1 

## DRAFT
TECHNICAL/ECONOMIC PROFILES OF MAJOR PRODUCING COALBED METHANE BASINS IN THE

UNITED STATES SAN JUAN BASIN

Introduction The San Juan Basin covers approximately 22,000 square miles in southwestern Colorado and northwestern New Mexico, Figure 1. The basin extends across mountainous terrain of public property and tribal reservat ions.

Figure 1. Areal Extent of the San Juan Basin 1

The coal bed methane (CBM) resource within this basin i s contained within the upper cretaceous age Fruitland and Menefee coals, Figure 2.

1 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/fs/fs-147-02/ )23 Figure 2. San Juan Basin Stratigraphic Column

Source: Advanced Resources International, Incorporated

The San Juan Basin’s Fruitland coals range from 3,100 feet deep (to the base of the formation) to 6,000 feet deep. The coals are shallowes t in the central “fairway”, deepening to the north and south. Net Fruitland coal thicknes s ranges from 50 to 90 feet in the central and northern portions of the basin to 10 to 30 feet in the outlying areas.4

Individual coal beds are larger and more contiguous in the Fruitland fairway than the peripheral areas, especially to the southwest of the fairway. 2 The San Juan Basin has been one of the longest-producing a nd profitable CBM basins in the world. The first well targeting CBM was dr illed in 1977 by Amoco. By 1991, 2,032 wells were producing 270 billion cubic feet (Bcf). As o f the end of 2009, the CBM play in the basin is mature, having produced nearly 16 tri llion cubic feet (Tcf) to date. The high productivity CBM wells in this basin provided the motivation for the expanded CBM play activity in the coal basins of the U.S and worldwide.
The success of the basin is the result of favorable co al seam thickness, good permeability and gas content, existing over a large area. Development of the coals for methane was assisted by extensive drilling in previous decades into the gas-containing Pictured Cliffs sandstone below the coals, which resul ted in an in-place infrastructure to handle the gas.



### Resource Potential The USGS estimates that San Juan Basin coal seams con tain over 24 Tcf of CBM resources, of which the majority is contained within th e Fruitland coal (98% of the total). 3 Based on in-depth studies undertaken by Advanced Resources, t he Fruitland coals in the
basin are estimated to hold on the order of 46 Tcf of tec hnically recoverable CBM

resource. 

### Development/Production History and Trends Well Drilling CBM well drilling in the San Juan Basin peaked in 2006, when 658 C BM wells were drilled, and has been steeply declining since. An est imated 300 CBM wells were drilled in 2009, down from 414 in 2008, Figure 3. Much of the early expansion in CBM well drilling was dri ven by development of the core area of the Fruitland coal “fairway.” Today, the well drilling in the basin is predominately in the southern and other extensions of the p lay.

2 U.S.G.S. Professional Paper, 1625-B Geologic Assessment of Coal in the Colorado Plateau: Arizona, New Mexico and Utah. Chapter Q. 2000 3 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/fs/fs-147-02/ )5 Figure 3. Coalbed Methane Well Drilling in the San Juan Basin

0 100 200 300 400 500 600 700

1997 1999 2001 2003 2005 2007 2009Wells Drilled/Year

Sources: IHS Inc. ( http://www.ihs.com/energy-solutions/index.htm ), and HPDI, Inc. ( http://www.hpdi.com/ )

Production CBM production from the San Juan Basin had been in a mode rate decline since the late 1990s, where production approached 1 Tcf per year. San Juan Basin production has remained close to 800 Bcf/year in 2007 and 2008, Figure 4. Figure 4. Coalbed Methane Production in the San Jua n Basin

0 200 400 600 800 1,000 1,200

1997 1999 2001 2003 2005 2007 2009 (e)Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )6



### Market/Access/Environmental Considerations Resource Access Based on the most recent federal lands resource charac terization, 4 an estimated
50% of CBM resource in the San Juan Basin underlies federa l lands. An estimated 5% of
the CBM resource in the basin is off limits to all de velopment and production, and another 14% is subject to federal leasing restrictions th at limit development during certain months of the year.
Market Access A well developed network of gathering systems and pipelines pr ovide ready
market access for San Juan Basin CBM Production. Much of the gas produced in the basin currently trades through the Blanco Hub and predominan tly services demand in southern California. Although its business location is i n northern New Mexico, the Blanco Hub is a primary provider of market center services to pipelines and producers located in southwestern Colorado part of the basin. Some of the gas produced in the basin is directed through the Waha area hubs. Due to its dista nce from the major gas market centers, the Blanco Hub has a negative basis different ial relative to Henry Hub. Though it will originate in Northern Colorado, the Rocki es Express pipeline could provide more profitable market access for San Juan Basin CB M by creating a direct route to major demand centers in the east.
Environmental Considerations Some of the development challenges encountered in the ba sin include: (1) altitudes of 5,000–7,000 feet, (2) high produced water salinity nec essitating disposal wells, (3) in a few reservoirs, desorbed methane conta minated with 4–6% carbon dioxide (CO 2 ), (4) environmental concerns in a national forest, an d (5) difficult access to remote
locations. The quality of CBM produced water varies throughout the San Juan basin. In the northern areas, freshwater influx results in relative ly high quality, low salinity produced

