Coalbed methane mining brings new life to old coal fields in Kansas

Friday, December 14th 2001, 12:00 am
By: News On 6

WICHITA, Kan. (AP) _ Decades ago, methane bound onto the rich coal deposits in southeast Kansas was a dangerous byproduct of coal mining _ better known for blowing up mines and killing unwary miners.

But new technologies may make coalbed methane _ a natural gas produced from underground coal deposits _ a lucrative new natural resource industry for Kansas.

In the past year, Devon Energy Corp. drilled 125 wells and leased 420,000 acres, mostly in Wilson and Neosho counties in southeast Kansas, said Devon spokesman Michael Barrett. Next year, the Oklahoma City-based firm plans to drill 200 more wells in the area.

``Those old fields haven't had any viable economic activity down there in 50 years,'' said Tim Carr, chief petroleum researcher for the Kansas Geological Survey.

Devon, which ranks among the top five U.S.-based independent oil and gas producers, has already invested $35 million in developing the first wells in its Cherokee Basin, a vast formation which extends from southeastern Kansas to northern Oklahoma, Barrett said.

``They are a big player _ they are the 10,000-pound gorilla,'' Carr said of the company. ``It is interesting when that kind of capital gets attracted to Kansas.''

With operations just beginning, the company has brought three employees to Chanute and four to Lenapah, Okla., and plans to likely double that number next year, the company said.

The firm's Cherokee Basin wells in Kansas have already produced 4 million cubic feet per day in their first year of production, and are expected to produce 25 million cubic feet a day in 2002 and 52 million cubic feet a day in 2003, Barrett said.

Their new fields are expected to be in production 20 to 30 years.

``Coalbed methane is a huge growth area for Devon,'' Barrett said. ``This is the fourth area within North America that we have identified as having a huge potential for us.''

Devon first got into coalbed methane production in the mid-1980s with the Northeast Blanco Unit in the San Juan Basin of northwestern New Mexico. It has since developed significant fields in the Powder River Basin of Wyoming and the Raton Basin of northeastern New Mexico and southeast Colorado.

Its company website tells investors that expansion of its coalbed methane projects are responsible for the company's 2001 production growth _ saying coalbed methane mining is characterized by low drilling risk, low development costs, low operating costs and a long economic life.

Devon will be a major player in an area of the state that needs economic input, Carr said. It will also replace falling state tax revenues from the Hugoton gas field in western Kansas as that field is depleted.

``It is nice, clean energy,'' Carr said. ``Methane will offset the natural decline in the Hugoton and has the potential to make a fairly significant impact on the amount of gas produced that keep those tax dollars, and keep me employed.''

In Kansas, the arrival of the coalbed methane mining has gone largely unnoticed outside the oil and gas industry.

But the advent of coalbed methane mining, which is still in its infancy, has not been without controversy in other states.

In Wyoming, that state's coalbed methane coordinator has recommended further study into potential problems caused by water discharged from methane development in an area of northeast Wyoming. An internal memo made public last summer said high-sodium water from development is being discharged into the steep Burger Draw and appears to be killing plants and causing soil problems.

In Kansas, the company plans to pipe the waste water from mining operations and reinject it into a disposal well, putting it in an underground zone which already contains residual oil or gas or undrinkable groundwater, said Brad Foster, one of Devon's project leaders for the Kansas fields.

Because the coalbed methane deposits lie just 1,000 feet underground in Kansas, the smaller-sized rigs used for drilling look more like water well rigs than the huge oil and gas drilling rigs more familiar in Kansas.

Once completed, the wells take up so little land that farmers can continue to raise crops around them, Foster said.

``Not many people realize that it is going on there,'' Barrett said of their Kansas operations. ``Nobody else is in the area.''