plans for the national natural gas pipeline. Before a
national gas pipeline system is constructed, the central government should consider
building gas pipelines from coalbed methane producing areas to nearby large cities. Gas
pipeline construction belongs to national infrastructure construction projects and should be
funded and constructed by the government.
For those mining areas that are far from population centers and lack pipeline systems, the
development of coalbed methane-fired power plants would be ideal. The CM recommends
that the State encourage the development of coalbed methane-fired power plants, treat
them as comprehensive resource use projects and give them preferential policies. For
example, after a coalbed methane power plant is connected to the electricity network and
is supplying electricity, it should be allowed to negotiate directly with the electricity
consumer, and the electricity department should charge the power plant only the grid
transmission cost.
7. Strengthen scientific research on coalbed methane. Coalbed methane development in
China is still in its preliminary stages, and certain key technical problems must be solved.
This CM suggests that the State Science and Technology Commission and the State
Planning Commission incorporate coalbed methane research and development projects in
the national key scientific research plan and increase financial support of research
projects.
8. Encourage use of foreign capital and introduction of advanced technology. Since
coalbed methane development falls in the category of environmental protection and clean
energy projects, The United Nations, World Bank, Global Environmental Facility, Asian
Development Bank, and US Initiative on Joint Implementation are all potential funding
sources. It is recommended that the government should give the necessary preferential
policies to joint venture and other cooperative coalbed methane projects, and reduce or
eliminate tariffs on technologies and equipment imported for coalbed methane projects.
This could be undertaken in light of the policy for preferential methods of management and
tariffs used in renovation projects at existing enterprises with new technologies.
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CHAPTER 7
CONCLUSIONS AND RECOMMENDATIONS
FOR FURTHER ACTION
7.1 OVERVIEW
As outlined in this report, China has tremendous coalbed methane resources, as well as
increasing demand for energy, including natural gas. China's coal industry, as the largest coal
producer in the world, has acquired substantial experience in recovering coalbed methane
using in-mine methods. Use of this methane, however, is in its initial developmental stages.
Recent reforms in the energy sector have promoted increased use of natural gas, and MOCI is
committed to develop coalbed methane as a key strategy for the coal industry.
Based on this report, as well as the current trends in China's energy demand, coalbed
methane development should be a priority with the Chinese government. Mechanisms for
coalbed methane development should be evaluated to develop appropriate policies, incentives
and a regulatory framework. This is an opportune time to evaluate coalbed methane and its
potential role in China's energy mix, as the energy sector is currently undergoing a major
restructuring program. Many barriers to coalbed methane development, including government
subsidies, have already been eliminated. China's move towards a more market-based
economy creates an environment conducive to developing additional energy sources such as
coalbed methane.
This chapter summarizes the policies, incentives, technical activities, feasibility assessments,
outreach, and investment considerations that promote coalbed methane recovery and use in
China. This includes current activities that need to be expanded, as well as recommendations
for additional actions. Section 7.6 summarizes conclusions and recommendations made by
the China Coalbed Methane Clearinghouse.
7.2 FOLLOW UP TECHNICAL ACTIVITIES
7.2.1 FEASIBILITY ASSESSMENTS
Cooperation with international agencies and foreign governments is important for obtaining
technical and financial assistance for specific coalbed methane projects. Section 6.2 outlines
existing foreign support and agencies playing an active role in expanding China's coalbed
methane industry.
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Establishment of policies by the Chinese government to encourage foreign companies to
invest in such projects could also create long-term benefits. Follow-up strategies include:
• training Chinese technical experts and government personnel on mine safety and
productivity, as well as energy and the environmental benefits of increased coalbed
methane development; and,
• studies to evaluate the feasibility of project development at specific sites, leading to the
implementation of demonstration projects.
Technological and economic feasibility determine the potential for commercial development of
coalbed methane. Relevant feasibility assessments for China include:
• production enhancement;
• the impact of coalbed methane projects on the environment;
• reservoir modeling;
• determination of optimal well placement;
• supply and demand analysis; and,
• investment risk analysis.
Feasibility studies should assess the necessity of the development of a given project. Among
the key considerations are technical viability of the project, and the technical risks associated
with the project, relative to methane recovery and use options. Project economics and
financial viability should also be addressed. Important related issues, including regulatory,
legal, and environmental issues, should also be examined.
In preparing feasibility studies, consultants or corporate experts should work closely with in-
country personnel from the mining community, relevant local government agencies, and
industries, and national government agencies. Widespread participation during the project
design and assessment stages may help expedite project approval and development states for
those projects considered worthwhile.
7.2.2 TRAINING
Personnel training and information services play a key role in promoting coalbed methane
development. Some training related to developing China's coalbed methane has already
occurred; several technical personnel have been to the US to receive training. Also, activities
of the recently established China Coalbed Methane Clearinghouse involve various aspects of
training and technology transfer (see Section 7.3).
Training programs can be designed for mining industry technical personnel and government
representatives. Technical personnel training emphasizes methane recovery, including pre-
mine drainage from the surface, methane use, and resource assessment. Programs for
government representatives include development of specific environmental and regulatory
guidelines to ensure safe and efficient implementation of methane recovery projects, legal and
economic training, and training in project feasibility assessment. Mining economics and
business management courses would also provide beneficial information for coalbed methane
project participants.
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These training programs should be coordinated with the Clearinghouse and with other follow-
up studies. Agencies interested in providing training should work closely with Chinese
representatives to identify specific needs and design relevant programs.
7.3 OUTREACH: THE COALBED METHANE CLEARINGHOUSE
In August 1994, the Ministry of Coal Industry (MOCI) established the China Coalbed Methane
Clearinghouse in Beijing. The Clearinghouse is part of MOCI's China Coal Information Institute
(CM). The CM supplies information on coal-related topics to top-level decision makers at MOCI,
as well as to subordinate branches and enterprises. The Clearinghouse is one of 21 divisions
of the CM, which has approximately 700 employees.
The Clearinghouse has made significant contributions to the development of coalbed methane
in China. In addition to co-authoring this report, the following activities have taken place or are
currently ongoing by the Clearinghouse:
BOX 13. PROVIDING ASSISTANCE TO FOREIGN
COMPANIES: A CLEARINGHOUSE ACTIVITY
In December, 1994 the China Coalbed Methane
Clearinghouse hosted a technical exchange between
Conoco and China's Ministry of Coal Industry
(MOCI). Conoco representatives presented their
experience in coalbed methane recovery for more
than 15 senior MOCI officials and mining experts.
The Clearinghouse provided Conoco with the
assistance and information needed to assess
methane development opportunities in some key
coal mining areas. It also explained the procedures
for management of coalbed methane projects in
China, and proposed some target areas for coalbed
methane development. As a result, Conoco is now
pursuing projects in China (Sun, 1995).
• Providing consulting services and
hosting technical seminars (see Box
13);
• Publication of the journal China
Coalbed Methane in both English and
Chinese. The first English-language
issue of this journal was published in
May 1995, and contains numerous
articles, most of them written by
Chinese experts, on a variety of topics
directly related to coalbed methane in
China;
• Completion of a bibliographic database,
and a database containing coalbed
methane recovery and use data;
• Completion of a report on coalbed
methane development in selected coal producing countries, for use by MOCI in formulating
coalbed methane policy;
• Appointment of Mr. Sun Maoyuan, Clearinghouse Director, to membership on the Coalbed
Methane Steering Committee of MOCI;
• Participated in the Intergas '94, symposium in Alabama, US; and
• Provided extensive information on coalbed methane development to Southwest Petroleum
University of China. With assistance from the Clearinghouse, the university's Well
Completion Technology Center was awarded a contract for coalbed methane research
projects from the Pingdingshan CMA.
• Organized the October, 1995 UNDP International Conference on Coalbed Methane
Development and Utilization;
• Integration into the new China United Coalbed Methane Co. Ltd. (China CBM), with Mr.
Sun Maoyuan as a member of its Board of Directors.
The Clearinghouse will continue to play a key role in China's coalbed methane development,
and plans to undertake the following activities:
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• Organizing experts to write a handbook of coalbed methane;
• Dissemination of information on coalbed methane throughout China;
• Organization of technical seminars and workshops;
• Organization of technical training programs;
• Presentation of policy recommendations for promoting coalbed development;
• Setting up branches of the Clearinghouse in key coal basins;
• Development and use of an economic analysis model for coal mine methane projects; and,
• Development of materials for marketing Clearinghouse services.
7.4 DEMONSTRATION PROJECTS
Demonstration projects for specific methane recovery and use options can expedite
development of coalbed methane resources, and effectively transfer necessary technologies.
There are various options for conducting demonstration projects, depending on the objectives
of the international funding agencies and national and local officials. The demonstration
projects should involve carefully selected project sites in coal basins with optimal coalbed
methane conditions, as defined in this report, and focus on technologies most pertinent to
China. Projects that address technical issues, such as well completion and stimulation
techniques, or those that investigate on-site use options, such as cofiring methane with coal or
using it in gas turbines, would have direct applications for China.
Currently, a GEF project ("China Coalbed Methane Resources Development") is underway in
China. It includes three demonstration projects for coalbed methane recovery administered by
the Songzao, Kailuan, and Tiefa CMAs. The projects are GEF-sponsored; UNDP is the
executing agency, and US contractors were selected as cooperative partners with the
individual CMAs. Section 3.5 includes a summary of each of these demonstration projects. In
addition, MOCI, MGMR, and CNPGC are involved in coalbed methane development in several
mining areas; over 39 wells were drilled by the end of 1994.
