recovery, which established a basic theoretical
system for exploiting and processing CBM. In
the following decade, the US government
invested more in research and completed an
assessment of the nation’s CBM resources. It
also spent $6 billion on drilling experiments and
on proving the technical feasibility of CBM
recovery, both of which are the pre-conditions
for CBM industrialisation.
Canada’s experience also proves that breakthroughs in exploration and production technologies are a prerequisite for the development of a
CBM industry. Canada increased output per well
substantially and then achieved mass production
after making significant advances in multi-branch
horizontal wells, coiled tubing fracturing and
nitrogen foam fracturing. These successes were
the result of a technology R&D programme tailored to Canada’s own CBM conditions.
Around 30 years of subsidies lay behind the
growth of a healthy CBM industry. The US
government supported coalbed methane development projects with tax subsidy policies and a
special-purpose fund started in accordance with
the Crude Oil Windfall Profit Tax Act of 1980
for financing the development of unconventional
energy with windfall profit taxes on conventional
energy. The tax subsidy policies were implemented in two stages. During stage 1 (from 1980
to 2002), CBM was subsidised for much of the
period. Stage 2 began with the new Energy
Policy Act of 2003, which set the subsidy
threshold at single well production capacity of no
more than 56,700 m
3 per day. At their highest,
the subsidies accounted for half the market price
of CBM. During the 30 years, the US government spent billions of dollars subsidising CBM.
Fourth, natural gas hydrate. The carbon content in gas hydrate is estimated to be more than
double that in other known fossil fuels, making it
a next-generation strategic energy source. Many
countries and regions have surveyed hydrate
deposits, discovering deposits at more than 130
sites. The first country to recover natural gas
hydrates is the former Soviet Union, which
pilot-produced gas hydrates in the 1970s at
Messoyakha, Siberia, with depressurisation and
inhibitor injection methods. After that, Canada,
the USA and Japan launched pilot gas hydrate
drilling and production projects and made significant progress. The pilot gas hydrate production project at Mallik, Canada in 2008 proved the
feasibility of the depressurisation method.
6.6.2 Current Developments
and Challenges in China’s
Unconventional Gas
(1) Current developments
First, tight gas. China has huge tight gas potential. Preliminary estimates using the analogy
method show that China has 10 trillion cubic
metres of recoverable tight gas. The cumulative
proven reserve rate is only 18% at present. The
huge potential could be tapped by speeding up
exploration and production. The biggest deposits
of tight gas in China are in the Ordos and
Sichuan basins, followed by the Tarim, Junggar
and Songliao basins, which together hold 90% of
China’s total tight gas resources.
The key technologies for recovering tight gas
are basically mature. China has made great progress in recent years by learning from other
countries about the main technologies of tight gas
exploitation, including vertical, cluster and horizontal well-staged fracturing. Fracturing reformation increases output per well to 10,000–20,000 m
3
per day. At the central Sulige gas field in Inner
Mongolia, for example, average daily single-well
output has been a steady and cost-effective
10,000 m
3 for four years.
Reserves and output are increasing rapidly. In
recent years, geological reserves and output of
tight gas have increased by 300 bcm and 5 bcm
respectively year-on-year. Cumulative proven
geological reserves of tight gas were 3.3 trillion
cubic metres at the end of 2011, accounting for
40% of China’s total geological gas reserves.
1.8 trillion cubic metres of tight gas were recoverable, accounting for about a third of recoverable
gas reserves in China. Tight gas output in 2011
amounted to 25.6 bcm, accounting for about a
quarter of the country’s total gas production.
Second, shale gas. China has huge shale gas
resource potential. Although China’s shale gas
380
S. Zifeng and N. Dickens
system for exploiting and processing CBM. In
the following decade, the US government
invested more in research and completed an
assessment of the nation’s CBM resources. It
also spent $6 billion on drilling experiments and
on proving the technical feasibility of CBM
recovery, both of which are the pre-conditions
for CBM industrialisation.
Canada’s experience also proves that breakthroughs in exploration and production technologies are a prerequisite for the development of a
CBM industry. Canada increased output per well
substantially and then achieved mass production
after making significant advances in multi-branch
horizontal wells, coiled tubing fracturing and
nitrogen foam fracturing. These successes were
the result of a technology R&D programme tailored to Canada’s own CBM conditions.
Around 30 years of subsidies lay behind the
growth of a healthy CBM industry. The US
government supported coalbed methane development projects with tax subsidy policies and a
special-purpose fund started in accordance with
the Crude Oil Windfall Profit Tax Act of 1980
for financing the development of unconventional
energy with windfall profit taxes on conventional
energy. The tax subsidy policies were implemented in two stages. During stage 1 (from 1980
to 2002), CBM was subsidised for much of the
period. Stage 2 began with the new Energy
Policy Act of 2003, which set the subsidy
threshold at single well production capacity of no
more than 56,700 m
3 per day. At their highest,
the subsidies accounted for half the market price
of CBM. During the 30 years, the US government spent billions of dollars subsidising CBM.
Fourth, natural gas hydrate. The carbon content in gas hydrate is estimated to be more than
double that in other known fossil fuels, making it
a next-generation strategic energy source. Many
countries and regions have surveyed hydrate
deposits, discovering deposits at more than 130
sites. The first country to recover natural gas
hydrates is the former Soviet Union, which
pilot-produced gas hydrates in the 1970s at
Messoyakha, Siberia, with depressurisation and
inhibitor injection methods. After that, Canada,
the USA and Japan launched pilot gas hydrate
drilling and production projects and made significant progress. The pilot gas hydrate production project at Mallik, Canada in 2008 proved the
feasibility of the depressurisation method.
6.6.2 Current Developments
and Challenges in China’s
Unconventional Gas
(1) Current developments
First, tight gas. China has huge tight gas potential. Preliminary estimates using the analogy
method show that China has 10 trillion cubic
metres of recoverable tight gas. The cumulative
proven reserve rate is only 18% at present. The
huge potential could be tapped by speeding up
exploration and production. The biggest deposits
of tight gas in China are in the Ordos and
Sichuan basins, followed by the Tarim, Junggar
and Songliao basins, which together hold 90% of
China’s total tight gas resources.
The key technologies for recovering tight gas
are basically mature. China has made great progress in recent years by learning from other
countries about the main technologies of tight gas
exploitation, including vertical, cluster and horizontal well-staged fracturing. Fracturing reformation increases output per well to 10,000–20,000 m
3
per day. At the central Sulige gas field in Inner
Mongolia, for example, average daily single-well
output has been a steady and cost-effective
10,000 m
3 for four years.
Reserves and output are increasing rapidly. In
recent years, geological reserves and output of
tight gas have increased by 300 bcm and 5 bcm
respectively year-on-year. Cumulative proven
geological reserves of tight gas were 3.3 trillion
cubic metres at the end of 2011, accounting for
40% of China’s total geological gas reserves.
1.8 trillion cubic metres of tight gas were recoverable, accounting for about a third of recoverable
gas reserves in China. Tight gas output in 2011
amounted to 25.6 bcm, accounting for about a
quarter of the country’s total gas production.
Second, shale gas. China has huge shale gas
resource potential. Although China’s shale gas
380
S. Zifeng and N. Dickens