The Economics of Powder River Basin Coalbed Methane Development
An analysis by Advanced Resources International, Arlington, VA, for the U.S. Department of Energy’s Office of Fossil Energy
Over the past year natural gas prices have risen to extraordinarily high levels reflecting the pressure that increased natural gas demand has placed on domestic natural gas supplies.
A major new source of domestic natural gas is coal seam natural gas, or coalbed methane as it is commonly called. Coalbed methane accounts for 10 percent of all domestic natural gas reserves and, in 2004, accounted for nine percent of U.S. dry gas production. The Powder River Basin in northeast Wyoming has become a major supplier of coalbed methane. Since 2001, coalbed methane production in the Basin has increased 200 percent to 332 billion cubic feet and now comprises almost 20 percent of U.S. annual coalbed methane production.
The present study examines recent data on actual Powder River Basin coalbed methane well production performance, analyzes Powder River Basin coalbed methane development and produced water management costs, and evaluates the impact of these costs on future coalbed methane production in the Basin. The study concludes that the choice of produced water management option has a significant effect on the volumes of coalbed methane that can be economically produced from the Powder River Basin and particularly from the Basin’s Indian Reservation lands.
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