Ideally, successful demonstration projects will be widely replicated by the mining industry.
Demonstration projects should expedite development of those projects considered too risky or
uncertain for the private sector to undertake without some assistance. Demonstration projects
may serve to convince Chinese experts that certain technical options with which they may be
unfamiliar can work in site-specific conditions. Since demonstration project results will be
made public, they serve as an example within China and in other countries that various
methane recovery and use options are feasible, thereby stimulating a wider basis for interest.
7.5 INVESTMENT CONSIDERATIONS
In many regards, China has a relatively favorable climate for foreign investment in coalbed
methane projects. Because the nation has recently suffered from energy shortages, the
government is keen on energy-related projects, particularly those related to increasing China's
power-generating capacity.
China has recently taken steps aimed at increasing foreign investment in energy-related
projects. For example, they are designating several key infrastructure projects to experiment
with the "build, operate and transfer" (BOT) method of attracting foreign investment (China
Energy Report, 1995). China is considering more widespread adoption of the BOT policy
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because it has been difficult to attract foreign investors to some of the major infrastructure
development projects due to a perceived poor rate of return. China is thus shifting its method
of attracting foreign investment, from simply giving favorable conditions to providing for mutual
economic benefit and long-term cooperative agreements.
In order to increase foreign participation in coalbed methane development, however, several
issues that will affect the desirability of investments by foreign companies must be resolved.
Some of these issues, such as taxation policies and legal frameworks for project development,
are relevant to a wide range of business opportunities in China, and the government will likely
address them through general initiatives to encourage foreign investment. There are other
issues specifically related to coalbed methane development, however, which must be
considered in developing policies to promote coalbed methane development in China. Among
the issues (both positive and negative) specifically related to coalbed methane development
are:
• Ownership of natural resources in China is clearly defined. The State owns all mineral
resources, and development of these resources by foreign entities must be approved by
the State.
• Chinese law provides for the formation of joint venture entities for the development of
mineral resources. Joint ventures are encouraged as a means of developing resources
and transferring technology.
• Taxation in China can be complex and development of a successful enterprise is
dependent on thorough understanding of the tax liabilities associated with any business
undertaken in China. Local tax relief is available, and numerous areas such as economic
and technological development zones are present, within which enterprises enjoy special
tax holidays.
• Commercial incentives for the development and use of coalbed methane will be necessary
for large-scale development of coalbed methane resources. Realistic pricing of the gas and
the energy into which it is converted must be implemented. China is rapidly moving in this
direction by freeing energy prices in a stepwise fashion, and removing subsidies.
China will thus need to focus on incentives for methane development and use, as well as
realistic energy pricing, as part of its ongoing formulation of coalbed methane policies. A high-
level group within the Ministry of Coal Industry is currently drafting recommendations for policy
and development guidelines.
7.6 CONCLUSIONS AND RECOMMENDATIONS BY THE CHINA COALBED
METHANE CLEARINGHOUSE
Following are conclusions and recommendations made by the China Coalbed Methane
Clearinghouse:
1. Increased production of natural gas: Currently, China has one of the fastest growing
economies in the world, with steady annual growth in energy production and consumption.
Unlike several developed countries, which rely on oil and gas for over half of their primary
energy demand, coal comprises approximately three-fourths of China's energy mix.
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According to MOCI, coal production will increase from 1.29 billion tons in 1994 to 1.4 billion
tons in 2000. China's current strategies for energy development focus on conserving and
optimizing energy resources, and expanding natural gas production.
2. Increased coalbed methane development: Although a newly exploited source of energy,
coalbed methane is now recognized worldwide as a significant energy source. In the US,
the coalbed methane industry has experienced tremendous growth over the past decade.
In 1983, annual coalbed methane production was 708 million cubic meters. In 1994,
production increased to 21.5 billion cubic meters, exceeding China's conventional natural
gas production of 17 billion cubic meters. The Clearinghouse recommends that China
include coalbed methane in its strategic energy development.
3. Selection of target areas and coal basins for coalbed methane development: Since the
geology of many of China's coal basins is complex, geologic conditions should be
considered in the selection of areas targeted for coalbed methane development. In
addition to geologic conditions, other key selection criteria include infrastructure, available
technology, and market conditions. China's major coal basins with high potential for
methane development are described in this report. Among the areas that have recently
attracted attention from investors is the Hedong Basin of Shanxi Province.
In the US, most coalbed methane projects are in coal basins whose ranks range from low
to medium volatile bituminous. Yet China has many coal basins whose mines produce
anthracite, which is typically highly fractured and gassy. Examples include the major coal-
producing regions of Yangquan, Jiaozuo, and Jincheng. These anthracite regions should
be considered as potential target areas for coalbed methane development.
4. Environmental impacts: Coalbed methane is a greenhouse gas. Based on a UN study on
methane emissions, Chinese coal mines liberate 19.4 billion cubic meters of methane per
annum, accounting for one-third of the world's total from this source. The UN and USEPA
are encouraging Chinese coal mines to expand their methane recovery and use, as it
benefits the regional and global environment. It is therefore recommended that the
Chinese authorities include methane recovery in their environmental protection programs.
5. Increase coalbed methane recovery: Chinese coal mines have a long history of coalbed
methane recovery. In 1993, over 100 mines produced 543 million cubic meters of
methane, led by Fushun and Yangquan CMAs. Although numerous mines have increased
their methane recovery over the past several years, the recovery rate for Chinese coal
mines averages less than 20 percent. It is recommended that the efficiencies of existing
recovery methods be improved. For in-mine drainage, recovery from adjacent seams and
gob areas using long holes should be used. A comprehensive drainage program before,
during, and after mining can increase recovery efficiencies up to 50 percent. Horizontal
directional drilling, as used at the Tiefa and Songzao CMAs, is an efficient method when
reliable, high power drills are used.
6. Hydraulic fracturing in mined areas: In the US, methane is recovered in both mined and
unmined areas. In unmined areas, coalbed methane well drilling and completion methods
are modified from conventional oil and gas technologies. In mined areas, companies
recover methane using horizontal boreholes and gob wells, as well as vertical wells in
advance of mining. Hydraulic fracturing to increase permeability, and therefore gas
production has been applied successfully in vertical wells in advance of coal mining.
7-6
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Currently, there are vertical well degasification tests at the Tiefa, Huaibei, and Jincheng
CMAs. It is recommended that additional hydraulic fracture tests be conducted at selected
Chinese coal mines.
7. Development is beginning: Coalbed methane development in China is now beginning.
Since the onset of the GEF-funded project "China Coalbed Methane Resources
Development" in 1990, methane recovery has come into focus, attracting the attention of
MOCI, the CNPGC, and the MGMR. Through 1994, 39 vertical wells have been drilled in at
least ten coal basins.
8. Well drilling and completion: In China, problems have occurred due to inappropriate use of
technologies, including formation damage, roof strata collapse, and inefficient fracturing
methods. Advanced technologies used in the US, including rotary percussion drilling and
open hole completion, may be applied to China in appropriate geologic conditions.
Fracturing parameters and drilling fluids should also be selected to maximize production.
9. Disposal of produced water: Water produced from coalbed methane wells often needs to
be treated prior to discharge. The US has developed regulations for disposal of produced
water. The methods used are site-specific, depending on water quality, quantity and
regional conditions. It is recommended that China evaluate water treatment and disposal
methods, and select those that are site-appropriate. In addition, environmental regulations
need to be established for the disposal of produced water.
10. On-site coalbed methane use: Unlike the US, China lacks a full integrated natural gas
pipeline system between mines, cities and provinces. This restricts large-scale use of
pipeline-quality coalbed methane. Some of the larger CMAs, including Kailuan, have
integrated pipeline systems that connect the mines to the cities. However, integrated
pipelines are non-existent in most mining regions, so that gas produced is supplied
primarily for miners' families in the immediate area. It is recommended that additional
pipeline infrastructure be built in key locations to allow the distribution and marketing of
gas, including coalbed methane.
Use of coalbed methane should be a priority in China. The remoteness of many coal
basins with high coalbed methane potential results in extremely high costs for pipeline
construction. On-site use, including power generation with gas turbines, is the most cost
effective use of coalbed methane in these areas. Several countries have installed gas
turbines using methane as fuel, and China built a gas turbine demonstration project in
1990. There is international interest in methane-powered power generation projects in
China; however, the costs for using China's electric grid are prohibitive. Coalbed methane
as an energy source has numerous, cost-effective industrial uses, including feedstocks for
producing ammonia, carbon black, formaldehyde, and other chemical products. Jincheng
CMA in Shanxi Province serves as a model for on-site coalbed methane use.
11. Gas prices and tax policy for surface wells: China's central government should develop
preferential policies to promote methane use. Prior to 1993, the US implemented state-
regulated wellhead prices, which lowered prices and resulted in decreased gas production.
Now, US gas prices are based on a free-market system, creating a balance between
production and consumption. China's wellhead and sales prices for conventional natural
gas are regulated; gas enterprises are commonly unprofitable due to low gas prices.
7-7
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Coalbed methane produced from coal mines is sold at an even lower price. Freeing gas
prices would provide a financial incentive to increase gas production and sales.
