Developing economies with large populations, such as China, will continue to support demand for coal in future years. In the industrialised countries coal demand for power generation will not be significantly reduced by competition from renewable energy. Optimism about clean coal utilisation technology and carbon dioxide sequestration and the real cost of nuclear power will lead governments to continue to build coal-fired power stations. Underground coal gasification technology may become economic.

Late 2008 and early 2009 saw cutbacks throughout the global coal industry as a result of the severe economic downturn. Several companies announced reduced production for 2009 as demand is projected to fall. Despite current economic uncertainties, the vast underground and near-surface worldwide coal resources must continue to be a major energy source into the future.

ACA Howe's experience of all stages of the extractive coal industry in many parts of the world enable us to design and manage coal exploration projects, estimate resources and reserves and service our clients' needs as the following examples demonstrate.

Coal Experience

Since the early 1980's, ACA Howe International Ltd has worked on numerous projects for several clients on open pit and underground coal projects and coal bed methane projects and has been involved in coal geology, exploration, resource and reserve estimation, feasibility studies and mine planning in a number of UK coal fields and in Australia, Sumatra, Kalimantan and Venezuela:

• Management of regional exploration for Miocene coal deposits in southeastern Kalimantan, Indonesia
• Regional reconnaissance, mapping, drilling and reserve estimation of several areas of the Cero Pelado coal belt in the Coro Province, Venezuela
• Geological assessment, reserve estimation and project planning at a major underground coal mine in New South Wales, Australia
• Geological and reserve audit of a UK underground coal mine for the Official Receiver
• Reserve estimations and valuations of a number of open cast deposits at various stages of development and production for major UK bank
• Geological mapping and reserve estimation at a variety of stripping ratios on the extensions to an open cast mine in Venezuela
• Technical advice at a large underground privatised coal mine in Scotland
• Geological assessment and reserve estimation at numerous small open cast and underground coal mines in the UK
• Stratigraphic and structural studies of large coal basins in Scotland for coal bed methane potential and well targeting and geological supervision of the resulting drilling programme
• Geological, mining and structural studies of coal mine methane targets in Scotland
• Geological studies and resource estimation using Micromine software, of a large opencast coal prospect in Scotland

Natural gas may be produced from wells in deep coal seams by pumping out water to reduce formation pressure. In the early 1990s in the USA there were about 6,000 coal bed methane (CBM) wells producing over a billion cubic feet per day, and CBM reserves represent a significant proportion of total onshore gas. The technology is now disseminated worldwide.

Coal Bed Methane Experience

ACA Howe International Ltd have been involved in coal exploration, geology, reserves estimation, feasibility studies and mine planning in Indonesia, Venezuela, Australia and the UK since early 1980's and in coal bed methane projects in the UK and Poland since 1990. We were closely involved with all aspects of the first technically successful coal bed methane project in Scotland and possibly the UK, from 1990 through to the drilling, stimulation and production from the first well in 1993 and subsequently at times until 2007, as follows:

• Familiarisation with the developing industry in the USA through visits to drilling, stimulation and production operations and conferences, courses and meetings in Alabama, Wyoming, Colorado and Nova Scotia
• Geological research, selection and negotiation of two hydrocarbons exploration licences for coal bed methane extending to 886 square kilometres in Scotland
• Negotiations and liaison with landowners, coal, gas and oil companies and planning authorities regarding access to land, minerals and data
• Detailed studies of seismic and borehole interpreted structure, stratigraphy, coal geotechnical data and mine abandonment records to select optimum sites for test wells
• Geological prognoses for the first five wells
• The first successful completion of an air-foam flush hydrocarbon well in the UK
• Extensive enquiries to well service companies regarding hydraulic fracture stimulation techniques and costs
• Well site geology including core logging, canister desorption tests, gas analyses, wireline logging and interpretation
• Interpretation of results from the first well to estimate gas in place, and for the design of nitrogen foam-sand and water-sand hydraulic fracture stimulations
• Successful water-sand hydraulic fracture stimulation
• Data compilation, rehabilitation and project review
• Production testing
• In-seam horizontal drilling for development of coal bed methane reservoirs

In addition, we have been involved in the analysis of geological data and mine abandonment plans in connection with target generation for two coal mine methane projects in central Scotland.