Coal bed methane (CBM), also referred to as coal seam gas or coal mine methane (CMM), is a type of natural gas that is trapped within coal deposits. To extract CBM, horizontal drilling and hydraulic fracturing techniques are employed, creating fractures in the coal seams to release the gas. The process also involves capturing and storing carbon dioxide emissions through CO2 sequestration methods.
CBM finds applications across various sectors, including power generation, residential use, commercial establishments, industrial operations, and transportation. Its use in power generation has gained popularity as it offers a cleaner alternative to traditional fossil fuels. Additionally, CBM serves as a valuable energy source for residential, commercial, and industrial purposes, providing a reliable and cost-effective fuel option. Furthermore, CBM shows promise as a cleaner fuel for vehicles, potentially playing a significant role in the transportation sector.
Key Drivers of the Coal Bed Methane Market
Multiple factors influence the coal bed methane market. Coal bed methane minimizes the need for traditional fossil fuels such as coal, resulting in decreased carbon emissions. It uses captured methane gas to offset greenhouse gas emissions. It also offers a number of additional advantages. According to the US Environmental Protection Agency, for instance, capturing and using CBM emissions can reduce greenhouse gas emissions, provide clean-burning energy for power generation and other applications, improve mine safety, and generate additional revenue for mine operators. CBM can be utilized to generate electricity and heat, supplied to natural gas pipelines, and used as automobile fuel, among other things.
Another aspect driving market expansion is the market's contribution to economic growth. The coal bed methane market creates financial resources by selling natural gas, which contributes to economic growth. It also generates employment, which benefits local economies. Additionally, utilizing coal bed methane helps diversify energy sources, reducing dependence on imported natural gas. This ensures a more stable energy supply and mitigates geopolitical risks. For instance, utilizing coal bed methane resources can decrease reliance on foreign natural gas imports, further saving import costs.
According to some experts, India could save over $2 billion on energy imports by harnessing just 10% of its estimated 2,600 billion cubic meters of coal bed methane (CBM) reserves. With India aiming to increase coal production to over one billion tonnes by 2025-26, utilizing CBM could reduce emissions and enhance energy security. The country's primary power production heavily relies on coal, making CBM a potential energy source. Government policies and initiatives promoting the exploration and utilization of CBM can contribute to emissions reduction and domestic energy sustainability.
Expansions and Innovations by Major Market Players
The coal bed methane market has significant contributors such as AAG Energy Holdings Ltd., Anglo American plc, Arrow Energy Pty Ltd., Australia Pacific LNG, BP plc, and others. These players assist in the market’s growth with the launch of new products and through collaborations and investments. Some of the recent developments in the market include-
• In April 2023, Oil and Natural Gas Corporation Limited (ONGC) inaugurated its first gas collecting cum gas compression station in the Bokaro coal bed methane (CBM) block. The GCS-Bokaro project, executed by a consortium of Tata Projects Limited and Corrtech International Pvt. Ltd., is designed to process 1 million metric standard cubic meters per day (MMSCMD) of CBM gas. It has tie-in agreements with GAIL for pipeline connectivity and Gas Sales Agreements (GSA) with five customers, achieving a premium of $7.1 per mmBtu over Brent’s linked base crude oil price. The installation, costing around INR 441 crore ($, is equipped with advanced technology and is currently connected to 55 wells.
• In March 2023, China’s provincial statistics bureau reported that Shanxi, a coal-rich province in China, extracted 1.71 billion cubic meters of coalbed methane in the first two months of 2023, representing 82.6% of the country's total. The province has implemented the operation of over 350 coalbed methane wells, with an annual production capacity of 2.1 billion cubic meters. With an estimated reserve of 8.31 trillion cubic meters, Shanxi aims to extract 20-25 billion cubic meters of coalbed methane by 2025, as per its five-year development plan.