United States Office of Air and Radiation
Environmental Protection Agency 6207-J
EPA-430-N-00-004
Fall 2006
COALBED METHANE EXTRA
A publication of the Coalbed Methane Outreach Program (CMOP)
www.epa.gov/coalbed
OUTREACH
PROGRAM
First Commercial Coalbed Methane Project in India
The development of India's energy resources to meet the na-
tion's growing energy needs is the goal of a U.S. Trade and
Development Agency (USTDA) grant awarded May 2006 to
Reliance Industries Limited (RIL), a private Indian company and
leader in the effort to develop India's coalbed methane (CBM) re-
sources. The $506,000 grant will partially fund technical assistance
to RIL to develop a Sohagpur CBM project, which will be the first
commercial CBM project in India.
The government of India has prioritized the development of CBM as
a means to meet the country's growing energy demands utilizing
domestic supply sources. In 2002, RIL was awarded exploration
licenses by the government for the development of CBM resources
in the Sohagpur East and Sohagpur West concession blocks in
Madhya Pradesh state in central India.
see RELIANCE, page 5
Reliance Industries Limited CEO and President PMS
Prasad (left) and USTDA Regional Director Carl B. Kress
(right) shake hands and exchange documents following the
award of the USTDA grant on the development of the first
commercial CBM project in India.
In this issue...
1 First Commercial Coalbed
Methane Project in India
1 Methane to Markets Update
2 Reflections on a Pioneering
Career
4 Asia-Pacific Partnership on
Clean Development and Cli-
mate
6 India CBM Activity Takes Off
7 Upcoming Events
8 CBM/CMM News
10 Two New Publications
To obtain CMOP reports, call
1-888-STARYES.
Access documents electronically
from the "Documents, Tools, and
Resources" pages on our Web site at
www.epa.gov/coalbed
To subscribe to CBM Extra and
CMB Notes, please go to our website
http://www.epa.gov/cmop/mailinglist.html
and register for our mailing list. You
will be added within two weeks.
Methane to Markets Update
M2M Events Happening Now!
Methane to Markets Partnership Coal Mine Methane Technical Work-
shop sponsored by USA, Australia, and Japan
4-5 October 2006
Marriott Brisbane, Brisbane Australia
Information forthcoming at: http://www.methanetomarkets.org/events/
index.htm
Methane to Markets Coal Subcommittee Working Meeting
6 October 2006
Marriott Brisbane, Brisbane Australia
Information forthcoming at: http://www.methanetomarkets.org/events/
index.htm
VAMCATto reduce methane emissions
A technology developed by Australia's Commonwealth Scientific and Indus-
trial Research Organization (CSIRO), called VAMCAT (Ventilation Air Meth-
ane Catalytic Turbine) is poised to take a sizable bite out of methane emis-
sions with a greenhouse effect equivalent to more than 237 million tonnes of
carbon dioxide. These emissions are released to the atmosphere every year
see M2M UPDATE, page 4
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Fall 2006
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COALBED METHANE EXTRA
Reflections on a Pioneering Career
Introduction
The Coalbed Methane Outreach Program (CMOP) re-
cently met with Charles (Chuck) Dixon to discuss his long
and pioneering career in the coal, coalbed methane (CBM)
and coal mine methane (CMM) industries. Mr. Dixon was
Vice President of Engineering at Jim Walter Resources,
Inc. from 1974 through 2002, during which time he over-
saw ground-breaking changes in the company's methane
drainage operations.
Today, Jim Walter Resources is one of the leaders in
CMM drainage in the United States and around the world.
The company sells an average of 23 million cubic feet per
day of pipeline quality gas from three mines, preventing
3.4 million metric tons of CO2 equivalent (MMTCO2e) from
being emitted into the atmosphere each year. Only one
other CMM drainage project in the United States uses
more methane. Jim Walter Resources also manages an
integrated gas upgrade plant to remove impurities from
medium-quality gas and enhance it to pipeline-quality gas.
A BCCK cryogenic unit, with a throughput capacity of
about 12 million cubic feet per day, is used to remove ni-
trogen from the drained gas.
When you started at Jim Walter, how were coal indus-
try practices and operations different than they are
today?
Back when I started, most underground mining was con-
ducted at shallow mines, and not much methane gas was
being produced. The dominant method of mining was
room and pillar. Surface mining was found mostly in the
Eastern U.S. This has changed. Underground mines have
gone deeper and have encountered more methane. The
dominant method of mining is now longwall. Now, surface
mines are predominantly located in the west instead of the
east. Wyoming produces as much coal as the next five
states put together [Editor's Note: So far this year, Wyo-
ming has produced 107.7 Million Short Tons of coal while
the next five states have together produced 108.6 Million
Short Tons (EIA, 2006)] .