4 All characterizations of CBM resource potential underl ying federal lands included in this report are based on U.S. Department of Interior, Bureau of Land Managem ent, Scientific Inventory of Onshore Federal Lands' Oil and Gas Resources and the Extent and Nature of Restricti ons or Impediments to Their Development — Phase II Cumulative Inventory, prepared by Advanced Resources International, 2006 ( http://www.blm.gov/epca/ )7

water. The CBM produced water in the central areas of the Fruitland coal fairway can be brackish (total dissolved solids (TDS) levels of 20,000 ppm) . However, in all areas, 95% of produced water is reinjected into deep disposal zones in t he basin; the remainder is evaporated. 5 A final Environmental Impact Assessment (EIA) has recent ly been issued for the Northern (Colorado) portion of the basin, which could open up areas of the basin for new exploration and drilling. 6 In April, 2010, the Bureau of Land Management (BLM) and conservation groups settled an eight-year dispute over a ma nagement plan for nearly 10,000 natural gas wells in the basin. 7

5 Cox. D.O., Stevens, S.H., Water Disposal From Coalbed Methane Wells in the San Juan Basi n , SPE Paper No. presented at the SPE Annual Technical Conferen ce and Exhibition, 3-6 October 1993, Houston, TX. 6 http://www.fs.fed.us/r2/sanjuan/projects/ea/nsjb/feis/fei s.shtml 7 http://www.huffingtonpost.com/2010/04/27/san-juan-basin-drilling-d_ n_554337.html8 

## POWDER RIVER BASIN

Introduction The Powder River Basin CBM play is located in northeas tern Wyoming and southeastern Montana, Figure 5, consisting of thick coals of sub-bituminous rank. It is an elongated basin of trending from the northwest to the sout heast, bounded by the Black Hills on the east and the Big Horn Mountains on the we st. The CBM play covers 12,000 square miles and encompasses parts of seven counties in tw o states.

Figure 5. Outline and Location of the Powder River Basin

Source: Advanced Resources International, Incorporated9

The coalbed methane is contained in Tertiary-age Fort U nion Formation coal seams, such as the Anderson, Wyodak, Big George and deeper coals (Figure 6). The main characteristic of the basin is the extraordinary thicknesses of individual seams; the record coal seam thickness reported in the United States is a 220 foot thick seam near Bu ffalo, Wyoming in the Wasatch formation (Eocene). 8 Another distinguishing characteristic is the shallow depth of the coal seams in the basin; most of this resource is at a depth of 2,500 feet or less. Although the basin’s potential as a large CBM resource was recognized more than two decades ago, its low-rank coals discouraged development. By the mid-1990s however, activity increased rapidly as the geology and reservoir propertie s of the Powder River Basin CBM play were beginning to be understood. To date, an estimated 3.1 Tcf of CBM has been recovered
from this basin. In summary, the factors favoring CBM production in the P owder River Basin are the thick coal seams, high permeability, shallow depths, and co rrespondingly low drilling and completion costs. Unfavorable characteristics are low -rank coals, low methane content of coals, water disposal, and problems with water rights.



### Resource Potential The USGS estimates that Powder River Basin coal seams contain over 14 Tcf of CBM resources, with the Upper Fort Union Formation containing 85% of the total (about 12.1 Tcf). Coalbed-gas resources of the Wasatch Formation were ass essed at a mean of about 1.9 Tcf, and
those in the Lower Fort Union-Lance were assessed at a mean of about 0.19 Tcf. 9
Advanced Resources estimates that Powder River Basin c oal seams contain 78 Tcf of CBM resources in place. 10 Under state-of-the-art technology, which can produce fr om multiple coal seams using a single well, an estimated 52 Tcf of CB M resources could be technically recovered. Over 92% of this resource exists in Wyoming and is concentrated in the Big George coal horizon, the largest and most regionally extensive of the multiple coals that exist in the
basin.

8 Larsen, V.E.: "Preliminary Evaluation of Coalbed Methan e Geology and Activity in the Recluse Area, Powder River Basin, Wyoming," Quarterly Review of Methane from Coalseams Technology (June 1989) , Nos. 3 and 4, 2- 10 9 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/dds/dds-069/dds-069-c/ ) 10 Kuuskraa, V., Van Leeuwen, T. Multi-Seam Well Completion Technology Implications for Powder Riv er Basin Coal Bed Methane Production: 2008 Update. Contract No. DE-AC26-04NT41817, 200810 Figure 6. Powder River Basin Stratigraphic Column

Source: U.S. Geological Survey



### Development/Production History and Trends Well Drilling After reaching a peak of over 3,500 wells drilled in 2001, well dri lling in the Powder River basin has been between 2,000 and 2,500 wells per year fo r the past 6 years, Figure 7.11

Figure 7. Coalbed Methane Well Drilling in the Powd er River Basin

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

1997 1999 2001 2003 2005 2007 2009Wells Drilled/Year

Sources: IHS Inc. ( http://www.ihs.com/energy-solutions/index.htm ), and HPDI, Inc. ( http://www.hpdi.com/ )

Production Production from the Powder River Basin increased rapidly between 1997 and 2020, growing from below 100 Bcf/year to over 300 Bcf/year over t his time period, Figure 8. Production grew more slowly between 2001 and 2006 as produced water issues limited new drilling. As drilling resumed, production increased again and i n 2008 was 572 Bcf/year



### Market/Access/Environmental Characteristics Resource Access Based on the most recent federal lands resource charac terization, an estimated 43% of
CBM resource in the Powder River Basin underlies federal lands. Of this, an estimated 6% of
the CBM resource in the basin is off limits to all de velopment and production and another 21% is subject to federal leasing restrictions that limit develop ment during certain months of the year.12 Figure 8. Coalbed Methane Production in the Powder River Basin

