Australian Parliamentary Library - The development of Australia’s coal seam gas resources  

Coal seam gas is the big energy and environment story of the year in Australia, with the potential to become a big wedge issue in federal politics for the Liberal and National parties (along with minor right wing MPs).

More on that later, but in the meantime its interesting to see that Michael Roarty from the the Australian Parliamentary Library has produced a note on the industry - The development of Australia’s coal seam gas resources.

The aim of this Background Note is to outline recent developments in this increasingly important part of Australia’s energy sector. The Note is primarily about the extent of this resource and its development (including some environmental matters related to this) but it does not cover the details or controversies relating to how and where it is developed.

Coal seam gas (CSG) occurs naturally, in varying quantities, in coal seams. It consists mainly of methane (CH4) – hence its other name of coal bed methane (CBM). Methane burns well in air, and thus can be used as fuel.

Gases in coal seams are formed during the long geological process of coal formation (coalification) when organic matter is converted into coal. The gas accumulates underground, held within the cleats (natural fractures) and pores of the coal itself. Not all coal seams contain useful quantities of methane. In some cases, the coal gas may consist mainly of carbon dioxide (CO2), or it may contain poisonous carbon monoxide (CO), or nitrogen. There may also be quantities of hydrocarbon gases other than methane (for example, ethane, propane, butane).

When methane is released as a side-effect of coal-mining operations it is called coal mine methane (CMM) and is usually vented to the air (although in particular cases it can be captured and used as an energy source[1]). It used to be considered a nuisance that hindered coal mining as it was responsible for serious coal mine fires and explosions in earlier years. CMM nowadays is much more effectively managed using methods such as methane drainage, in association with mining activities.

Coal seam methane is identical to “natural gas” (also methane) associated with traditional oil and gas fields, but its exploitation and use is a relatively new phenomenon. Until recently, the natural gas or methane used in Australia and elsewhere was nearly all supplied from reservoir gas—that is, ‘conventional gas’ that occurs in underground porous sedimentary rock reservoirs (gas fields) rather than in coal seams. But coal seam gas, just like conventional gas, can be used to power water and space heating for industrial, commercial and domestic users, as well as in gas turbines to generate electricity. Thus, the coal seams are merely a new source for an old and valued fuel.

The Eastern Australian natural gas market has for some time been supplied from the Cooper/Eromanga oil and gas fields in central Australia and the Gippsland Basin located offshore from south-east Victoria. While some new, but small, oil and gas fields have been developed in offshore Victoria, and some additions to the central Australian gas fields have been found, the consensus is that these fields are slowly depleting and will be unable to supply the growing Eastern Australian gas market well into the future.

The development of the coal seam gas deposits in Queensland and New South Wales associated with the coal fields will not only enable the supply of natural gas for the growing Eastern Australian market but also enable the establishment of major export liquefied natural gas (LNG) industries, providing an impetus to employment, infrastructure investment and Australia’s exports.

It should be noted that as well as pumping out the methane from a coal seam, another method for extracting the gas involves in situ combustion of the coal seam and any included methane to form ‘syngas’, which can be used to generate electricity at the surface. This technology, known as “underground coal gasification”, is at a less advanced stage in Australia, with a 5MW facility undergoing development and demonstration near Dalby in Queensland[2]. It offers the potential to extract energy from coal seams that are too deep to mine economically. As this technology represents a different set of technical and environmental challenges to those of coal seam gas, and the timeline for commercial large-scale development is probably a decade or more away, underground coal gasification is not included in the scope of this paper.