When I started, most coal mines were captive rather than
independent operations. Mines were owned by steel com-
panies or utilities (for example: US Steel, Bethlehem, AEP,
Southern Company, Duke Power) to supply coal for their
own needs. Over the years this has changed. Steel com-
panies and utilities got out of the coal mining industry and
now buy their coal through contracts of various lengths.
Almost no utilities or steel companies in the U.S. own their
own coal mines today. This has changed the way mines
are operated. During captive operation, maintaining pro-
duction was the primary focus, and the cost was some-
what secondary. Steel companies and utilities were able to
pass through the cost of the coal to steel and electricity
customers. Today, coal mine operators look at cost and
productivity rather than total production. As is true for any
other business, coal companies need to make a profit to
stay in business, so the priority is to achieve the lowest
cost but maintain efficient operation.
One way in which the industry has changed in Europe and
the former Soviet Union is that it is transitioning away from
fulfilling social roles or national interests. When coal mines
were owned by the government, jobs were maintained to
benefit society. For example, mines in England and Ger-
many that were not cost effective stayed open to keep citi-
zens employed. In addition, mines in Germany stayed
open during World War II so that the government could
make petroleum products out of coal. After the War, Ger-
many and the Soviet Union supported the coal mining in-
dustry to maintain energy independence. Today, coal sec-
tors around the world are becoming more market-oriented.
As a result, mines are being shut down, and coal is being
imported from countries that can produce it more cost-
effectively.
How was methane drainage handled differently then
than it is today?
When I started in the industry, there were no CMM or CBM
efforts other than a handful of novelty projects. Methane
was managed by mine ventilation fans, and drainage was
not cost effective at all. In addition, there were no environ-
mental incentives back then to influence methane drain-
age.
Another impediment to drainage up until 10 years ago was
an oversupply of natural gas in the United States. It cost
too much to transport it and capture it, so much so that
most oil producers simply flared fugitive methane emis-
sions. Neither electricity producers nor other market end-
users were demanding natural gas. This has changed
over the years. Utilities began demanding natural gas and
(Continued on next page)
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COALBED METHANE EXTRA
C. O A L B I
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OUTREACH
tightening the market when it started becoming prohibi-
tively expensive to develop other types of power plants.
Coal-fired plants became more expensive to build and
more difficult to site because of pressure from the environ-
mental community. In addition, problems with nuclear en-
ergy were perceived. The construction of a natural gas
fired power plant could get approval within two or three
years, while it took 30 years to site a nuclear plant and 15
to site a coal-fired plant. When demand for gas started to
grow, market prices increased. This change improved the
economics for capturing CBM and CMM and catalyzed the
industry.
How did Jim Walter make the decision to pursue meth-
ane recovery and utilization? Was it strictly a busi-
ness decision, or did other factors influence the com-
pany?
The people at Jim Walter considered themselves business
people that happened to be mining coal. Their goal was to
improve profitability, whether by improving mining produc-
tivity or by other means. We didn't have tunnel vision, so
we were able to branch out and incorporate CMM/CBM
efforts into our operations. There was also a can-do atti-
tude in the company and the feeling that just because no-
body had done it before didn't mean it couldn't be done.
I came on board as the company was scrutinizing the
costs of handling methane at the #3 Mine near Brook-
wood. We hired some consultants who had experience
operating deep mines in Germany to do planning and fea-
sibility studies. They concluded that the mines could not
be operated productively without some form of degasifica-
tion.
Jim Walter's initial motivation to handle the gas was taken
from a coal productivity standpoint. There was no interest
at the onset of making money on the drained gas. Drain-
age was intended to get the gas out in order to have a
cost-productive mining operation. About the same time, an
oil and gas group in Houston approached us with the idea
of capturing the drained gas and developing it commer-
cially. This was music to our ears because we could make
some money selling a resource that we intended to drain
anyway for coal productivity purposes.
Describe the accomplishment that you are most proud
of during your career at Jim Walter?
First, I am very proud of being part of such a successful
company. Initially, as a small coal producer with very am-
bitious plans, we faced insurmountable odds. Many coal
mining experts said we had a snowball's chance in hell to
be successful. To have been involved with developing this
company into a very successful coal mining and degassing
company has made me and others involved proud. One of
the accomplishments I am most proud of was being in-
volved in the development of the BCCK plant because
there was a lot of opposition at the local level and the cor-
porate office from people who didn't want to spend the
money.