Projects which involve gas recovery and use from active mines are now included in the
Catalogue of Utilization of Comprehensive Resources, and are eligible for relevant
preferential policies. However, it is currently uncertain whether coalbed methane produced
from surface wells qualifies for these same preferential policies. It is suggested that the
State Planning Commission include vertical coalbed methane wells in the Catalogue of
Comprehensive Utilization of Resources, qualifying for preferential policies on taxation and
investment.
12. State loans and funding for coalbed methane projects: The state should allocate additional
funds and loans for coalbed methane projects, as coalbed methane is now included in the
Catalogue of Priorities of Current Industrial Development.
13. MOCI loans for coalbed methane use: Coalbed methane development is an important part
of comprehensive use at high gas coal mines, as well as being cost-effective. MOCI
arranges state loans with low interest rates for the coal industry. Since coalbed methane
recovery and use are a tertiary industry of the coal sector, MOCI should allocate a
percentage of loans specifically for coalbed methane projects.
14. Market conditions and foreign investments: Current market conditions and policies in
China may deter investment in coalbed methane projects. Foreign investors are currently
interested in coalbed methane projects in China. Changes in market conditions and policy
could attract foreign investment. Examples include freeing natural gas prices, construction
of pipelines in key areas, and preferential policies for power generation.
15. Demonstration projects and training: Coalbed methane projects often require sophisticated
technologies, and technological barriers for site-specific projects in China need to be
addressed. It is recommended that funding for R&D coalbed methane projects is available
for the key State R&D programs. In addition, a training program should be available to
educate both technical personnel of the mining industry, and government officials to aid in
their decisions on energy policy.
16. Clearinghouse activities: Established in 1994, the China Coalbed Methane Clearinghouse
provides an important information service and promotes the development of coalbed
methane in China. The Clearinghouse currently plans to expand its activities to include a
variety of information services for organizations and companies, both in China and abroad.
7-8
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Prague, 1991, Proceedings, Vol. 1: Prague, United Nations, p. 63-78.
REF-8
-------
Zhao Shu, Zuo Wenqi., Zhang Wenhui, and Wang Xingjin, 1995, Sino-Australia coalbed
methane exploration project in Huawell's Liulin Contract Area, in International
Conference on Coalbed Methane Development and Utilization, Beijing, 1995,
Proceedings, Vol. A: Beijing, United Nations, p. 170-176.
Zheng Xuetao, 1995, Development prospects of coalbed methane in Pingle coal bearing area,
Fengcheng coal mining area, and Qushi No. 1 well test situation, in International
Conference on Coalbed Methane Development and Utilization, Beijing, 1995,
Proceedings, Vol. A: Beijing, United Nations, p. 338-352.
REF-9
-------
APPENDIX A
LIST OF CONTACTS
-------
APPENDIX A - LIST OF CONTACTS
Sun Maoyuan, Director
China Coalbed Methane Clearinghouse
21 Hepingli Beijie
P.O. Box1419
Beijing 100713
tel: (86) (10) 420-1328 fax: 421-5187
Internet address: abd310@istic.sti.ac.cn
Wang Zhenyu
Director, Senior Engineer
Fushun Branch of the Central Coal Mining
Research Institute
Fushun, Liaoning 113001
tel: (86) (413)668-8521
Ministry of Foreign Trade and Economic
Cooperation
2 Dongchangan Street
Beijing 100731
tel: (86) (10)519-8114
telecopier: (86) (10) 512-9568
telex: 22478 MFERT CN
Carol Bibler
Manager of International Projects
Raven Ridge Resources, Incorporated
584 25 Road
Grand Junction, Colorado, USA
tel: (970) 245-4088 fax: (970) 245-2514
Internet address: tbc@ravenridge.com
Pan Zhenwu
Director General
Xi'an Branch of the Central Coal Mining Research Institute
44YantaRoad(N)710054
Xi'an, Shaanxi
tel: (86) (29) 723-4674
Meng Xiande
Project Coordinator
Office of International Cooperation
Central Coal Mining Research Institute
Qingniangoulu, Hepingli
Beijing 100013
tel: (86) (10)421-2752
fax: 421-9234
Karl Schultz, Coalbed Methane Program Manager
USEPA Atmospheric Pollution Prevention Division
401 M Street, SW
Washington, DC 20460
tel: (202) 233-9468 fax: 233-9569
Internet address: schultz.karl@epamail.epa.gov
Voluntary Reporting of Greenhouse Gases
U.S. Department of Energy
Energy Information Administration, EI-81
1000 Independence Avenue, SW
Washington, DC 20585
A-1
-------
APPENDIX B
EXPLANATION OF CHINESE RESOURCE AND COAL
RANK CLASSIFICATION SYSTEMS
Appendix B Includes the Following Figure and Tables:
Page
Figure B-1. Correlation of Chinese, German, and US Coal Rank Classification Systems B-2
Table B-1. Relation Between Coalbed Methane and Coal Resource Classification
Systems in China B-3
Table B-2. Predicted Gas Contents for Coal Seams at Depths Greater than 1000 m B-4
-------
APPENDIX B
EXPLANATION OF CHINESE COAL RANK, COAL RESOURCE, AND COALBED
METHANE RESOURCE CLASSIFICATION SYSTEMS
Coal Rank Classification System
China's coal rank classification system divides coal types into eleven categories, ranging from
anthracite to peat. Figure B-1 shows these categories, along with their approximate
equivalents in the German and US classification systems.
Coal Reserve Classification System
Based on the energy resource classification method recommended by the World Energy
Conference, the Chinese energy resources classification system consists of: solid fuels; liquid
fuels; gaseous fuels; hydropower; nuclear energy; electrical energy; solar energy; biomass
energy; wind energy; ocean energy; geothermal; and nuclear fusion. In addition, energy
resources can be divided into several categories: primary vs. secondary energy; renewable
vs. non-renewable energy; conventional vs. alternative energy; and commercial vs. non-
commercial energy
The Chinese coal reserves classification system is based on three exploratory stages: coal
prospecting; preliminary exploration; and detailed exploration. Reserves are divided into
Grades A, B, C and D. Of these, Grades A and B are the best defined and highest-confidence
level of reserves. The following table is an approximate correlation between the Chinese and
US coal reserve classification systems.
China United States
Grade A Reserves Measured Reserves
Grade B Reserves Indicated Reserves
Grade C Reserves Inferred Reserves
Grade D Reserves Hypothetical Resources
The terms commonly used to describe China's coal reserves are as follows:
Industrial reserves: The sum of Grade A, B, and C reserves; used as a reference for mine
design.
Proven reserves: Total of Grade A and B reserves.
Available reserves: Equal to demonstrated reserves, minus mined reserves.
Future reserves: Grade D reserves; obtained from coal exploration and used as reference to
future planning of coal industry.
B-1
-------
Figure B-1 Correlation of Chinese, German, and US Coal Classification Systems
Rank
China
Peat
Young Brown
Coal
Old Brown
Coal
Long Flame
Coal
Gas Coal
Fatty-gas Coal
Gas-fatty Coal
and Fatty Coal
Coking Coal
Lean Coal
Meager Coal
Anthracite
Germany
Torf
Weichbraunkohle
Mattbraunkohle
Glanzbraunkohle
Flammkohle
Gasflammkohle
Gaskohle
Fettkohle
Esskohle
Magerkohle
Anthrazit
Meta-Anthr.
USA
Peat
Lignite
Sub-_ _
Bit. B
\A
C \
en
B §
_2
m
A £
_c
03
IE
Medium
Volatile
Bituminous
Low
Volatile
Bituminous
Semi-
Anthracite
Anthracite
Meta-A
Refl.
Rm .,
oil
— 0.2
— 0.3
— 0.4
— 0.5
— 0.6
— 0.7
- 0.8
- 1.0
1 2
— 1.4
— 1.6
— 1.8
— 2.0
- 3.0
— 4.0
Vol. M.
d.a.f.
%
— 68
— 64
— 60
CC
- 52
— 48
— 44
in
— 36
— 32
no
— 24
-20
- 16
- 12
— 8
A
Carbon
Content
d.a.f.
— ca. 60
ra 71
ra 77
ca 87
— ca.yi
Bed
Moisture
— ca. 75
n 35
n ?5
rn ft 10
Cal. Value
Btu/lb
(kcal/kg)
7200
(4000)
9900
(5500)
12600
(7000)
15500
(8650)
15500
(8650)
Applicability of Different
Rank Parameters
l
'oT
•f
_c
C/}
03
£:•
^
c
o
-8
s
hydrogen (d.a.f.)
1
_c
C/}
03
£:•
T3^
i_
vitrinite reflectance _
0)
•1
.C
-------
Coalbed Methane Resource Classification System
Total coalbed methane resources include the recoverable volume of methane from coal seams
and adjacent rocks. Currently, coalbed methane resource estimates for China refer only to
mineable coal seams, excluding adjacent strata and unmined seams. Key factors that affect
these resources are:
• Coal occurrence, geometry, and thickness;
• Geologic conditions, including depth of burial, tectonic history, coal rank, and permeability;
• Gas content and in-mine degasification; and
• Economic and geographic factors.
