Economics of CSG - links to research papers

Social, legal and health issues related to air and water toxic pollution in Australia.

Economics of CSG - links to research papers

Postby HVPA_research » Thu Mar 01, 2012 8:49 am

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In response to your enquiry I have found the following information that may be of some interest:

CSG economic modelling; On the alleged benefits of the Santos coal seam gas project in North West NSW
February 14, 2012 David Richardson

This analysis takes apart the "Jobs" assumptions of the Allen Report ( ... Qfbqp2YDA&
sig2=jmsi0_DzFXXqdB_Uirzqjg&ct=b ).
It may be of interest that there are hardly any direct jobs expected but over 500 of new public servants!

COAL SEAM GAS BONANZA? by Martin Knox. He is a retired coal and petroleum reservoir engineer and this is his website
There is heated argument between Queensland’s Coal Seam Gas (CSG)companies and landholders at or near sites of projects in the Surat Basin coalfield area. Publicity often presents ill-informed opinion. This paper presents basic information required to understand CSG technology and project economics.
Coal Seam Gas (
He thinks that CSG is not all that profitable and that coal in de-gassed coal seams could be more valuable. In other words, CSG and coal mining are not mutually exclusive and that coal mining may follow CSG. This is a bit of a worry.

This links to a paper entitled: Berman: Why the Marcellus Will Disappoint Expectations
It is about the economics of the shale gas, not coal seam gas, but the problems and patterns may be similar.

It is hard to find CSG well production statistics from Australian sources. However equivalent data from the US Powder River coal bed methane wells ( are readily available and they indicate:
An average well reached a peak production rate of 319 Mcf/D after 1.2 years of production then declined at 45% per year. The decline curves showed little hyperbolic behavior. Peak average water rate of 569 BWPD was reached 0.4 years after the start of production. The length of time to reach peak gas rate is decreasing, likely an indication of successful dewatering in areas of the field.

This means that the life of a typical CSG well is quite short and that new wells would need to be drilled all the time in order to achieve a constant level of production. In other words, this will be gasland for ever expanding into new areas. In contrast to that, the conventional gas production fields stay the same for long period of time.


Very slow progress here, good data is hard to come by, and much seems to be commercial in confidence.

I need a Lisbeth Salander look alike.

Do you or your colleagues have a copy of the Santos report "the economic impacts of developing Coal Seam Gas operations in North West NSW", sometimes called The Allen report? If you examine page 11 "expected annual northwest NSW CSG production", it projects a flat line in CSG production from 2023 to 2035 at 210PJ per annum. Even allowing for a phasing in of new wells there is little indication of a falloff in gas output over time, as we were discussing at Bin 688. Is there any other information supporting the assumption that production from a well tails off over the life cycle? Where did this assumption originate?

There is a bit of data around on Investment and government subsidies, also of interest as it may also indicate that NSW taxpayers are subsidising the CSG industry. Do you have any analysis describing government contributions to the CSG industry?

Bill Hastings

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Joined: Thu Jun 18, 2009 10:26 pm

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