0 100 200 300 400 500 600 700

1997 1999 2001 2003 2005 2007 2009 (e)Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )

Market Access The Cheyenne Hub originally began operations in 2000 to suppo rt the growing need for natural gas transportation out of the Powder River Basi n and to provide trading services for eastern Wyoming and northern Colorado area producers and o ther market makers. However, as production from the basin continued to increase, access t o markets for Powder River Basin CBM was limited by a lack of pipeline capacity and unfavorable basis differentials. In November 2009, Kinder Morgan completed the Rockies Express Pipeline, providi ng Rocky Mountain gas access to Midwestern markets. This pipeline is one of the largest pipelines ever constructed in the United States; stretching 1,679 miles from northwestern Colo rado to eastern Ohio, capable of transporting 1.8 Bcf per day.
Environmental Considerations The volume of water produced in association with CBM gas production in the Powder River Basin is significant. 11 Depending on quality, this water is either surface discha rged, reinjected, or sometimes put to other beneficial uses. F or example, water from the Fort Union

11 U.S. Department of Energy, National Energy Technology L aboratory, The Economics of Powder River Basin Coalbed Methane Development , Prepared by Advanced Resources International, Inc., Jan uary 2006 ( http://www.fossil.energy.gov/programs/oilgas/publications/co albed_methane/PRB_Coalbed_Methane_Developmen t.html )13

Formation, a major CBM formation, supplies municipal wa ter to the city of Gillette. TDS levels in the water produced from these coal beds often meet th e water quality criteria for drinking

water. Nonetheless, potential environmental impacts from CBM oper ations can be experienced, and include: reduced flow or loss of domestic water wells, mortality and reduced growth and vigor of vegetation, erosion, soil compaction, and los s of topsoil. 12 Nearby farming and ranching operations that rely on source water for irrigation an d water operations are particularly sensitive to increases in salinity and sodicity, if and/or when t hey occur. Waters with TDS levels over 500 mg/L and sodium adsorption ratios (SARs) over 6 (chara cteristics often associated with CBM waters) have decreasing utility for cropland irrigation an d other agricultural and wildlife uses. In addition, many citizens in the Powder River Basin are c oncerned about the potential loss of drinking water.

12 http://www.blm.gov/wy/st/en/info/NEPA/bfodocs/prb_eis.h tml14 

## APPALACHIAN BASIN

Introduction The Mississippian and Pennsylvanian aged coals of the Appalachi a Basin are located over a large geographic area in Virginia, West Virginia, Pennsylvania, Ohio, Kentucky, and Tennessee, Figure 9. The basin is often considered in tw o distinct parts:

• The Northern Appalachian basin (Figure 9a), occupying approxim ately 44,000 sq miles in West Virginia, Pennsylvania, Ohio, Kentucky, and Maryland. Residing from outcrop to 2,000-feet deep, the Pennsylvanian Age coals in the basin ar e shallower than its counterparts to the south, the Central Appalachian and Bla ck Warrior basins. The important seams in the Northern Appalachian basin lie a bove the Pottsville formation, which contains the seams of the Central Appalachian an d Warrior basins. 13

• The narrow 23,000-square mile Central Appalachian basin (Figur e 9b), which extends over portions of West Virginia, Virginia, Kentucky, an d Tennessee in a northeast to southwest direction with the area of most promise and highest gas content near its

center. 14 The coals are primarily commercially productive in South western Virginia and Southern West Virginia in the Pocahontas Basin. Coalbed development in the Central Appalachian Basin occur red quickly after 2000. CBM development in the Northern Appalachian Basin has lagged that in many other areas because of insufficient reservoir knowledge, inadequate wel l completion techniques, and unresolved CBM ownership issues revolving around whether the gas is owned by the mineral owner or the oil and gas owner. Because of the extensive mining in the area, the coals a re under-pressured and produce less water than many other basins, though the chloride co ntent and total solids content tend to be higher. Because the coals are shallower, more under pre ssured, and generally lower rank, their gas content is lower at 150–200 scf/ton.

13 Byrer, C.W., Mroz, T.H., and Covatch, G.L.: "Coalbed Methane Production Potential in U.S. Basins," Journal of Petroleum Technology (July 1987) 39, No. 7, 821-834 14 Hunt, A.M. and Steele, D.J.: "Coalbed Methane Developm ent in the Northern and Central Appalachian Basins-- Past, Present and Future," Proc., Coalbed Methane Symposium , Tuscaloosa, Alabama (May 1991) 127.15 Figure 9a. Northern Appalachian Basin 15

Figure 9b. Central Appalachian Basin

15 Limerick, Samuel H., Coalbed Methane in the United State s: A GIS Study, Search and Discovery Article #10066 (2004), adapted from a poster presentation at AAPG Annual Meet ing, Dallas, Texas, April 18-21, 2004)16

In the Central Appalachian Basin, mining in the basin ha s tended to reduce the amount of water that needs to be removed to achieve gas production. Gas content and permeabilities tend to be similar to the Warrior basin (see below), but both pr operties are higher than the Northern Appalachian. The Pennsylvanian Age coal generally ranges from high-A to low-volatile bituminous, a higher rank than accorded its northern count erpart. A generalized stratigraphic column of the Central Appalachi an Basin is shown in Figure
10. Figure 10. Generalized Stratigraphic Column -- Centr al Appalachian Basin



### Resource Potential In 2004, the USGS estimated that 8.4 Tcf of CBM was technic ally recoverable in the West Dunkard and Pocahontas formations in the Appalachian basin. 16 These are the only two
coal bed formations that the USGS has assessed to date in the basin, with the Pocahontas formation containing 3.6 Tcf, and the West Dunkard containing a bout 4.8 Tcf. Advanced

16 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/of/2004/1272/ )17

Resources estimates that 9.3 Tcf is technically recover able from these formations, considered over a comparable geographical area.


