ROLLA, Mo. (ResourceInvestor.com) -- There have been continuous debates within the country on how to change China's energy mix to reduce dependence on foreign oil and the impacts of years of over- and inefficient-use of coal that has created significant environmental damage and social costs. Its 11th Five-Year Plan (2006-2010), unveiled in 2005, clearly articulated these goals and placed emphasis on efficiency in energy production and utilization as well as environmental protection. The plan specifically mentioned the development and increased use of natural gas and coalbed methane.
China's estimated natural gas requirements will be 200 x 109 m3 (200 billion cubic meters) by 2020, 50% of them will have to be imported. Development of China's own coalbed methane (CBM) reserves will help bridge the gap between domestic supply and demand.
According to the latest data, China's total natural gas and CBM reserves are about the same: the former is estimated to be round 36.7 x 1012 m3 (36 trillion cubic meters) while the latter around 31.46 x 1012 m3 --at under 2,000 m depths. The combined resources constitute an enormous domestic energy source. Efficient use of China's methane (chemical formula: CH4) resources will not only provide the country with badly needed energy!awithout imports, to sustain its economy's double-digit growth, it will also will lessen environmental impacts.
PetroChina, one of the two partners China United Coalbed Methane (CUCBM)--China's only coalbed methane company allowed to cooperate with foreign partners--decided to withdraw its 50% stake after 12 years. The transition is expected to be finalized the next few months and the company will become a wholly owned-subsidiary of the China National Coal Group.
China's CBM Resources
Methane occurs naturally, over geologic time scales, in the coal coalification proces. Although it has always been associated with coal mining processes, methane occurs in non-coal geologic formations as well. It is a clean form of energy, but unfortunately it has gained an undesirable notoriety in China. This is due to the deaths of coal miners from methane-ignited coal-dust explosions. Through 2007, methane ignitions/explosions have always been the leading cause of coal mining deaths.
Methane present in coal is site-specific but generally increases with coal rank (anthracite has the highest methane content, followed by bituminous rank) and mining depth. Although commonly referred to as two forms of energy, natural gas and methane are basically the same thing and provide the same amount of energy content (in BTUs, British Thermal Units, or metric-unit kilocalories).
Two terms are also commonly used when referring to methane, coalbed methane (CBM) and coal mine methane (CMM): coal mine methane is gas released from coal or surrounding rock strata during coal mining (an emission reduction opportunity), while CBM is an unconventional source of natural gas, not emitted to the atmosphere. These two terms have been used interchangeably.
Of the 74 countries that have CBM resources, China ranks third in resource potential. Up to 95% of its resource are situated in four gas-bearing regions: Ordos Basin and Junggar Basin (western and eastern Mongolia, respectively), Qinshui Basin (Shanxi Province), Tu-Ha Basin (Turpan-Hami Basin, Xinjiang Province) as well as the Yun-Gui region (Yunnan and Guizhou, in southwestern China), with each of these regions containing in excess of 1 trillion m3 in reserves. Of these four regions, Shanxi-Shaanxi-Inner Mongolia region has a bulk part totaling 17.25 x 1012 m3. Shanxi, specifically, accounts for approximately 27.2% or 1.0 x 1012 m3, mainly in Qinshui Basin and Hedong Coal Basin (He-dong means "east of Yellow River!").
According to recent (2003) a survey of 115 targeted regions, average methane content is 9.76 m3 per tonne with an average concentration of 90.6%, or averaging 115 million m3/km2 with a gas saturation of 41%. With increasing mining depths, these numbers are expected to increase as well.
Over the years, several major CBM producing districts have been established: Yangquan (Shanxi Province), Huainan (Anhui Province), Songzao (Sichuan Province), Fushun (Liaoning Province), and Pingdingshan (Henan Province). For example, Yangquan District (Shanxi Province) is China's largest CBM basin and sees 250 million m3 being extracted annually; other regions, such as Huainan (Anhui Province), Fushun (Liaoning Province), and Songzao (Sichuan Province) each extract over 100 million m3 annually.
Coal Mines' Methane Emissions
Methane released to the atmosphere from gassy underground coal mine ventilation systems constitutes a major source of greenhouse gas emissions. Both operating and abandoned coal-mines, post-mining coal processing, storage, and transportation are sources of methane emissions in China--commonly referred to as ventilation air methane (VAM). The U.S. Environmental Protection Agency estimates that they account for 95% of the methane emitted into the atmosphere, with remainder from CMM drainage systems. The exact number of China's operating coal mines is not known; government data range from 85,000 (in the early 2000s) to 29,500 (today). Actual values are probably in the 40,000 to 50,000 range, almost exclusively underground operations. The U.S EPA and China Coal Information Institute (CCII) put the total VAM emissions from these mines through ventilation airshafts into the atmosphere around 13 billion m3 annually. EPA data also show that China emits the most amount of VAM into the atmosphere ranging from 45% (2001) to 48.7% (2002).
Based on U.N. data, approximately one-third or 19.4 billion m3 of methane produced during coal mining is vented directly into the atmosphere annually; nearly 100% of coal mining methane is vented.
Until recently, because of the very low methane concentration in this ventilation air (usually under 1%), coal operators had no technically proven options to recover this gas for its energy value. During the last decade, newly developed technologies in the United Kingdom, Australia, and the U.S. offer the means to recover most of these emissions at low cost. A typical example that has just been recognized by the U.S. EPA is technology that enables VAM to be used as a primary energy-producing source. According to Wisconsin-based manufacturer MEGTEC the catalytic and thermal flow reversal reaction of VAM allows up to 100% methane from the airshafts to be processed.
Above, China's first multi-lateral well using directional drilling techniques, with a total 13 laterals at a total lateral distance of 7,687 m
China's CBM Industry
Some of the earliest methane drainage practices date back the 17th century. In 1637 AD, in one of the earliest Chinese technical publications, Super Craftsmanship Open Volume (Tian Gong Kai Wu) described how bamboo was used to extract and channel methane out of coal seams. Modern systematic drainage has been practiced in Fushun and Tianfu (both in Liaoning Province), Yangquan and Tianfu (Sichuan Province) since the 1950s. However, drainage operations in these regions were often driven by mine safety concerns, and performed by local mining bureaus. Gas production was often limited in production, sporadic, and localized. More importantly, it was rarely financially rewarding.
Early systematic efforts to develop China's CBM industry was slow for several reasons. Firstly, China's CBM reserves have very low permeability in many areas, and are often situated in complex geological settings. Secondly, it requires sophisticated drilling equipment and proven drilling methods that were unavailable at the time. Lastly, a lack of systematic government financial support, proper policies and tax incentives has also hindered its development.
Encouraged by the successful development in CBM industry in the United States in the 1980s and early 1990s, China established the China United Coalbed Methane Corporation (CUCBM) in July 1996. The former Ministry of Coal Industry (dissolved in the mid 1990s, most reorganized into current China national Coal Group), China National Petroleum Corporation (CNPC) and the former Ministry of Geology and Mineral Resources participated on a three-equal-partners basis. The agency's mission includes: exploration, development, production, transportation, sales and utilization of all of China's CBM resources. The agency was also given the exclusive rights to manage the exploration, development and production of CBM by foreign investors, becoming the fourth such entity in China besides CNPC, PetroChina Company, Ltd. (