What is coal seam gas?

Gas has been used in Australia since the 1820s. It is used for cooking, heating and providing hot water. It’s also a major fuel source used to generate electricity for homes and industry, here and overseas.

Natural gas is methane

Natural gas is mainly methane – a colourless and odourless gas (it is typically 90% to 98% methane (CH₄) with small amounts of other hydrocarbons, nitrogen and carbon dioxide (CO₂)) .

Gas is often referred to as a low carbon energy source as it produces around half the greenhouse gas emissions of coal when used as a fuel for electricity generation. Gas fuelled electricity generation also requires much less water than is required to run a coal fired power plant.

Gas is also known as a ‘cleaner burning fuel’ because it creates very little local air pollution (smog, ash etc) so it does not reduce air quality in the immediate area where it is used.

Coal seam gas is natural gas that is extracted from coal seams deep below the ground.

Historically, natural gas has been mainly extracted from large sandstone reservoirs. Improved drilling and production techniques now mean that we can extract natural gas from what are known as ‘unconventional reservoirs’ such as coal seams. Australia's major CSG resources are found in eastern Australia. Currently the largest known proven reserves are in Queensland's Bowen and Surat Basins. CSG provides 90% of Queensland’s gas needs and 15% of the State’s electricity generation. Coal seam gas is now about to form the basis of a major new liquefied natural gas export industry that will deliver substantial economic benefits to Queenslanders and create many thousands of jobs in the state.

CSG is stored deep under the ground, typically 200 to 1,000 metres below the surface. It is held in the coal seams by pressure from water contained within the coals. The coal seams generally support smaller and more brackish groundwater flows than aquifers which are used predominantly for agriculture.

The wells are cased and sealed

Fraccing helps the gas to flow

In some locations, there are few natural pathways for water and gas to flow within the coals (i.e. the coals are not highly “permeable”). In this situation a mixture of predominantly water and sand is pumped into the coal under pressure to provide additional pathways to help release the gas. This is known as fraccing. This is a controlled and closely monitored activity, and the fraccing fluids used by Australia Pacific LNG are readily degradable and are not considered harmful in the concentrations applied.

Many countries that do not have large natural gas reserves like Australia are also keen to use gas, particularly to generate electricity. The technology to liquefy gas by cooling it to -161^oC was first developed in the early 20^th century and allows the export of natural gas over large distances. Today’s LNG industry uses specially designed shipping vessels to transport the liquefied natural gas to overseas markets. It is then re-gassed in the receiving country and used just like normal natural gas for heating, cooking and electricity generation. LNG is an enormous growth industry, with many countries seeking lower carbon fuels and to diversify their sources of energy.

Australia is a major exporter of LNG

One of the first LNG export facilities in the world was built by ConocoPhillips in Alaska and began exporting to Japan in 1969. Japan is still the biggest importer of LNG but emerging markets in China and other parts of Asia are growing rapidly. Australia is a major beneficiary of this growing industry and is forecast to soon rival Qatar as the biggest exporter of LNG, bringing increased jobs and economic growth to Queensland.

Difference to Shale Gas

Most of the information being presented about the US gas industry through movies, websites and social media concerns shale gas, not coal seam gas. While both are classified as ‘unconventional’ gas resources, the geology is very different and the extraction processes also differ.

Shale gas wells are a lot deeper, with all the wells requiring hydraulic fracturing which is often more extensive than the process required for CSG. CSG production in Queensland is currently mainly from wells that do not require fracture stimulation and we expect to only fracture around 30 to 40% of wells in the Australia Pacific LNG project. Shale gas fraccing also uses different and more numerous chemical additives as the temperatures are much higher at the greater depths, thus requiring chemical additives that can withstand extreme heat.

Coal seam gas is mostly methane and has far more simplified drilling, production, storage and treatment processes than shale gas (which generally results in the production of some higher order complex hydrocarbons, including light oils).