Coalseam Gas a Hot New Energy Source?

New Zealand's biggest coal company has confirmed Taranaki as the country's hot spot for future development of a new energy source - coalseam gas.

State-owned enterprise Solid Energy is now forecasting that the vast coalfields in eastern Taranaki have the potential to produce enough gas to supply a 400-megawatt power station the size of Huntly for 45 years.

The company says an independent assessment of its coalseam gas acreage in Taranaki indicates it has 858 billion cubic feet (24.3 billion cubic meters) of what are known as contingent resources, which could represent as much as 900 petajoules of gas - way up on its previous estimate of 190PJ.

By way of comparison, the Pohokura offshore gasfield in North Taranaki contains between 500 and 1200PJ of gas, while South Taranaki's Kupe field is estimated to contain 300PJ. A city the size of New Plymouth consumes around 5PJ a year for residential use.

Solid Energy has reacted to the results of the assessment - which was conducted by Texas-based Netherland, Sewell and Associates Inc - by applying to the Government for a five-year extension of the petroleum exploration permit that encompasses the eastern Taranaki coalfields. This will give the company time to move into discovery and appraisal phases.

And, so that it can focus its entire coalseam gas operations on Taranaki, the company has dumped a number of exploration permits it now considers to be less prospective, including Waiau and Winton in the South Island, and Counties in the North Island. It also looks likely to mothball an exploration permit at Huntly, including a coalseam-gas demonstration plant it built there.

Dr. Steven Pearce, Solid Energy's general manager of gas developments, said in an interview last night that his company will now carry out more exploration drilling in an effort to find the best place to build a pilot gas production plant.

"There's lots that needs to be done - build the pilot plant so we can then begin to understand what rates of gas production we can achieve, and the cost of production," he said.

"But it is very exciting for us. The results of our exploration drilling out there have exceeded all expectations, and we are confident we have discovered a very significant nonconventional gas supply."

Solid Energy's decision to focus its coalseam gas operations entirely on Taranaki follows the drilling of a series of exploration wells along the region's eastern border over the past two years. Four of them were drilled in the Waitaanga and Mt Damper areas, with a further seven drilled in Tahora and Tangarakau.

Pearce said the success of the drilling program, and the assessment that has resulted in the four- fold increase in contingent gas resources, is extremely encouraging.

Coalseam gas is being used increasingly around the world - it already provides 15 percent of the United States' gas supply and close to 90 percent in Queensland.

According to information supplied by Solid Energy, when coal forms in the ground, associated chemical and biological processes produce methane gas. This methane sticks to the coal surface and stays in place because of high underground pressure within the coalseam. When water is pumped out of the seam, the pressure is lowered and the gas is released to the surface.

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