Powder River Basin Coalbed Methane Development and Produced

The loss of CBM resources, royalties and tax receipts from more stringent CBM produced
water management practices would be substantial. Table S-2 provides a summary of the
potential losses that would occur from requirements to use progressively more stringent water
disposal alternatives. The PRB Study recognizes that, in practice, a combination of water
disposal alternatives would be used. Once the final mix of options is established, the
information in this study can be used to estimate these impacts.
Table S-2. Summary of Impacts from Using Alternative Water Disposal Methods
for CBM Produced Water in the PRB
Water Disposal Method
Loss of CBM
Resource
xi
Loss of CBM
Royalty
Loss of
Production/
Ad Valorem Taxes
(Tcf) ($ million) ($ million)
Surface Discharge -- -- --
Infiltration Impoundment (2.4) ($506) ($362)
Shallow Re-injection (3.6) ($756) ($540)
Reverse Osmosis/w:
• Trucking of Residual (15.3) ($3,184) ($2,272)
• Deep Disposal of Residual (12.2) ($2,547) ($1,810)
Improvements in coalbed methane production technology and water management practices
can help maintain the economic viability of Powder River coalbed methane. The current
volatile natural gas prices and historically high basin differentials place major hurdles on the
economics of Powder River CBM. Further raising the barrier is the recognition that a considerable
portion of the shallower, thick coals in the basin have already been drilled, leaving
deeper and thinner coals as the target. Finally, the costs of more stringent water management
practices will further lower the economic viability of this large natural gas resource.