What is Coal Seam Gas, How is it Found and Produced?

What is coal seam gas?

Coal seam gas is a form of natural gas (methane) found in coal seams, rather than in the sandstone reservoirs that hold conventional natural gas. As an end-use product, it is the same as conventional natural gas and is used to generate electricity and to power natural gas appliances such as heaters and stoves.

How is coal seam gas formed?

Large quantities of methane, carbon dioxide and water are generated during the coal formation process over vast periods of time. Most of the gas and water seeps away, but some methane is retained within the coal seam. Most of this is absorbed onto the coal surface; the remainder exists as free methane in the natural fractures within the seams or is dissolved in water within the seam.

Water pressure within the seam traps methane within the coal and this water has to be drawn off before the methane is extracted. As the pressure in the seam decreases, methane production increases. A well is used to extract water from the seam allowing the methane to flow.

What is Victoria’s potential for coal seam gas?

There is currently no coal seam gas production in Victoria, nor are there any applications to begin production. A number of exploration licences have been granted, however, while the location of Victoria’s coal resources is well known, the amount of associated gas and the feasibility of extraction are uncertain. Nevertheless, the most prospective part of Victoria for coal seam gas is the Gippsland basin, due to its extensive coal resources.

In the event that the production of coal seam gas is feasible and that a proposal to extract the gas met all regulatory requirements, it is estimated that it would take around five or more years for such a project to commence commercial production.

What is the process for exploring for coal seam gas?

Coal seam gas exploration involves geological studies that provide scientific data used to assess whether coal seam gas is available in commercial quantities. Seismic surveys are used to produce a detailed image of the geology beneath the earth's surface to determine the size and location of coal seams. Seismic surveys use sound waves produced using specialized truck-mounted equipment and read by recording devices at the surface. If the survey is successful these may be followed up by drilling to recover core samples or to test gas flows.

Exploration wells are also used to assess the likely impact of local coal seam gas production on aquifers to measure how much water is actually pumped from wells before the gas is produced. Once this is done the regulator can make an informed decision on to the likely impact of any proposal for full-scale production.

How is coal seam gas produced?

Commercial production of coal seam gas requires the drilling and construction of a number of wells. These activities are tightly regulated by the Government. Wells are typically drilled at a spacing of between 200 and 1000 metres and each well occupies a space of about 10 by 10 meters. Steel pipes are installed in the well and the gap between the casing and borehole wall is filled with cement that ensures that there is no cross-contamination between the coal seam and any overlying aquifers.

Following completion wells are plugged with concrete and regulations require the site to be rehabilitated. Production wells may be in operation from 10 to 20 years.

What is hydraulic fracturing?

Hydraulic fracturing is not a new technique, however there is a significant amount of inaccurate information about it in circulation, particularly regarding its use in Queensland and New South Wales.

Hydraulic fracturing is sometimes used to help the gas flow from the coal. This involves pumping a fluid consisting largely of water and sand under pressure into a coal seam. The sand holds the fracture open to provide a pathway for the gas and water to flow to the gas well for extraction.

Based on evidence to date, the nature of Victoria’s coal resource may not require hydraulic fracturing to get coal seam gas to flow. Even with black coal seams hydraulic fracturing is only used in a small number of cases (in Queensland hydraulic fracturing is only used in 8 per cent of cases).

Furthermore, chemicals used in the process of hydraulic fracturing in other states would be unlikely to meet the strict requirements in Victoria for the protection of groundwater under Victoria’s strong environmental legislation.