EnCana suspends BC coalbed methane operation

The British Columbia government’s scheme for massive coalbed methane extraction in the Rocky Mountains suffered another serious setback Wednesday with the announcement that Encana is backing away from its exploratory pilot project north of Elkford.

Encana announced at an open house in Elkford on Wednesday, October 27 that it will suspend operation of its five-year old coalbed methane project near Elkford, pending recruitment of a financial and technology partner. Encana said it hopes to find such a partner over the winter and resume operations at the site in the Spring. Encana will continue to make lease payments on the gas field so as to maintain its exclusive right to restart the operation.

Encana project lead Alan Greeves said only one of the 17 wells produced commercial flows of methane. He said the company considers that horizontal drilling may be the answer to extracting commercial quantities of gas from the coalbeds. One diagonal hole would send spurs horizontally into the layered coalbeds, according to a diagram presented at the event. Enanca said this would also substantially reduce the gasfield’s footprint on the landscape. It said that it did not have the expertise to undertake such drilling.

However, it is generally acknowledged in the coalbed methane industry that directional drilling would be uneconomical and technically challenging in the mountains where the coal seams are hardly horizontal.

Alan Greeves said that he will not longer manage the Elkford project and is being reassigned to Encana’s coalbed methane interests in northeastern BC, including Hudson Hope.

Report by David Thomas, Fernie

EnCana announced record third quarter results the same day – oil and gas sales up 22%, cash flow increase 40% to $1.36 billion.

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