“Coal Bed Methane Market spending will reach $14.8 billion in 2020”, says Visiongain

27 September 2019
Energy

This latest report by business intelligence provider Visiongain assesses that Coal Bed Methane Market spending will reach $14.8 billion in 2020, and is expected to reach $23.4 billion by 2023, registering a CAGR of 9.4% from 2020 to 2030. Coal bed methane (CBM) is the gas found in the majority of coal deposits. It is created during the process of coalification, where over millions of years plant material is converted into coal. Additionally, CBM is made up of pure methane, a clean-burning fuel that contains lesser impurities and requires minimal processing. It is regarded environmentally friendly than petroleum, carbon or even standard natural gas.  

Coal Has A Large Internal Surface Area, It Can Store Surprisingly Large Volumes Of Methane-Rich Gas

Large amounts of methane-rich gas are produced and deposited on inner layers within the coal during coalification. Because coal has such a big inner layer, it can store amazingly big quantities of methane-rich gas; it can carry six or seven times as much gas as a standard rock-sized natural gas reservoir. Moreover, much of the coal, and therefore much of the methane, lies at shallow depths, making wells easy to drill and cheap to complete. Increased stress seals fractures (cleats) in the coal with higher size, thereby reducing the permeability and capacity of the gas to pass through and out the coal.

Exploration Costs For Coal-Bed Methane Are Low, And The Wells Are Cost Effective To Drill

Coal-bed methane exploration costs are low and the wells are cost-effective for drilling. In most coals, methane occurs, and the location of the coal resources of the nation is already well known. Coal methane is therefore an attractive resource. It is estimated that the cost of producing one cubic meter of CBM through vertical drilling is around USD 0.11 globally. It pays for the highest percentage of drilling costs earned. It is estimated that the drilling cost represents approximately 74.3 percent of the total cost of one cubic meter of CBM gas production.

Increased Production Of Coal-Bed Methane Brings Some Challenges Also

However, increased coal-bed methane production carries some technological and environmental challenges and costs with it. For instance, gas rests on bottom of oil which, in turn, rests on bottom of water in a conventional oil or gas reservoir. An oil or gas well draws only from the extracted petroleum without a large volume of water being produced. But water permeates coal beds, and methane is trapped in the coal by its pressure. Water must first be drawn off to produce methane from coal beds, reducing the pressure so that methane can flow out of the coal and into the well bore. Surface disposal of large volumes of potable water can affect streams and other habitats, and subsurface reinjection makes production more costly. In addition, methane is a greenhouse gas; in the atmosphere it acts to trap heat and thus contributes to global warming.

Depleting Conventional Natural Gas Reserves Has Increased Focus Towards CBM

By 2040, in the worldwide power environment, organic petrol is anticipated to be on level with crude oil. However, the depletion of conventional natural gas reserves raises questions about its sustainable status, resulting in an increased focus on the use of unconventional sources of gas such as CBM, shale gas, and tight gas. In addition, it is projected that recoverable unconventional gas supplies, including CBM, are much bigger than standard natural gas assets, with a significant chuck remaining unexplored. It is expected that increased global exploration and extraction will drive CBM production over the next six years.

Electricity accounts for the next biggest segment sharing 8.1% of the total cost for producing CBM gas by the means of vertical drilling

Electricity speaks for 8.7 times of the complete price of generating CBM petrol through vertical processing for the next largest section. Maintenance costs for machinery and equipment used to manufacture CBM represent 6.8 times of the complete price. Operational expenses account for about 5.4 percent of the total cost and other costs incurred for CBM production. Global market revenue for CBM (coal bed methane) is expected to reach USD 17.31 billion by 2020, growing by 5.9 percent from 2020 to 2030.

Due to flexible income subsidies, CBM growth in the U.S. has been and is anticipated to be more pronounced during the prediction era. Pure methane acquires the maximum percentage of methane from the coal bed in the U.S.'s eastern coalfield and only gas dehydration is done to remove moisture in order to obtain pipeline quality. Sometimes stripping nitrogen or carbon dioxide in western coalfields is a necessity. There is collection, transport, marketing and pricing similar to conventional natural gas after production.

Power Generation Emerged As The Leading Application Accounted For 37.3% Of Total CBM Produced Globally

At an estimated CAGR of 8.5 percent from 2020 to 2030, power generation and the largest market are also expected to be the fastest growing application markets for CBM. The increase in the market share of power generation can be attributed to the fact that it is expected that other applications, such as residential and commercial use, will decrease in share by 2020. CBM's power generation is cheaper and therefore preferred in both developed and developing countries. The process of generating electricity converts methane from coal mines into carbon dioxide and water and significantly reduces greenhouse gases. To earn carbon credits, developing countries are now shifting focus towards CBM for power generation. Companies such as Essar Oil and Caterpillar are investing in large CBM projects for power generation.

 CBM can be efficiently used as a fertilizer

CBM can be used effectively as a fertilizer, with methane being a source of ammonia used in half of the fertilizer market around the world.  The methane market for coal beds is essential in helping food production to meet the growing needs of the population. Essar, a CBM-based company currently supplies Matix Fertilizers and Chemicals with 1 million cubic meters of the required gas.