### Development/Production History and Trends Well Drilling Drilling in the Appalachian Basin was steady at between 250 and 300 wells per year between 1997 and 2003, with one little increase in 2001. Beginning in 2004, well drilling began to increase, Figure 11, peaking in 2006 at over 600 wells. Most o f the drilling is in the Central Appalachian Basin. Drilling is still expected to remain hi gh in the basin even as the CBM

resource matures. Figure 11. Appalachian Basin Well Drilling

0 100 200 300 400 500 600 700

1997 1999 2001 2003 2005 2007Wells Drilled/Year

Sources: IHS Inc. ( http://www.ihs.com/energy-solutions/index.htm ), and HPDI, Inc. ( http://www.hpdi.com/ )

Production In conjunction with increased well drilling after 2003, product ion also has seen a steady rise, Figure 12. Production reached 140 Bcf/year in 2008, up from 40 Bcf/year in 1997. As drilling continues, production is expected to continue to rise , again with the focus of activity in the Central Appalachian Basin.18 Figure 12. Appalachian Basin Production

0 20 40 60 80 100 120 140 160

1997 1999 2001 2003 2005 2007Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )



### Market/Access/Environmental Characteristics Resource Access Only 2% of the acreage in the Appalachian Basin is classi fied as federal lands, and presumably, about 2% of the resource potential underlies f ederal lands. Overall, about 1% of the total acreage is inaccessible and 1% is accessible with restrictions on drilling. A small portion of the resource also underlies state government lands.
Market Access The Appalachian Basin is favorably located near major pi pelines transporting gas to northeastern markets. The Basin is also in close pro ximity to the Dominion South Point Hub. Producers typically benefit from a negligible or even slightly positive basis differential.
Environmental Considerations Like other Eastern basins, the Appalachian basin coal se ams generally produce waters that have higher concentrations of chlorides and dissol ved solids than produced water from most western basins, which preclude them from most beneficial uses. The produced water quality in the basin can be highly variable, but typically contains TD S levels above 10,000 ppm TDS, and can be high in metals, sulfur and arsenic.19 

### RATON BASIN
Introduction The Raton Basin is located in the southeastern corne r of Colorado and spans into the northeastern corner of New Mexico, Figure 13. It is one o f the smallest of the coal basins, covering 2,200 square miles extending from the northeastern New Mexico border and the
southeastern Colorado. The basin is bounded on the nort h by the Wet Mountains and bounded on the west by the Sangre de Cristo Mountains. Altitudes of 9,000 feet are reached in the basin. Figure 13. Raton Basin 17

Late Cretaceous and Paleocene coals in the Raton basi n are found in the Vermejo and Raton formations. Below the Vermejo is the Trinidad sa ndstone. The low-volatile bituminous coal exists in seams of 14-foot maximum thickness, averag ing 3 to 8 feet in the Vermejo
formation and 12-foot maximum thickness in the Raton form ation; generally the seams are thin,

17 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/fs/2005/3027/508fs3027.html )20

but they may be numerous for a given well. As many as 40 seams exist in these formations, with a cumulative thickness of 90 feet from outcrop to a depth of 4,000 feet. Most seams are lenticular
and discontinuous. 18 The generalized stratigraphy of Cenozoic and Mesozoic unit s in Raton basin is shown in Figure 14. Figure 14. Generalized Stratigraphic Column, Central & Northern Raton Basin 19

18 Stevens, S.H.: "Raton Basin-Colorado and New Mexico," Quarterly Review of Methane from Coalseams Technology (August 1993) 11, No. 1, 33-36. 19 Worrall, John, “Preliminary Geology of Oakdale Field, Northwest Raton Basin, Huerfano County, Colorado,” Adapted from Transactions, AAPG Southwest Section Conve ntion, Ruidoso, New Mexico, June 6-8, 200221



### Resource Potential A 2004 USGS assessment of undiscovered continuous resources estimates that 1.59 Tcf of recoverable resources are contained in the Raton (0.61 Tcf) and Vermejo (0.98) Tcf)
Formation coals in the Raton basin. 20 Advanced Resources estimates 8.2 Tcf is technically recoverable from a similar geographical area.


### Development/Production History and Trends Well Drilling Drilling in the Raton Basin increased steadily from 1998 to 2007, peaking at 570 wells, after which drilling has started to decline (Figure 15). Figure 15. Raton Basin Well Drilling

0 100 200 300 400 500 600

1997 1999 2001 2003 2005 2007Wells Drilled/Year

Sources: IHS Inc. ( http://www.ihs.com/energy-solutions/index.htm ), and HPDI, Inc. ( http://www.hpdi.com/ )

Production Similarly, production in the Raton Basin increased ste adily from 1998 to 2007, peaking at over 140 Bcf year (Figure 16), a level that should be mainta ined into the foreseeable future.

