The Geology of Coalbed Methane
Coalbed natural gas is natural gas (CH4) that occurs in coal beds and has been created during the conversion of plant material to coal, a process known as coalification.

During coalification, plant material that accumulated in ancient swamps and bogs and was preserved fast enough to prevent decay, begins to compress. This material is first converted to peat as the majority of the water is expelled. As the temperature increases with the continuation of the burial, ranks of coal start to form from this peat starting with lignite coal, followed by subbituminous coal and bituminous coal. In the Powder River Basin, the coal is subbituminous in rank.

Biogenic natural gas (methane attributed to bacterial activity) is first to form. At these different stages of coalification, various hydrocarbons (including coalbed natural gas), carbon dioxide, nitrogen and water are released. The coalification process can stop at any time, depending on geologic conditions, leaving what we see today as varying ranks of coal. Much of the coalbed natural gas generated by the coalification process escapes to the surface or migrates into an adjacent reservoir or other rocks but a portion is trapped within the coal itself, primarily absorbed on or absorbed within the micropores of the coal.

The most significant quantity of biogenic natural gas in Wyoming and Montana exists in the relatively shallow, thick coal beds in the Powder River Basin. The primary targets are confined to the coal beds of the Tongue River Member of the Fort Union Formation and the Wasatch Formation. Although Wyoming and Montana coal fields contain large coal resources in numerous thick beds, the shallow depths and low rank coals were once considered too low in gas content to be economically produced using conventional coalbed natural gas production methods. However, there were two factors that renewed interest in the financial viability of coalbed natural gas production. First was the development of a production technique in which wells are completed open hole. Second, the use of water well rigs meant that wells could be drilled more economically with a smaller environmental impact as opposed to conventional drilling practices. The coalbed natural gas development in the Powder River Basin is currently one of the most active natural gas plays in the United States. Future production in the Powder River Basin is expected to increase even more. (Geology of coalbed natural gas information provided by the Wyoming State Geological Survey).