Fueling debate

Coal mines in China can not only produce coal, but also boast great potential for methane, a much cleaner energy.

Yet it seems difficult for coalmine owners and methane developers to join hands to extract the gas, let alone to jointly put the resource into commercial usage.

"It should be a win-win situation for both mine owners and us to commercially co-develop coalbed methane and coal products. The current situation is that we often face boycotts by mine owners while doing our job," Sun Maoyuan, general manager of China United Coal-bed Methane Corp (CUCMC), reveals to China Business Weekly.

Coal accounts for about 70 percent of China's current energy consumption and mine operators are often reluctant to postpone digging for coal until CUCMC finishes extracting methane.

Yet there should be no conflict between extracting methane and digging for coal, the boss says.

With methane extracted, mining coal is much safer, lessening the danger of explosion.

Also the methane collected will be put into commercial applications, such as serving as chemical industrial material, vehicle fuel or civilian gas, Sun says.

"The method and technology we adopt do not undermine coal extraction at all," Sun adds.

After borrowing technology from the United States, the world's largest coalbed methane producer, CUCMC then added its own innovation and expertise.

"We are doing a good job in drilling multi-branch horizontal wells. To enhance well production, we are pumping carbon dioxide into the mine to facilitate extraction," Sun says.

Carbon dioxide injected into the mine can help force methane out, while the coal seam will remain intact, says Huang Shengchu, director of the China Coal Information Institute.

"It is indeed a win-win situation in technology cooperation and future commercial applications. But coal mine owners still oppose CUCMC's monopoly as it has the exclusive right to cooperate with foreign counterparts in exploration. If the market is further deregulated, perhaps the segment will be enhanced," Huang says.

Sun replies that CUCMC welcomes market deregulation.

"There will be no problem for us to cooperate with mine owners. We are stronger in coalbed gas exploration and we can provide the technology and services they lack," Sun says.

Production in CUCMC wells can be more than two times higher than that of coal mine operators.

"Our per-well output can reach 2,000 cubic meters a day, while an ordinary coal company can only maintain at 900 cubic meters," Sun says.

Obstacles

According to Huang, there are other obstacles to further development of the industry in China, including the geological condition of its mines, which do not have high yields of methane.

The problem was partly solved with CUCMC's development of high-yielding wells in Qingshui Basin of Shanxi Province.

CUCMC plans to invest 2.2 billion yuan this year to drill hundreds of new wells and boost production capacity in Qingshui.

Another obstacle is the lack of a pipeline that can transport methane to end users, according to Huang.

Sun says that there is a 100-kilometer pipeline planned but details are not yet finalized.

With empowerment from state authorities, CUCMC has development rights to 40,000 square kilometers of coal mining blocks around China, with about 3,000 square kilometers in friction with local coal mines.

The company has finished exploiting up to 4,000 square kilometers and has transferred the blocks to local coal mining authorities.

"Currently in China, we are developing only three-tenths of the proven coalbed methane. Therefore, the segment has great potential to tap," Sun stresses.

According to statistics from the China Coal Information Institute, China boasts a 37 trillion cubic-meter reserve of coalbed methane, the third-largest in the world, next only to Russia and Canada, equivalent to 45 billion tons of standard coal. Sixty percent of the gas in coal beds is over 1,500 meters deep.

More than 600 coal-bed methane wells have been sunk across the country to date, according to Xinhua News Agency. Most of them are still in the prospecting and experimental stage and far from commercial operation. The top daily methane output has been 16,000 cubic meters, two-thirds of which was from the CUCMC.

(China Daily 06/16/2007 page3)