20 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/fs/2005/3027/508fs3027.html )22 Figure 16. Raton Basin Production

0 20 40 60 80 100 120 140 160

1997 1999 2001 2003 2005 2007Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )



### Market/Access and Environmental Characteristics Resource Access A significant but unquantified portion of the CBM resource in the Raton Basin underlies federal lands, some of which is inaccessible, and some of which is accessible under development
restrictions.
Market Access Traditionally constrained in terms of pipeline access to gas markets, in 2005, Colorado Interstate Gas Company (CIG), a subsidiary of El Paso Corporation, constructed a pipeline to expand the then existing pipeline system in the Raton Bas in and extend transportation to the panhandle of Oklahoma. Another expansion, in 2008, provides approximately 130 million cubic feet per day (MMcf/d) of additional capacity from the La s Animas County area northward along the Front Range of Colorado to the Cheyenne Hub.
Environmental Considerations Environmental and development challenges encountered in the Raton basin are similar to those in the San Juan basin, including the high altitude of the basin, the sometimes high produced water salinity necessitating disposal wells, environment al concerns related to development on federal land, and difficult access to remote locations.23

However, the coal seams of the Vermejo and Raton form ations often produce water that can meet federal water quality criteria for drinking wa ter. The underlying sandstone beds within the Vermejo and Raton formations, as well as intrusi ve dikes and sills, also contain water of that meets the drinking water quality criteria.24 

## BLACK WARRIOR BASIN

Introduction The CBM industry began in the Black Warrior Basin of Al abama, and has been the source of much of the information and technology that ha s defined this industry. Early research from the Gas Research Institute’s (GRI) Rock Creek fac ility and field data from the many companies in the basin made the process viable there, es pecially for multiple, thin seams that are often individually only marginally profitable. Coal mining in the basin for over 100 years provided a sour ce of geologic and engineering data that gave impetus to early CBM developme nt. Much of this development original was motivated by the fact that the coal mines in the area have experienced safety problems throughout the history of mining there because coa ls in the basin tend to be gassy, and the methane must be degassed in areas before the coal c an be mined. Methane degasification in advance of underground mining bega n in the early 1970s in the basin, and in the late 1970s and early 1980s, concerted effor ts to improve mine safety conditions in deeply buried coal beds by degasification prior to and dur ing mining operations was initiated. At first, vertical ventilation holes were drilled into the Blue Creek coal bed in Alabama, and the gas that was produced from coal beds in advance of mining, or from gob wells drilled into old works after mining, and was vented into the atmosphere The first permit to drill a CBM well for commercial production in the Black Warrior Basin was issued in 1981. The CBM industry in the basin was centered along a Tuscaloosa-toBirmingham axis, driven primarily by an infrastructure of s ervice companies and accessible pipelines already in place to serve conventional natural production in the basin dating back to 1953. In 1983, the Rock Creek research site was established by G RI, followed by the establishment of the Eastern Region Coalbed Methane Re source Center in 1985 at the University of Alabama. From this, the industry grew rapidly in the basin as the decade of the 1980s progressed, creating a boom atmosphere locally in the midst of an oil and gas industry depression
nationwide. The Black Warrior Basin covers an area of about 23,000 squa re miles in Alabama and Mississippi (Figure 17). The basin is approximately 230 miles long from west to east and approximately 188 miles long from north to south. Coalbed met hane production in Alabama is25

limited to the bituminous coalfields of west-central A labama, primarily in Jefferson and
Tuscaloosa Counties. 21 Figure 17. Black Warrior Basin 22

Coal seams in the basin from which methane is commerc ially produced range in depth from 500 feet in the Cobb seams to 4,500 feet in the Black C reek seams. However, the most productive depths are at about 1,500 to 3,000 feet. Individual se am thicknesses run from 1 foot or less to 8 feet with multiple seams occurring over a 1,000-foot interval. Net thickness of coal seams in any well may reach a maximum of 20–30 feet. 23
The coal in Alabama occurs in the Pottsville formation of lower Pennsylvanian Age rock. Four main coal groups occur in the Pottsville formation: C obb, Pratt, Mary Lee, and Black Creek (Figure 18). The coal groups outcrop in the northern part o f the basin. Additionally, a later interest has been shown in the Gwin group above the Co bb and the J-Interval below Black Creek. Rank of the coals is medium- to high-volatile bituminous, the Black Creek group being of

21 "Raton Basin, Colorado and New Mexico," Quarterly Review of Methane from Coalseams Technology (March 1990) 7, No. 3, 6-7. 22 Limerick, Samuel H., Coalbed Methane in the United State s: A GIS Study, Search and Discovery Article #10066 (2004), adapted from a poster presentation at AAPG Annual Meet ing, Dallas, Texas, April 18-21, 2004) 23 "Raton Basin, Colorado and New Mexico," Quarterly Review of Methane from Coalseams Technology (March 1990) 7, No. 3, 6-7.26

higher rank. The coals generally have low ash content, low sulfur content, and high methane content, on the order of 96%, and there are negligible a mounts of carbon dioxide or nitrogen present Figure 18. Generalized Stratigraphic Column – Black Warrior Basin 24

24 Pashin, J. C., 2005, Coalbed methane exploration in thrust be lts: experience from the southern Appalachians, USA: Tuscaloosa, Alabama, University of Alabama, Colle ge of Continuing Studies, 2005 International Coalbed Methane Symposium Proceedings, paper 0519, 14 p.27



### Resource Potential A 2002 USGS assessment of undiscovered continuous resources estimates that over 7.0
Tcf of recoverable resources are contained in the Blac k Warrior Basin. 25 Advanced Resources estimates that 5.1 Tcf is technically recoverable from a comparable area.