Initially, I saw the potential for producing and capturing
low-quality gas, and I developed a way to get a feel for the
amount of low-quality gas that might be available on an
ongoing basis. We did tests to quantify what size opera-
tions this supply of methane could sustain. From this infor-
mation, we proved to ourselves that it could be a sustain-
able operation. Then we went through the process of pick-
ing the best method of utilizing the low quality gas. My first
thought was to generate electricity with either a turbine or
internal combustion (1C) engine but concluded after some
studies that this was not cost effective. Then I came
across the idea of upgrading the gas to pipeline quality
and contacted two companies selling two different proc-
esses: pressure-swing adsorption and cryogenic. Both
technologies had pros and cons. After lengthily evalua-
tions, the cryogenic process was selected although it was
more complicated.
It took quite a bit of effort to get our request for funding
approved by the corporate people because they saw it as
a high risk investment. When it began operating in the late
1990's, it was the first successful commercial application
of the cryogenic unit. Now that it has been built, it is ex-
tremely successful. It started turning a profit after only 3 or
4 months. We based the original cost estimate on $3 [per
million BTU] gas, and that price has gone up to $11 [per
MMBTU]. Today, people from all over the world tour our
see CHUCK DIXON, page 5
What do you want to know about?
If you have suggestions or requests for future CBM Extra content, please drop us a line.
www.epa.gov/coalbed
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C. O A L B I
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OUTREACH
Methane to Markets
M2M Update from page 7
from the world's underground coal mines through exhaust
ventilation air. CSIRO and the Australian Greenhouse
Office, together with China's Shanghai Jiaotong University
and Huainan Coal Mining Group, will construct the first
pilot-scale demonstration unit at a coal mine in China.
The low-heating value gas turbine will be powered by
about 1% methane in ventilation air. It will generate green
power while also consuming the mine's fugitive methane.
The project is being conducted under the Australian Gov-
ernment's Bilateral Climate Change Partnerships Program
along with support from an Australia-China special fund
grant under the Australian Government International Sci-
ence Linkage Program. The initial investigation of catalytic
combustion performance was supported by a grant from
the Australian Coal Association Research Program
(ACARP).
The project is being led by Dr. Shi Su from CSIRO Explo-
ration and Mining. "China is responsible for about 45%
of total ventilation air methane emissions," Dr. Su said.
"Although gas drainage efficiency in China has increased
from 15% in 1998 to 26% in 2004, much of the captured
gas is poor in quality. It is estimated that 70 to 80% of the
drainage gas has a methane concentration of less than
30%, which cannot be used by conventional technologies."
A prototype demonstration unit with a power output of 10
to 30 kilowatts will first be demonstrated in the Chinese
mine. Operational performance data and experience
gained from this small unit will be used for the design of a
second-generation turbine of at least 1 megawatt output.
Approximately 70% of all coal mining related greenhouse
gas emissions can be attributed to methane exhausted to
the atmosphere. This is not only bad for the environment,
but also a waste of an important energy source. VAMCAT
has the potential to reduce these emissions while also pro-
viding a valuable source of clean, green energy.
More information on the international Methane to Markets
effort is at http://www.methanetomarkets.org {£
Asia-Pacific Partnership on Clean
Development and Climate
The Asia-Pacific Partnership on Clean Development
and Climate, also known as AP6, is an international
agreement among Australia, India, Japan, the Peo-
ple's Republic of China, South Korea, and the United
States. The AP6 was launched January 12, 2006 in Syd-
ney, Australia, when Environment and Energy Ministers
from partner countries agreed to co-operate on develop-
ment and transfer of technology which enables reduction
of greenhouse gas emissions. The partnership will pro-
mote the development and deployment of clean, efficient
technologies and practices that will achieve practical re-
sults in areas such as methane capture and use, clean
coal, and bio-energy. The Partnership builds on existing
multilateral climate initiatives including the Methane to
Markets Partnership.
The founding partners agreed to work together with private
sector partners to meet goals for energy security, national
air pollution reduction, and climate change in ways that
promote sustainable economic growth and poverty reduc-
tion. The Partnership will focus on expanding investment
and trade in cleaner energy technologies, goods and ser-
vices in key market sectors. Eight public-private sector
task forces focus on cleaner use of fossil energy, renew-
able energy and distributed generation, power generation
and transmission, steel, aluminum, cement, coal mining
and buildings and appliances.
Asia-Pacific Partners account for 50% of the world's
greenhouse gas emissions, energy consumption, GDP
and population. Collectively, they generate approximately
65% of world primary coal production. Coal is the domi-
nant fuel source globally and among the Partners, and its
use is expected to grow over the coming decades. Accord-
ing to the International Energy Agency (IEA), by 2030,
coal-based power generation is projected to more than
triple. Despite competition from natural gas, coal is likely
to provide 33% of global electricity generation. Over 58%
of the world's recoverable coal reserves are located in four
Asia-Pacific Partner countries: the United States (27%),
China (13%), India (10%) and Australia (8.7%).