Specific exploration and development programs for coalbed methane are relatively new in
China. Currently, the classification of these resources is related directly to the existing coal
reserve classification system, as coal seams are both the source rocks and the reservoirs for
coalbed methane. Thus coalbed methane resources are currently divided into three categories,
shown in Table B-1 with their equivalent coal reserve classification system:
TABLE B-1. RELATION BETWEEN COALBED METHANE AND COAL RESOURCE
CLASSIFICATION SYSTEMS IN CHINA
CATEGORY
COALBED
METHANE
COAL
I
Proven
Industrial
(A+B+C)
II
Indicated
Demonstrated
(A+B+C+D)
III
Prospective
Future/Hypothetical
(D Reserves)
In general, the absolute maximum depth of burial used to calculate prospective coalbed
methane resources in China is 2,000 m. However, resource estimates may sometimes
assume a maximum burial depth of 1,000 or 1,500 m, depending on the location, age, and
geologic setting of the specific coal-bearing region. Generally, a depth of 2,000 m is used for
north China, and 1,500 m is used for south China. An exception is Liapanshui Basin in south
China, where 2,000 m is used as the maximum depth. The current reserve calculation method
defines reserve blocks based on the reserve category (I, II, or III), depth of burial, age of the
coal deposit, and the specific coal-bearing region. The coalbed methane reserves for a given
block are calculated using the Monte Carlo method1 for sample selection, then calculated
volumetrically as follows:
Coal reserves (tons) x Methane content of coal (m3/ton)
Total coalbed methane reserves are the sum of the reserves in each block. For a given block,
coal reserves are a constant, whereas gas content is a random variable. To determine the gas
content of coal seams in reserve blocks at depths above 1,000 m, data are measured using
the direct method, primarily from core sample desorption. Where measured gas content data
are lacking, gas contents are extrapolated using adjacent blocks or coal-bearing regions, as is
done for coal reserves.
1 The Monte Carlo method is a random sampling process for generating uniformly distributed
pseudorandom numbers and using these to "draw" random samples from known frequency distributions.
B-3
-------
For estimating the gas content of seams in reserve blocks below 1,000 m, predicted values
based on coal rank are used, as shown in Table B-2. Both measured and predicted gas
contents are calculated on an ash and moisture free basis.
TABLE B-2. PREDICTED GAS CONTENTS FOR COAL SEAMS AT DEPTHS >1,000 M:
COAL RANK
(Chinese)
Long Flame
Gas Coal
Fatty Coal
Coking Coal
Lean Coal
Meager Coal
Anthracite 3
Anthracite 2
Anthracite 1
COAL RANK
(US Equivalent)
High Volatile
Bituminous C
High Volatile
Bituminous B
High Volatile
Bituminous A
Medium Volatile
Bituminous
Low Volatile
Bituminous
Semi-Anthracite
Anthracite
Anthracite
Meta-anthracite
R°max
(Percent)
0.50-0.65
0.65-0.90
0.90- 1.20
1.20- 1.70
1.70- 1.90
1.90-2.50
2.50-4.00
4.00-6.00
>6.00
GAS
CONTENT
(m3/ton)
5-6
7-8
14.2
14.89
17.35
19.82
26.19
25-30
2-3
REMARKS
Inferred by analogy
with Huainan CMA
Inferred by analogy
with Jixi CMA
Calculated
Calculated
Calculated
Calculated
Calculated
Calculated
Inferred by analogy
with coals in Fujian &
Jiangxi Provinces
B-4
-------
APPENDIX C
METHANE EMISSIONS DATA
Appendix C Includes the Following Tables:
Table C-1. 1992 Methane Emissions From China's Key State-Run Coal Mines C-1
Table C-2. 1994 Methane Emissions From China's Key State-Run Coal Mines C-4
Table C-3. 1993 Specific Emissions of Local Mining Areas Considered by MOCI to be
High Gas C-7
Table C-4. High Gas CMAs in China and Their Average Specific Emissions C-8
-------
TABLE C-1. 1992 METHANE EMISSIONS FROM CHINA'S KEY STATE-RUN COAL MINES, BY PROVINCE
Xijiang Uygur Autonomous Region
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Ningxia Hui Autonomous Region
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Gansu Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Shaanxi Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Yunan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Guizhou Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Sichuan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Number of Mines
Total
10
1
11
5
6
1
12
18
5
23
19
9
1
29
5
5
10
4
20
24
10
44
54
With
Drainage
3
3
1
1
15
15
26
26
Methane
Vented
m3
12,636,000
4,293,360
16,929,360
9,236,000
65,663,700
1 ,854,760
76,754,460
17,142,200
23,537,000
40,679,200
28,163,900
118,516,500
1,152,730
147,833,130
3,264,200
20,189,600
23,453,800
9,402,100
348,522,000
357,924,100
19,202,400
490,301 ,900
509,504,300
Methane
Drained
m3
8,020,000
8,020,000
3,500,000
3,500,000
40,620,000
40,620,000
154,140,000
154,140,000
Methane
Total
m3
12,636,000
4,293,360
16,929,360
9,236,000
73,683,700
1 ,854,760
84,774,460
17,142,200
23,537,000
40,679,200
28,163,900
122,016,500
1,152,730
151,333,130
3,264,200
20,189,600
23,453,800
9,402,100
389,142,000
398,544,100
19,202,400
644,441 ,900
663,644,300
Drained &
Utilized
m3
3,400,000
3,400,000
8,080,000
8,080,000
90,940,000
90,940,000
Drained &
Vented
m3
4,620,000
4,620,000
3,500,000
3,500,000
32,540,000
32,540,000
63,200,000
63,200,000
Total
Emitted
m3
12,636,000
4,293,360
16,929,360
9,236,000
70,283,700
1 ,854,760
81 ,374,460
17,142,200
23,537,000
40,679,200
28,163,900
122,016,500
1,152,730
151,333,130
3,264,200
20,189,600
23,453,800
9,402,100
381 ,062,000
390,464,100
19,202,400
553,501 ,900
572,704,300
Coal
Output
t
2,914,200
1 ,206,000
4,120,200
2,896,800
6,331,700
521,000
9,749,500
5,584,900
627,000
6,211,900
7,507,800
6,548,300
323,800
14,379,900
783,000
1 ,823,500
2,606,500
1 ,224,500
10,437,700
1 1 ,662,200
5,087,300
13,102,000
18,189,300
Absolute
Emission
m3/min
24.04
8.17
32.21
17.57
140.19
3.53
161.29
32.61
44.78
77.39
53.58
232.15
2.19
287.92
6.21
38.41
44.62
17.89
740.38
758.27
36.53
1,226.11
1 ,262.64
Relative
Emission
m3/t
4.34
3.56
4.11
3.19
11.64
3.56
8.70
3.07
37.54
6.55
3.75
18.63
3.56
10.52
4.17
11.07
9.00
7.68
37.28
34.17
3.77
49.19
36.49
-------
TABLE C-1. 1992 METHANE EMISSIONS FROM CHINA'S KEY STATE-RUN COAL MINES, BY PROVINCE
Hunan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Henan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Shandong Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Jiangxi Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Anhui Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Zhejiang Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Jiangsu Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
18
34
52
16
28
1
45
49
3
52
8
15
23
7
17
24
11
11
20
2
22
3
3
14
14
6
6
5
5
14,346,000
103,030,400
117,376,400
68,050,300
282,607,400
3,327,890
353,985,590
74,563,400
28,104,500
102,667,900
1 1 ,423,800
114,215,700
125,639,500
43,059,100
239,164,300
282,223,400
31,125,100
31,125,100
58,361,500
13,765,100
72,126,600
1 ,830,000
1 ,830,000
19,510,000
19,510,000
9,260,000
9,260,000
9,510,000
9,510,000
14,346,000
104,860,400
119,206,400
68,050,300
302,117,400
3,327,890
373,495,590
74,563,400
28,104,500
102,667,900
1 1 ,423,800
123,475,700
134,899,500
43,059,100
248,674,300
291 ,733,400
31,125,100
31,125,100
58,361,500
13,765,100
72,126,600
1 ,050,000
1 ,050,000
10,610,000
10,610,000
5,060,000
5,060,000
6,100,000
6,100,000
780,000
780,000
8,900,000
8,900,000
4,200,000
4,200,000
3,410,000
3,410,000
14,346,000
103,810,400
118,156,400
68,050,300
291 ,507,400
33,278,900
392,836,600
74,563,400
28,104,500
102,667,900
1 1 ,423,800
118,415,700
129,839,500
43,059,100
242,574,300
285,633,400
31,125,100
31,125,100
58,361,500
13,765,100
72,126,600
3,099,400
3,864,300
6,963,700
19,415,900