### Development/Production History and Trends Well Drilling Drilling in the Black Warrior Basin increased steadily f rom 1997 to 2006, peaking at about 430 wells, after which drilling started to decline (Figur e 19), though drilling is still expected to remain relatively high in the basin. .

Figure 19. Black Warrior Basin Well Drilling

0 50 100 150 200 250 300 350 400 450

1997 1999 2001 2003 2005 2007Wells Drilled/Year

Sources: IHS Inc. ( http://www.ihs.com/energy-solutions/index.htm ), and HPDI, Inc. ( http://www.hpdi.com/ )

Production Production in the Black Warrior Basin has remained in th e 110 to 120 Bcf per year range consistently from 1997 to 2006 (Figure 20), though it may be dif ficult to continue to sustain that level for long into the foreseeable future. .

25 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/fs/2004/3092/fs2004-3092.html )28 Figure 20. Black Warrior Basin Production

80 90 100 110 120 130 140

1997 1999 2001 2003 2005 2007Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )



### Market/Access/Environmental Characteristics Resource Access Similar to the Appalachian basin, about 4% of the acreage in the Black Warrior basin is classified as federal lands, with about 2% inaccessible t o leasing. A small portion of the resource also underlies state government lands.
Market Access Issues Similar to the Appalachian basin, the Black Warrior basin is favorably located near major pipelines transporting gas from the Gulf Coast to northea stern markets, mostly through the dominant Henry Hub.
Environmental A significant factor in establishing the process in the B lack Warrior Basin has been the ground-level treatment and disposal of produced waters. Even though the produced water quality does not meet drilling water standards, typically with TDS levels in excess of 30,000 ppm, the lack of suitable formations to dispose of produced waters, required that processes be developed to treat and surface discharge the produced water. Technolo gy demonstrations and cooperation with government, along with close environmental monitoring, made this successful.29 

## UINTA-PICEANCE BASINS

Introduction Uinta-Piceance Basins are located in northwestern Col orado and northeastern Utah. The Douglas Creek Arch separates the Piceance Basin from th e Uinta Basin. The Wasatch Plateau is included in this province, Figure 21 Figure 21. Unita-Piceance Basin 26

The Piceance basin in western Colorado is an ellipticall y shaped basin divided by the
Colorado River into one-third of the area south of the river (Figure 22). It contains coal of Late Cretaceous Age that underlies 6,570 square miles. The Uinta Basin of northeastern Utah and
northwestern Colorado is a westward extension of the P iceance basin, where the best-tested field
in the basin has been the Book Cliffs field.

26 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/fs/fs-0026-02/fs-0026-02.html )30 Figure 22. Piceance Basin 27

The coal in the Piceance basin is gassy with methan e contents ranging from 440 to 570 scf/ton. Individual seams are 50 feet thick near Rifle, C olorado. Net thicknesses of seams in single wells are 120 feet in the south and 250 feet in the northeast part of the basin. Three primary coal groups exist in the Mesaverde group: Black Diamo nd, Cameo, and Coal Ridge. The Black Diamond coal group is restricted mostly to the nort hern one-half of the basin, the Cameo group across the entire basin, and the Coal Ridge group ab out one-fourth of the basin. 28 In the Unita basin (Figure 23), in the Book Cliffs fiel d, Upper Cretaceous, Mesaverde group coals are the main targets, where cores from tes t wells were analyzed to have a gas content of 443 scf/ton; 25 mines exist in eight coal beds. 29 The Ferron coals within the Ferron sandstone

27 Limerick, Samuel H., Coalbed Methane in the United State s: A GIS Study, Search and Discovery Article #10066 (2004), adapted from a poster presentation at AAPG Annual Meet ing, Dallas, Texas, April 18-21, 2004) 28 Tremain, C.M.: "Coalbed Methane Development in Colorad o," Information Series 32, Colorado Geological Survey, U.S. Dept. of Natural Resources (September 1990). 29 Gloyn, R.W. and Sommer, S.N.: "Exploration for Coalbe d Methane Gains Momentum in Uinta Basin," Oil and Gas Journal (May 1993) 91, No. 22, 73-76.31

are the main targets in the Drunkard’s Wash field. The Fe rron coals range from 1,200–3,400 feet in depth, with an average depth of 2,400 feet. These are hig h-volatile, B bituminous coals. 30 Figure 23. Uinta Basin 31

Although thick seams and good gas content are characteristi cs of the basin, the coal is deep. Permeabilities that fall below 1 md in the northeas tern part of the basin do not provide the

30 Burns, T.D. and Lamarre, R.A.: "Drunkards Wash Project: Coalbed Methane Production from Ferron Coals in East-Central Utah," paper 9709 presented at the 1997 Internationa l Coalbed Methane Symposium, Tuscaloosa, Alabama, 12-16 May. 31 Limerick, Samuel H., Coalbed Methane in the United State s: A GIS Study, Search and Discovery Article #10066 (2004), adapted from a poster presentation at AAPG Annual Meet ing, Dallas, Texas, April 18-21, 2004)32

natural fracture network for commercial flow rates of gas. In the southeast part of the basin, the permeabilities improve because of structural deformation s that have left the rock fractured. In the southeast, the over-pressured nature of the coal improve s gas content. Overall, however, the depth of the basin gives a low permeability, which is its greatest impediment to development.



