Global Coal Seam Gas Market - Forecast(2024 - 2030)

Global Coal Seam Gas Market Overview

Global coal seam gas market size is estimated to reach US$2.1 billion by 2027, after growing at a CAGR of 3.7% during 2022-2027. Coal seam gas is a natural gas which is found in natural coal deposits and is formed during formation of coal. The gas is extracted from coal seam either by drilling or by hydraulic fracturing in which fluid is injected under high pressure in coal seam to widen the fractures in order to release the gas. The coal seam gas is of various types like coalbed methane, coal mine methane etc. which are collected from unmined coal reserves formed between sedimentary and metamorphic rocks. The major application of coal seam gas is in power generation, vehicles fuels, and feedstock for making plastics & fertilizers. Hence, for such applicability, coal seam gas is majorly used in automotive, power industry, agriculture and plastics sector. Factors like, increase in commercial vehicles consumption, high demand in power sector and increase in fertilizer production are driving the growth of global coal seam gas market. However, extraction process like hydraulic fracturing can cause certain environment problems like ground water contamination, which can hamper the growth of global coal seam gas industry.

COVID-19 Impact

The lockdown implemented by countries all across the world, so as to prevent the wide spread of COVID-19 negatively impacted the productivity of various industrial sectors including oil & gas sector. Hence, due to lack of availability of labors, the production volume of natural gas declined, and also the lockdown restriction led to decrease in the consumption volume by end users of natural gas like plastic, automobiles. For instance, as per PlasticEurope, in 2020, the production of new plastics was down by 51% at 55 million tons. Also, as per the International Organization of Motor Vehicle Manufacturing, in 2020 there was a 16% global decline in vehicles production. Hence, besides the end users there was reduction in productivity and global demand of natural gases also. For instance, as per International Energy Agency, in first quarter of 2020, the natural gas driven drilling in US was 110 rigs compared to 190 rigs in 2019 for same period. Further, as per another report of International Energy Agency, in 2020, there was 4% decrease in global natural gas demand. The decrease in global demand of natural gas and production capacity of its end users had a negative impact on the usage of natural gas like coal seam gas.

Report Coverage

The report: “Global Coal Seam Gas Market Report – Forecast (2022 – 2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the Global Coal Seam Gas Industry.

By Form – Coalbed Methane, Coal Mine Methane, Abandoned Mine Methane, and Underground Syngas

By Process – Drilling (Vertical Drilling, Horizontal Drilling), Hydraulic Fracturing

By Application – Power Generation, Vehicle Fuel (LNG, CNG), Feedstock (Thermoplastics, Fertilizers Others), and Others

By End User – Automotive (Cars, Heavy Duty Trucks, Light Duty Vehicles, Others), Energy & Power Industry, Plastic (Polystyrene, Polypropylene, Polyethylene), Agriculture, Chemicals, and Others

By Geography - North America (USA, Canada, Mexico), Europe (UK, Germany, France, Italy, Netherland, Spain, Russia, Belgium, Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, Rest of South America), Rest of the World (Middle East, Africa)

Key Takeaways

• North America dominates the global coal seam gas industry, as the region has countries like United States, Canada, Mexico which are leading producers as well as consumers of natural gas.
• Coal seam gas is more preferred over shale gas on account of having less manufacturing cost, higher gas concentration, shallow reservoirs and less need of fracture stimulation
• Coal seam gas (CSG) is simply natural gas, which consists mainly of methane which is used every day to generate electricity, run home appliances, and fuel vehicles
  

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Global Coal Seam Gas Market Segment Analysis – By Form

Coalbed methane held a significant share in global coal seam gas market in 2021, with a share of over 32.0%. Coalbed methane is increasingly used for industrial and utility purpose like as feedstock is used in plastic manufacturing, and as gasoline is used for automobile fuel. The rapid development in these sectors has increased their scale of productivity, which has positively impacted the usage of coalbed methane. For instance, as per PlasticEurope, in 2021, the plastic production in Europe increased by 11.3% compared to 2020. Also, as per National Automobile Dealers Association, in 2021, the vehicles sales in US for Q2 was 17 million units, in which 76.9% was light trucks & sports utility vehicles (SUVs). Such increase in productivity of plastics and automotive sector will increase the demand for coalbed methane to be used in them. Hence, this will positively impact the growth of global coal seam gas industry.

Global Coal Seam Gas Market Segment Analysis – By End User

Energy and power sector held a significant share in global coal seam gas market in 2021, with a share of over 27.0%. Coal seam gas is majorly used in power plants as fuel for gas turbines which when spins generates electricity. The coal seam gas burns more efficiently than coal and emits less greenhouse gas emission. Hence, with the growing demand for gas-powered electricity, the usage of natural gas in power sector has increased, which will positively impact the usage of coal seam gas. For instance, as per International Energy Information Administration, in 2021, in European countries gas fired power generation increased by 5%, with Spain & Italy showing 25% increase and Turkey 17%. Also, as per another report by Energy Information Administration, in 2021, gas consumption in power generation increased by 15% in Brazil, 12% in Peru, and 10% in Chile. The increase in demand and consumption for natural gas by power sector will lead to more usage of coal seam gas as fuel in this sector, which will positively impact the growth of global coal seam gas industry.

