Economic factors affecting the rate of development of coalbed methane resources

The analysis contains a comparison of recent price forecasts for natural gas and a discussion of the discrepancies among the commercial service (Data Resources and others) and the Department of Energy's published forecasts in the National Energy Policy Plan. The assumptions underlying projected growth in energy sectors are explained. The analysis also includes an examination of historical exploration and development costs for crude and conventional methane resources based on footage and discoveries data from 1947 to 1984. Costs per crude equivalent barrel (COE-BBL) are computed for conventional methane resources and compared with costs similarly computed for some representative coalbed methane wells. Demand projections show nearly level growth for domestic natural gas consumption, and a slow decline in natural gas discoveries per crude equivalent barrel. Coalbed methane appears to be substantially less costly than exploring for conventional resources. With reasonable access to existing pipelines, coalbed methane resources may be less costly than drilling development locations for conventional methane.