Coalbed Methane Development
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In Alberta, CBM is subject to similar drilling, production, and operational rules as other forms of natural gas.
CBM development may, in some cases, have associated water production. If the well is drilled into a coal zone that is saturated with water, the water must be extracted to reduce pressure and allow the gas to be released. To date, little water has been produced in association with CBM development in Alberta.
The depth of the well plays a large role in determining the characteristics of the water produced. Shallow water wells typically produce non-saline (fresh) water. Deeper petroleum wells usually produce saline (salty water).
Handling saline water
Any saline water that is produced during gas production must be returned to a similar underground environment through deep disposal wells. The Energy Resources Conservation Board (ERCB) regulates the production, handling, and use of water produced in association with natural gas, oil, and bitumen. ERCB Directive 65: Resources Applications for Conventional Oil and Gas Reservoirs and Directive 51: Injection and Disposal Wells provide more information on water disposal.
Handling non-saline water
If non-saline water is produced with gas, in addition to ERCB regulations, it must be handled according to regulations set out in the Water Act. The producer must be authorized by the Alberta Environment to use, divert, or dispose of any non-saline water before the wells are drilled. Before authorization is granted, adjacent property owners, who would be impacted by the development, must be informed of plans to handle the water.
Aquifer protection
When drilled, a CBM well could pass through several groundwater aquifers. Well casing is cemented in place to protect groundwater aquifers. Well drilling, completion, and production requirements address how drilling fluids are handled, and prevent mixing water from different zones.
For more detail, please view the Coalbed Methane Wells and Water Well Protection document.
Current water production in Alberta
Most of the current shallow CBM development in Alberta has not produced water. Some deeper projects in the Mannville zone () have produced saline water, and some Ardley test wells have produced small amounts of water of varying quality.
Links to more information on water
Well Spacing
CBM wells generally produce at low gas rates and low pressures. To optimize gas recovery from these wells, it may be necessary to locate the CBM wells closer together than some conventional gas wells. Closer well spacing is a long established practice in Alberta for oil and gas development, and it is becoming increasingly common throughout the province. Spacing for CBM wells could range from two to eight per section.
Standard gas well spacing for much of Alberta is one well per section per pool. However, standard spacing regulations provide for increasing well density through application to the ERCB. A significant part of the province, notably in areas of shallower gas development, has a common spacing of two to four gas wells per section per pool.
Regulations to reduce well spacing requirements
To reduce the spacing from set standards, an application must be filed to the ERCB in accordance with Directive 65: Resources Applications for Conventional Oil and Gas Reservoirs, which was updated August 11, 2006. Effective this date, notification of a well spacing application must be conducted and the notification period completed prior to filing an application with the ERCB. Notification requirements have been broadened to include Freehold mineral owners whose mineral right have been released.
Best practices
Good land use practices, such as drilling multiple wells from a single location and aligning roads or pipelines along natural field breaks, can reduce surface disturbance. This also helps recover more gas from lower pressure wells. Industry commonly uses existing infrastructure and surface installations to minimize surface impacts and disturbance in areas that already produce conventional natural gas or oil. Industry has also worked with government to develop a guideline of best practices for CBM development.
Techniques such as horizontal/directional drilling and well fencing can also reduce environmental impacts of denser well spacing and protect native prairie, sensitive environments, critical habitats, and important recreation areas.
Link to more information on best practices
Compression and Noise
Gas produced from CBM wells normally needs to be compressed so it can be transported by pipeline to market. Compressors may be located at well sites, but more commonly are located in a centralized location serving multiple gas wells.
Compressors can vary in size and the ERCB must approve their installation if the total on site power exceeds 75 kilowatts (100 horsepower) (see Directive 56: Energy Development Application Guide).
Companies are encouraged to take steps that will reduce the amount of noise compressors make, as the noise can be disturbing for local residents. Noise associated with compression in Alberta is regulated by the ERCB (see Directive 38: Noise Control Directive User Guide).
Land Access
As with other natural gas development, a producer interested in developing CBM must get approval to access land from the landowner or land manager. This may be a private landowner, a provincial government department, First Nations, or a federal government department.
Access to private land
If a private landowner refuses to grant land access to a company granted a well licence by the ERCB, an appeal can be made to the Surface Rights Board. If it is determined the project is in the best interests of Albertans, the Surface Rights Board may grant access and may determine an appropriate amount of compensation to be paid by the energy company to the landowner.
Access to public land
An energy company seeking to develop CBM on public land may apply to Sustainable Resource Development (SRD) for access for a mineral surface lease or other surface access disposition. In some cases, a pre-existing disposition holder may need to grant consent for the company to access this land. If the company has a well licence and the pre-existing disposition holder denies consent, an appeal may be made to the Surface Rights Board. In the province's forested areas, the energy company may need to pay a Timber Damage Assessment charge as a condition of access.
Public Information
Public consultation requirements
When new energy projects are proposed, industry, regulators and the public must review the project's impact on current and future land use. Public discussions on specific project plans and options are often needed to fully understand and address impacts.
Energy developers must make all reasonable efforts to reduce environmental impacts, align development with existing regional strategies prepare, resource plans, and manage concerns about land fragmentation and local impacts.
