Rockin and rolling in Alberta

[cowman]

Just got the word that a major Texas company has an extensive methane gas project planned for my area this summer. Talking 8 wells to a quarter probably in the neighborhood of 500 plus wells.
An engineer buddy tipped me off on this one a couple of days ago. It seems there is a lot of opposition to these methane wells in certain parts of the province due to water concerns. Apparently the coal seam here is basically dry so shouldn't be a problem! I know the one on my land produces maybe a couple of hundred gallons a month.
I can see this project putting a lot of money into the farmers pocket...lets see 8 leases/quarter at $15,000/ surface lease equals $120,000 up front and a yearly rent of $20,000! That should allow a lot of guys to keep losing money on farming?
And just consider if you own the mineral rights....
Why our local cowboys just might survive BSE!

[cropduster]

Potential for some of that here in east central AB. too.Seems like the `real futrure` for Alberta!!

[Horse]

Talk of that here to I think or hope that there is a lot of study put into it as in colorado it sure isnt pretty. And here water is 300-400 ft or more and then only around 3 gal per minsome more lots less and with the sloughs dry and river flo very low we cant afford much more prosperity . But I suspect if tye oil boys want it the govmt will see a clear path for them to get it.North west of Edmonton

[poorboy]

Cowman,

If you see $6000 per lease you will be lucky. They are usually only using 2 acres per site and then a goat trail coming in so as to use less acres. On a lot of the coal bed methane they are drilling from pads, so you get full value from the first lease, and then only another $1000 or so for every well after that on the pad.

Considering that the price of gas is 3-4 times higher than in the 1980's, it is a shame that they are paying the landowners no more than they did in the 1980's. The operators, construction companies, pipe suppliers, drilling rigs, laborers, etc., are certainly getting more.

[cowman]

Well they paid me full value for mine and it hardly takes up any room(maybe a 10 ft.X 12 ft. area enclosed in pipe)
, but then it was a test well, drilled right beside a deep lease that had a pipeline running to it. I'll tell you they sure don't make much of a mess as they don't have to plow out a lease, just drill right on top of the pasture. I'll try to find out what kind of deal they offer on multiple leases.

[Horse]

Poorboy I heard the other day talk about oil prices it was said that in 1980 dollars oil should be 65 per barrel now and as I rember when gas was 23 cents per gal I personaly had more trouble getting my hands on 23cents than I do now getting 73cents per litre. So mabey gas is a bargian after all 25yr ago people didnt drive 50 or more miles to work every day.

[poorboy]

Cowman,

When you say that your test well for the coal bed methane was beside your deep well, do you mean that it is its own 2-3 acre site or is it a 1/2 acre add on to the original site for the deep well. Here in my area (Encana) the oil company pays only $1000 for the well if it is added to the original site (ie. a 1/2 acre addition to the original site) and $350 additional per year annual payment.

If you are adding to the original site and getting paid an extra $10000 for it, then I would sure like to talk to you more about it!

[cowman]

Well when they drilled it it was a full site but now it just takes up this little space in the middle of the lease. They have a gate from the fenced big lease but just a pipe "corral" around the well head and small heater shack. I got $15,000 for the original lease and $2300/year rent for the methane well. This was a reduction from the $3000 I wanted because they use the road on the big lease. We had a fair bit of wrangling over the whole thing as they wanted to be pretty cheap. They tried to slip a few sneaky "escape" clauses into the lease agreement but as I no longer do anything with oil companies, until my lawyer sees it, he quickly got them to see the light!
It always amazes me how farmers think they can go up against an oil company and outsmart them or get a real good deal. The landmen deal with many clients and have all kinds of company lawyers to back them up...and then along comes the farmer who maybe does a deal like this once every few years? I think it cost me about $700 in lawyer fees for that particular lease. I think I got pretty good legal advice...the lawyer ripped up the companys lease and wrote a new one! This lawyer specializes in oil and gas and does nothing else and he just loves to make the companys dance!