Improving the efficiency of the mining and processing of
coal and improving the monitoring and control of coal mine
methane gas can make a significant contribution to emis-
sions reductions and workplace safety. The Coal Mining
Task Force (CMTF) will address the reclamation and reha-
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COALBED METHANE EXTRA
C. O A L B I
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OUTREACH
bilitation of mined lands, runoff, abandoned mines and
best safety practices. The CMTF will work collaboratively
with the Cleaner Fossil Energy Task Force to ensure that
synergies are captured in improving coal processing and
developing new coal-based generation technologies.
The objectives of the Coal Mining Task Force are to do the
following:
• Facilitate technologies and practices that can improve
the economics and efficiencies of mining and process-
ing and continue to improve safety and reduce envi-
ronmental impacts.
• Establish, as appropriate, efficiency and emissions
intensity and mine reclamation objectives based on
each nation's circumstances.
• Identify current reclamation activities in each country,
as appropriate, and exchange best practice informa-
tion in reclamation of surface mined lands with a focus
on enhanced surface reclamation practices that im-
prove the opportunities for carbon sequestration.
CMOP staff participated in the Asia Pacific Partnership on
Clean Development and Climate meetings in New Delhi,
India August 8-10, 2006. Thirty-two delegates from the
United States, India, Australia, China and Japan were in
attendance (see Figure 1). The purpose of the meeting
was to finalize the Coal Mining Task Force Action Plan, as
well as to discuss the role of the Task Force in future pro-
ject implementation. The four areas of emphasis in the
Figure 1. APP Coal Mining Task Force meeting in
Delhi, India August 8-10, 2006
Coal Mining Task Force Action Plan are Health and
Safety, Environmental Impacts, Economic Resource Re-
covery and Workforce Planning and Skills Development.
For more information on APP please go to
www.asiapacificpartnership.org H
from page 1
The USTDA grant reflects the
agency's commitment to support
India in the development of its en-
ergy resources. Specifically, the
grant will assist RIL in assessing the
market and gas infrastructure re-
quirements for the commercial de-
velopment of these concession
blocks.
RIL has selected Advanced Re-
sources International, Inc. (ARI),
based in Arlington, Virginia, to per-
form the technical assistance. In
addition to the USTDA grant, RIL will
contribute additional resources to-
wards the completion of the techni-
cal assistance.
Over the past decade, USTDA has
actively supported the development
of the CBM sector in India through
the agency's sponsorship of two ori-
entation visits and several early in-
vestment analysis studies. The U.S.
Environmental Protection Agency is
also working with the Indian Minis-
tries of Coal and of Petroleum and
Natural Gas to support the establish-
ment of a Coal Mine and Coal Bed
Methane (CMM/CBM) Clearing-
house in India.
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C. O A L B I
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India CBM Activity Takes Off
India's tremendous economic growth in
recent years has intensified the demand
for domestic energy sources and has
spurred interest and activity in coalbed meth-
ane (CBM) development. India's annual
GDP has been growing by at least 6% per
year since 1991.1 India's middle class is ex-
panding and there is a technology-driven
boom in manufacturing, yet two-thirds of In-
dia's 1.1 billion people live in rural areas with
nearly 260 million people living on less than
$1 a day. Agriculture supports 60% of the
labor force, but provides only 19% of GDP.
Despite India's rapid growth, its GDP per
capita is roughly half that of China ($3,300
versus $6,800). As a result, the Indian gov-
ernment has initiated an economic reform
plan designed to improve the life of the rural
poor while boosting the overall economic
performance of the country. India's success
and future development will largely be a func-
tion of its investment in infrastructure and its
access to affordable energy.
India increasingly is turning to unconven-
tional sources of energy to fuel its growth.