Before a development application can be filed, the energy developers must consult with any parties who may be directly or adversely affected by the project. The requirements are outlined in the ERCB's Directive 56: Energy Development Application Guide and Schedules and Directive 65: Resource Applications for Conventional Oil and Gas Reservoirs.
Well data
Since CBM is a form of natural gas, all CBM wells are licensed as natural gas wells in Alberta. This means that data on CBM wells, including produced fluid volumes and rates (oil, gas, and water) must be collected and reported to the ERCB in the same manner as occurs for other gas wells in the province. Also, produced fluids must be sampled and analyzed. All this information is public, according to standard data confidentiality provisions and regulations.
ERCB Well List
- CBM Well List (as of 2003)
- CBM Well List (as of 2004)
- CBM Well List (as of 2005)
- CBM Well List (as of 2006)
Test Wells
An energy company may apply to the ERCB for experimental scheme status in accordance with standard regulations. Under experimental scheme status, limited well information can be held confidential by the ERCB for 3 years. All data must still be reported to the ERCB for release at the end of the experimental scheme, or earlier if conditions warrant. All experimental scheme applications are public documents, and a list of all experimental projects is published by the ERCB.
Links to more information on public information
- EnerFAQs 8: Proposed Oil and Gas Development: A Landowner's Guide
- ERCB Brochure: Understanding Oil and Gas Development in Alberta
- ERCB Bulletin 2004-21: Changes to Well Statuses for Wells Completed in Coals & Tracking of CBM Activity in Alberta
Air Emissions
Flaring is the burning of natural gas that cannot be economically conserved. Venting is the release of natural gas to the atmosphere where conservation or flaring is not practical due to gas volumes being too small. The ERCB regulates flaring and venting according to the methods outlined in its Directive 60: Upstream Petroleum Industry Flaring Guide. Public notice of any extended flare testing is required.
Because CBM is predominantly clean-burning methane and contains no heavy hydrocarbons, the flares are similar to the flames that burn in home furnaces, except larger in scale.
Efforts by the Alberta government, the petroleum industry and stakeholder organizations such as the Clean Air Strategic Alliance (CASA) have reduced flaring by 62 per cent and venting by 44 per cent since 1996. In 2005, industry achieved a 96.3 percent solution gas conservation rate, the highest level achieved to date. The contribution of CBM to overall vented or flared gas volumes in Alberta has been small.
Link to more information on Emissions
Royalty
CBM is governed by the same royalty system as all other natural gas production on provincial Crown ("the Crown") land in Alberta. Energy companies producing on Crown land must pay a royalty to the province for oil and gas. The overall objective is to ensure that the Crown retains a fair share of the oil and gas production as royalty for Albertans.
Royalty calculation
The amount of CBM royalties owed is calculated at the wellhead. As with all other types of natural gas production, the amount of royalty revenue collected on CBM production will be impacted by a number of factors, including current market gas prices, the amount of energy in the gas stream, and when the gas pool was discovered ("vintage classification").
Since a gas producer produces and processes the Crown's share of natural gas and gas products, the Crown shares in the costs of gathering, compressing, and processing by providing cost allowances that are deducted from the amount of royalty to be paid. The Crown royalty on natural gas, natural gas products, and CBM is established under Natural Gas Royalty Regulation, 2002 
and the Alberta Natural Gas Royalty Principles and Procedures, June 2003.
Links to more information on Royalty
Tenure
Tenure is the process of leasing and administering petroleum and natural gas rights owned by the Province of Alberta.
The provincial Crown ("the Crown") owns 81 per cent of Alberta's mineral rights. The remaining 19 per cent are freehold mineral rights owned by the federal government on behalf of First Nations or in National Parks and by companies and individuals.
The Petroleum and Natural Gas Tenure Regulation governs CBM. There is no regulatory distinction between conventional natural gas and CBM land tenure.
Coal Rights vs. Natural Gas Rights
Since the Crown treats CBM the same as natural gas, the rights to explore and develop CBM are granted under conventional petroleum and natural gas leases. Owners of the Crown coal rights can only recover natural gas for safety and conservation reasons.
The amendment to Section 67 of the Mines and Minerals Act by the Energy Statutes Amendment Act, 2003 confirms that the right to the natural gas in Crown coal, including CBM or natural gas in coal (NGC), does not belong to the lessee of the Crown coal rights and, when read in conjunction with section 4(2)(b) of the Petroleum and Natural Gas Tenure Regulation, by implication or inference grants that right to CBM to the petroleum and natural gas lessee.
Links to more information on Tenure
Legislation
Copies are available on the Queen's Printer web site at: http://www.qp.gov.ab.ca/
Some specific legislation includes:
Agriculture and FoodEnergy
Energy and Utilities Board
Environment
- Water Act (and Regulation)
Sustainable Resource Development
Best Management Practices
One of the MAC Final Report's recommendations was the development of a best management practices manual for CBM operations. The Canadian Associaiton of Petroleum Producers (CAPP) worked with members of the MAC who reviewed the document and provided their suggestions and comments. CAPP released the Best Management Practices Natural Gas in Coal (NGC)/Coalbed Methane (CBM) in May 2006 and will update the documents as required.
