Methane Farming Company Makes Case To Landowners

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A company wanting to farm methane in the Powder River Basin has made its case to landowners, saying it will be profitable, it won't harm water resources and it may be able to steadily produce methane for 356 years.

Luca Technologies officials took questions from landowners Tuesday night and released the list of "nutrients" that it plans to put into old methane wells to stimulate native microbes to produce methane.

They also will present that information, along with proposed rules and regulations for the burgeoning industry, to the Wyoming Oil and Gas Conservation Commission on June 8.

Most of the ingredients needed to make the microbes grow are also things humans need and regularly eat, Luca Technologies CEO Robert Pfeiffer told the crowd of more than 200 at the Clarion Inn and Convention Center.

"We have, up to this point, been working with the commission and they have approved what those ingredients are. But we thought it made a lot of sense to disclose those items and tell you what it is we put down there," Pfeiffer said.

The ingredients are worth about $30 million, Pfeiffer said.

"It doesn't look like $30 million, but I can tell you it is about eight years of hard research and about $30 million," he said. "We thought that you would look at it and go 'Gee, I had a bunch of this for breakfast this morning.'"

Luca's process, which it calls a restoration, involves sending about 700 pounds of a precise mixture of the nutrients down into old methane wells with about 5,000 barrels of water out of the Wasatch Formation. The water and nutrients will sit in the coal formation - not the sands where water wells are - for a year or more. They will help to activate the microbes so they will eat the coal and produce methane. That methane can then be pulled off and sold just like a traditional methane operation.

Most of the treatment mixture is made up of "cell vitality en hancers" such as glycerol, weak organic acids, formic acid, acetic acid, propionic and butyric, lactic acid, decanoic, glyceryl triacetate, ethyl lactate and polyoxyethylene, the comapny said. The solution also includes tracers, such as sodium chloride and sodium bloride, and vitamins, such as calcium, magnesium and phosphate.

The wells Luca has treated so far are producing from 30,000 to 40,000 cubic feet of gas a day. Those aren't high-producing wells. But because a restoration only costs about $10,000, Luca is still profitable at current gas prices, Pfeiffer said.

Luca expects to improve its technology to return more gas in coming years and hopes gas prices will go back up, which will increase profits.

Based on calculations of Powder River Basin coal and Luca's research, the company should be able to continue stimulating growth and producing methane for 356 years.

Landowners had some concerns and questions.

Luca recently bought 725 former Devo n Energy wells, some of which are on land owned by Dudley and Marilyn Mackey. Luca has told landowners they will reuse the water pumped from the coal and no longer discharge it for ranch use.

"We've come to kind of depend on it, so if they inject all the water and don't let us use any of it, it is going to hurt us," Dudley Mackey said.

Luca officials said they will allow use of some water for cattle, which Mackey said was satisfactory.

Mackey wondered how far the nutrient water would travel when put back into the coal seam. He wanted to know if it could possibly contaminate other wells and move into other water aquifers. Luca officials said that shouldn't be a problem because of the amount of water being put back in the ground.

One of Luca's issues is which agency will oversee the project - the Bureau of Land Management or the Wyoming Oil and Gas Commission. Luca is producing gas, which is regulated by the state commission, but the microbes are making the gas by consuming coal, which is regulated by the BLM.

"The BLM is throwing up its arms, as they should, and said what does that mean? Who owns that gas now?" Pfeiffer said. "We have made the arguments that it is the oil and gas (commission)."

Copyright 2010 The Associated Press.



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