| With coal bed methane, the gas content per | | | | gas to bleed off." |
| unit volume of coal increases with depth. | | | | |
| Pressure is what holds it in the coal. Often, | | | | And that is what makes this exploration. |
| companies drill deeper looking for more gas | | | | "Everything we've got in terms of water, |
| per unit volume of coal. However, according | | | | permeability, and that kind of stuff is |
| to Marchioni, "The deeper you go, | | | | coming from coal mines that are very |
| permeability decreases. And it decreases | | | | shallow." The slim-hole drilling, over the |
| exponentially, not linearly." There's always | | | | next several months, should answer many of |
| a trade-off in any coal basin. Geologists | | | | Dr. Marchioni's questions. |
| will try to find the depth where they will | | | | |
| find optimal gas content and optimal | | | | Coal Bed Methane Development May Alleviate |
| permeability. Of course, the more shallow the | | | | Pollution & Mine Fatality Problems in China |
| depth, where you can find an economic gas | | | | |
| deposit, the better for the company and its | | | | China's the world's largest producer and |
| shareholders. | | | | consumer of coal. The country also holds 13 |
| | | | percent of the world's recoverable reserves. |
| What do you need to know about risks when | | | | Last week, China's National Development and |
| investing in coal bed methane gas exploration | | | | Reform Commission (NDRC) reported the |
| companies? The risk is permeability and the | | | | country's coal output jumped by 8 percent to |
| ability to produce the gas from the coal. | | | | 2.11 billion tons in 2005. The U.S. Energy |
| Permeability, as Marchioni explained, is the | | | | Information Administration Outlook 2005 |
| ability for the gas to flow from the coal | | | | projected China's coal consumption would grow |
| into the well bore. "Coal typically has a set | | | | to 1.81 billion tons by 2015, about |
| of fractures, a natural set of fractures, in | | | | one-quarter of the world's total consumption |
| it," he clarified. "They can be better or | | | | of coal. Nearly half the coal expected to be |
| less well developed. It can have minerals in | | | | consumed in Asia over the next decade will be |
| them, for instance. A mineral can be | | | | burned in China. In 2002, the industrial |
| deposited there that can plug between the | | | | sector consumed about 47 of that coal. As the |
| fractures. Coal, as a substance, has very low | | | | world's leading producer of both steel and |
| permeability. But because it is fractured, it | | | | pig iron, China needs fuel to meet the |
| can have good permeability." | | | | world's eager appetite. Together with India, |
| | | | these two countries will represent 71 percent |
| We asked Dr. Marchioni point blank about the | | | | of the forecasted growth in coal consumption |
| project Pacific Asia China Energy (TSX: | | | | over the next decade. |
| PCE)will soon be drilling on its massive | | | | |
| Guizhou project in China, "We don't feel | | | | China's dependence upon coal comes at a |
| there's much risk on the coal being there. We | | | | price. The NDRC reported nearly 6,000 died in |
| have abundant evidence for that. I don't feel | | | | coal mining accidents in 2005. The World Bank |
| there's very much risk about gas content. | | | | estimates about 400,000 Chinese die each year |
| There's a lot of Chinese testing, and even if | | | | from air pollution-related illnesses, mainly |
| it is not fully accurate, within the margins | | | | heart and lung diseases. Not only does China |
| of error, you'd still have a lot of gas in | | | | export 24 percent of its coal to other Asian |
| the ground. We have good control | | | | countries, it is exporting its pollution from |
| geologically. Much of the place has already | | | | coal emissions. "As much as 40 percent of air |
| been explored for coal. I don't feel much | | | | pollution in Japan and South Korea originates |
| geological risk in that respect." | | | | from China," said Dan Millison, an |
| | | | environment and energy specialist for the |
| He cautioned, "The risks in any CBM play are: | | | | Asian Development Bank. Boo Kyung-Jin of the |
| 'Can you get out of the ground at the right | | | | Korea Energy Economics Institute said, "South |
| price?' What influences that is the | | | | Koreans are increasingly concerned. In |
| permeability of the coal and also the amount | | | | spring, everybody is coughing. It is getting |
| of water that is there. We're looking for | | | | worse in recent years." A report in Channel |
| permeability. That's what we are trying to | | | | NewsAsia suggested, "There is also growing |
| measure: If there's water there, can we pump | | | | evidence that the pollution has reached North |
| out the water fast enough to reduce the head | | | | America." |
| of water so that we drop the pressure on the | | | | |
| coal? That's basically what we have to do. | | | | COPYRIGHT © 2007 by StockInterview, Inc. |
| You have to drop the pressure and allow the | | | | ALL RIGHTS RESERVED. |