Increasing natural gas demand owing to its ecofriendly existence has led to the development of unconventional reserves such as coalbed methane (CBM). Shift in trend towards adoption of cleaner fuels in power generation and in transportation industry as an alternative to coal and petroleum products has been the major factor for the growth of natural gas demand.
Depleting conventional oil & gas reserves has led to the shift in exploration of unconventional reserves such as shale, CBM and tight gas. According to BP Energy Outlook 2030, natural gas is anticipated to have demand at par with crude oil in the global energy basket. This increase in demand for natural gas coupled with developing unconventional gas reserves is expected to be a major driving factor for CBM market over the next six years.
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Growing E&P activities globally is also expected to have a positive impact on the market growth. Increasing environmental hazards related to petroleum crude and coal along with favourable regulatory scenario for unconventional reserves is anticipated to augment market growth. Increasing global natural gas trading and rising gas prices has further led to feasible extraction of CBM in Australia and China. This is further supported by the development of horizontal drilling and fracturing technologies.
Increasing groundwater contamination in coal basins due to CBM extraction has put the market under several environmental regulations. This is expected to have a negative impact on the market growth. The CBM market growth is also restrained by its high cost of extraction.
Power generation was the largest application segment for coal bed methane market and accounted for over 35% of the total market volume in 2013. CBM has the maximum methane purity and is cleaner as compared to other natural gas sources. CBM demand from power generation is anticipated to have the highest growth owing to several governmental regulations and standards in support of natural gas.
Power generation application was followed by industrial applications which accounted for over 29% of the total demand in 2013. Expansion of several existing natural gas pipeline networks coupled with increasing preference for gas turbines may boost the coal bed methane market demand from industrial applications. CBM is also gaining insight in residential and commercial segments for cooking and heating purposes owing to its high purity and economical aspects.
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U.S. continued its dominance in global coalbed methane market in terms of production and accounted for over 61% of the total market share in 2013. Early development of unconventional gas reserves coupled with regulatory support has boosted the market growth in this region. CBM Outreach Program (CMOP) by the U.S. EPA has also fuelled the market growth over the last few years. U.S. was followed by Canada in terms global market volume.
Asia Pacific coalbed methane market is expected to project highest growth rates over the next six years. The market in this region is characterised by growing E&P activities in nations such as China, Australia, India and Indonesia owing to large unexplored CBM reserves.
In terms of demand, Asia Pacific is expected to have the maximum shares owing to the rising disposable income among the rural and suburban population of this region. The market is expected to have positive outlook for countries such as China, Australia, Russia and India due to large technically recoverable CBM reserves.
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