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