19,701,400
934,800
40,052,100
31 ,927,700
1,869,100
33,796,800
3,174,900
4,190,500
7,365,400
6,684,400
18,241,300
24,925,700
1 ,032,800
1 ,032,800
15,182,700
1,200,100
16,382,800
27.29
199.51
226.80
129.47
574.80
6.33
710.60
141.86
53.47
195.33
21.73
234.92
256.65
81.92
473.12
555.04
59.22
59.22
111.04
26.19
137.23
4.63
27.14
17.12
3.50
15.33
3.56
9.33
2.34
15.04
3.04
3.60
29.47
18.32
6.44
13.63
11.70
30.14
30.14
3.84
11.47
4.40
-------
TABLE C-1. 1992 METHANE EMISSIONS FROM CHINA'S KEY STATE-RUN COAL MINES, BY PROVINCE
Heilongjiang Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Jilin Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Liaoning Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Nei Mongol Autonomous Region
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Shanxi Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Hebei Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
28
32
1
61
27
18
45
11
35
3
49
29
3
5
37
44
28
1
73
39
19
58
4
4
1
1
12
12
2
2
13
13
7
7
107,696,000
373,780,800
3,821,300
485,298,100
20,704,100
100,819,400
121,523,500
13,855,200
416,812,900
34,354,710
465,022,810
68,150,100
21,068,200
26,168,490
115,386,790
245,560,900
692,284,200
37,455,470
975,300,570
87,432,800
210,480,500
297,913,300
16,340,000
16,340,000
330,000
330,000
132,850,000
132,850,000
1,400,000
1,400,000
114,530,000
114,530,000
20,660,000
20,660,000
107,696,000
390,120,800
3,821,300
501,638,100
20,704,100
101,149,400
121,853,500
13,855,200
549,662,900
34,354,710
597,872,810
68,150,100
26,439,000
26,168,490
120,757,590
245,560,900
806,814,200
37,455,470
1 ,089,830,570
87,432,800
231,140,500
318,573,300
0
0
0
0
114,880,000
114,880,000
0
0
95,620,000
95,620,000
10,390,000
10,390,000
16,340,000
16,340,000
330,000
330,000
17,970,000
17,970,000
1,400,000
1,400,000
18,910,000
18,910,000
10,270,000
10,270,000
107,696,000
390,120,800
3,821,300
501,638,100
20,704,100
101,149,400
121,853,500
13,855,200
434,782,900
34,354,710
482,992,810
68,150,100
26,439,000
26,168,490
120,757,590
245,560,900
711,194,200
37,455,470
994,210,570
87,432,800
220,750,500
308,183,300
26,951 ,900
21,893,400
1,073,400
49,918,700
5,672,800
6,529,300
12,202,100
2,460,200
27,404,800
9,650,200
39,515,200
18,239,500
917,100
7,350,700
26,507,300
66,693,600
36,230,100
10,521,200
113,444,900
30,728,700
12,781,200
43,509,900
204.90
742.24
7.27
954.41
39.39
192.45
231.84
26.36
1 ,045.78
65.36
1,137.50
129.66
50.30
49.79
229.75
467.20
1 ,535.03
71.26
2,073.49
166.35
439.77
606.12
4.00
17.82
3.56
10.05
3.65
15.49
9.99
5.63
20.06
3.56
15.13
3.74
28.83
3.56
4.56
3.68
22.27
3.56
9.61
2.85
18.08
7.32
-------
TABLE C-2. 1994 METHANE EMISSIONS FROM CHINA'S KEY STATE-RUN COAL MINES, BY PROVINCE
Xijiang Uygur Autonomous Region
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Ningxia Hui Autonomous Region
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Gansu Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Shaanxi Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Yunan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Guizhou Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Sichuan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Number of Mines
Total
10
1
11
3
6
1
10
15
4
19
19
10
1
30
5
5
10
4
19
23
11
43
54
With
Drainage
4
4
2
2
2
2
15
15
25
25
Methane
Vented
m3
4,994,400
2,671,890
7,666,290
16,240,900
79,468,100
1 ,893,770
97,602,770
16,618,500
30,131,200
46,749,700
19,173,500
156,557,700
967,050
176,698,250
4,075,710
35,282,330
39,358,040
5,242,000
368,068,300
373,310,300
15,034,200
465,686,600
480,720,800
Methane
Drained
m3
13,083,000
13,083,000
3,048,600
3,048,600
4,722,000
4,722,000
48,496,100
48,496,100
152,959,600
152,959,600
Methane
Total
m3
4,994,400
2,671,890
7,666,290
16,240,900
92,551,100
1 ,893,770
110,685,770
16,618,500
33,179,800
49,798,300
19,173,500
161,279,700
967,050
181,420,250
4,075,710
35,282,330
39,358,040
5,242,000
416,564,400
421 ,806,400
15,034,200
618,646,200
633,680,400
Drained &
Utilized
m3
5,629,000
5,629,000
13,907,600
13,907,600
101,774,300
101,774,300
Drained &
Vented
m3
7,454,000
7,454,000
3,048,600
3,048,600
4,722,000
4,722,000
34,588,500
34,588,500
51,185,300
51,185,300
Total
Emitted
m3
4,994,400
2,671,890
7,666,290
16,240,900
86,922,100
1 ,893,770
105,056,770
16,618,500
33,179,800
49,798,300
19,173,500
161,279,700
967,050
181,420,250
4,075,710
35,282,330
39,358,040
5,242,000
402,656,800
407,898,800
15,034,200
516,871,900
531,906,100
Coal
Output
t
2,369,100
1 ,266,300
3,635,400
2,836,500
6,301,300
330,500
9,468,300
5,342,600
892,600
6,235,200
6,252,300
6,243,600
315,000
12,810,900
785,300
1 ,795,700
2,581,000
689,600
1 1 ,223,400
11,913,000
3,983,700
12,808,300
16,792,000
Absolute
Emission
m /min
9.50
5.08
14.59
30.90
176.09
3.60
210.59
31.62
63.13
94.75
36.48
306.85
1.84
345.17
7.75
67.13
74.88
9.97
792.55
802.52
28.60
1,177.03
1 ,205.63
Relative
Emission
m3/t
2.11
2.11
2.11
5.73
14.69
5.73
11.69
3.11
37.17
7.99
3.07
25.83
3.07
14.16
5.19
19.65
15.25
7.60
37.12
35.41
3.77
48.30
37.74
-------
TABLE C-2. 1994 METHANE EMISSIONS FROM CHINA'S KEY STATE-RUN COAL MINES, BY PROVINCE
Hunan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Henan Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Shandong Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Jiangxi Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Anhui Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Zhejiang Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Jiangsu Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
19
31
50
17
29
1
47
54
3
57
8
15
23
7
17
24
11
11
20
2
22
3
3
18
18
8
8
5
5
9,763,100
100,771,600
110,534,700
95,671,700
291,101,800
4,159,430
390,932,930
100,557,100
32,585,400
133,142,500
10,307,100
100,033,300
110,340,400
30,603,500
293,657,100
324,260,600
28,013,700
28,013,700
51,637,400
12,095,700
63,733,100
2,425,200
2,425,200
23,532,500
23,532,500
11,514,500
11,514,500
9,820,700
9,820,700
9,763,100
103,196,800
112,959,900
95,671,700
314,634,300
4,159,430
414,465,430
100,557,100
32,585,400
133,142,500
10,307,100
111,547,800
121,854,900
30,603,500
303,477,800
334,081,300
28,013,700
28,013,700
51,637,400
12,095,700
63,733,100
1,938,200
1,938,200
13,786,600
13,786,600
8,000,000
8,000,000
7,418,300
7,418,300
487,000
487,000
9,745,900
9,745,900
3,514,500
3,514,500
2,402,400
2,402,400
9,763,100
101,258,600
111,021,700
95,671,700
300,847,700
4,159,430
400,678,830
100,557,100
32,585,400
133,142,500
10,307,100
103,547,800
113,854,900
30,603,500
296,059,500
326,663,000
28,013,700
28,013,700
51,637,400
12,095,700
63,733,100
2,969,400
3,338,100
6,307,500
19,550,500
19,405,400
850,600
39,806,500
37,877,000
1,816,600
39,693,600
3,050,600
3,811,400
6,862,000
4,824,700
22,377,400
27,202,100
906,700
906,700
15,744,100
1,096,400
16,840,500
18.58
196.34
214.92
182.02
598.62
7.91
788.55
191.32
62.00
253.32
19.61
212.23
231.84
58.23
577.39
635.62
53.30
53.30
98.24
23.01
121.25
3.29
30.91
17.91
4.89
16.21
4.89
10.41
2.65
17.94
3.35
3.38
29.27
17.76
6.34
13.56
12.28
30.90
30.90
3.28
11.03
3.78
-------
TABLE C-2. 1994 METHANE EMISSIONS FROM CHINA'S KEY STATE-RUN COAL MINES, BY PROVINCE
Heilongjiang Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Jilin Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Liaoning Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Nei Mongol Autonomous Region
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Shanxi Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
Hebei Province
Low Methane Mines
High Methane and Outburst Mines
Open-Pits
Totals
TOTAL - 20 PROVINCES
TOTAL HIGH GAS MINES
TOTAL RECOVERY SYSTEMS
24
32
1
57
24
18
42
10
30
3
43
26
4
5
35
39
24
1
64
36
15
51
318
4
4
1
1
15
15
?
