Media awareness campaign about BC's coalbed gas resource



    CALGARY, Aug. 1 /CNW/ -

    
    What is the Canadian Society for Unconventional Gas (CSUG)?

    CSUG facilitates the exchange of information regarding unconventional
    gas.
    We provide factual information to media, government, regulators,
    industry, First Nations and members of the public about:

    -   The challenges surrounding development of unconventional gas
    -   How the industry explores for and produces the resource in an
        environmentally sensitive and economical manner

    We strive to:

    -   Increase dialogue between the unconventional gas industry and the
        federal and Alberta and British Columbia governments
    -   Improve the quality and consistency of communications with
        stakeholders and First Nations in these provinces

    We support:

    -   The development of regulatory protocols and best practices to develop
        unconventional gas in an environmentally, socially and economically
        responsible manner
    -   Appropriate engagement with all stakeholders and First Nations

    We represent 130 member companies and have a wealth of unconventional gas
    information, both technical and non-technical.

    We are pleased to provide the attached information.

    Please contact CSUG for more information, graphics and/or comments
    regarding unconventional gas development in British Columbia.
    

    WHAT YOU SHOULD KNOW ABOUT COALBED GAS DEVELOPMENT IN BRITISH COLUMBIA
    ----------------------------------------------------------------------
    What is unconventional gas? What makes it different from any other
    natural gas?

    Some natural gases are known as "unconventional" because they are more
difficult to develop. The gas is no different than natural gas produced from
conventional reservoirs; rather the means of exploring for and producing it
are what make it "unconventional".
    Unconventional gas can be found in rock formations, such as sandstone,
limestone or shale, and is commonly referred to as "tight gas". These rocks
have extremely low natural permeability - that is, liquids and gases do not
flow easily through them.

    What is Coalbed Gas (CBG)?

    CBG (also referred to as natural gas from coal (NGC) in Alberta) is
simply the natural gas that is present in most coal seams. Sometimes it is
referred to as coalbed methane because methane is the principal component of
natural gas. CBG is created by the natural process that converts organic
matter into coal over time. While a large amount of gas that is generated over
time is expelled from the coalbed reservoir, pressure from overlying rock
strata and/or water within the natural fracture system of the coal seam allows
a portion of methane to be retained within the coal seam through the process
of adsorption.

    CBG is sweet gas that contains no hydrogen sulphide (H(2)S or sour gas).

    CBG requires a couple of things to occur before it will flow to the
wellhead. The coals may first be fractured to open up pathways, and the
reservoir typically needs to be depressured and, in some cases, dewatered, to
allow desorption of gas to occur.
    Like conventional natural gas, CBG is a cost-effective and clean-burning
fuel, with many applications such as home heating. Coalbed gas is the cleanest
form of natural gas and the lowest carbon emitter of any hydrocarbons used for
heating or electricity generation. CBG is a hydrogen rich fuel (comprised of 4
hydrogen molecules and 1 carbon (CH(4)). It is considered to be more
environmentally neutral than oil or coal and requires minimal processing.

    North American History of CBG

    United States

    Pioneering development of coalbed gas (coal bed methane as it is referred
to in the US) began in the early 1950s and little was understood about the
extraction process at this time, particularly as it related to surface
discharge of produced water. Over time, practices and techniques utilized to
produced CBG have improved. Strict regulations and lessons learned ensure that
today's practices protect the environment.

    Canada

    Exploration for CBG began in Alberta in the early 1980s and today, CBG
represents approximately 5 per cent of total Canadian production.
    With more than 11,000 CBG wells drilled to date, significant experience
and technical knowledge has been gained regarding the safe extraction of this
natural gas resource.
    Provinces in Canada have some of the most stringent regulations in the
world which ensure that CBG development occurs in an environmentally and
socially responsible manner.

    ENVIRONMENTAL CONCERNS
    ----------------------
    WELL DENSITY

    Is it true that more wells are required to extract CBG?

