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Montana
Montana Coal Resources and Coal Bed Methane Potential
Montana is an inland U.S. state largely in the western United States but because of its immense size stretches into the north-central United States. Although Montana is often regarded as mountainous, about 60% of the state is actually prairie in the Great Plains. The central and western two-thirds of the state have numerous mountain ranges (approximately 77 named) of the northern Rock Mountains; thus the state's name, derived from the Spanish word montaña ("mountain").
Coals across the country are ranked by their grade or amount of coalification that has occurred. Anthracite is the best grade of coal followed by bituminous, sub-bituminous and lignite. Methane gas is found in all coals with only the BTU (British Thermal Units) varying within coal grades, anthracite having the highest BTU value and lignite the lowest. The volume of gas in the coal is thought to be directly proportional to coal thickness as is the case in Wyoming.
The state of Montana is ranked 6th in the U.S. in coal reserves and production with an estimated 119.3 billion tons of coal of bituminous to lignite grade. Areas of sub-bituminous to bituminous are most likely to be explored and developed by the Coal Bed Methane (CBM) industry. These coals occur mainly in the counties of Powder River, Rosebud, Custer and Big Horn but there are scattered areas of sub-bituminous coals found in Blaine, Musselshell and Carbon Counties. Montana estimates the amount of methane gas to be produced from coal beds could be as high as 17.7 TCF (Trillion Cubic Feet), with coal thicknesses reaching as much as 170 feet and an average thought to be 40 feet.
Montana predicts that 12,500 CBM wells will be drilled in the state with 90% of these wells located in three counties: Big Horn, Rosebud, and Powder River. Of these counties, 5,788 wells (46.3%) will be located on land where the federal government, specifically the Bureau of Land Management, owns or manages the mineral rights, 6,088 wells (48.7%) will be on land with privately owned mineral rights and 625 wells (5%) will be on state controlled mineral rights.
Montana State Government
Montana has essentially prohibited the development of their CBM resources due to concerns of CBM produced water impairing their surface water quality, irrigation and loss of riparian area from higher surface water flows and the impact dewatering activities would have on groundwater in areas of CBM development. The state has estimated groundwater levels could fall as much as 20 feet down gradient of CBM activities.
The CX Ranch field operated by Fidelity Exploration and Production Company is currently the only company with CBM operations in the state and had been "Grandfathered in" because they acquired their permits prior to the state stopping the CBM development. The majority of Fidelity's production is from a depth of 250 to 300 feet but they also have production from deeper coals at 400 to 600 feet. The wells produce between 7.5 gpm (gallons per minute) to as much as 16 gpm and average 14 gpm. The amount of gas produced from these wells is not know yet but the State of Montana has estimated the average CBM well will produce between 180 to 300 MCF (Thousand Cubic Feet) per day of gas per well, with a life expectancy between 15 to 20 years.
Because Montana needs the revenue for the state and like Wyoming rely on mineral royalties for much of the states operating capital, Montana is looking to impose guidelines for the development of their resource and still protect its population from the perceived pitfalls of CBM development.
Montana has always said they wanted the CBM industry to re-inject the produced water and their guidelines reflect their whishes. Currently under review by Montana State Government is a proposal that gives operators three methods of water management. The first is to have industry re-inject their produced water; second, allow industry to treat the water, and third to have industry impound the water still meeting the treatment standards.
Industry would then be allowed to petition the state with documentation that the economics would not allow for re-injection of produced water. The state will review the petition documents for 380 days then approve or disapprove. If approved industry must re-petition showing the economics are unfavorable for treatment of the water and wait again another 380 days for a response and so on to the third option and 380 days. You will have waited 3 years to get approval to start permitting your wells and discharge facilities. The state may also say you can't afford to develop the states minerals. The State of Montana will vote on acceptance of this method in late March 2006.
Note: The water treatment standards that Montana wants industry to meet are so low that a Reverse Osmosis system would have difficulty meeting the standards and would be very costly.