Coalbed Methane: Conventional Rules for an Unconventional Resource

Abstract

Considering the evolution of coalbed methane development In North America, the authors highlight the risks involved at various stages of development. To manage these risks and potentially increase the chance of successful projects, the authors offer suggestions for adapting leases and agreements typically used in the oil and gas industry to reflect the uniqueness of coalbed methane development. The authors also suggest amendments to Alberta's current legislation affecting Crownlands. The authors acknowledge that the issues that arise in the coalbed methane context will change over time as projects are carried out, the industry matures and the legal and regulatory frameworks governing coalbed methane evolve. In providing possible solutions to the current situation, consideration is given to common law principles of ownership of coalbed methane, legislation affecting Crown and freeholdlands, typical freeholdleases, joint ventures and operating agreements and environmental concerns surrounding coalbed methane development.