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Coalbed Methane Coalbed Methane in in Kansas Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr [email protected] The Chanute Publishing Co, 07/10/2002
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Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr [email protected]

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Page 1: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Coalbed Methane Coalbed Methane inin

KansasKansasPresented to:

Senate Utilities CommitteeMarch 4, 2004

Presented by:Timothy R. [email protected]

The Chanute Publishing Co, 07/10/2002

Page 2: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

OutlineOutline• Background on the Natural Gas Markets• Background on Coalbed Methane (CBM)• Overview of Kansas CBM Activity

– Role of Geological Survey• Impact on Kansas

– Economy• Potential Issues

– Supply Problems– Severed Minerals vs. Surface– Enhanced Coalbed Methane Recovery– Carbon Sequestration

Page 3: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Kansas national population and energy use rankings:Kansas national population and energy use rankings:

Population – 32th (2002)

Total per capita energy – 18th (2000)

Natural Gas Consumption (2002)Natural Gas Consumption (2002)

Residential – 71,002 MMcf

Commercial – 38,812 MMcf

Industrial – 105,400*

Electric Power – 23,126 MMcf

Natural Gas Production (2002) – 453,417 MMcf

*Estimated.

Kansas ProfileKansas Profile

Page 4: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Natural Gas Prices Natural Gas Prices Continue to Be VolatileContinue to Be Volatile

$1

$3

$5

$7

$9

Jan-90

Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

$/M

CF

Industrial PriceCity Gate PriceWellhead Price

Page 5: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Recent Energy PricesRecent Energy Prices

Page 6: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Coalbed Methane Production Coalbed Methane Production from U.S. Basinsfrom U.S. Basins

0

200

400

600

800

1000

1200

1400

1600

1800

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Emerging BasinsAppalachian BasinWarrior BasinSan Juan & Raton Basins

Year

CB

M P

rodu

ctio

n (B

illio

n C

ubic

Fee

t)

EIA 2001 Annual Report, September 2002U.S. Crude Oil, Natural Gas, and Natural Gas Liquids

CBM representsapproximately 10%of US gas reserves

Page 7: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Coalbed Methane ActivityCoalbed Methane Activity

Page 8: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Kansas Coalbed Methane ActivityKansas Coalbed Methane Activity

OIL &GAS FIELDSand

major gas pipelines(�8")

oil oil &gas gas gaspipeline

Bourbon ArchCherokee Basin

Fore

st C

ity B

asinknowncoal bed

gasprojects

Wyandotte

24

9

1

0

1

0

59

9

12314

0

13

116

0288328

86568110

180

7

0

0

14142

07

8

0

7

12

NUMBERof WELLSDRILLEDfor

COALBEDGAS bycounty

(through mid-2003)

25mi 25km

N

Douglas

Franklin

Johnson

LeavenworthJefferson

AtchisonDoniphan

BrownNemaha

Jackson

Pottawatomie

Wabaunsee

Shawnee

Osage

Miami

Linn

Bourbon

Crawford

CherokeeLabette

Neosho

Allen

AndersonCoffey

Woodson

Wilson

MontgomeryChautauqua

Elk

Cowley

GreenwoodButler

Lyon

ChaseMorris

0

24

Page 9: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Unconventional ReservoirUnconventional Reservoir

FracturedReservoir

Micropores

Page 10: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Methane Production fromMethane Production fromMicroporesMicropores

Desorption

Replacement

Page 11: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Time

Conventional Gas andConventional Gas andCoal Bed GasCoal Bed Gas

Vol

ume

per d

ay

PRODUCTION DECLINE

–coalbed gas

–conventional gas

Adapted from Rice, 1997

Page 12: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

–.

