Release Date: December 16, 2002

WASHINGTON, DC - The Powder River Basin, a vast region of high plains in Wyoming and Montana known for producing low-sulfur coal, is also becoming a primary source of America's fastest growing natural gas resource, coalbed methane.

Now, a new Department of Energy report projects that the region may hold more coalbed methane than previously estimated but the amount that will actually be produced will depend largely on the choice of the water disposal method.

The study, Powder River Basin Coalbed Methane Development and Produced Water Management Study, was prepared by Advanced Resources International of Arlington, VA. The Energy Department's Office of Fossil Energy commissioned the study through its National Energy Technology Laboratory to help federal and state agencies plan for future development of this significant natural gas resource.

The study found that discharging water produced during coalbed methane operations into rivers and streams – a practice currently allowed by state permits since the quality of the water is generally as good as normal drinking water – is the lowest cost option and results in the largest estimates of economically recoverable gas.

Powder River CBM Production
	The Powder River Basin is the site of the nation's fastest growing domestic natural gas play -- the development of coalbed methane (CBM).

The report concludes that more than 29 trillion cubic feet (Tcf) – or nearly 75 percent of the 39 Tcf of technically recoverable gas estimated in the study – could be economically produced with the surface discharge disposal method at the study's assumed gas prices. The study did not assess the amount of produced water that would meet state permitting standards for this type of disposal; so, actual producible quantities of coalbed methane might be somewhat less.

Constructing infiltration impoundment ponds with associated evaporation equipment would be the next most economically attractive water disposal option, the study found, potentially resulting in 28 Tcf of economically recoverable gas.

Re-injecting the water into shallow fresh water zones – a method that has only limited success to day – could likely lead to about 27 Tcf of economically recoverable gas, while treating the produced water with a process called "reverse osmosis" would cut the amount of economical gas to around 18 to 22 Tcf.

Deep reinjection of the produced water was not included among the disposal alternatives studied because it is likely to be significantly more expensive, and many experts believe that it constitutes a loss of a valuable resource for the arid West.

In each of the study's cases, the amount of natural gas potentially producible from Powder River coal seams could be a valuable addition to the nation's energy supplies. The study's 39 Tcf estimate of technically-recoverable reserves is among the highest of a range of resource estimates for the Powder River Basin from Federal, State, and industry organizations. Because of differences in methodologies, geologic models, and assumptions, other current estimates vary greatly, in some cases by a factor of five, ranging as low as 8 Tcf.

Currently, throughout the lower 48 states, proven reserves of all natural gas supplies amount to just over 180 Tcf. About 22 Tcf of natural gas are consumed by Americans each year.

Nearly 4 billion cubic feet per day of coalbed methane is currently being produced in the United States, with about 20 percent of it coming from the Powder River Basin. Within the next 10 years, however, as much as 75 percent of the growth in coalbed methane production is expected to occur in this region. As many as 39,000 new coalbed methane wells could be drilled in the Powder River Basin during the next decade, compared to the 9,000 coalbed methane wells operating today.

The new DOE study also concludes that future coalbed methane operations will require fewer wells than previously estimated by other studies and that the amount of water associated with coalbed methane production in the Powder River Basin may be substantially less than the studies estimated.

The U.S. Department of the Interior's Bureau of Land Management and the U.S. Environmental Protection Agency, along with several state agencies, cooperated with the Energy Department on the study. The complete report is available on-line at the National Energy Technology Center's Strategic Center for Natural Gas website at http://www.netl.doe.gov/technologies/oil-gas/index.html. The report is also available on CD.

The study is one of several being sponsored by the Energy Department that examine the issues surrounding coalbed methane development. Others include development of best management practices, electronic mapping of environmental and well data, a coalbed methane primer for the public, a handbook for the development and review of environmental documents required for coalbed methane projects, analysis of the options for beneficial use of coalbed methane produced water, and research on technologies for produced water treatment.