### Resource Potential A 2002 USGS assessment of undiscovered continuous resources estimates that nearly 2.4
Tcf of recoverable resources are contained in the Unita -Piceance basin. 32 Advanced Resources estimates that 11.3 Tcf is technically recoverable.


### Development/Production History and Trends Well Drilling Drilling in the Unita-Piceance basins peaked in 2001 at 170 wel ls, after which drilling went into sharp decline until 2005, where it appears to be le veling off (Figure 24).

Figure 24. Unita-Piceance Basin Well Drilling

0 50 100 150 200

1997 1999 2001 2003 2005 2007Wells Drilled/Year

Sources: IHS Inc.( http://www.ihs.com/energy-solutions/index.h tm), and HPDI, Inc. ( http://www.hpdi.com/ )

Production Production in the Unita-Piceance basin peaked at 113 Bcf in 2002, following the trend in drilling. Production declined to about 70 Bcf in 2005, where it appears to be leveling off (Figure 25).

32 U.S. Geological Survey, National Oil and Gas Assess ment ( http://pubs.usgs.gov/fs/fs-0026-02/fs-0026-02.html )33 Figure 25. Unita-Piceance Basin Production

0 20 40 60 80 100 120

1997 1999 2001 2003 2005 2007Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )



### Market/Access and Environmental Characteristics Resource Access
Based on the most recent federal lands resource charac terization, an estimated 67% of
CBM resource in the Unita and Piceance basins underlies f ederal lands. An estimated 16% of the CBM resource is off limits to all development and pr oduction and another 41% is subject to federal leasing restrictions that limit development durin g certain months of the year.
Market Access The addition of a new natural gas market center, the Whit e River Hub in western Colorado (owned by a partnership between Enterprise Products Partners, LP and Questar Gas ), now provides natural gas producers in the Piceance and Uinta basins better access to the multiple intrastate and interstate pipelines that now serve the expanding production fields located within the surrounding area.
Environmental Considerations
The Blackhawk Formation and the Ferron coals often me et federal drinking water criteria. For example, groundwater from the Blackhawk F ormation taken at can have TDS levels below 10,000 mg/L. Castlegate Field coal beds have published TDS levels of 5,000 mg/L in production waters. Water at depth in the Piceance Basin appears to be of poor quality.34 

## CHEROKEE/FOREST CITY

Introduction The Western Interior Coal Region comprises three coa l basins, the Arkoma (discussed separately), the Cherokee, and the Forest City Basins, and encompasses portions of Arkansas, Oklahoma, Kansas, Missouri, Nebraska, and Iowa. The Ch erokee Basin begins near the
Oklahoma-Kansas-Missouri border and extends northward al ong the Kansas-Missouri border (Figure 26). The basin is part of the Cherokee Platform Pr ovince, which covers approximately 26,500 square miles in Oklahoma, Kansas, and Missouri. The F orest City Basin covers about 47,000 square miles in Iowa, Kansas, Missouri, and Nebraska. Figure 26. Cherokee Basin 33

33 Limerick, Samuel H., Coalbed Methane in the United State s: A GIS Study, Search and Discovery Article #10066 (2004), adapted from a poster presentation at AAPG Annual Meet ing, Dallas, Texas, April 18-21, 2004)35

The geologic framework and many of the characteristics pertaining to coalbed gas are the same for both the Cherokee Platform and Forest City Ba sins. The big difference is that more development of coalbed gas has taken place in the Cheroke e Platform, and more data are available for better assessing the recoverable coalbed gas potential.
The thickest coal seams in the Cherokee Platform are a ssigned to the Middle Pennsylvanian (Desmoinesian) Cherokee Group, which varies in thickness from 300 to 500 feet. The main coal beds in the basin, is ascending order, are R iverton, Rowe, Weir-Pittsburg, Mineral, Fleming, Croweburg, Bevier, and Mulky. The Rivert on, Weir-Pittsburg, Bevier, and Mulky are the thickest, and the Weir-Pittsburg seam can be as much as 5 ft thick. 34,35 Commercial production in this basin is relatively recent. In a manner similar to the Arkoma basin (see below), low water production rates and hi gh permeability encourage commercial development of the shallow seams (600–1,200 feet deep). Wells were first drilled to develop the coal resource in 1990, although conventional gas- containing-coal gas was produced commercially many years before targeting the coals. In the Forest City Basin, coal-bearing strata are pre sent in the Pennsylvanian Atokan and Desmoinesian Series. In all four States, the coals ar e assigned to the Riverton Formation and the Cherokee, Marmaton, and Pleasanton Groups. The coal beds are relatively widespread and commonly too deep to mine. Drill holes indicate that the c umulative coal thickness may be as much as 22 feet, and individual beds may be as thick as 10 fe et. However, many of the beds are less than 2 feet thick, requiring more expensive, multiple- seam completions for commercial production.



### Resource Potential The somewhat dated 1995 USGS assessment of undiscovered cont inuous resources estimates that nearly 2.4 Tcf of recoverable resources are contained in the Cherokee/Forest City
basins. 36 Advanced Resources estimates that 2.5 Tcf is technicall y recoverable from a similar geographical area.