This is illustrated by the growing interest in
Indian CBM. Methane is seen as alternative
gas for meeting local gas needs. As gas de-
mand rises sharply in India, CBM and coal-
mine methane (CMM) will be able to compete
favorably with imported coal, gas, or LNG on
a fuel cost basis for power generation. From
an environmental standpoint the use of CMM
also makes sense. India's heavy reliance on
coal, much of it low quality, is a major cause
of the country's air pollution and relatively
high carbon intensity level.2
The Indian government has offered blocks for
exploration and production of CBM through
an international bidding process, with the
third and latest bidding round completed
June 30th of this year. Eighteen Indian com-
panies and eight foreign firms submitted 54
bids for 10 blocks during the most recent
round. Figure 1 highlights the locations of
these blocks. The third round attracted more
Figure 1. CBM Blocks on Offer Under Third Round of Bidding
1
6
8
7
5
2
9
4
10
3
Field Name
Raj Mahal
Mand-Raigarh
Barmer
Kothagudem
Tatapani-Ramkola
Birbhum
Barmer
Singrauli
Godavari-Valley
Sohagpur
Block Name
RM-CBM-2005/III
MR-CBM-2005/III
BS(4)-CBM-2005/III
KG(East)-CBM-2005/lll
TR-CBM-2005/III
BB-CBM-2005/III
BS(5)-CBM-2005/III
SR-CBM-2005/III
GV(North)-2005/lll
SP(North)-CBM-2005/lll
State
Jharkhand
Chattisgarth
Rajasthan
Andhra
Pradesh
Chattisgarth
West Bengal
Rajasthan
Madhya
Pradesh
Andhra
Pradesh
Madhya
Pradesh
Total
Area
(sq. km)
469
634
1,168
750
458
248
739
330
386
609
5,791
CBM
Resources
(BCM)
158
119
82
57
54
50
38
31
30
17
635*
* Totals may not sum due to independent rounding
Source: Government of India, Ministry of Petroleum and Natural Gas
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C. O A L B I
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bids than the previous two rounds
combined. In 2001, the first round
saw 16 bids for four blocks from six
Indian firms while round two, held in
2003, received 14 bids for eight
blocks from seven Indian firms and
one foreign firm. The 10 blocks of-
fered in the third round, summarized
in Figure 1, cover an area of around
5,800 square kilometers and are
estimated to contain 635 billion cubic
meters (BCM) of CBM resources.
The 16 blocks already awarded by
the Ministry of Petroleum and Natu-
ral Gas cover 7,729 square kilome-
ters with estimated CBM resources
of 792 BCM. Over the last three
years, more than 75 exploratory
(test) wells have been drilled in the
awarded blocks.2
So far, with three encouraging dis-
coveries by Great Eastern Energy,
Oil and Natural Gas Corporation,
and Reliance Industries, India ex-
pects to see the first CBM produc-
tion in 2007. (See text box on page
1) Between 1990 and 2005, India's
methane emissions from operating
mines more than doubled from 486
million cubic meters (MMCM) to
1,001 MMCM. While there is some
drainage of CMM, there are currently
no commercial projects for its recov-
ery or use in India. A $25 million
dollar project of the United Nations
Development Program (UNDP), the
Global Environmental Facility (GEF),
and the Indian Ministry of Coal
seeks to demonstrate the commer-
cial feasibility of utilizing methane
gas recovered before, during, and
after coal extraction. Recovered
CMM will be used for power genera-
tion and CNG fuel for mine vehicles.
The Central Mine Planning and De-
sign Institute (CMPDI) is India's lead
implementing agency for this project.
Drilling of the first well in Moonidih
has already started. Future results
could lead to expanded application
of CMM technologies and ap-
proaches at commercial scale.2
All of the activity surrounding CMM
and CBM in India not only fits into
India's strategy to attract investment
in infrastructure, but it also contrib-
utes to India's long-term strategy by
providing rural areas with a reliable
source of energy, ensuring those
inhabiting the Indian countryside a
larger piece of future economic
growth. C
"Can I Fly?" Economist, June 1, 2006.
2 Methane to Markets Partnership Coal Subcommittee, Coal Mine Methane Global Overview, http://www.methanetomarkets.org/resources/coalmines/docs/overview_ch14.pdf
Upcoming CBM/CMM Events
Coal 21 Workshop Coal Subcommit-
tee Meeting
7-8 October 2006
Brisbane, Australia
2006 International Workshop on Coal-
bed Methane/Coal Mine Methane
17-18 October 2006
Landmark Hotel, Beijing, China
URL: http://www.coalinfo.net.cn/
english.htm Background and Registration
(PDF, 4 pp., 393 KB, About PDF)
Energy Virginia Conference: "A
Greener Pasture for Virginia's Econ-
omy"
17-19 October 2006
Virginia Military Institute
Lexington, VA, USA
Website: http://www.energyvacon.org
15th International Coal Preparation
Congress
17-20 October 2006
Beijing International Convention Centre, Bei-
jing, China
Contact: Kevin McMillan or Sun Jiaohua
Phone: 013 691 5291 or+86 10 6422 9939
Email: kmcmillan@anglocoal.co.za or
sjiaohua@chinasafety.gov.cn
Second International Conference on