[cakadu]

You know cowman, the more I read about this coalbed methane, the more I have to question whether it is a good thing or not - especially if it could mean doing damage to acquifers that are already getting pushed to the max. This spring, while not the driest on record, has certainly been one where there hasn't been much in the way of run off. The lack of surface water is a very good indicator of what is happening below with the groundwater acquifers. If the surface water is not recharging, then neither is the acquifer.

Much of what I have read about coalbed methane extraction is that drilling through acquifers is not uncommon and the acquifer can then drain. At a time when we need to be preserving whatever water we can get our hands on, is this something that we should even be considering?

Isn't it ironic that some of the biggest revenue generators in this province i.e. oil and gas extraction can take our most precious resource out of the hydrological cycle forever?

[cowman]

At times I too wonder just how safe these shallow wells are. Now it does make sense the gas company would do everything possible to not allow water into the coal seam as they want dry gas not wet gas? It costs a lot of money to knock the water out.
However having said that...one of the problems of the oil and gas industry is how unstable it is. Quick buck artists are the rule rather than the exception! And they are not above breaking the rules and doing whatever it takes to get high production so they can sell out at a big profit! That is what water injection is all about really...it is not a sustainable practice in the long run. Our Provincial government has a very lax attitude when it comes to the oil and gas industry and they are too cheap to police the whole thing properly! Which I find amazing considering the amount of money Alberta makes from oil and gas...to busy wasting money trying to keep the doctors and teachers driving new BMWs, perhaps?
The coalbed methane east of Innisfail/Penhold field seems to be very dry gas and what little water there is, is sweet water. But I still wonder? A lot of the deeper water wells(300 feet or more) around here have a lot of gas in them! Why people can light their taps!
It is a funny area for water! Some people can hardly find any at just about any depth and others have no problem finding water at 50-150 feet. I believe a good water witch is well worth the few dollars he will cost?
A disturbing trend is the number of shallow wells that seem to be going dry this spring? One neighbor had a 60 foot well that was tested at 26 gallons/minute go dry this spring. He has been hauling water for his feeder cattle until he can get another well drilled. I guess if he can't find any he will be done feeding cattle.

[cakadu]

We happen to be one of those that are sitting on very good water - actually the best within a 6 mile radius of us. Neighbors have had to drill 3 or 4 times and have barely gotten enough water to do the house, let alone anything else. Under these circumstances, we are going to protect that water with all that we can. Having said that though, the reality is that the company will get in here if they want; we'll just ensure that the water is protected, at least to the extent we are able to.

Even though we've had good water, I still wonder if anything will happen to it. With things not recharging this year and it being so dry the past 3 years, you wonder just how much some of these aquifers can take. Unless we get some much needed moisture, I think we will be cutting back as much as we can on water consumption. On the bright side, with never watering the lawn, grass cutting has been kept to a minimum the past 3 years.

It would be nice if the industry would get "policed" to the extent that it is supposed to. Something like 80% of the reclamations aren't done in the proper amount of time, if at all. Sustainable Resources should be getting on top of it all.

[cowman]

I agree sustainable resources should be on top of it but how can they when the Alberta government keeps cutting their budget...employees? Is the real reason that the oil companies really call the tune? And maybe Ralph and gang are bought and paid for?
Let's face it, oil and gas rock the cradle in Alberta? Just look at the Alberta governments revenue figures? About 1/3 of total- oil and gas royalties. Another 20% corporate taxes...guess who the majority of the corporations in Alberta are? About 25% personal income tax...who makes the big petro dollar salaries? And about 10% gambling,booze, cigarettes...well we all know oil field people like to play?
The oil and gas sector has allowed us to put up with some very incompetent governments...governments that know full well not to bite the hand that feeds them! Consider when the boom really took off? When the Tories took over in the early seventies? Now I know that the oil crisis happened then and that was partly the reason for the boom, but it was also the governments willingness to move to a more "American" style of government? And give away the store? Was this a good thing? Well for some people it definitely was...for others not so good?
Never forget that we had an extremely competent government before the Tories! There was no provincial debt before Lougheed got in...and we never had the massive oil revenue! Of course it was a government built on certain principles that obviously the Alberta people didn't agree with? Fiscal responsibility, personal responsibility, and living within our means?