USA

Natural Gas in the USA is prolific with over 100,000 billion cubic feet of gas held in proven undeveloped reserves, by the nature of categorisation, these reserves should eventually make their way to market providing ample opportunity for development and investment in this mature and well serviced industry. As certain extraction technologies advance new commercial opportunities appear so as to extract these reserves with good returns.

Hydraulic fracturing or ‘fraccing’ is a term for injecting high pressure fluid laden with clean sand into the gas bearing seam. This process causes pre existing fractures to split and open up whilst the sand grains form ‘props’ to maintain the newly opened fractures. The fluid in the well is then pumped out, this reduces the hydrostatic or ‘confining pressure’ until the pressure of gas in the seam is greater and the gas begins to flow. This gas flow is at a much higher rate than would have been possible under normal permeative conditions, thus increasing the return to the investor/developer.

In the USA commercial gas production from coal seams commenced in the 1970’s. The first CBM fields were developed in high rank bituminous coals of Alabama, the Appalachians of Pennsylvania, Virginia, West Virginia, the San Juan Basin of Colorado, and New Mexico. Commercial CBM production in the Powder River Basin began in 1987. These coal beds are among the thickest coals in the world and contain extensive recoverable CBM reserves. The CBM industry in the USA has been mainly driven by considerable exploration success where production has increased dramatically from 10 billion cubic feet (Bcf) in the mid 1980s to approximately 1500 Bcf in 2001. This increase was primarily the result of large scale commercial exploitation of the San Juan Basin, the Black Warrior Basin in Alabama and more recently, the Powder River Basin. Coal-bed methane accounts for about 10% of U.S. natural-gas production.