0
20
20
9
9
131
39,904,100
436,600,600
1,248,740
477,753,440
13,833,600
111,365,400
125,199,000
17,316,200
393,823,400
37,950,150
449,089,750
30,137,890
71,034,500
18,883,200
120,055,590
244,526,800
680,270,700
38,328,650
963,126,150
72,981,000
176,982,000
249,963,000
4768251010
13,467,300
13,467,300
1,556,000
1,556,000
142,171,000
142,171,000
0
115,237,200
115,237,200
19,250,500
19,250,500
561284200
39,904,100
450,067,900
1,248,740
491,220,740
13,833,600
112,921,400
126,755,000
17,316,200
535,994,400
37,950,150
591,260,750
30,137,890
71,034,500
18,883,200
120,055,590
244,526,800
795,507,900
38,328,650
1,078,363,350
72,981,000
196,232,500
269,213,500
5329535210
126,716,200
126,716,200
0
0
101,854,400
101,854,400
14,171,700
14,171,700
395196300
13,467,300
13,467,300
1,556,000
1,556,000
15,454,800
15,454,800
0
13,382,800
13,382,800
5,078,800
5,078,800
166087900
39,904,100
450,067,900
1,248,740
491,220,740
13,833,600
112,921,400
126,755,000
17,316,200
409,278,200
37,950,150
464,544,550
30,137,890
71,034,500
18,883,200
120,055,590
244,526,800
693,653,500
38,328,650
976,508,950
72,981,000
182,060,800
255,041,800
4934338910
23,543,400
15,242,100
738,900
39,524,400
4,645,400
5,903,600
10,549,000
3,512,800
23,791,300
7,697,800
35,001,900
13,429,600
3,654,300
8,430,000
25,513,900
66,943,200
37,474,000
10,501,000
114,918,200
29,741,300
12,368,000
42,109,300
468671400
75.92
856.29
2.38
934.59
26.32
214.84
241.16
32.95
1,019.78
72.20
1,124.93
57.34
135.15
35.93
228.42
465.23
1,513.52
72.92
2,051.67
138.85
373.35
512.20
10140
1.69
29.53
1.69
12.43
2.98
19.13
12.02
4.93
22.53
4.93
16.89
2.24
19.44
2.24
4.71
3.65
21.23
3.65
9.38
2.45
15.87
6.39
-------
TABLE C-3. 1993 SPECIFIC EMISSIONS OF LOCAL MINING AREAS THAT
ARE CONSIDERED BY MOCI TO BE HIGH-GAS
REGION LOCAL MINING AREA
PROVINCE
AVERAGE SPECIFIC
EMISSIONS (m3/ton)
NORTH
Lingshan
Hebei
23.81
SOUTH
Tongxin
Lewei
Yarong
Longmenshan
Shangrao
Gannon
Wutong
Xuanjing
Ningzhen
Yilil
Puxi
Guizhou
Sichuan
Sichuan
Sichuan
Fujian
Jiangxi
Anhui
Anhui
Jiangsu
Jiangsu
Hubei
50.20
27.72
28.06
23.46
14.00
19.86
14.95
51.73
12.81
16.63
15.71
MOCI does not consider the coal mines in these LMA's to be key state-run mines,
and therefore emissions from these mines are not included in Tables C-1 and C-2
-------
TABLE C-4. HIGH GAS CMAs IN CHINA AND THEIR AVERAGE SPECIFIC EMISSIONS
REGION
Northeast
Northeast
Northeast
Northeast
PROVINCE
Northeast
Northeast
Northeast
Northeast
PROVINCE
Northeast
Northeast
Northeast
Northeast
Northeast
Northeast
Northeast
PROVINCE
North
North
North
North
North
PROVINCE
North
PROVINCE
North
North
PROVINCE
North
North
PROVINCE
North
North
North
North
North
PROVINCE
PROVINCE
Heilongjiang
Heilongjiang
Heilongjiang
Heilongjiang
TOTAL
Jilin
Jilin
Jilin
Jilin
TOTAL
Liaoning
Liaoning
Liaoning
Liaoning
Liaoning
Liaoning
Liaoning
TOTAL
Hebei
Hebei
Hebei
Hebei
Hebei
TOTAL
Shandong
TOTAL
Jiangsu
Jiangsu
TOTAL
Anhui
Anhui
TOTAL
Henan
Henan
Henan
Henan
Henan
TOTAL
COAL BASIN
Sanjiang-Mulinghe
Sanjiang-Mulinghe
Sanjiang-Mulinghe
Sanjiang-Mulinghe
Jiaohe-Liaoyuan
Yilin-Yitong
Yanbian
Hongyang-Hunjiang
Nanpiao
Hongyang-Hunjiang
Fuxin
Donhua-Fushun
Donhua-Fushun
Songliao
Nanpiao
Taixing-Shandou
Chengde
Jingtang
Jingtang
Xuanwei
Guangfang
Lunan
Xuhuai
Huainan
Xuhuai
Qinshui
Taixing-Shandou
Yuxi
Yuxi
Yuxi
CMA
Jixi
Shuangyanshan
Qitaihe
Hegang
Liaoyuan
Shulun
Huichun
Tonghua
Nanpiao
Yantai
Fuxin
Shenyang
Fushun
Tiefa
Beipiao
Fengfeng
Xinglong
Kailuan
Babaoshan
Xiahuayuan
Zibo
Yangchang
Xuzhou
Huainan
Huiabei
Jiaozuo
Hebi
Pingdingshan
Yima
Xinmi
# MINES
(94FUSHUN)
32
18
30
15
3
2
17
29
# MINES
(1991 JP)
15
9
6
2
32
10
5
3
10
28
1
2
13
8
3
5
4
35
5
4
1
2
3
15
2
2
2
2
4
7
6
13
8
7
4
3
2
24
1993 COAL
PRODUCTION (Tons)
11,644,200
10,015,500
10,060,100
13,130,700
72,270,000
3,979,000
3,803,800
1,610,100
3,809,300
24,240,000
1,954,200
NA
12,698,700
4,410,500
8,579,400
1,024,100
2,177,600
52,590,000
10,370,000
1,050,000
17,604,800
290,000
630,000
63,400,000
5,061,700
68,030,000
609,400
13,103,000
25,060,000
11,498,500
14,232,100
36,130,000
3,799,600
4,671,500
17,147,800
8,609,600
NA
92,790,000
SPECIFIC EMISISONS (m3/ton)
AVERAGE
29.84
15.77
19.18
16.17
29.53
16.36
22.63
15.52
18.25
19.13
12.29
22.35
29.08
26.18
31.58
12.73
24.57
22.53
21.28
14.65
12.00
15.82
21.77
28.00
15.87
14.66
17.94
13.97
13.16
11.03
12.00
18.41
12.00
11.45
13.56
19.97
15.73
NA
10.84
8.79
16.21
SOURCE
JP
JP
JP
JP
JP
JP
JP
JP, CM
JP
JP
JP
JP
JP
JP
JP, CM
JP
JP, CM
CM
JP
CM
JP
JP
JP
JP
CM
JP
CM
JP
JP
JP
JP
JP
1994 TOTAL METHANE (103m3):
LIBERATED
450,070
112,920
535,990
196,230
32,590
12,100
303,480
314,630
DRAINED
13,470
1,560
142,170
19,250
0
0
9,820
23,530
-------
TABLE C-4. HIGH GAS CMAs IN CHINA AND THEIR AVERAGE SPECIFIC EMISSIONS
North
North
North
North
North
North
PROVINCE
North
North
North
PROVINCE
North
PROVINCE
North
North
PROVINCE
South
PROVINCE
South
South
South
South
PROVINCE
South
South
South
PROVINCE
South
South
South
South
South
South
South
South
South
PROVINCE
South
South
South
PROVINCE
Shanxi
Shanxi
Shanxi
Shanxi
Shanxi
Shanxi
TOTAL
Shaanxi
Shaanxi
Shaanxi
TOTAL
Inner Mongolia
TOTAL
Ningxia
Ningxia
TOTAL
Zheijiang
TOTAL
Jiangxi
Jiangxi
Jiangxi
Jiangxi
TOTAL
Hunan
Hunan
Hunan
TOTAL
Sichuan
Sichuan
Sichuan
Sichuan
Sichuan
Sichuan
Sichuan
Sichuan
Sichuan
TOTAL
Guizhou
Guizhou
Guizhou
TOTAL
Qinshui
Daning
Daning
Qinshui
Qinshui
Qinshui
Ordos
Jinshaan
Ordos
Daqingshan
Zhuohe
Zhuohe
Suzhe-Wanbian
Pingdong
Pingdong
Jiyou
Pingdong
Lianshao
Chenzi
Chenzi
Chuannon-Qianbei
Chuannon-Qianbei
Chuannon-Qianbei
Chuannon-Qianbei
Huayingshan-Yongrong
Huayingshan-Yongrong
Huayingshan-Yongrong
Dukou-Chuxiong
Guangwang
Liupanshui
Liupanshui
Liupanshui
Yangquan
Datong
Xuangang
Xishan
Yinying Mine
Jincheng
Tongchuan
Hancheng
Cuijiagou
Baotou
Shitanjing
Shizuishan
Changguang
Fencheng
Yinggangling
Pingxiang
Leping
Lianshao
Baisha
Zixing
Furong
Nantong
Songzao
Zhonglianshan
Yongrong
Tianfu
Huayingshan
Dukou *
Guangwang
Liuzhi
Shuicheng
Panjiang
24
10
4
6
11
15
31
43
19
9
4
3
2
1
19
3
3
2
8
6
6
3
1
4
9
9
5
5
3
?
13
7
4
3
14
7
7
5
2
7
5
?
