Abstract

This paper presents a review of the actual production, sales, and economic data from two production, sales, and economic data from two production areas with 52 wells developed by a production areas with 52 wells developed by a joint coal industry gas industry effort owned equally by Jim Walter Resources, Inc. (JWR). a subsidiary of Jim Waiter Corporation of Tampa, Florida and Enhanced Energy Resources, Inc. (EER), a Subsidiary of Kaneb Services, Inc. of Houston, Texas. The unique reservoir characteristics of the coal environment are described in brief, a comparison of actual methane production from coal with computer model predictions is presented. and the capital and operating costs are discussed with specific emphasis on the economic results.

This information differs from similar previous work in that economic vitality is now apparent whereas previous inquiries were essentially restricted to the technical reservoir engineering characteristics and the physical capability of coal to desorb (produce) methane. There are a number of published papers on this important technical aspect several papers on this important technical aspect several of which are references for this presentation.

Production Area 1 (31 well production area) has been generating an operating profit for the past 21 months. Profits have increased substantially past 21 months. Profits have increased substantially in the past year as a result of the completion of an 8" transmission line and reduced operating costs. initial production commenced in late 19/9. A five well pilot project was evaluated for approximately two years before commercial development commenced in late 1981. A total of 31 wells were drilled by mid-1982. First sales commenced in February of 1982. Production Area II drilling commenced in January of 1983 with initial sales in March of 1983.

The economic viability is demonstrated based on actual operating profits over the past twenty-one months and current experience with respect to improvements in operational techniques and costs. These data are applied to the computer forecasts of long term deliverabilities for projections of expected economic performance.

Introduction

Although coal has been used as an energy Source since prehistoric times, the vast coal reserves in the United States (approximately 26 percent of the worlds known coal reserves) have taken on added significance as a clean energy source with the successful extraction of methane from coal seams through vertical well bores.

During the process of coalification considerable quantities of gases are evolved from the indigenous carbonaceous material. These gases include methane and heavier hydrocarbons carbon dioxide, nitrogen, oxygen, hydrogen, and helium. The primary constituents are methane and carbon dioxide. These gases have been observed in coal mines and the emmission of methane from coal beds has created problems in mining coal since the inception of problems in mining coal since the inception of the industry. In many cases the presence of methane can cause the cessation of mining operations. Regardless of the range of severity, methane presence in coal mines is detrimental to safety, increases mining costs, and reduces efficiency of mine production. Quantities of methane and air in proper production. Quantities of methane and air in proper proportions (5 to 12% present methane) result in proportions (5 to 12% present methane) result in explosive mixtures. It is the ignition of these mixtures that cause the disastrous explosions in coal mines. Concurrently, however, methane being the principal constituent of natural gas offers a potentially large supply of energy for traditional residential, commercial and industrial markets.

Historically mines are engineered to vent as much methane as possible. According to the U.S. Department of Energy (DOE) estimates, in excess of 25u million cubic feet (MMcf) of methane gas is vented daily as a routine safety measure for underground mining operations. However, this vented methane from active mines is only a small percentage of the potentially producible methane percentage of the potentially producible methane available from properly developed vertical well programs. An alternate to venting is to reduce programs. An alternate to venting is to reduce the coal extraction rate. Both solutions are expensive and wasteful.

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