Global Coal Seam Gas Market Segment Analysis – By Geography

North America held the largest share in global coal seam gas market in 2021, with a share of over 30.0%. The region has major economies like United States and Canada which are one of the major producers of natural gases like coalbed methane and is considered as important source of energy in these countries. The increasing in demand for clean source of fuel has led to increase in production of natural gas in this region. For instance, as per US Energy Information Administration, in October 2021, the dry natural gas production increased by 2%. Also, as per International Energy Agency, in first eight months of 2021, industrial gas consumption in US increased by 1.8% whereas other sectors like gas network & energy sector showed increase of 1.4%. Further, natural gas consumption in Canada increased by 4% in first ten months of 2021, whereas pipeline exports to the United States increased by an estimated 17%. Coalbed methane is used as a clean energy source of compressed natural gas for multiple domestic and industrial purposes, which in turn, will positively impact the growth of global coal seam gas industry in North American region.

Global Coal Seam Gas Market Drivers

High Demand of Passenger Vehicles

Coalbed methane is a primary clean energy source of natural gas and clean burning fuel like compressed natural gas (CNG), extracted from it, is majorly used in automotive vehicles especially passenger vehicles. The growing consumption of such vehicles will lead to increase in usage of CNG fuels. For instance, as per Europe Automobile Manufacturer Association, in November 2021, the new passenger car registration in the first ten months increased up to 2.2% with an increase shown in European Union markets like Italy showed 12.7%, Spain showed 5.6% and France showed 3.1%. Such high consumption of passenger vehicle will increase the usage of CNG fuel in them, resulting in more usage of coalbed methane in production of CNG fuel. Hence this will boost the growth of global coal seam gas industry in automotive sector.  

Growing trade of Liquid Nitrogen Gas

Coal seam gas when cooled under pressure to temperature of -161°C creates liquid nitrogen gas. Such gas is used in variety of ways like its residential uses include cooking, heating homes, while commercial uses include generating electricity, fuelling commercial vehicle and manufacturing products like fertilizers, paints. LNG on account of being cheaper and clean fuel source has led to increase it demand globally, which has led to increase in its global trade. For instance, as per International Energy agency, global LNG trade expanded by 6% in 2021, a sharp acceleration from the 2020, with Asia Pacific region registering an 8% y-o-y increase. Moreover, LNG imports into Central and South America soared by 69%, supported by Brazil’s severe drought curtailing hydropower generation. The increase in global trade of LNG gas will lead to more usage of coal seam gas for its production, thereby having a positive impact on the growth of global coal seam gas industry.

Global Seam Gas Market Challenges

Environmental Impact of Extraction Process

In order to extract the coal seam gas formed in coal reserves developed near metamorphic rocks, hydraulic fracturing is used. In such process a solution of water, sand, and a small amount of additives is pumped at high pressure into the coal deposit which creates cracks that releases the gas into wells for extraction. Such process though is effective, but has various environmental issues like ground water contamination, methane & air pollution, exposure to toxic chemicals, fracking induced earthquakes and blowout due to gas explosion. Hence, all of these problems associated with the extraction of coal seam gas by hydraulic fracturing, may confine the growth global coal seam gas industry.

Global Seam Gas Industry Outlook

The companies to develop a strong regional presence and strengthen their market position, continuously engage in mergers and acquisitions. In the global coal seam gas market report, the global coal seam gas top 10 companies are:

1. Exxon Mobil (XTO Energy)
2. BP PLC
3. ConocoPhillips
4. Australia Pacific LNG
5. Shell (QGC)
6. Santos
7. Anglo Coal
8. Arrow Energy
9. AAG Energy
10. G3 Exploration

Recent Developments

• In 2021, Bharat Coking Coal Ltd signed an agreement worth US$ 254.2 million with Prabha Energy Private Ltd. for commercial extraction of coal bed methane from Jharia Block I, Jharkhand under leasehold area of BCCL.  
• In 2021, EIG Global Energy Partner acquired 10% stake from Origin Energy in its Australia Pacific LNG project which is the biggest coal seam gas-to LNG plant on Australia’s east coast.
• In 2019, Australia Pacific LNG has announced it will supply an additional 10 petajoules of natural gas to Santos in 2020 and 2021, and this new contract will increase company’s total domestic contracted supply commitment to over 350 PJ for 2020 and 2021.

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