COAL SEAM GAS. Some basics in economics, geology and hydrogeology as applied to eastern Australia

Transcription

1 COAL SEAM GAS Some basics in economics, geology and hydrogeology as applied to eastern Australia Acknowledgements for data sources: Peter Flood, Carey Bradford, Anita Andrew

2 Coal seam gas (CSG) is natural gas Natural gas what is it, how does it form and where does it occur? Natural gas is dominated by methane CH 4. May have small amounts of other hydrocarbons, CO 2, N 2. It is a colourless, odourless gas that will burn at concentrations of 5-15% in air. In nature, it mostly forms by decomposition of organic material (e.g. in landfills, swamps, sediments and organic-bearing rocks). Methane is an attractive fuel as it is easy to distribute and on burning produces much less CO 2 on a weight basis than coal (the C/H ratio is 0.25 versus >1.4 for black coal).

3 Natural gas in rocks Economic concentrations of natural gas occur in sedimentary basins where it has formed by decomposition of organic material deposited at the time of sedimentation (marine and terrestrial sources). Most economic sources are late Palaeozoic to Neogene in age (e.g. 400 Ma to 10 Ma), and gas is forming in modern sediments Three major types of gas occurrence are found in sedimentary rock basins: Conventional gas, hosted in porous and permeable rocks such as sandstone and limestone, and commonly associated with oil Shale gas, hosted in tight fine grained shale Coal seam gas, hosted in coal (mostly in black coal).

4 Methane hydrate A huge potential resource of natural gas is locked up in modern marine sediments in the form of methane hydrate (properly termed methane clathrate CH H 2 O, an ice-like substance forming in coldwater conditions)

5 The oil and gas window Most natural gas is generated from sedimentary rocks buried to considerable depth and subjected to heat and pressure. The gas window overlaps that of oil, but most forms at higher temperature. Black coal in eastern Australian sedimentary basins has been subject to temperatures (e.g. > C) that generated considerable methane

6 A brief interlude on shale gas Production only just commenced in Australia, and there are potential large resources (e.g. Cooper, Canning Basins). Forms by decomposition of organic material originally deposited in marine mud, when this material is lithified into shale, and methane is generated by heat and pressure. Shale is a tight rock and acts as a barrier to fluid flow (whether that be water, oil or gas) To economically extract gas, shale needs to be fractured ( fracked ) following directional drilling and use of high pressure water, sand and small amounts of added chemicals (see later)

7 Shale gas Large resources currently being developed and exploited in the USA 00s to 000 m This is resulting in the USA changing from being an energy importer to exporter and affecting world politics Directional drilling

8 Coal seam gas Formed during and subsequent to the coalification process from original organic material. The source rock (particularly black coal), is also the reservoir Gas is absorbed on to coal and constrained by water pressure Optimal reservoir depth m Gas can be released by drilling into, and dewatering the coal (by releasing pressure) Methane drainage has occurred for many decades in the underground coal mining industry to reduce the risk of gas blowouts and methane explosions

9 Coal seam gas CSG is generated as primary or secondary gas during and subsequent to the process of coalification of organic material CSG can form by thermal and biological processes During the earliest stage of coalification biogenic methane generated as a by-product of microbial action (primary biogenic gas) Subsequently, thermogenic methane forms with burial and temperatures >50 C Later, biogenic methane can form by reduction of CO 2 from shallow groundwaters (secondary biogenic gas) Gases produced are adsorbed onto micropore surfaces and stored in cleats, fractures and other openings in coal, and also in groundwaters within the coal beds

10 Coal seam gas: derived from coal maturation and subsequent biogenic processes Coal thin section Coal SEM image From Pells 2012

11 Coal seam gas In Australia, large CSG resources in the Surat and Sydney-Gunnedah and Bowen Basins. Industry grew rapidly in Qld for supplying gas as liquefied natural gas (LNG) exports. Limited use for local supply. From Kelly, 2012 Saline water storage Environmental concerns include: storage of saline waters at surface and potential for contamination disturbance of shallow aquifers that could be used for water supplies gas, salt and chemical entry into aquifer waters fugitive emissions disposal of salts from desalination plants

12 The economic drivers since 1999 increasing world energy need, especially growing major economies (e.g. China, India) saw rising price of oil June 2015 to March 2016 WTI crude fell from $US105 to $US33 BBL - viability of shale gas and CSG? what happens next?