34 Schwochow, S.D. (ed.): "Cherokee Basin, Kansas and Okl ahoma," Quarterly Review of Methane from Coalseams Technology (April 1992) 9, Nos. 3 and 4, 5. 35 Stevens, S.H. and Sheehy, L.D.: "Western Interior Coal Region (Arkoma, Cherokee, and Forest City Basins)," Quarterly Review of Methane from Coalseams Technology (August 1993) 11, No. 1, 43-48. 36 U.S. Geological Survey, National Oil and Gas Assess ment ( http://energy.cr.usgs.gov/oilgas/noga/assessment_updates_2008.html )36



### Development/Production History and Trends Well Drilling Drilling in the Cherokee/Forest City basins peaked in 2004 at over 400 wells, after which in went into sharp decline (Figure 27).

Figure 27. Cherokee/Forest City Basin Well Drilling

0 50 100 150 200 250 300 350 400 450

1997 1999 2001 2003 2005 2007Wells Drilled/Year

Sources: IHS Inc.( http://www.ihs.com/energy-solutions/index.h tm), and HPDI, Inc. ( http://www.hpdi.com/ ) Production Production in the Cherokee/Forest City basins has contin ued to increase, surpassing 60 Bcf in 2008 (Figure 28).

Figure 28. Cherokee/Forest City Basin Production

0 10 20 30 40 50 60 70

1997 1999 2001 2003 2005 2007Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )37



### Market/Access/Environmental Characteristics Resource Access Most of the land in the Cherokee and Forest City Basin area is privately owned.
Market Access Also, the Cherokee/Forest City Basin area would be an a dvantageous CBM production location because it currently has a network of pipelines in place to transport the gas produced.
Environmental Considerations There are plenty of recognized zones for disposing of wate rs that are produced by the
extraction of the CBM in these basins. Initial water r ates from a individual coal varies from 1 to over 500 barrels a day. Multiple seam completion varies from a mist to over 1,000 barrels a day. The water quality is generally salty to slightly salty throughout most of the basin. The mostly undeveloped Forest City basin is anticipated to have simila r characteristics.38 

## ARKOMA BASIN

Introduction The Arkoma Basin covers about 13,500 square miles along the border of central Arkansas and Oklahoma (Figure 29). The east-to-west trendi ng basin is about 250 miles long and 20 to 50 miles wide. In Arkansas, the province is bounded on th e north by the Ozark Uplift and in Oklahoma it is bounded on the north by the Cherokee Pl atform. Figure 29. Arkoma Basin 37

The three most important coals in the Oklahoma part o f the basin are the Hartshorne, Stigler, and Secor. It has been estimated that 10 individua l seams that are each 1–7 feet thick exist in the Oklahoma part of the basin. The best gas content is reported to be on the order of 700 scf/ton at a 3,000-foot depth in Le Flore County. The Ha rtshorne coal seam is the main target at

37 Limerick, Samuel H., Coalbed Methane in the United State s: A GIS Study, Search and Discovery Article #10066 (2004), adapted from a poster presentation at AAPG Annual Meet ing, Dallas, Texas, April 18-21, 2004)39

600–1,400 foot depth, and with good permeability of 3–30 md. Coals in th e basin are of Pennsylvanian Age. 38



### Resource Potential The somewhat dated 1995 USGS assessment of undiscovered cont inuous resources
estimates that over 2.6 Tcf of recoverable CBM resourc es are contained in the Arkoma basin. 39 Advanced Resources estimates that 6.7 Tcf is technically recoverable from a similar geographical area.


### Development/Production History and Trends Well Drilling Drilling in the Arkoma basin peaked in 2004 at nearly 400 wells (Figure 30).

Figure 30. Arkoma Basin Well Drilling

0 50 100 150 200 250 300 350 400 450

1997 1999 2001 2003 2005 2007Wells Drilled/Year

Sources: IHS Inc.( http://www.ihs.com/energy-solutions/index.h tm), and HPDI, Inc. ( http://www.hpdi.com/ )

Production Production in the Arkoma basin has continued to increase, reaching 67 Bcf in 2007 (Figure 31).

38 Byrer, C.W., Mroz, T.H., and Covatch, G.L.: "Coalbed Methane Production Potential in U.S. Basins," Journal of Petroleum Technology (July 1987) 39, No. 7, 821-834 39 U.S. Geological Survey, National Oil and Gas Assess ment ( http://energy.cr.usgs.gov/oilgas/noga/assessment_updates_2008.html )40 Figure 31. Arkoma Basin Production

0 10 20 30 40 50 60 70 80

1997 1999 2001 2003 2005 2007Bcf/Year

Sources: IHS Inc., ( http://www.ihs.com/energy-solutions/index.htm ), HPDI, Inc. ( http://www.hpdi.com/ ), and the Energy Information Administration ( http://tonto.eia.doe.gov/dnav/ng/ng_prod_coalbed_s1_a.htm )



### Market/Access/Environmental Characteristics Resource Access Most of the land in the Arkoma Basin area is privately owned.
Market Access Issues Even before CBM wells had been drilled, extensive conve ntional gas production occurred
from sands in the Arkoma basin interbedded with coal. C onsequently, a widespread infrastructure for gas production exists in the basin. , the Arkoma Basin area would be an advantageous CBM production location because it currently has a network of pipelines in place to transport the gas produced.
Environmental Considerations There are plenty of recognized zones for disposing of wate rs that are produced by the
extraction of the CBM in these basins.