Frequently Asked Questions

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Coal Bed Methane

What is Coal Bed Methane (CBM)?

CBM is a form of natural gas that is extracted from deep coal seams around the world. Formed from plant materials over millions of years, coal contains methane in the matrix attached directly to the molecules; certain deep coals contain enough methane to warrant production using wells. Methane was first considered a nuisance and hazard in shallow coal mining, but because the gas is pure and can be fed directly into gas distribution networks, CBM is now commercially extracted from deep coal in Australia and USA.

Where is CBM found around the World?

Coal deposits containing methane are found around the world in both deep and shallow locations. However, the world's primary CBM reserves are generally believed to be in Western Canada, USA, Australia, Eastern Europe, China, India and the UK.

Where are the UK's CBM deposits?

The UK has been a prolific coal producer since 1900 - with production peaking in 1939. While methane has traditionally been vented and more recently collected (CMM) from coal mines, CBM is an underdeveloped industry in the UK. In 2000 a UK study mapped the potential of CBM reserves, and found significant CBM resources in the Midland Valley of Scotland, Canonbie, Cumbria, Lincolnshire, Yorkshire, South Lancashire, North Staffordshire and North & South Wales.

How is CBM extracted?

The lifecycle of a CBM project is similar to that of oil and gas - starting with appraisal wells and finishing with production wells. Appraisal wells typically take around a month from start to finish, and Composite will be drilling a number of appraisal wells throughout its Lease to better understand the coal and methane.

After the appraisal programme, drilling locations will be finalized to best extract the methane with minimal disturbance of the environment. Composite then uses its own drilling rig to drill a horizontal borehole, and then use a second more-powerful rig to drill the horizontal component of the hole into the coal seam. The drilling rig is then removed and facilities are installed.

A process of dewatering commences before the methane will flow from the coal up the well bore to the surface. Saline water is pumped out of the ground, collected, the iron removed, and with environmental regulator consents, the water is allowed to flow into the sea. Composite will not be re-injecting the water into the ground as is commonplace with many USA CBM operations. Because the water is saline - essentially seawater - it is unsuitable for drinking but can be fed directly into the Firth of Forth.

When the dewatering is completed, Methane will be gathered from several locations connected to many wellbores, and sent to a compressor station where it will be fed directly into the national gas distribution network, sold to intensive users in the region, or supplied to a Composite Energy-owned small electricity generation facility.

How does the Methane form?

The formation of methane underground is a natural part of coalification - the process of dead plant material becoming coal. As the material becomes buried under layers of sediments, the material transforms first into brown coal and then black coal. As part of this transformation process methane is formed and either attaches to the surrounding rocks or directly on to the coal pores.

Why is CBM important to Scotland and the UK?

Composite believes CBM is important to the UK because it is a potential long-term source of indigenous natural gas. This untapped energy resource has the potential to alleviate the UK's need for a secure and diverse energy supply - an energy resource that would go untapped without CBM extraction activities. For Scotland in particular - with a heritage of oil and gas exploration and experience in coal mining, Composite can draw upon the areas of expertise that have been developed in both areas in its efforts to develop the resource.

Composite Energy

Who is behind Composite Energy?

Composite Energy was formed in 2004 with the aim of evaluating the potential of CBM production. Company Directors and the management team have a breadth of E&P and management experience from around the world.

See Board of Directors for details.

Who are Composite's Partners?

Composite Energy is working with a number of partners in its day-to-day activities, the company works closely with BG Group and The Royal Bank of Scotland.

In March 2007, Composite announced a CO₂ storage project to evaluate the potential of using flue-gas injection as part of enhancing methane recovery. The project is co-funded by BG Group, Scottish Power and The Royal Bank of Scotland, with Strathclyde University, Glasgow and Imperial College, London undertaking the evaluation.

Where is Composite's main Scottish asset?

At present, Composite owns License PEDL 133, located in Central Scotland incorporating parts of Stirling, Clackmannanshire, Perth and Kinross, Fife, Falkirk and West Lothian council areas. The License is 500 km², covering the Kincardine Basin.

How much Methane is contained in Composite's asset?

From its initial appraisal programme, Composite believes there are up to 2 tscf of gas reserves in License PEDL 133 - enough to provide 10 percent of Scotland`s natural gas requirements for 20 years.

Why does Composite own its own Drilling Rigs?