Jl Projects in Ukraine, "Climate
Change and Business"
23-25 October 2006
Kyiv, Ukraine
Phone: +(38 044) 453-28-56
Fax: +(38 044) 456-94-62
Email: jiconference@biomass.kiev.ua
Website: http://www.biomass.kiev.ua/
Jlconf2006/index.php?page=01&lang=en
Carbon Expo Asia 2006
26-27 October 2006
Beijing, China
13th PhD Workshop on International
Climate Policy
27-28 October 2006
University of Leeds, Leeds, UK
Contact: Karin Hufnagel
Phone:+44-113-3437432
Fax: +44-113-3436716
Email: karin@env.leeds.ac.uk
India Energy Summit: Strategies for
Securing Oil and Gas Needs in Asia
7-8 November 2006
Hotel Le Meridien
New Delhi, India
8th Annual Unconventional Gas Con-
ference
Hosted by the Canadian Society for Uncon-
ventional Gas
15-17 November 2006
Telus Convention Centre
Calgary, Alberta, Canada
Contact: Kerri Markle
Phone: (403) 233-9298
E-mail: kmarkle@csug.ca
Website: http://www.csug.ca
APP Coal Mine Safety Workshop
5-7 December 2006
Pittsburgh, Pennsylvania
Email: cmontesano@nma.org
Global Forum on Flaring Reduction
13-15 December 2006
Paris, France
Website: hitps;/,'fiaringreductjonforum.org
Methane to Markets Steering Commit-
tee Meeting
14-15 December 2006
Rome, Italy
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Fall 2006
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COALBED METHANE EXTRA
CBM/CMM News
— International —
Pacific Asia China Energy (PACE)
Awarded CBM Concessions. Re-
cently PACE, a Canadian company,
was awarded a coalbed methane
concession of 970 square kilometers
in Guizhou. They are currently drill-
ing to confirm the discovery of a large
coalbed methane source of approxi-
mately 5.2 trillion cubic feet. Within
about 500 miles of the Guizhou pro-
ject, there are more than 240 million
people, including many commercial
and residential users in need of a
secure supply of energy. China re-
ceives about 70% of its energy from
coal and its 30,000 coal mines re-
lease methane gas that account for
40% of China's air pollution. Methane
gas explosions also cause the deaths
of more than 6,000 Chinese coal min-
ers every year.
Petrochina Finds Coalbed Methane
Reserve in Junggar Basin. Petro-
china, China's largest oil producer by
output, has discovered rich reserves
of coalbed methane in the remote
Junggar basin and is in the process
of studying the best way to develop
the find, says Market Watch. The
Junggar basin in the northwestern
Xinjiang region has estimated coal-
bed methane reserves of 2.2 trillion
cubic meters, equivalent to 151 mil-
lion cubic meters per square kilome-
ter. The Junggar district is a semi
desert region, surrounded by moun-
tains. PetroChina's Xinjiang-based
unit has prioritized the basin as a key
region for coalbed methane develop-
ment. The China Petrochemical
News reports that China has total
proven coalbed methane reserves of
36.8 trillion cubic meters, and natural
gas reserves of 38 trillion cubic me-
ters. The country plans to boost its
annual production of coalbed meth-
ane to 10 billion cubic meters in
2010, from around 100 million cubic
meters in 2005.
Chinese Press Reports on CMM
and CBM industry. According to a
September 2, 2006 article, about
90% of the 1,300 taxi cabs in Shanxi
Province have been refit to burn com-
pressed coalbed methane (CBM) and
gasoline. The city is located about 50
km from the country's largest CBM
exploitation base in Qinshui Basin.
One cubic meter of CBM is equiva-
lent to 1.13 liters of gasoline but re-
tails at less than half the price of
gasoline. Several policy initiatives to
promote CBM have recently been
carried out by the Chinese govern-
ment. On June 19, the State Council,
China's Cabinet, promulgated a 16-
clause guideline offering a series of
preferential policies on land use,
taxation, loans and access of meth-
ane-generated electricity to local
power grids. As a result, financial,
taxation, and land resources authori-
ties are currently preparing meas-
ures, under the direction of the Na-
tional Development and Reform
Commission (NRDC), to put the
guidelines into practice. One of the
goals of such legislation is to encour-
age greater foreign investment in the
CBM industry. To date, China United
Coalbed Methane Corporation
(CUCBM) has 27 contracts for CBM
exploitation with companies such as
the United States' Chevron and other
foreign companies in Britain, Canada,
and Australia. On April 5, CUCBM
signed a cooperative contract with
Orion Energy International to join into
a Product Sharing Agreement (PSA)
for exploitation of CBM resources in
Shanxi Province. For the entire arti-
cle see http://www.chinadaily.com.cn/
china/2006-09/02/content 679951 .htm
New CBM and Coal Discoveries to
Power Botswana. As reported in the
African Echo News, large reserves of
coalbed methane gas as well as coal
itself have been discovered in Bot-
swana. Both methane and coal are
potential energy resources and could
curb the constant power shortages
being experienced in the region.