13 The economic drivers Increasing world energy need, especially growing major economies: China, India Natural gas (including CSG) is viewed as being convenient, less polluting than coal or oil, and potentially more abundant Although not a new industry in Australia, CSG development has really only grown since 2005, with the impetus being the LNG export market Over 70% of Queensland s domestic gas supply is CSG, only 6% in NSW: potential for growth in supplying households, industry and for power generation In 2013, 4840 CSG wells in Qld and 230 in NSW

14 The economic drivers NSW has a problem situation where most of its gas supply to 1 million customers is conventional gas (Cooper Basin), with the resource diminishing and contracts ending by New Bass Strait gas contract with AGL in Customers will pay more. Current and potential employment and investment benefits. In Queensland, projects underway employ people and generate $1 bn p.a. in royalties to the Qld govt. A caveat: since 2014, the world economic outlook has become weaker and demand for energy resources (thermal coal, gas, oil) has decreased, resulting in lower prices and loss of economic viability for some operations. In Queensland, LNG developments and exports are delayed and less viable, and in NSW, abandonment of Gloucester Basin and Camden operations by AOG. Santos hunkering down in Narrabri area

15 Australian sedimentary basins with CSG potential Sydney-Gunnedah-Bowen, Surat and Galilee Basins are main focus

16 Australian CSG reserves Reserve life is 150 years at current rates of production, but production is projected to increase with the establishment of the CSG LNG industry Australia has substantial subeconomic demonstrated resources and large inferred resources Qld has 92% of the reserves, NSW 8% reserves in the Surat (69%) and Bowen (23%) basins with small amounts in the Clarence-Moreton (1%), Gunnedah (4%), Gloucester and Sydney basins CSG uses are growing pipeline gas or as a fuel for on-site electric power generation pipeline gas to regional centres and cities as power generation, industrial facilities and mains gas LNG for export

17 Australian CSG Reserves On a world basis, Australia is well endowed with unconventional gas (e.g. CSG)

18 Why does CSG only occur here? Must have the appropriate sedimentary rocks (e.g. coal) and geological conditions Many other parts of Australia are underlain by sedimentary rocks, but these either do not have the source materials, or they have been subject to heat and pressure that have destroyed gas potential CSG does not occur in igneous and metamorphic rocks that underlie about half of continental Australia There is essentially NO CSG potential in the New England region of northern NSW due to the above factors and community group concerns about CSG Mining in the region are baseless

19 CSG in southern Queensland and northern NSW In southern Queensland, CSG mainly occurs in the Walloon Coal Measures of the Surat Basin (which is a lobe of the Eromanga/Great Artesian Basin), with a resource also in the underlying Bandanna Formation of the Bowen Basin Productive aquifers of the Surat Basin are shown in blue and aquitards shown in brown

20 CSG in southern Queensland and northern NSW Namoi alluvium In northern NSW, CSG mainly occurs in coal measures of the Gunnedah Basin, underlying the Surat Basin Productive aquifers of the Surat Basin are shown in yellow, aquitards in grey and brown

21 Depth sub-sea (km) -1.0 CSG in Sydney Basin Time (Ma) Permian Triassic Jurassic Cretaceous Tertiary Sea level ISO-VR Burial history the Sydney Basin Faiz et al Missing section Wianamatta Gp Mittagong Fm Hawkesbury SS Narrabeen Gp Illawarra Coal Measures Shoalhaven Gp

22 Depth sub-sea (km) CSG in Sydney Basin Time (Ma) Permian Triassic Jurassic Cretaceous Tertiary B 50 0 C Sea level ISO-VR A Missing section Wianamatta Gp Mittagong Fm Hawkesbury SS Narrabeen Gp Illawarra Coal Measures Shoalhaven Gp Faiz & Hendry 2006

