How is natural gas from coal found?

Most aspects of NGC exploration are no different from exploration for conventional natural gas. Because of NGC's co-occurrence with coal, however, the targeted coal seam locations and areal extent are typically well known due to coal assessments or well log records obtained from drilling wells targeting conventional reservoirs. As a result, "exploration" for NGC largely involves simply drilling to delineate and evaluate the productivity of known coal deposits.

Where is natural gas from coal found?

NGC is present wherever coal is found, and because coal is found in great quantities throughout the world, NGC may be one of the most abundant energy sources. Currently, the United States is the largest producer of NGC, with production of 49.7 billion cubic metres in 2007. Daily production in the U.S. amounts to 136.1 million cubic metres or about 9.2 per cent of U.S. natural gas production. NGC reserves are estimated at 620 billion cubic metres or approximately 9.2 per cent of total U.S. natural gas reserves. NGC is also produced in Canada and Australia with development projects underway in the United Kingdom, China, Colombia, India and the Ukraine.

NGC potential in Canada

Although NGC exploration has been ongoing in the U.S. since the late 1970s, it did not begin in Canada until the mid 1990s. Exploration and development activity focussed initially on Alberta and British Columbia and, more recently, in Nova Scotia. Significant commercial success was not achieved until late 2001.

In Alberta, coalfields are found in the southern half of the province. The Canadian Society for Unconventional Gas estimates Alberta has up to 14.2 trillion cubic metres of NGC in place, and economic reserves of 24.3 billion cubic metres at year-end 2007. At that time, there were approximately 10,070 wells in Alberta producing a combined total of 20.9 million cubic metres of NGC per day.

The British Columbia Ministry of Energy, Mines and Petroleum Resources estimates British Columbia has 2.8 trillion cubic metres of NGC in place in 14 separate coalfields. As of year-end 2007, 87 test wells had been drilled, but commercial production was not expected until 2009.

Nova Scotia has three major coalfields that may contain more than 46 billion cubic metres of NGC. Some testing has been conducted in two of the basins, but there is no commercial production.

The National Energy Board and TransCanada Pipelines estimate the future production of NGC in Canada will be two billion cubic feet per day in 2014 and three billion cubic feet per day in 2024, or about 12 to 18 per cent of current Canadian natural gas production.

In its publication, Canada's Energy Future - Reference Case and Scenarios to 2030, the National Energy Board presents a reference case and three possible scenarios regarding energy demand, production and trade to 2030. The reference case and the three scenarios, as they pertain to NGC are summarized in the following table.

Source: national Energy Board, Canada's Energy Future - Reference Case and Scenarios to 2030