    In some CBG producing areas, the well density can range from 2 to 8 wells
per 640-acre section. However, completed CBG wellheads typically occupy only a
few square metres. CBG exploration in BC is in the early phase and until
exploratory wells are drilled to determine the ability of the coal seams to
produce natural gas, it is too soon to speculate on what well spacing might be
required.
    In BC, well licensing and spacing/density are regulated by the Oil and
Gas Commission (OGC), the same as for conventional oil and gas exploration and
development. If a company wishes to drill multiple wells per 640-acre section,
they must apply for and receive approval from the OGC.
    The company must also demonstrate that they have identified any
environmental concerns, and that they have plans in place to mitigate the
effects of their activities.

    -------------------------------------------------------------------------
    PROTECTING UNDERGROUND WATER 

SOURCES (GROUNDWATER) What is an aquifer? Can CBG activity harm underground water aquifers? An aquifer is an underground geological zone or horizon that is capable of storing and yielding quantities of water. It is commonly composed of sand, gravel, or permeable rock which can be bounded by layers of impermeable material such as clay or shale. These impermeable layers constrain the aquifer to the permeable zone and prevent migration of water between aquifer layers. Thus; various aquifers can be present at various depths without interconnection. Aquifers at any depth can be protected from hydrocarbon or other seepage by the presence of an impermeable layer. How are aquifers protected? When drilling a well, corrosion-resistant steel casing (surface casing) is cemented in the hole to prevent connection and ensure isolation of shallow aquifers. Once deeper drilling to the target zone is complete, another deeper layer of steel casing is installed and cemented in the hole (production casing). Many oil and gas wells are drilled through shallow aquifers; CBG wells are no different and are subject to strict BC regulations designed to protect aquifers. CBG wells have steel casing cemented in place from the bottom of the well to the surface, ensuring a steel and cement barrier between shallow aquifers and the producing coal or sand formations. What is "drilling mud"? Drilling fluid or mud is usually water based or oil-based with the primary ingredient being fine clay such as kaolinite or bentonite. When drilling through aquifer zones, no toxic chemicals or materials are added. During the drilling process, drilling fluids are circulated through the well bore by pumping from surface down the drillstring and then circulating the fluids back to surface. This process lubricates the drill bit and, at the same time, lifts the drill cuttings to the surface where they are removed before the mud is pumped back down the wellbore. What is "fraccing"? Is it harmful to the environment? Fraccing is a stimulation process, commonly used in the oil and gas industry, that connects the natural fractures that are present in the deep underground rock formations to the vertical or horizontal drilled wellbore. This process creates pathways through which the gas can flow more freely to the wellbore. In fracture stimulation of coal seams, the process is essentially the same, although commonly compressed gas such as nitrogen (which makes up 78% of the air we breathe) is used rather than a liquid based fracture fluid. Fluids used to frac CBG wells will vary based on the geological characteristics of the formations but, generally, nitrogen and water, or a combination of the two and sometimes sand are used. Nitrogen, water and sand are not toxic and pose no threat to the environment. What is methane migration? Aquifers, whether in unconsolidated gravels and sands or in porous rock or coal, can contain naturally occurring methane. As a result, it is not uncommon for methane to be found in shallow aquifers, particularly if that zone is a coal seam. This can become a problem, independent of any CBG exploration or development, in water wells which are normally drilled in areas where "shallow gas" exists. Recognition of the presence of this gas and equipping of water wells to "separate" the gas from the water allows for safe operation of these water wells and the avoidance of methane build-up in enclosed structures linked to the water well. ------------------------------------------------------------------------- PRODUCED WATER CONCERNS It is important to note that not all CBG wells produce water. In fact, wells drilled in British Columbia to date (83 test wells as of February 2007) indicate both "dry" and wet coal seams. The volume of produced water in a wet well will vary. On February 14, 2007 the BC Ministry of Energy, Mines and Petroleum Resources (MEMPR) announced that BC will meet or beat best practices for North America for commercially viable coalbed gas production and will require no surface discharge of produced water from coalbed gas. Any re-injected produced water must be injected well