Time

Production Stages of aProduction Stages of aCoalbed Gas WellCoalbed Gas Well

–Gas

–Water

Vol

ume

StableProduction

Stage

DewateringStage

DeclineStage

Adapted from Rice, 1997

Page 13: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Kansas Coalbed Methane Kansas Coalbed Methane Monthly ProductionMonthly Production

Page 14: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Neosho County CBM ProductionNeosho County CBM Production

3,585

0

500

1000

1500

2000

2500

3000

3500

4000

1995 1996 1997 1998 1999 2000 2001 2002 2003

Year

Prod

uctio

n M

illio

n C

ubic

Fee

t

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Dol

lars

Mill

ions

at W

ellh

ead

Production (mmcf)Estimated Annual ProductionValueEstimated Annual Value

Estimated Annual Value Assumes Constant Production and Price for Remainder of Year

2003 Production Through November2003 Value through September

Page 15: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

SE Kansas CBM ProductionSE Kansas CBM Production9.06

0

1

2

3

4

5

6

7

8

9

10

1995 1996 1997 1998 1999 2000 2001 2002 2003

Year

Bill

ion

Cub

ic F

eet

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Dol

lars

Mill

ions

Wel

lhea

d

Production (Bcf)Value

Estimated 2003 Annual Value Assumes Constant Production and Price for Remainder of Year

Includes Gas Production for Labette, Montgomery, Neosho and Wilson counties

2003 Production Through November2003 Prices through September

Page 16: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Kansas Gas ProductionKansas Gas Production

30.000

35.000

40.000

45.000

50.000

55.000

60.000

65.000

70.000

75.000

Jan-9

0Ja

n-91

Jan-9

2Ja

n-93

Jan-9

4Ja

n-95

Jan-9

6Ja

n-97

Jan-9

8Ja

n-99

Jan-0

0Ja

n-01

Jan-0

2Ja

n-03

Gas

Pro

duct

ion

(BC

F/M

onth

)

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

Avg.

Wel

lhea

d Pr

ice

($ P

er M

CF)

Production Through November 2003Wellhead Prices through September 2003

Production Through November 2003Wellhead Prices through September 2003

Page 17: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Coalbed Methane ProgramCoalbed Methane Program

Page 18: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Coalbed Methane ProgramCoalbed Methane Program

Page 19: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Coalbed Methane ProgramCoalbed Methane Program

Page 20: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

WeirWeir--Pitt CoalPitt Coal

Page 21: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

United States Carbon Dioxide United States Carbon Dioxide EmissionsEmissions

By Source & Sector)

Commercial16%

Commercial16%

Oil42%Oil

42%

Coal37%Coal37%

Transportation33%

Transportation33%

Residential20%

Industry31%

Industry31%

Natural Gas21%

Other29%

Other29%

Transportation33%

Transportation33%

Electricity38%

Electricity38%

EIA AEO2002

Page 22: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Southeast KansasSoutheast Kansas

214 m tons/yr

1,095

380

552

249

163

CBM

25 Miles

Greenwood Co.

El Dorado Field

“Gol

den

Lane

s”

Salya

rds T

rend

Partially miscible and immiscible CO2 EOR • El Dorado

• Salyards Trend,

Enhanced Coalbed Methane (N2 and CO2)Cement plant gas stream may be best suited for ECBM

Lafarge

Industry

G as

O il & G as

O il

C B M EthanolOil and Gas Fields

RefineryAmmonia

Power

Cement

Page 23: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Cement ProductionCement Production

Dry Kiln Portland Cement ProcessCalcination ProcessCaCO3 > CaO + CO20.51 tons CO2 / ton cement

CO2 and N2 kiln gas mix may be suitable for ECBM with little processing

Page 24: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Landfill GasLandfill Gas

Landfill Gas (LFG) CH4, CO2, NMOC Pipeline

Page 25: Coalbed Methane in Kansas - Kansas Geological Survey · Coalbed Methane in Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu

Kansas CBM SummaryKansas CBM Summary• Expect CBM Production Increase to Continue • Continued Exploration Expected

– Extent Dependent on Outcome of Pilots› Geological Survey Working to Provide Information

– Northward Spread– Significant Impact on SE Kansas Economy– Potential Significant Impact on Kansas Economy

• A Substantial Boost in US Supplies will take Time– US Market Controls Kansas Gas Price – Kansas is Vulnerable to Energy Price Spikes