1
1
35
7
7
5
19
10,476,900
31,754,600
2,062,100
14,127,700
1 ,203,000
10,320,600
306,560,000
4,721,600
3,462,800
863,100
33,630,000
1 ,904,500
55,140,000
6,005,800
2,560,800
13,720,000
1,027,600
1,380,000
2,000,300
505,300
2,741,400
1,082,900
21,040,000
2,360,100
1 ,676,800
2,142,400
40,750,000
2,394,700
2,208,600
2,696,400
613,800
1 ,501 ,800
1 ,345,900
669,800
NA
1,667,200
79,350,000
1,454,100
4,122,200
5,014,000
45,290,000
25.95
21.42
11.81
12.35
NA
19.00
21.23
17.08
16.48
10.32
25.83
45.50
19.44
12.48
14.27
14.69
27.64
30.90
28.55
37.86
30.62
18.86
29.27
37.88
23.20
22.04
30.91
26.72
36.83
47.99
58.38
37.65
50.40
26.07
10.78
17.04
48.30
51.31
33.74
20.42
37.12
JP, CM
JP
JP
JP
CM
JP
CM, JP
JP
JP, CM
CM, JP
JP
JP
JP, CM
JP
JP
JP, CM
JP, CM
JP
JP
JP
JP
JP
JP
JP
CM
JP
JP
JP
JP
JP
795,510
161,280
71,030
92,550
28,010
111,550
103,200
618,650
416,560
115,240
4,720
0
13,080
0
11,510
2,430
152,960
48,500
-------
TABLE C-4. HIGH GAS CMAs IN CHINA AND THEIR AVERAGE SPECIFIC EMISSIONS
South
PROVINCE
South
South
PROVINCE
South
South
South
PROVINCE
Northwest
Northwest
PROVINCE
Northwest
Northwest
Northwest
Northwest
Northwest
PROVINCE
Yunnan
TOTAL
Guangxi
Guangxi
TOTAL
Guangdong
Guangdong
Guangdong
TOTAL
Gansu
Gansu
TOTAL
Xinjiang
Xinjiang
Xinjiang
Xinjiang
Xinjiang
TOTAL
GRAND TOTAL
Nanning
Guizhong
Yuebei
Yuebei
Guangzhou
Zhongqilian
Jingyuan-Jingtai
S. Junggar Basin
Talimu Basin
Talimu Basin
Talimu Basin
Chaidamu Basin
Nanning
Hongmao
Meitian
Quren
Maoming
Yaoji
Jingyuan
Uramqi
Guala Mine
Tiema Mine
Baojishan Mine
Lucaoshan Mine
5
NA
NA
4
0
0
318
?
?
?
?
?
?
1
1
2
281
24,020,000
226,200
810,100
11,960,000
920,400
1 ,084,200
118,600
9,510,000
2,718,100
3,350,800
18,060,000
2,166,600
NA
NA
NA
NA
23,920,000
19.65
19.69
24.48
NA
41.83
16.33
11.72
NA
14.49
11.25
37.17
16.00
15.24
22.56
NA
27.25
CM
CM
CM
CM
CM
JP
JP
CM
CM
CM
CM
CM
35,280
NA
NA
33,180
NA
4,424,810
0
NA
NA
3,050
0
561,290
There are 1 2 local mine areas (LMAs) that do not appear on this table, which are considered by MOCI to be high gas mines. They are listed separately in Table C-3 (Appendix C) of this report.
NOTE: Emissions data for CMAs in Guangxi and Guangdong Provinces from CM, 1995; No total emissions data are available for these provinces
Average specific emissions from JP data calculated using arithmatic average of all high gas mines within a given CMA
-------
APPENDIX D
PROVISIONAL REGULATIONS AND RULES FOR THE
MANAGEMENT OF EXPLORATION AND
DEVELOPMENT OF METHANE
-------
Provisional Regulation and Rules
For the Management of Exploration and
Development of Coalbed Methane
Editor; According to " La-w of Mineral
Resources in tht Peoples Republic of China" and
Reply from the State Planning Commission on
management of exploration and development of
coalbed methane. the Ministry of Coal Industry
formulated and issued the " Provisional Regulation
and Rules for the Management of Exploration and
Development of Coalbed Methane" in April, 1994.
Chapter 1 General Principle
Article I This Regulation is formulated in
accordance with the * Law of Mineral Resources in
the People's Republic of China ™ and relevant
regulations issued by the State Council» with an
objective to maintaining rational development and
utilization of coaibed methane resources,
strengthening the management of exploration and
development of coalbed methane resources and
ensuring that the exploration, planning, design
and mining operation of coal resources will not be
affected by the exploration and development of th«
eoalbed methane,
Article 2 Coalbed methane is a kind of
resource associated and co—generated with coal in
the form of gas. which is an excellent clean energy
and raw material for chemical industry. The state
enjoys the ownership of all coalbed methane
resources and eccourages the exploration and
development of coalbed methane resources,
Article 3 Agreement from the legal persons
of the related coal mine enterprises and approval by
the Ministry of Coal Industry must be obtained
before the exploration and development of the
coalbed methane resource in mining areas of
production or under construction. For the
exploration and development of coalbed methane in
mining areas under state plans, the Ministry of
Coal Industry should be solicited for advice and
opinions.
Article 4 The state shall exercise the right
to make unified planning for :he exploration and
development of coaibed methane and while the
management work shall be performed at different
levels.
The Ministry of Coal Industry shall supervise
and manage the exploration and development of
coalbed methane according to the principles of
comprehensive exploration and development and
reasonable distribution in conjunction with unified
pianning, comprehensive exploration,
comprehensive evaluation of coal resources.
Departments in charge of coal industry work
in provinces, autonomous regions- aod
municipalities under the direct jurisdiction of the
central government shall be responsible for
formulating and Implementing the exploration and
development planning of coalbed methane in the
respective area and shall exercise the right to
supervise and manage the exploration and
development of coalbed methane ia accordance with
this Regulation.
Article 5 The Ministry of Coal Industry shall
perform the following responsibilities in the
exploration and development of coalbed methane:
1. Formulating national plan of exploration
and development of coalfaed methane j
2. Reviewing and approving coalbed mtthane
exploration plans;
3. Reviewing and approving coaibed methane
development projects and issuing production
license for coalbed methane development?
4. Supervising, inspecting and managing
exploration, development and production of
eoalbed methane i
5- Coordinating the relationships between
exploration and development of eoalhed methane
and the exploration and mining of coal,
Article 6 Any disputes in relation to the
exploration and development of coalfaed methane
and exploration and development of coal shall be
settled by the Ministry of Coal Industry through
consultation with the departments concerned and /
or with the people's governments of provinces*
autonomous regions and municipalities under the
direct jurisdiction of the central government. If
such consultation fails to reach an agreement, such
dispute shall be filed to the comprehensive
planning department under the State Council for
final verdict.
Article 7 The projec: proposal» feasibility
study reports and preliminary designs for the
exploration and development of coalbed methane
shalt be reviewed and approved by the departments
in charge of coal industry in the provinces,
autonomous regions and municipalities under the
central government before submitting to the
Ministry of Coal Industry for review and approval.
Article 8 The State encourages introduction
48 CHINA COALBED METHANE NO, 1 MAY 1995
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of foreign funds and advanced foreign technology
to explore and develop coaSbed methane,
All projects For the exploration and
development of coaibed methane with foreign funds
and foreign and overseas advanced technology shall
be reviewed and approved by the Ministry of Coal
Industry whose responsibilities shall include;
1. Approving and defining the area for
oversea* cooperation, delineating blocks for co —
operation, defining forms of co — operation and
approving the master planning for the development
of coaibed methane with foreign input,
2. Sponsoring negotiations between domestic
enterprises and foreign enterprises, signing and
implementing letters of intent and contracts for
joint exploration and development of coaibed
methane.
3, Within the areas assigned for co—operatson
with foreign partners, no enterprises or
organizations shall be allowed to engage in
activities for exploration and development of
coaibed methane or sign economic co-operation
agreements with foreign enterprises for "he
exploration and development of coaibed methane in
such areas unless special approval has been
obtained from the Ministry of Coal Industry.
Article 9 The state encourages and fully
supports positive introduction of modern
development technologies and equipment and
intensified scientific research for coaibed methane
development by relying on scientific and
technological progress for continues improvement
of she development level,
Chapter 2 Coaibed Methane Exploration
Article 10 The comprehensive exploration
evaluation "work for coaibed methane resources in
mining areas, of which master feasibility study
reports» master planning and overall development
plan have already been approved by the planning
organizations under the State Council and by the
Ministry of Coal Industry and in the key national
mining areas where pre-inv«mea± studies are
under way shall be implemented after the. approval
by the Ministry of Coal Industry and no
registration for th*t exploration of coaibed methane
la these areas shall be processed,
The department in charge of coal industry in
each province, autonomous region and municipality
under the direct jurisdiction of the central
government shall have the power to approve the
exploration of eoalbed methane in the local mining
areas and shall file such approval to the Ministry of
Coal Industry.
Article II All the information for the
exploration of coaibed methane shall be submitted
to the Ministry of Coal Industry. The Ministry of
Coal Industry shall review and approve the findings
of geological exploration of coaibed methane.
Article 12 For the additional exploration of
coaibed methane in mining areas or within the coal
properties, the extent of coaibed methane reserves
with content of over 8 cubic meters of methane per
ton of coal and the location of coaibed methajie
should be cleariy defined and in each coal property
a? least one borehole should be selected for in—situ
measurements of permeability, strata stress,
temperature at the bottom, of borehole and in coal
seams as well as other parameters in order to make
evaluation of coaibed methane reserves which shall
be submitted.