23 Exploring for CSG: directional drilling has revolutionised the industry Downhole steerable drilling motor and drill bit Directionally drilled borehole Several directional wells can be completed from the one site. The drilling process might follow on from preliminary exploration involving a seismic survey OLD NEW Drilling involves considerable friction, thus drill fluid additives are used From Pells, 2012

24 Exploring and testing for CSG Exploration takes place in known coal basins Drill core of coal is recovered for testing Laboratory testing of coal core takes place to determine gas yield and flow rate. Gas is absorbed into coal and is at least partly released along fracture systems (cleat) when pressure is reduced. Drilling also provides data on reservoir pressure, gas and water production and water composition

25 Extracting CSG CSG is produced via cased wells. The drill hole is cased with steel and cemented in place to prevent escape of gas and associated formation water into shallow aquifers and at the wellhead Double steel casing with cement infill Gas and water entry into the bottom of the cased hole

26 Water is pumped out of the coal seam aquifer thus reducing the pressure. Gas is desorbed from coal and released. Produced water and gas are separated at the wellhead Fracking (hydraulic fracturing) of the coal seam aquifer has been used in about 20% of CSG wells in eastern Australia in order to improve rate of gas extraction Extracting CSG

27 Fracking process, modelled on shale gas extraction in USA

28 Composition of a typical fracking fluid used in Australia Some of the above chemicals include sodium hypochlorite and hydrochloric acid (as used in domestic swimming pools), acetic acid (vinegar) and disinfectants. Use of partly watersoluble benzene derivatives (BTEX chemicals) is banned in Australian jurisdictions. Other scientific considerations are that coal seams are not in hydrologic connectivity with other aquifers (due to aquitards) and huge dilution factors are involved

29 Produced (formation) water compositions CSG-associated water is commonly brackish, with a range of mg/l TDS (compare typical drinking water of <500 mg/l TDS). Values in RED exceed ANZECC guidelines for stock water Data for 126 CSG formation waters in Surat and Bowen Basins, Queensland Waters are essentially Na-Cl- HCO 3 types, with low Ca, Mg, K, SO 4, metals ph BTEX <2 ppb Cl ppm Zn Most <0.5ppm SO 4 <1-105 ppm Cd ppm HCO ppm Cu Most <0.02ppm Na ppm Pb Most <0.01 ppm Ca ppm As 0.02 ppm Mg <1-302 ppm Hg < ppm K <1-276 ppm U ppm Fe < ppm V 0.03 ppm B ppm Ni Most <0.02ppm F ppm Cr Most <0.02 ppm

30 Water and CSG extraction over time Predicted gas and water production from a CSG well: time frame is up to 20 years

31 Community concerns about water and CSG 1. aquifer drawdown extraction 2. aquifer contamination from CSG-associated waters (e.g. salinity, BTEX chemicals, gas, heavy metals, F, B) 3. disruption to, and potential local sterilisation of current farming and grazing practices 4. threat to native flora and fauna 5. fugitive emissions of methane from wells and pipelines (powerful greenhouse gas) 6. end of well life

32 Environmental consequences of water and CSG extraction Potential for aquifer interference, e.g. is there significant connectivity between CSG aquifers and shallow aquifers used by rural industries, towns, etc? Hydrological modelling of the Surat Basin in southern Queensland by non-corporate organisations (University of Southern Queensland, Queensland Water Commission) has demonstrated the likelihood of limited drawdown of water levels in productive aquifers over decadal periods This is due to presence of abundant aquitards in the Basin sequence and that the amounts of water withdrawn represent a tiny fraction of the total groundwater resource

33 Hypothesised risks to aquifers from dewatering Remember that in the real-world situation (e.g. Surat Basin), many of the overlying units are aquitards

34 Testing for aquifer interaction potential for aquifer interference, e.g. is there significant connectivity between CSG aquifers and shallow aquifers used by rural industries, towns, etc? hydrological modelling to assess the potential drawdown of water levels in productive aquifers over decadal periods; aquitards in the basin sequence will limit the amounts of water withdrawn active monitoring of groundwater impacts water chemistry ground surface levels