below any domestic water aquifer. The BC Energy Plan confirmed this direction indicating that "companies will not be allowed to surface discharge produced water. Any re-injected produced water must be injected well below any domestic water aquifer." MEMPR is currently working with the Oil and Gas Commission and the Ministry of Environment to ensure government's direction regarding the produced water disposal is formalized. In British Columbia, coal zones may occur over large areas and in a wide range of depths. It is important to understand the vertical spatial relationship between groundwater aquifers used for domestic purposes and the average depths at which the coal seams are being targeted for CBG production. A typical residential or farm water well is 10-100m in depth whereas a water disposal well is typically 700-2000m in depth. Therefore, there is a large vertical separation between the zones used for disposal of water from the aquifers used by residential water wells. Also, there are impermeable layers of rock between these two zones which does not allow the flow of water from the disposal zone to the shallow aquifer. Shallow coals are often penetrated by water wells. These shallow coals usually contain gas, though in lesser concentrations than coals at greater depths. If these coals are not isolated from the targeted aquifers (usually sandstone) it is likely the water well will be "gassy". Shallow coal zones are sometimes even used as aquifers. In Alberta, over 11,000 CBG wells have been drilled to produce the natural gas found in the shallow coals of the Horseshoe Canyon Formation and to date there has been no connection between water well contamination and CBG development. In British Columbia, the current government has stated in their new Energy Plan that surface discharge of produced water is prohibited. ------------------------------------------------------------------------- FLARING AND AIR QUALITY Air quality is a top priority for British Columbians. The BC Government announced in the BC Energy Plan that all routine flaring at oil and gas producing wells and production facilities will be eliminated by 2016, with an interim goal to reduce flaring by 50 per cent by 2011. The BC Oil and Gas Commission (OGC) is developing flaring guidelines to document flaring "best management practices". The OGC guidelines will use the same principles as Alberta's flaring guidelines which require companies to ask themselves three questions: Can you eliminate this source of flaring? If no, can you reduce the amount of flaring at that site? If no, can you improve the combustion efficiency of the flare? Flaring is typically a one-time occurrence, or very infrequent, in the life of a CBG well. ------------------------------------------------------------------------- CONTROLLING NOISE FROM CBG PRODUCTION Noise associated with CBG development is regulated by the BC Oil & Gas Commission. When sound control features are incorporated into facility design in the planning stages, sound levels can be kept to acceptable minimums. CBG operators consult with local land owners and will install noise suppression technology that meets or is better than regulated standards. ------------------------------------------------------------------------- WHY DEVELOP CBG? Is CBG extraction really as "nasty" as some people say? There is no question that CBG extraction is a challenging business with technological challenges unique to the unconventional gas industry. Media has extensively covered the rare cases where the surface discharge of water containing salts has caused damage and where methane migration has been blamed on nearby CBG developments in the United States. While some of the early CBG developments in the Powder River Basin in Wyoming were not developed with optimal water treatment and mitigation processes, the governments and industry have responded by implementing new stricter standards for water production, treatment and disposal or usage. New technology and lessons learned from incidents at older sites have been key to the environmentally, socially and economically responsible development of this resource. It is important to develop valuable CBG resources to ensure that we can continue to meet society's growing need for energy. Did you know? - 25 per cent of total Canadian gas production comes from unconventional gas (approximately 5 per cent is CBG) - 40 per cent of total US gas production comes from unconventional gas - 80 per cent of gas production in 10 years will be from wells yet to be drilled in North America - By 2025, unconventional gas will account for approximately 80 per cent of new drilling and 50 per cent of gas production

For further information:

For further information: MEDIA CONTACT: Lisa Rollins, Manager,
Communications and Engagement, Canadian Society for Unconventional Gas, phone:
(403) 233-9298 ext. 226, fax: (403) 233-9267, lrollins@csug.ca, www.csug.ca

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CANADIAN SOCIETY FOR UNCONVENTIONAL GAS

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