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Editorial comment

The Australian coalbed methane (CBM) industry has again showed its ability to attract big money with two multi-billion dollar deals reported last month.


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Oil major, Royal Dutch Shell, and its Chinese partner, PetroChina, have agreed to pay AU$ 3.5 billion (US$ 3.2 billion) for Arrow Energy’s Queensland assets. Assuming the deal gets the required regulatory and shareholder approvals, it will give China its first stake in the Australian CBM industry, which has also attracted investments from ConocoPhilips, BG Group and Petronas. Meanwhile, BG will reportedly sign a contract worth an estimated US$ 40 billion to supply liquefied natural gas (LNG) to China from its Australian CBM deposits.

Australian CBM (or coal seam gas, as our Aussie friends prefer to call it) is the most sensational part of a growing international industry. In China, for example, it has been reported that PetroChina aims to produce 10 billion m3/year of CBM from the east part of the Erdon Basin by 2020. Next month’s issue will look at this in detail with World Coal’s annual CBM Review. For the moment it is enough to ponder – with a little amusement – the fact that coal could ultimately end up providing a significant portion of the world’s LNG needs. And people say that King Coal is dead?

Support for the King will also be much in evidence this month in Lexington, Kentucky, as the annual Coal Prep show comes to town. As usual, this month’s issue includes a number of articles on coal preparation (from p. 16), as well as the annual Coal Preparation Buyers’ Guide, which can be found from p. 54. World Coal will also be exhibiting at the show, so be sure to stop by stand 623 and say hello.

Finally, I note with some disappointment that the US EPA has continued the US Government’s flip-flop approach to coal, this time proposing a veto of the Army Corps of Engineers permit for Arch Coal’s Spruce No. 1 mine in southern West Virginia. I have already written about the lack of clarity in the federal Government’s approach to coal. It is disturbing, although perhaps not unsurprising, that it continues. One hopes that a degree of sense will someday prevail; unfortunately, experience suggests that coal will continue to be victimised even as it provides the energy required to keep the world working.


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