Huge reserves of coalbed methane
gas discovered in Kodibeleng (central
Botswana) have raised prospects of
electricity generation for both local
use and export in the region now
reeling under shortages. Explorations
made by the Kalahari Gas Corpora-
tion, which has been producing gas in
the region, indicate there is over 90
million tons of coalbed methane in an
area of 50,000 sq/km. In terms of
coal reserves, Morupule, a coal min-
ing company has recently discovered
over 200 billion tons of coal in Bot-
swana. The company intends to be
producing an average of 5 million
tons annually until 2010 when it could
expand production. Botswana Power
Corporation (BPC) has set a target of
400 to 1,200 megawatts of electricity
generated from coalbed methane and
coal within a short period to offset the
looming power shortages in the re-
gion.
Zimbabwe Explores Gas Plants.
Exploration of coalbed methane natu-
ral gas reserves in Zimbabwe could
soon become a reality, after highly-
placed government sources said a
global oil conglomerate was mulling
prospects of recovering the resource
and building gas-energy plants in the
country. The venture, if successful,
will not only see production of elec-
tricity at the proposed gas-energy
plants; but will result in the production
of synthetic fuels that will go a long
way in alleviating the current fuel cri-
sis that has threatened to cripple Zim-
babwe's industries. The source, iden-
see INT'L NEWS, page 10
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Fall 2006
Page 9
COALBED METHANE EXTRA
— Domestic —
Researchers Hope 'Bugs' Can
Speed Up Coalbed Production.
Researchers at Argonne National
Laboratory, with help from the Mon-
tana Bureau of Mines and Geology,
are studying whether microbes can
be manipulated by science to expand
the life of coalbed methane wells in
the Powder River Basin of Montana
and Wyoming. As reported in the
Billings Gazette, researchers have
been studying whether microscopic
bacteria that naturally break down
organic materials to create methane
can be encouraged to produce the
natural gas faster and for an ex-
tended period. The life of a coalbed
methane well can vary, but some es-
timates are 20 years for wells in the
Powder River Basin. Based on the
large volume of coal in the basin, en-
hancing microbes could extend meth-
ane production by several hundred
years according to some estimates.
Argonne is working on proving its
concept and is planning to file for a
patent this year. Additional research
on anaerobic microbes in the basin
by Luca Technologies, Inc., a pri-
vately held company in Denver, Colo-
rado, suggests that methane produc-
tion can be increased or decreased
by altering the microbes' access to
water or nutrients, or that production
can be halted by exposing the organ-
isms to oxygen or heat sterilization.
Shoal Creek Mine Returns to Op-
eration. As reported in the Mont-
gomery Advertiser, more than 600
coal miners returned to work in Au-
gust at the Shoal Creek mine in Ala-
bama, scene of a fire and roof col-
lapse on February 24, 2006. No one
was injured in the accident that
closed the west Jefferson County
mine. The fire was triggered by meth-
ane. State and federal officials have
cleared the mine to start production,
but mining operations are expected to
be limited because some water still
needs to be pumped out. Daryl Dew-
berry, an international vice president
with United Mine Workers of America,
estimated the mine will be capable of
producing roughly 4,500 tons of coal
a week. Last year, it produced 3.1
million tons of coal, 57,000 tons a
week.
Companies Sue Montana Over
Coalbed Methane Regulations. As
reported in Montana Forum, four oil
and gas companies filed suit against
the Montana Board of Environmental
Review and the Montana Department
of Environmental Quality to invalidate
water-quality standards intended to
protect rivers in the Powder River
Basin from pollution from coalbed
methane development. The compa-
nies - Marathon Oil Co., Marathon
subsidiary Pennaco Energy Inc.,
Nance Petroleum Corp. and Yates
Petroleum Corp. - say water-quality
standards adopted in 2003 and ear-
lier this year are excessively restric-
tive, are not based on science and
violate state law. Marathon officials
said more than 20,000 coalbed meth-
ane wells have been drilled in the
basin and they have not degraded
rivers. The plaintiffs say Montana is
trying to control Wyoming water-
quality standards in violation of Wyo-
ming's sovereignty, the U.S. Constitu-
tion and federal law. The battle over
water-quality standards is being
fought because drilling for the natural
gas found in coal seams requires
pumping to the surface and disposing
of huge volumes of groundwater. The
groundwater in the northern portion of
the basin runs high in sodium. Mon-
tana irrigators say discharges of the
coalbed methane water into rivers
and streams could pollute the water
and damage their soils and crops.
DOE Announces Loan Guarantee
Program for Clean Energy Pro-
jects. The Department of Energy
has issued policy guidelines that will
govern the first round of federal loan
guarantees, totaling $2 billion, for
projects intended to bring new clean
energy technologies into viable com-
mercial use. DOE issued a solicita-
tion announcement August 8 inviting
interested parties to submit project
proposals for the first round that meet
the program's statutory requirements.
