The same year that Royal Dutch Shell’s Canadian subsidiary was forced to put their coalbed methane plans on hold in BC’s Sacred Headwaters region, the company was quietly laying the groundwork for a large coalbed methane project in northeast BC.

In 2008 Shell signed a joint venture agreement with Canadian Spirit Resources, dumping $50 million into the “Farrel Creek pilot project” just north of Hudson’s Hope, BC. The project is adjacent to the Peace River Coalbed Methane project, which is the first and only commercially producing CBM project in the province.

Shell has been busy. They have purchased 95 sections of land, have completed an expandable gas processing plant, a gas gathering system, and a total of twelve wells so far. The project sold its first unit of gas in June 2009.

Shell is tapping into gas trapped in the Gething formation, home of the first coal discovered in BC. Potential reserves of the Gething formation have been pegged at about 4 trillion cubic feet, about half the potential reserves estimated to be in the Klappan anthracite coals in BC’s Sacred Headwaters.

Shell Farrell Creek

The sales line that Shell has built has a capacity of 55 million cubic feet per day, “evidence that Canadian Spirit Resources and Shell expect to be producing a lot of gas from the Gething formation”

The Hague-based multinational has donated cash to a park in Hudson’s Hope, has taken town councilors on a tour of their plant, and are nearing a decision about whether to scale up the project and become 75% owners in the process.

Gordon Campbell’s provincial government panders to the gas industry; their drive to slash royalties and provide other subsidies to the richest industry in the world will produce a short term revenue fix, but place a long term environmental and social burden on the next generation of British Columbians.

Shell’s coalbed methane project is an unfortunate example of Campbell’s brand of climate leadership.