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Coalbed Gas Development in the Western United States: Legal Issues and Operational Concerns

Kurt M. Petersen, Proceedings of 37th Annual Rocky Mountain Mineral Law Institute (1991)

Due to its flammability, coalbed gas1 has traditionally been considered to be a coal mining hazard. Because coalbed gas [13-4] constantly seeps into coal mines and is explosive in low concentrations, coal miners vigilantly vented the coalbed gas into the atmosphere. If that vigilance was relaxed, tragedy often followed. Coalbed gas was thus part of the workaday vocabulary of every coal miner, probably in a profane sense, but was not considered a potential energy resource. Such wasting of coalbed gas by ventilation continued until the late 1970's when a combination of improved economics, technical advances, tremendous development potential,2 and tax incentives3 made coalbed gas an attractive energy resource. Coalbed gas has become so attractive that its development has been one of the few bright spots in the oil patch in the 1980's. In fact, the last five years have seen a marked increase in experimental and commercial coalbed gas development projects in the United States. By the end of 1991, over 9,000 coalbed gas wells are projected to be drilled.4 In the San Juan Basin of southwestern Colorado and northwestern New Mexico, more coalbed gas wells were permitted and drilled in 1990 than had ever been permitted and drilled in previous years.

This increased activity has focused the coalbed gas developer's attention on two major legal issues. First, does the coal [13-5]