35 Environmental consequences of water and CSG extraction Planned monitoring system for Surat Basin

36 Environmental consequences of water and CSG extraction Examples of potential water drawdown levels due to CSG extraction in the Surat Basin over decades from QWC hydrological modelling study. Does not take into account (a) natural recharge, or (b) drawdown due to other water users (e.g. agriculture)

37 Environmental consequences of water and CSG extraction In Surat Basin, 1500 GL water would be extracted with CSG production over 20 years (i.e. 75 GL p.a.) This is about 1/40000 th of the water in the Great Artesian Basin (Surat Basin is part) Does not take into account (a) natural recharge (880 GL p.a.), or (b) other uses of Basin water for agriculture, town water supplies, etc. By legislation in Queensland, CSG producers are required to make good any impact on water supply

38 Aquifer contamination water produced from coal seams is highly variable in quality (potable to saline) and quantity disposal options: evaporation dams (no longer permitted), reverse osmosis (RO) treatment, re-injection into suitable deep aquifers (treated or untreated), direct use of water for power station cooling, coal washing, stock salts can be used a commercial source of salt, soda ash and chlorine RO water is required for drinking water standards and is used for stock, augmentation of town supply, irrigation of crops and tree plantations, industry, dust suppression supplements and augments GAB groundwater

39 Impact on farming and native flora and fauna Apart from water issues there are other impacts including: Effects of land clearing on native flora and fauna Disturbance of farming and grazing operations infrastructure and access roads microseismic disturbance from fracking and water removal: allegations that earthquakes are caused surface subsidence

40 Geoscience Australia geodetic network to monitor ground surface response to resource extraction in Surat Basin From Garthwaite et al. (2015)

41 Landowners and CSG companies Surat Basin Tara, Queensland all underground resources are owned by the Crown landholders have legal rights access, negotiation and compensation CSG companies cannot enter land without consent and must negotiate on placement of infrastructure sites must be rehabilitated at the end life land owners are entitled to financial compensation for CSG activities

42 Fugitive greenhouse gas emissions Background methane values: methane seepage to the atmosphere from sedimentary basins containing coal deposits is commonplace emissions globally from geological sources Mt/a with Mt/a from seeps and micro-seeps (Etiope et al. 2012) sources are primarily located along coal basin fringes associated with coal outcrop and subcrop formations What are fugitive emissions? IPCC Guidelines for National Greenhouse Gas Inventories: Energy Sector - includes CH 4, CO 2 and N 2 O (from combustion) Conventional oil and gas (equipment and well leaks etc.) exploration production venting and flaring processing storage distribution Coal mining seam gas underground mining (ventilation air, drainage) open-cut mining post-mining abandoned mines (only underground)

43 CSG Fugitives currently not counted in National Inventory but fugitives from CSG under scrutiny industry rapidly growing with large export CSG LNG proposed/underway LNG projects proposed in Queensland total capacity Mt pa 1000 s of wells and long distance pipelines potential for significant fugitive emissions little reliable data available most studies based on life cycle assessment results sensitive to assumptions Remember, methane is generated naturally by ruminant animals (20% of emissions in Australia), anaerobic vegetation decomposition, landfill, sewage treatment plants, flatulence, etc.

44 End of well life? wells are expected to be productive for 20 years not much experience site dependant small footprint of well with directional drilling and multi head wells pipelines are buried underground requirement to seal well and rehabilitate site can well life be extended?

45 Potential environmental impacts - summary Aquifer drawdown Aquifer contamination from CSG-associated waters (e.g. salinity, BTEX chemicals, gas, heavy metals, F, B) Fugitive emissions of methane from wells and pipelines (powerful greenhouse gas) Disruption to, and potential local sterilisation of current farming and grazing practices Threat to native flora and fauna (just like farming, grazing, roads, urban sprawl)

46 Attempting to dispel myths - a difficult task for the scientist Unfortunately, good science and media- and politics-driven agendas do not mix well Factual information can be ignored or selectively used to suit the arguments of protagonists Fear, ignorance and political opportunism make media stories, whereas scientific information and logic don t