Alberta will face tough challenges in juggling landowner rights and environmental concerns while trying to develop burgeoning resources such as coalbed methane (CBM), the province's energy minister says.
In a speech to the Canadian Association of Petroleum Landmen (CAPL) in Calgary last week, Greg Melchin said that with record drilling and increased interest in tapping the province's CBM reserves, working with land-owners and other stakeholders will play a key part of developing this resource.
Coalbed methane is natural gas contained in coal seams.
"I've been in the homes of many of our partners and many of the people of rural Alberta. I've sat down and talked to them and really started to appreciate the challenge that (CBM) does overlay over all the other conventional and non-conventional activities going on in the province," Melchin said.
Gaining and keeping access to those lands, he added, will continue to be a major challenge "because of the level of activity that will potentially continue to escalate over time."
CBM drilling has risen sharply in recent years as explorers and producers rush to harvest the largely untapped resource. Last year more than 3,000 such wells were drilled in Alberta.
Environmental groups such as the Pembina Institute have predicted that CBM development will become a major battleground between landowners and the energy industry.
Melchin said that a final report drafted by a multi-advisory stakeholder committee on CBM issues such as land access and the impact on water resources will likely be released soon.
"We will be really working aggressively as a department to implement as many of (the report's) recommendations as fast as we can, so we can continue to have the right regulatory structures to deal with the opportunity that is so vast in our coalbed methane."
Coal-related issues featured prominently on the Alberta government's agenda last week. In his televised state-of-the-province address, Premier Ralph Klein stated that half of Alberta's energy comes from "clean coal," a claim opposition members and environmentalists dubbed false.
However, the energy minister noted economically viable clean-coal technologies are within grasp, saying techniques already exist to capture sulphur and carbon dioxide emissions. He likened advances in clean-coal technology to development of the oilsands, where technological improvements have driven down production costs.
"You have (the coal industry) that has improved its standards and reduced its emissions substantially to even where it was 20 or 30 years ago," Melchin told CAPL members. "Then you start adding on where the technology could take you ... there is some very exciting research that is ongoing."
"It is like in the oilsands - when they started, things were costing $35 to $40 a barrel to produce. Today, they are more in the range of $10 to $15 (per barrel) ... so in the low $20s, you'll get a return on the capital."
Meanwhile, after meeting with federal Natural Resources Minister Gary Lunn, Melchin said the Alberta government expects a "fresh start" and an open dialogue with the federal government on the energy file.
"It'll be no surprise to you that we're quite electrified in Alberta by the prospect of working with the Conservative government in Ottawa," he told Lunn.
Pierre Alvarez, president of the Canadian Association of Petroleum Producers, said his initial hour-long meeting with Lunn was "incredibly positive."
"Unlike some politicians who view the resource sector as being kind of sunset industries, he's very much one who sees there are tremendous opportunities across the country and wants to see those taken advantage of."
- with files from Canadian Press