Drilling wells to access the coal seams is a significant cost to CBM companies. The deep coal seams - in the case of Composite's asset - 3000 ft below the surface - require robust drilling rigs for vertical and horizontal bore holes. As part of its strategy to reduce drilling costs, Composite owns its own mobile drilling rigs; one for vertical drilling, and a more-powerful rig for drilling the horizontal component of the bore hole. While other E&P companies are at the mercy of drilling companies, Composite with its own locally-staffed drilling teams is able to ensure a safe, clean and quick drilling operation while at the same time controlling its drilling costs.

Composite's two rigs Soilmec 'G' series, were built in Italy, and are ideally suited to drilling programmes that require rigs which are smaller, lighter and quieter than for conventional oil and gas. The rigs are based on a flat-bed lorry, and require only a small land area footprint in the drilling stages.

How does Composite access the Deep Coal Beds?

Composite accesses the deep coal beds by first drilling vertical bore holes, and then finishing with horizontal extended reach bore holes. Composite's drillers are able to 'steer the drill bit horizontally through the coal seams to optimize the location of the borehole through the coal. From one drill location, a number of horizontal reach boreholes can be drilled - minimizing the need for multiple drill location and facilitating the collection of methane.

How does Composite draw the Methane out of the ground?

Once the drilling has been completed, a programme of dewatering starts to remove water from the coal. The dewatering process enables the methane to flow from the coal to the surface with the water, where it is removed and supplied to the gas network, local intensive users, or to Composite's own electricity generation facility.

In March 2007, Composite announced a CO₂ storage project to evaluate the potential of using flue-gas injection as part of enhancing methane recovery. Composite believes that CO₂ injection into the coals is a real way to enhance the recovery of methane, while at the same time offering a solution for CO₂ storage. Whereas other CO₂ storage projects store the gas in an underground void or rock-matrix, Composite's programme will evaluate the ability of CO₂ to chemically bond to coal. Coal can typically absorb five times more CO₂ than the methane it release.

Who regulates Composite's activities?

In conducting its operations, Composite is involved with a number of regulatory bodies in the UK:

DBERR: Drilling Licences
Local Authorities/Councils : planning permission to drill wells and establish production facilities
Scottish Environmental Protection Agency: environmental regulation
The Coal Authority: permission to access the UK's coal reserves
Heath & Safety Executive: operational safety

Can Composite supply Gas to my home?

Composite is not in the business of supplying gas to home users directly. As part of its strategy, Composite will be supplying methane directly into the UK's gas distribution network via underground pipelines, and also eventually run an electricity generator.

What are Composite's activities around C0₂?

Reducing greenhouse gasses is a major part of the UK's energy strategy, and Composite believes that it can play a part in reducing the country's harmful emissions. As part of its CO₂ storage evaluation project announced in March 2007, Composite is working with Strathclyde University,Glasgow and Imperial College,London in a project co-funded by BG Group, Scottish Power and The Royal Bank of Scotland. The project is evaluating the use of CO₂ to enhance methane recovery through the injection of flue-gas into the coal seams.

When will Composite begin producing Methane?

Composite expects to begin methane production in early 2008.

What will Composite do with the Methane?

Once the water has been separated from the methane, Composite will supply the methane directly into the UK's gas distribution network. Composite is also planning to supply the methane to intensive users in the region, and eventually feed its own electricity generation facility.

The Community and Environment

Where is Composite active in the UK?

Composite`s current activities are focused in Central Scotland in parts of the Stirling, Clackmannanshire, Perth & Kinross, Fife, Falkirk and West Lothian council areas - around 20 miles from Glasgow and Edinburgh The company is also evaluating CBM potential in other parts of the world.

What does Composite do to safeguard the Environment?

Composite believes strongly in conducting its operations within the guidelines and regulations set out by a number of authorities and organisations.

Returning land to its original state - in accordance with local regulations. No destruction of significant landscape features i.e. tree belts, hedgerows, field patterns. No damage to habitats/species/water/air pollution.

Is CBM drilling disruptive?

In its early days in USA, CBM was considered to be disruptive by many people. However, drilling and technology has moved on considerably, and Composite uses the most recent drilling technology and current practices - with an emphasis on protecting the environment with minimal disruption to the local inhabitants.

Since Composite's Licence area is heavily-populated, the Company places great emphasis on making a minimal impact on the landscape - often by choosing locations that can be hidden by natural geographic features. After the drilling has finished - usually a period of 60 days - all that remains are a few small facilities to handle the dewatering process and methane production stage.