Article 13 In any boreholes where coaibed
methane outburst is encountered, such borehole
should be regarded as exploration wells where
regular measurements of pressure t flow,
temperature and other parameters should be taken
and analysis and assays should be made to
determine the composition and contents which
shall be used as :he basis for evaluation of coaibed
methane reserves. In the event of such matters t
the departments in charge of coal industry in the
related provinces, autonomous regions and
municipalities under the central government should
be notified.
Article 14 Trial extraction options must be
prepared before trial extraction of coaibed methane
in any exploration wells is conducted in the course
of geological exploration. Such trial extraction
should not exceed half a year. The option and time
— frame for such trial extraction should be
approved by the department in charge of coal
industry ia the respective provinces, autonomous
regions and municipalities under the central
government.
Chapter 3 Coaibed Methane Development
Article 15 AH feasibility study reports and
general planning of mining areas and feasibility
study reports of coal mines prepared after the
issuance of this Regulation should include the
planning of coaibed methane development*
Article IS The initiatives from local
governments at all levels and enterprises as well as
foreign businessmen should be brought into full
play and joint development and utilization of
coaibed methane should be encouraged.
Article 17 For coaibed methane production,
license of eoalbed methaae development and
production must be obtained. The Ministry of Coal
Industry shall formulate a separate management
rules for coaibed methane production license.
For the development and production of
coaibed methane in the area of state—owned key
coal mines, coaibed methane production license can
CHINA CO ALB ED METHANE NO. 1 MAY 1995
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he issued only by the Ministry of Coal Industry
with the agreement from the said mines and with
the peliminary review by the departmnts in the
respective provinces T autonomous regions and
municipalities under the central government.
For the development: and production of
coalbed methane in the areas of local coal mines,
coaibed methane production license shall be issued
upon the agreement by the said local mines and
approval by the department in charge of coal
industry in provinces, autonomous regions and
municipalities under the central government. Such
issuance should be filed to the Ministry of Coal
Industry.
Article 18 In the development of coalbed
methane on coalfields, continues and stable
development policy should be followed under the
guidance of cost effectiveness with less input and
more output-
The development and utilisation of coalbed
methane must be preceded by clear delineation of
resources and assured source of users of coalbed
methane T which shall be planned and arranged in
the scientific procedure of coalbed methane
production for the maximized utilisation of coalbed
methane. Advanced and effective technology
should be employed to maximize coalbed methane
output and production period, to achieve high rate
of extraction and to yield the optimum techno —
economic benefits.
Article 19 The design and development of
coal bee! methane projects must be fit into the
design and production requirements of coal mines
without affecting normal mining operation in coal
mines due to extraction, of coalbed methane.
In order to improve the design of coalbed
methane development projects, all the designs
submitted to coal industry authorities for review
and approval should be evaluated by relevant
technical department,
Article 20 The implementation of the
construction projects for the development of
coalbed methane must be based on the approved
design to achieve unified organization and
completion of the projects and associated facilities
within the shortest possible period. For coal mines
where methane is drained from the underground
and utilized, the existing methane drainage
facilities should be taken into consideration for
reasonable utilization of these facilities when
preparing designs of methane recovery from the
surface.
Article 21 Advanced and highly efficient
construction techniques should be employed to
achieve complete project construction including gas
extraction, gas supply, gas cleaning and
utilization. The project construction shall conform
to the relevant regulations o( environmental
protection.
Article 22 Upon the completion of all project
items of coalbed methane development, acceptance
inspection shall be performed according to the
relevant project quality standards. The designed
target should be achieved within the shortest
possible time after the gas wells are put into
production.
Article 23 Coalbed methane research and
monitoring work should be strengthened in. the
course of coalbed methane development in order to
timely ascertain the behavior of coalbed methane
and to make adjustment in different mining levels
so as to ensure smooth replacement of gas weils for
stable and consistent gas supply for a long period.
Chapter 4 Development of
Methane and Development of Coal
Coalbed
Article 24 The exploration and development
of coalbed methane should be subordinated to the
development and production of coal.
Article 25 Coal production enterprises shall
not be held liable for losses suffered by coalbed
methane exploration and development enterprises
due to surface subsidence or due to other reasons
as a result of coal development.
Article 26 If the original design should be
modified by coal production enterprises due to
changes of geological structure and variation of
coal seams. new approval should be obtained from
the authority which approved the original design.
If such modification will affect the exploration and
development of coalbed methane, the coal
production enterprise which made this modification
should send official notice half a year in advance to
the affected enterprise of coalbed methane
exploration and development in order to allow the
affected party for' emergency measures. Coal
production enterprises shall not be held liable for
any economic losses as a result of such
modification.
Article 2? Coalbed methane development and
production enterprises should make economic
compensation to coal production enterprises if the
latter suffer economic losses due to exploration and
development of coalbed methane.
Article 28 Coal enterprises and coalbed
methane enterprises in the same region should
establish a close co-operation relationship, adhere
to the principle of mutual benefit and mutual
understanding and correctly handle the relation
between coai mining and coalbed methane
extraction. They should exchange developent plans
and necessary drawings.
Article 29 All coalbed methane wells
(including exploration test wells and production
wells) must be cemented or sealed according to
relevant regulations without leaving any hidden
danger to the coal mining operation. No steel tubes
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or any other objects which may affect coal mining
operation should be left in coal seams. For those
objects which cannot be removed, their precise
spatial locations must be provided to coal mining
departments.
Chapter 5 Supplementary Articles
Article 30 The departments in charge of coal
industry in provinces, autonomous regions and
municipalities under the direct jurisdiction of the
central government shall in accordance with this
Regulation and the actual conditions in the
respective locality formulate implementation
procedures which shall be filed to the Ministry of
Coal Industry.
Article 31 All enterprises which started
coaibed methane exploration, development and
production activities before the issuance of this
Regulation shall complete registration and
necessary formalities in accordance with this
Regulation within one year.
Article 32 This Regulation shall be
interpreted by the Ministry of Coal Industry.
Article 33 This Regulation shall be effective
upon the date of issuance.
CHINA COALBED METHANE NO, 1 MAY 1995 51
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APPENDIX E
FOR MORE INFORMATION
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FOR MORE INFORMATION...
For more information on coalbed methane recovery experiences, project potential, or program activities
and accomplishments, contact:
Coalbed Methane Program Manager
US Environmental Protection Agency
Mail Code 6202J
Atmospheric Pollution Prevention Division
401 M Street, SW
Washington, DC 20460
Telephone: 202 233-9468
Facsimile: 202 233-9569
Internet: schultz.karl@epamail.epa.gov
Automated Faxback: Call 202 233-9659 and enter #1740
Selected list of EPA Coalbed Methane Outreach Reports:
• USEPA (U.S. Environmental Protection Agency). Finance Opportunities for Coal Mine Methane
Projects: A Guide to Federal Assistance. Office of Air and Radiation (6202J). Washington, D.C.
August 1995.
• USEPA (U.S. Environmental Protection Agency). Finance Opportunities for Coal Mine Methane
Projects: A Guide for Vest Virginia. Office of Air and Radiation (6202J). Washington, D.C.
August 1995.
• USEPA (U.S. Environmental Protection Agency). Finance Opportunities for Coal Mine Methane
Projects: A Guide for Southwestern Pennsylvania. Office of Air and Radiation (6202J).
Washington, D.C. EPA-430-R-95-008. June 1995.
• USEPA (U.S. Environmental Protection Agency). Economic Assessment of the Potential for
Profitable Use of Coal Mine Methane: Case Studies of Three Hypothetical U.S. Mines. Office
of Air and Radiation (6202J). Washington, D.C. EPA-430-R-95-006. May 1995.
• USEPA (U.S. Environmental Protection Agency). Identifying Opportunities for Methane
Recovery at U.S. Coal Mines: Draft Profiles of Selected Gassy Underground Coal Mines.
Office of Air and Radiation (6202J). Washington, D.C. EPA-430-R-94-012. September 1994.
• USEPA (U.S. Environmental Protection Agency). The Environmental and Economic Benefits of
Coalbed Methane Development in the Appalachian Region. Office of Air and Radiation (6202J).
Washington, D.C. EPA-430-R-94-007. April 1994.
• USEPA (U.S. Environmental Protection Agency). Opportunities to Reduce Anthropogenic
Methane Emissions in the United States. Report to Congress. Office of Air and Radiation
(6202J). Washington, D.C. EPA-430-R-93-012. October 1993.
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• USEPA (U.S. Environmental Protection Agency). Anthropogenic Methane Emissions in the
United States: Estimates for 1990. Report to Congress. Office of Air and Radiation (6202J).
Washington, D.C. EPA-430-R-93-003. April 1993.
• USEPA (U.S. Environmental Protection Agency). Options for Reducing Methane Internationally -
Volume 1: Technological Options for Reducing Methane Emissions. Washington, D.C. EPA
430-4-93-006 A. July 1993.
• USEPA (U.S. Environmental Protection Agency). Options for Reducing Methane Internationally -
Volume 2: International Opportunities for Reducing Methane Emissions. Washington, D.C.
EPA 430-R-93-006 B. October 1993.
• USEPA (U.S. Environmental Protection Agency). A Guide for Methane Mitigation Projects: Gas to
Energy at Coal Mines. Draft. February 1996.
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