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Coalbed Gas Operations From the State Regulatory Perspective

William A. Keefe, Coalbed Gas Development (1992)

When most of the oil and gas conservation statutes were enacted, their application was directed toward more traditional means of exploration and production. Coalbed gas operations do not always neatly fit into traditional molds. As a result, problems can occur in applying these statutes and their underlying regulations to coalbed gas development. This paper will examine some of those problems.

At the outset, it should be noted that the conservation statutes and regulations do seem to apply to coalbed gas operations generally. These acts provide in some manner that their respective regulating commissions have authority to regulate all natural gas operations1 with natural gas including all gases occurring naturally in the gaseous stage in the [6A-2] reservoir.2 Notwithstanding such general application, various specific provisions of the statutes and regulations do not apply with such ease to coalbed gas activities. To a large degree, this is due to differences between more traditional oil and gas operations and coalbed gas operations.

Unlike most gas reservoirs where the gas migrated from the source rock to the reservoir rock, coal generally is both the source rock and reservoir for coalbed gas. Permeability of the coalbed gas reservoir depends upon the presence of a natural fracture system, or cleats. Release of the coalbed gas is controlled by diffusion throu