U.S. Water News Online
GILLETTE, Wyo. -- Reinjecting water from coal bed methane wells can be profitable as long as gas prices remain at moderate levels, a study commissioned by a conservation group has found.
Methane gas is produced by pumping groundwater to relieve the pressure trapping the gas in coal seams. In Wyoming, most of that water is dumped on the ground.
Environmentalists argue the practice damages shallow aquifers and crops because of the high content of salt in the water.
Thomas Goerold, a consultant with Golden, Colo.,-based Lookout Mountain Analysis, said his study shows the break-even price for methane production using surface discharge is between $2.25 to $2.47 per thousand cubic feet of methane, depending on the location of the well in the Powder River Basin.
The basin's methane gas is now selling at about $1.70 per mcf. Last year, the price averaged about $3.50 per mcf and this year the state forecasts average methane prices around $2.10, according to the Wyoming Oil and Gas Conservation Commission.
Deep well reinjection would cost between $2.98 and $3.05 per mcf of gas produced, said Goerold, who was hired by the Northern Plains Resource Council.
According to the study, reinjection costs about 28 percent more than the surface discharge method.
``It is in (industry's) best interest to minimize the amount of environmental remediation they are required to do because obviously that boosts the bottom line,'' he said.
The study relies on data on water disposal and methane production costs from the Environmental Protection Agency, investment company Morgan Stanley Dean Witter, a survey of methane operators by the Eastern Research Group and the methane industry.
The Environmental Protection Agency has said the surface discharge method may violate the Clean Water Act. It is expected to release a study this summer examining other options, including treatment and reinjection.
``We think these companies should recharge the aquifers they deplete and this study indicates they can afford to do it,'' said Mark Fix, the chair of the council's coal bed methane task force.
Methane companies argue that, even if they could afford to reinject methane water, landowners usually want the water in reservoirs and stock tanks to water cattle and wildlife. They also say most of the shallow sand aquifers suitable for holding reinjected water are already full.
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