In an effort to remove barriers to resource development in Alberta, the Government of Alberta is seeking to clarify the ownership of coalbed methane within the province.

On October 27, 2010, the provincial legislature introduced Bill 26, the Mines and Minerals (Coalbed Methane) Amendment Act, 2010, 3rd Sess., 27th Leg., Alberta, 2010. This Bill declares that coalbed methane is, and always has been, natural gas for both Crown and freehold minerals. Therefore, if the Bill is passed, coalbed methane in Alberta will be owned by natural gas rights holders rather than coal owners.

Existing agreements entered into by the natural gas mineral owner, or their lessee, that specifically granted coalbed methane rights to the coal owner, or their lessee, will not be affected. The Bill also protects the Crown, coal owners, or their lessee, and surface owners from being sued by the natural gas owner, or their lessee, for coalbed methane extraction, production or removal prior to the Bill coming into force.

Coal seams with coalbed methane potential are found underneath much of Alberta. Notably, a study by the Alberta Geological Survey found that Alberta’s coalbed resource may contain approximately 500 trillion cubic feet (Tcf) of coalbed methane. In contrast, the estimated ultimate potential of marketable conventional natural gas in Alberta is between 205-253 Tcf.

To take effect, the Bill must receive Royal Assent. Depending on the amount of questioning from opposition, this could take anywhere from a week to several months.