The responses are due by November
6. The federal loan guarantee pro-
gram was authorized by Congress in
the Energy Policy Act of 2005. Title
17 of the Energy Policy Act,
"Incentives for Innovative Technolo-
gies," provides federal loan guaran-
tees for 10 categories of clean energy
projects, not to exceed 80% of the
project's total cost. DOE can make
loan guarantees only for projects that
"avoid, reduce, or sequester air pol-
lutants or anthropogenic (man-made)
emissions of greenhouse gases" and
employ new or improved technolo-
gies. The loan guarantee program is
targeted at early commercial use only
and not for basic energy research,
development, and demonstration pro-
grams.
In the guidelines, DOE said the first
round will focus on technologies in
specific areas: biomass; hydrogen;
solar; wind and hydropower; ad-
vanced fossil energy (coal gasifica-
tion); carbon sequestration practices
and technologies; electricity delivery
and energy reliability; alternative fuel
vehicles; industry energy efficiency
projects; and pollution control equip-
ment. More information on the federal
loan guarantee program is available
at http://www.LGProgram.energy.gov/
see DOMESTIC NEWS, page 10
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Fall 2006
Page 10
COALBED METHANE EXTRA
Announcement:
Two New Publications!
Bill Wehrum, USEPA Assistant Administrator for Air and Radiation, wrote a guest commentary on EPA's methane re-
duction efforts in the August 2006 issue of World Coal. In addition, CMOP's own Pamela Franklin and Barbora Jemel-
kova wrote an article in the September 2006 issue for World Coal on "The Power of Methane." The article discusses
the global potential of coal mine methane to save energy resources and money.
Int'l NeWS from pages
tified by The Southern Times
(Namibia), said the company was
currently evaluating cost-effective
methods of recovering the natural
gas before committing themselves to
the project. Zimbabwe has an un-
known quantity of CBM natural gas
reserves, but estimates pit Zim-
babwe's reserves as the largest in
sub-Saharan Africa, and significantly
larger than South African reserves
estimated at 825 billion tonnes. The
gas-energy plants, when constructed,
will be responsible for the production
of electricity for Zesa Holdings, which
is the sole provider of electricity in the
country.
Riversdale Reports Successful Ex-
ploration at South African Colliery.
Australia-listed Riversdale Mining
said in a statement that its explora-
tion at the Zululand Anthracite Col-
liery (ZAC) in South Africa indicated
"new and substantial sources" of an-
thracite at two blocks being explored.
Riversdale is the operator and owns
74% of ZAC, located in northern
Kwazulu-Natal province of South Af-
rica. ZAC is a former BMP Billiton
operation. A number of gassy aban-
doned anthracite mines are located in
this area, tv
NeWS from page 9
Sharpe Resources Acquires WV Coal-Gas Rights. As reported on
MarketWire, Sharpe Resources Corporation has closed an option
agreement to purchase a 100% interest in the coal and coal gas rights
to approximately 17,000 acres in Preston County, West Virginia. The
purchase option involves several payments including $250,000 to ex-
ercise the option to purchase. A final payment of $100,000 is to be
paid within 180 days of the purchase option agreement date. The
property involves approximately six (6) separate coal seams to include
the Bakerstown, Upper Freeport, Lower Freeport, Upper Kittanning
and Lower Kittanning followed by the deeper Clarion coal seam. Some
of the Upper Freeport coal has been mined previously on this property.
Sharpe has completed an evaluation of the coal resources on the
property with the help of an independent coal resource consulting firm.
This property offers an excellent opportunity for development of a
large coalbed methane (CBM) program encompassing the ability to
drill and complete a several hundred well drilling program. Additionally
the coal resources are potentially mineable, as indicated some of
these coal resources have been mined previously. The coal gas po-
tential will involve the initial drill testing of test wells on the property
over the next 6 months in an effort to establish methane production
from the deeper coal seams to include the Upper and Lower Kittan-
ning seams. The Company is evaluating the possibility of acquiring
additional coal resource acreage in this area, property that adjoins
Sharpe's current land position. (£
CMOP Contacts
Address inquiries about the Coalbed Meth-
ane Extra or about the USEPA Coalbed
Methane Outreach Program to:
Pamela Franklin
Phone: 202-343-9476
E-mail: franklin, pamela@epa.gov
Barbora Jemelkova
Phone: 202-343-9899
E-mail: jemelkova. barbora@epa.gov
Jayne Somers
Phone: 202-343-9896
E-mail: somers.jayne@epa.gov
Our mailing address is:
U.S. Environmental Protection Agency
Coalbed Methane Outreach Program, 6207J
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Visit our Web site at:
www.epa.gov/coalbed
www.methanetomarkets.org
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