Coalbed Methane Coalbed Methane in in Kansas Kansas Presented - PowerPoint PPT Presentation

Coalbed Methane Coalbed Methane in in Kansas Kansas Presented to: Senate Utilities Committee March 4, 2004 Presented by: Timothy R. Carr tcarr@kgs.ku.edu The Chanute Publishing Co, 07/10/2002

Outline Outline • 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

Kansas Profile Kansas Profile Kansas national population and energy use rankings: Kansas national population and energy use rankings: � Population – 32 th (2002) � Total per capita energy – 18 th (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.

Natural Gas Prices Natural Gas Prices Continue to Be Volatile Continue to Be Volatile $9 Industrial Price City Gate Price $7 Wellhead Price $/MCF $5 $3 $1 0 1 2 3 4 5 6 7 8 9 0 1 2 3 9 9 9 9 9 9 9 9 9 9 0 0 0 0 - - - - - - - - - - - - - - n n n n n n n n n n n n n n a a a a a a a a a a a a a a J J J J J J J J J J J J J J

Recent Energy Prices Recent Energy Prices

Coalbed Methane Production Coalbed Methane Production from U.S. Basins from U.S. Basins 1800 CBM Production (Billion Cubic Feet) Emerging Basins 1600 Appalachian Basin 1400 Warrior Basin 1200 San Juan & Raton Basins 1000 CBM represents 800 approximately 10% 600 of US gas reserves 400 200 0 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 Year EIA 2001 Annual Report, September 2002 U.S. Crude Oil, Natural Gas, and Natural Gas Liquids

Coalbed Methane Activity Coalbed Methane Activity

Kansas Coalbed Methane Activity Kansas Coalbed Methane Activity n know ncoalbed 25mi 25km i oil oil &gas gas gaspipeline s gasprojects a Nem aha Brown B NUMBERofWELLS OIL&GAS FIELDS 2 14 y DRILLEDfor and t Doniphan COA LBEDGAS by i 12 major gas pipelines C Atchison county 14 ( � 8") Jackson (through mid-2003) t 7 s Leavenworth Jefferson e Pottawatom ie 0 r 0 9 o Shawnee N 0 F W yandotte 0 Johnson Douglas 8 59 0 Osage W abaunsee Miam i Franklin Lyon 9 0 123 1 M orris 14 Chase Coffey Linn Anderson 7 1 13 24 Greenwood Bourbon Arch Butler Bourbon Allen W oodson 7 24 6 11 0 Neosho W ilson Crawford 328 288 Elk C 0 18 h Cow ley e M ontgom ery Labette r Cherokee o Chautauqua 0 k 568 86 0 e 110 e B a s i n

Unconventional Reservoir Unconventional Reservoir Fractured Reservoir Micropores

Desorption Methane Production from Methane Production from Micropores Micropores Replacement

Conventional Gas and Conventional Gas and Coal Bed Gas Coal Bed Gas Time PRODUCTION DECLINE Volume per day –coalbed gas –conventional gas Adapted from Rice, 1997

Production Stages of a Production Stages of a Coalbed Gas Well Coalbed Gas Well Time –. –Gas Volume –Water Dewatering Stable Decline Stage Production Stage Stage Adapted from Rice, 1997

Kansas Coalbed Methane Kansas Coalbed Methane Monthly Production Monthly Production

Neosho County CBM Production Neosho County CBM Production 4000 $20 2003 Production Through November 3,585 $18 Production (mmcf) 2003 Value through September 3500 Estimated Annual Production $16 Production Million Cubic Feet Dollars Millions at Wellhead 3000 Value $14 Estimated Annual Value 2500 $12 2000 $10 Estimated Annual Value Assumes Constant Production and Price for Remainder of Year $8 1500 $6 1000 $4 500 $2 0 $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 Year

SE Kansas CBM Production SE Kansas CBM Production 10 $50 9.06 9 $45 2003 Production Through November Production (Bcf) 2003 Prices through September 8 $40 Value Dollars Millions Wellhead 7 $35 Billion Cubic Feet 6 Estimated 2003 Annual Value Assumes $30 Constant Production and Price for Remainder of Year 5 $25 Includes Gas Production for Labette, 4 $20 Montgomery, Neosho and Wilson counties 3 $15 2 $10 1 $5 0 $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 Year

Kansas Gas Production Kansas Gas Production 75.000 $9.00 70.000 $8.00 Avg. Wellhead Price ($ Per MCF) Gas Production (BCF/Month) 65.000 $7.00 60.000 $6.00 55.000 $5.00 50.000 $4.00 45.000 $3.00 40.000 $2.00 35.000 $1.00 30.000 $0.00 0 1 2 3 4 5 6 7 8 9 0 1 2 3 9 9 9 9 9 9 9 9 9 9 0 0 0 0 - - - - - - - - - - - - - - n n n n n n n n n n n n n n a a a a a a a a a a a a a a J J J J J J J J J J J J J J Production Through November 2003 Production Through November 2003 Wellhead Prices through September 2003 Wellhead Prices through September 2003

Coalbed Methane Program Coalbed Methane Program

Coalbed Methane Program Coalbed Methane Program

Coalbed Methane Program Coalbed Methane Program

-Pitt Coal Pitt Coal Weir- Weir

United States Carbon Dioxide United States Carbon Dioxide Emissions Emissions By Source & Sector) Transportation Transportation Transportation Transportation 33% 33% 33% 33% Residential 20% Electricity Electricity Other Other Commercial Commercial 38% Industry Natural Gas 38% Industry 29% 29% 16% 16% 31% 21% 31% Coal Coal 37% 37% Oil Oil 42% 42% EIA AEO2002

Southeast Kansas Southeast Kansas 25 Miles Partially miscible and ” s e d immiscible CO 2 EOR n n El Dorado a e L r T Field n 380 e s • El Dorado d d r l o a 214 m G y l “ • Salyards Trend , a S 552 tons/yr Greenwood Co. Enhanced Coalbed 249 Lafarge Methane (N 2 and CO 2 ) Cement plant gas stream 163 may be best suited for CBM ECBM 1,095 Industry C B M Ethanol Oil and O il Cement Ammonia Gas Fields O il & G as Power Refinery G as

Cement Production Cement Production Calcination Process Dry Kiln Portland Cement Process CaCO 3 > CaO + CO 2 0.51 tons CO2 / ton cement CO 2 and N 2 kiln gas mix may be suitable for ECBM with little processing

Pipeline Landfill Gas Landfill Gas Landfill Gas (LFG) CH 4 , CO 2 , NMOC

Kansas CBM Summary Kansas 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