CBM can be readily converted into diesel, petrol or ethanol

CBM can be easily converted to diesel, petrol or ethanol, CBM can be stored in canisters or used as a domestic fuel. The Fischer-Tropsch synthesis model has been shown to be an effective method for converting a mixture of carbon monoxide and hydrogen into liquid hydrocarbons and numerous CBM by-products. With the potential to retain fossil fuel demand, the coal bed methane market is expected to show robust growth over the timeframe forecast. Increasing the use of unconventional sources of energy because of the need for clean energy will be a boon for CBM. Coal bed methane market has the potential to offer an alternative to conventional sources of energy and can help to reduce greenhouse emissions that can open up new avenues for business growth. For example, the fossil carbon floor industry has the ability to revolutionize Zimbabwe's equilibrium of payments by decreasing exports of oil goods and fertilizers representing 32% of the country's exports.
 

Properties Of Methane To Act As A Greenhouse Gas Are Likely To Hamper The Growth Of Coal Bed Methane

During the forecast timeline, severe dewatering requirement to extract the gas in combination with other methane properties to act as a greenhouse gas is likely to hamper the growth of the methane coal bed market. Disruption of groundwater and decline of groundwater level due to injection of additives and extraction of water from coalbeds will further limit the development of the sector.

 

Leading Regional & National Analysis

U.S. dominated CBM production, accounting for 52.8% of total CBM produced globally

 Increasing power consumption in primary markets like the U.S., Canada, China, Russia, and Indonesia is expected to promote the use of CBM as an energy source in the light of growing manufacturing sectors. It is expected that technological advances in the introduction of new extraction processes such as hydraulic fracturing to produce CBM in the U.S. and Canada will open up new opportunities in the years to come. The presence of big coal deposits in China, India, and Australia, along with legislative assistance to encourage fresh mineral processing projects, is anticipated to guarantee access to CBM producers for raw materials. This factor is expected to have a positive impact on the market during the forecast period.

In the global market, Canada followed the U.S. and accounted for 11.5% of total production in 2013. North American market growth is motivated mainly by the country's increasing supply for sustainable energy and reduced dependence on standard natural gas outlets. However, Asia Pacific is expected to be the fastest growing CBM market at an estimated CAGR of 14.9 percent from 2020 to 2030, due to growing drilling activities mainly in coal-rich countries such as China, India, Indonesia and Australia.

Asia Pacific is one region where GDP development levels are increasing at a fast rate owing to increasing disposable consumer revenue. Growing GDP leads to increased energy demand in the region. Asia Pacific power development is powered primarily by China, India, and Indonesia. As well as being a large demand center, Asia Pacific is also emerging as a large supply center including CBM for unconventional gas resources. Unproven coal bed methane stocks in nations like India, China and Indonesia are the justification why fresh entrants and businesses are prepared to spend in this region. In China, coal bed methane is increasing in order to supplement significant proportions of natural gas supply due to increased demand for natural gas compared to the domestic production of the same. Asia Pacific area is a big demand base for natural oil assets and is also anticipated to arise as a good production base owing to the growing concern of businesses.

 

Leading Players

Dart Energy
Baker Hughes
Santos Ltd.

BG Group (Royal Dutch Shell PLC.)
Arrow Energy
Origin Energy
Great Eastern Energy
PetroChina
Petronas
 Encana Corporation
Concophillips

 

A major chunk of the global CBM market is captured by BG Group and Arrow Energy

BG Group, Arrow Energy, Dart Energy, Santos, Origin Energy, Great Eastern Energy, PetroChina and Petronas are key players on the global coal bed methane market. These businesses give a varied range in the methane coal bed industry in aspects of both the carrier firms ' goods and facilities as well as being extremely embedded across the value chain. BG Group and Arrow Energy are capturing a major part of the global CBM market. Together, the two companies accounted for more than half of the 2013 global market. In the rest of the market, there is severe competition and companies like Dart Energy, Santos, Origin Energy, Great Eastern Energy and PetroChina share it.

 

Increasing implementation of the methane coal bed industry as an option to electricity will reduce the strain on emerging country

 domestic energy grids Increasing implementation of the methane coal bed industry as an option to electricity will reduce the strain on emerging states ' domestic energy grids. This technology can be used to overcome power outages along with limited access to clean energy. Largest CBM reserves in Africa found in the South African Development Community (SADC), in particular Zimbabwe can improve economies positively and reduce imports thereby increasing the size of the methane coal bed market.

The comprehensive report offers market estimation and forecast for the period ranging 2020-2030 for leading national markets and rest of the world. Moreover, the report contains dedicated leading companies covering 10 leading producers in the field of Coal Bed Methane.

The Coal Bed Methane Market Report 2020-2030 report will be of value to anyone who wants to better understand the Coal Bed Methane market and its various segments. It will be useful for businesses who wish to better comprehend the part of the market they are already involved in, or those wishing to enter or expand into a different regional or technical part of the Coal Bed Methane industry.

Visiongain is a trading partner with the US Federal Government
CCR Ref number: KD4R6

Do you have any custom requirements we can help you with? Any need for specific country, geo region, market segment or specific company information? Contact us today, we can discuss your needs and see how we can help: sara.peerun@visiongain.com

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