Natural gas is one of the most rapidly growing forms of energy and has made its presence felt significantly in the global energy market. It has been rapidly catching up with crude oil as a fuel alternative because of its cleaner existence. Natural gas has been able to successfully penetrate the transportation and domestic application markets, thus helping it evolve as the primary global fuel. However, there has been an increased emphasis on the usage of unconventional natural gas sources such as shale gas, tight gas, methane hydrates and CBM owing to the depletion of conventional natural gas reserves.
Coal Bed Methane is an unconventional form of natural gas which is found in coal seams or coal deposits. It is also known as coal seam gas, virgin coal seam methane, or ‘sweet gas’, owing to a lack of hydrogen sulfide. There are different methods of recovering CBM, making it a very stable source of energy. Drilling cost is the major contributor to the overall production cost. Electricity cost, machine maintenance cost and operational costs also contribute to the total cost of production. The leading application area is power generation.
Coal Bed Methane market has seen healthy growth in recent years, and is expected to witness continued growth due to the following factors:
Coal Bed Methane production is expected to be driven by increasing exploration and extraction on a global scale over the next few years.
Methane emissions that result from conventional fuel and coal mining are reduced in this case, thus driving the market.
Governments provide tax incentives to companies undertaking this operation, which again is a big driving factor. CBM is also priced lower than other unconventional natural gases, increasing its market attractiveness.
Growing demand for sustainable fuel in the country in order to reduce reliance on conventional sources of natural gas is expected to be the key driving force for the North American market.
Growing GDP in Asia-Pacific is responsible for the increasing energy demand in the region, with China, India and Indonesia being the prime contributors. Companies have been attracted to invest in this region due to the huge amount of unproven reserves of Coal Bed Methane in these countries.
However, the market is also not without its challenges. The dewatering of a CBM well consumes a lot of time, increasing the overall cost of its development which is a major challenge to this market. The Chinese market has not reached its full potential owing to myriad issues ranging from geological conditions, to conflicting mining rights, to insufficient subsidies and difficulties faced in attracting private capital. Also, doubts still persist regarding the quality, quantity and dispersal of the water from the coal seams.
The U.S. dominates global production, followed by Canada. The Asia Pacific region is expected to be one of the fastest growing markets in the near future owing to an increase in drilling activities, primarily in coal rich countries such as India, Australia, China and Indonesia. In Europe, the United Kingdom also has gathered pace in extraction activities of coal bed methane. Australia has been a major contributor to the market, with coal seam gas exploration a thriving activity, and the industry is aggressively expanding in the New South Wales (NSW) region. Bowen basin, Surat basin and Sydney basin are some of the well-known sites for coal seam gas exploration. India and China are especially showing good promise in terms of coal bed methane reserves and their exploration.
Key players in this market include:
Green Dragon Gas Ltd.
Great Eastern Energy
The market has seen some major developments in the past few years, some of which are:
In September 2019, EssarOil and Gas Exploration and Production (EOGEPL), a business arm of India’s Essar Group, announced that it has readied plans to double the production of coal-seam gas from its Raniganj east block, located in West Bengal, with the Urja-Ganga gas pipeline in the horizon, which would be connecting eastern India users. Through this project, the company plans to increase production to 1 mmscmd, from the current capacity of 0.45 mmscmd. The organization has already invested Rupees 4000 crore into the project.
In November 2018, Strata-X Energy Ltd., headquartered in Colorado, announced that it had received the final approval for its Environmental Management Plan (EMP), thus clearing the path to start their 2-well drilling campaign on the Serowe (located in Botswana) CSG project, over which they hold an area of 4784 sq.km.
In September 2018, China announced plans to build two large bases for the purpose of coal-bed methane production at Shanxi, a northern province with rich coal reserves. This was announced with a view to decrease the country’s dependence on coal as energy provider, while also curbing pollution. By 2020, China has planned to add proven Coal Bed Methane reserves of 420 billion cubic meters, along with 2-3 large bases for coal-bed gas production. The outputs from the two bases are expected to reach 8.3 billion cubic meters in combination.
In September 2017, Green Dragon Gas Ltd. announced that the China NDRC approved a Project Code for the Overall Development Plan on the Greka Chengzhuang Block, which meant that commencement of the Block’s ODP could now take place, along with further development of the acreage.
In-depth report on global coal bed methane market by Grand View Research:
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