Coal Seam GasFact Sheet

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Coal Seam Gas (CSG) is naturally occurring methane gas (CH4) in coal seams. It is referred to also as Coal Seam Methane (CSM) and Coal Bed Methane (CBM). Methane which is associated with coal mining operations is called Coal Mine Methane (CMM). Methane was long considered a major problem in underground coal mining but now CSG is recognised as a valuable resource. The methane is usually mixed with carbon dioxide, other hydrocarbons and nitrogen.

CSG forms by either biological or thermal processes. During the earliest stage of coalification (the process that turns plants into coal) biogenic methane is generated as a by-product of microbial action (similar to the mechanism which generates methane in council landfills). Biogenic methane is generally found in near-surface low rank coals such as lignite. Thermogenic methane is generally found in deeper higher-rank coals. When temperatures exceed about 50C due to burial, thermogenic processes begin to generate additional methane, carbon dioxide, nitrogen and water. The maximum generation of methane in bituminous coals occurs at around 150C.

The methane produced is adsorbed onto micropore surfaces and stored in cleats, fractures and other openings in the coals. It can occur also in groundwaters within the coal beds. CSG is held in place by water pressure and does not require a sealed trap as do conventional gas accumulations. The coal acts as a source and reservoir for the methane gas while the water is the seal.


Extraction Technology

CSG is produced by drilling a well into a coal seam, hydraulic fracturing the coal seam then releasing the gas by reducing the water pressure by pumping away the water. Hydraulic fracturing of the coal seam is done by pumping large volumes of water and sand at high pressure down the well into the coal seam which causes the coal seam to fracture. The sand carried in the water is deposited in the fractures to prevent them closing when pumping pressure ceases. The gas then moves through the sand-filled fractures to the well.

A commercial operation needs the right combination of coal thickness, gas content, permeability, drilling costs (number of wells, seam depth and coal type), the amount of dewatering required to allow gas flow and proximity to infrastructure.


Administration (Legislation)

In Australia the CMM and CSG resources are administered by State and Territory Governments. In New South Wales and Queensland, CMM is administered by mineral resources legislation and CSG is administered by petroleum resources legislation. In Victoria, CSG resources are administered under the legislation for mineral resources development.



Although the presence of methane has been known ever since coal mining began, separate commercial production of CSG is a relatively recent step. This commenced in the USA in the 1970s, and exploration for CSG in Australia began in 1976 in Queensland's Bowen Basin when Houston Oil and Minerals of Australia Incorporated drilled two unsuccessful wells. In February 1996 the first commercial CMM operation commenced at the Moura mine in Queensland methane drainage project (then owned by BHP Mitsui Coal Pty Ltd). In the same year at the Appin and Tower underground mines (then owned by BHP Pty Ltd) a CMM operation was used to fuel on-site generator sets (gas fired power stations). The first stand alone commercial production of CSG in Australia commenced in December 1996 at the Dawson Valley project (then owned by Conoco), adjoining the Moura coal mine. The Moura mine is now called Dawson and is owned by Anglo American.



CSG exploration involves locating highly productive areas, known as 'sweet spots' or 'fairways'. Initially, CSG was mainly sought within the Permian coal seams of the Bowen and Sydney Basins. However, since the early 2000s, CSG exploration also targeted the relatively shallow depths of the lower rank coal seams of the Jurassic age Surat and Clarence-Moreton Basins in Queensland. Although these seams have less gas content than high rank Permian age coal these lower rank coals at shallow depths (100 to 600m) are more permeable and CSG can be more easily desorbed (or extracted), resulting in higher recovery factors. Brown coal (or lignite) of Tertiary age also has become a target for CSG exploration in the Otway Basin in Victoria.

Over the past five to ten years, CSG exploration has increased substantially in Queensland and New South Wales as a result of the successful development of CSG production in Queensland.

During 2010-2011, CSG activity in Queensland continued at record levels with about 600 CSG production and exploration wells drilled. Exploration in Queensland continues to concentrate in the Bowen, Galilee and Surat basins while in New South Wales exploration continues in the Sydney, Gunnedah, Gloucester and Clarence-Moreton basins. Other prospective basins include the Cooper, Pedirka, Murray, Perth, Ipswich, Maryborough, Gippsland and Otway basins.

CSG is now also being explored in South Australia, Tasmania, Victoria and Western Australia. Nonetheless, CSG exploration in Australia as a whole is still relatively immature. The current high levels of exploration have significantly increased known resources: in mid-2011 2P reserves are now over three times higher than in mid-2008.



Australia’s identified CSG reserves have grown substantially in recent years. As at January 2012, the Economic Demonstrated Resources (EDR) of CSG in Australia were 35 905 PJ (33 tcf). Reserve life is around 150 years at current rates of production, however noting that production is projected to substantially increase with the establishment of the CSG LNG industry. In addition to EDR, Australia has substantial subeconomic demonstrated resources (65 529 PJ; 60 tcf) and very large inferred CSG resources.

Queensland has 33 001 PJ (or 92 per cent) of the reserves, with the remaining 2904 PJ in New South Wales. Nearly all current reserves are contained in the Surat (69 per cent) and Bowen (23 per cent) basins with small amounts in the Clarence-Moreton (1 per cent), Gunnedah (4 per cent), Gloucester and Sydney basins.


Australia’s annual CSG production has increased from 1 PJ in 1996 to 240 PJ (0.2 tcf) in 2010-11, around 10 per cent of Australia’s total gas production. Of the 2010–11 production of CSG, Queensland produced 234 PJ (0.2 tcf) (or 97 per cent) from the Bowen (121 PJ, 0.1 tcf) and Surat (113 PJ, 0.1 tcf) basins. In New South Wales 6 PJ was produced from the Sydney Basin.



CSG and CMM are generally used as either a fed for pipeline gas or as a fuel for on-site electric power generation. Pipeline gas is supplied to regional centres and cities for such uses as power generation, industrial facilities and mains gas for home heating, cooking and hot water. Water is produced as a by-product of CSG production and after treatment this water may be suitable for use as town water supply, industrial facilities (e.g. coal mines and abattoirs), feedlots and high-value horticultural development. Other untreated CSG water use options include aquaculture, recharging aquifers, habitat creation (e.g. wetlands) and recreation (e.g. sailing, boating, picnic spots).


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