Coal-bed methane, $5 trillion in energy that is not talked about
Coal-bed methane, have you heard of it? I’m sure most have not. Up until the recent surge in natural gas prices no one really paid attention to this fuel source. Now people are very interested.
Coal-bed methane is not a new item. It’s one of the fears that fill every coal mine. It is responsible for many of the explosions that have occurred in coal mines since the fuel has be sought. In the most simple description methane is produced as a by-product of the process that creates coal. This gas accumulates in cracks within the coal formation, under high pressure. The United States is estimated to have upwards of 700 trillion cubic feet of methane which is currently worth more than $5 trillion and can provide perhaps decades of energy.
In Kansas there are many that are very familiar with exactly what coal-bed methane is and what it can do. This is a positive and negative for the community, and they are expecting more interest as energy alternatives are sought.
The reason is that the wells in Kansas are not like those found in oil. An oil well is at peak production on its first day. A coal-bed methane well may not reach its peak for a decade. Thus leases to land-owners can be highly lucrative. An initial lease can be valued as much as $30,000, with monthly payments for a productive well being $3 or $4,000 a month or more.
While the money can be very good in these economically troubling times, there are other problems that come with it. Wheat, corn and other farm fields are cut by gravel roads to and from wells; roads are in need of constant repair from the heavy vehicles traveling to and from wells and storage facilities. And the influx of high property values has caused the local schools to lose matching federal funds.
And not every land owner has had the same benefits as another. Deals are made individually, and have been for decades. Early adapters may have only received a lease payment of $2,000 and well production payments can vary wildly.
Still this is not a horrible situation. And with the nation struggling to keep up with the cost of foreign oil, and Congress playing political games with the issue of domestic drilling this option is more attractive by the day.
With all the renewed interest in coal as an energy source there is one thing that we can be sure of. Coal-bed methane along with coal mining will be something that many more Americans will become familiar with in the coming years.