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Status Report: USGS Coal Assessment of the Powder River Basin, Wyoming

James A. Luppens1 , Timothy J. Rohrbacher2, Jon E. Haacke2, David C. Scott2, and Lee M. Osmonson2
U.S. Geological Survey Open-File Report 2006-1072 This report is preliminary and has not been reviewed for conformity with U.S. Geological Survey editorial standards and stratigraphic nomenclature. Any use of trade names is for descriptive purposes only and does not imply endorsement by the U.S.G.S.

U.S. Department of the Interior U.S. Geological Survey

1 2

USGS, Reston, VA USGS, Denver, CO

Figure 1. Title Slide: “Status Report: USGS Coal Assessment of the Powder River, Wyoming” by James A. Luppens , Timothy Status Wyoming” J. Rohrbacher, Jon E. Haacke, David C. Scott, and Lee M. Osmonson; U.S. Department of the Interior, U.S. Geological Survey.

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USGS Coal Program
Current and future coal assessments – not just another in-place coal resource number. Regional estimates of economically recoverable coal will be an integral part of current and future assessments. How much economically recoverable coal do we have left?

Figure 2. Objectives of the current and future USGS coal assessment programs. An inventory of the estimated economically recoverable coal provides a better foundation for energy planning than simply relying on in-place coal resources.

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Importance of Coal Assessment Project
National energy reliance and energy policy Regional energy and economic planning Federal lands inventory Coal bed methane (CBM) exploration and development Carbon sequestration

Figure 3. Importance of USGS coal assessment project to energy policy and research.

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Current and Future Coal Assessment Work, Where do we go from here?
Reserve investigations require more up front geology and engineering work. However, new, highly automated regional mine modeling and economic programs developed by the USGS facilitate the reserves evaluation. The USGS assessment methodology was formally evaluated by an external review panel with an open file report published in February, 2005 Rohrbacher, T. J., and others, 2005 (http://pubs.usgs.gov/of/2005/1076). ( Builds on the digital geologic framework of past coal resource assessments. Started next coal assessment phase in the greater Powder River Basin (PRB) in FY2005.

Figure 4. The direction of current and future USGS coal assessments.

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Regional Coal Resource Evaluation Overview
Data Collection
Coal bed geology (extent, thickness partings, structure, overburden, etc.) Factors affecting extraction (land-use and technical restrictions) Location of preparation plants, roads, and rail facilities State and county jurisdictions and resource ownership Mining and haulage assumptions Mine production and cost data Coal quality information Recent coal sales price(s) Tax information

GIS (ArcView)
Create or import grids / manipulate grids Calculate tonnages and areas for original, mined out, restricted, and available resources Create or modify mine models for each study area Allocate available resources to mine models

Based on actual data with periodic updates

CoalVal
Import available resources by mine model, all costs, and data Calculate recoverable tonnages and mining economics by mine model Produce reports of recoverable tons for incremental cash costs and discounted cash cost/rate of return, cost curves, and reserves Developed by USGS, publicly available

Figure 5. The USGS coal assessment project is designed to provide regional estimates of economically recoverable resources (reserves). Data collection and geological modeling are typically the most time intensive phase. Once the geology model is complete, the GIS program allocates the available coal resources to the various mine models. Finally, a program developed in-house called CoalVal performs the economic analyses.

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Environmental, Societal, and Technical Restrictions to Mining in the Gillette Coal Field, Wyoming

Figure 6. In addition to subtracting previously mined out resources, coal restricted by societal and environmental constraints are subtracted to determine the remaining available resources. An economic analysis of the available resources yields an estimate of reserves for the study area.

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The GIS Process of Merging Layers or Themes of Data into More Meaningful Interpretations

Figure 7. The availability of GIS coverages for land, restrictions, geology, etc. greatly facilitate the evaluation process.

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Available Resource Areas Input into CoalVal
GIS study assigns coal to mine models. Coal tons are imported by county into resource areas for each mine model.

Results from GIS are: Acreage In Situ Tons Coal In Situ Tons Parting

Figure 8. The first step in an economic evaluation is importing the coal volumes into CoalVal from the GIS mine models. This example is from an evaluation of the Pittsburgh coal bed in Pennsylvania, but the types of data imported are the same CoalVal is scheduled for publication in 2006

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CoalVal - Mine Model Equipment

Figure 9. CoalVal provides a series of tables to add and cost out mine equipment.

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CoalVal Mine Model Assumptions
Mine Model sets:
Mine productivity Recovery rates Out-of-seam dilution Other misc. costs

Figure 10. Mine models assumptions including productivity, dilution, and recovery rates are also entered. All data is based on published regional statistics and actual equipment pricing costs, as well as input from and verification of assumptions by coal mines in the region.

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Mine Model Employees

Figure 11. Input for the manpower table is also regionally-based from published labor statistics and mining company information. CoalVal will be published with all the basic tables completed as place markers; however, it will be the user’s responsibility to supply current information.

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CoalVal - Discounted Cash Flow Summary

Figure 12. The final result of the economic evaluation is a report summing the number of tons at a threshold price (including a discounted rate of return) for each area and mine model for the entire project area.

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Coal Resource/Reserve Cost Curve
e rv Cu

45.00

40.00

Resources
@ $35.00/ton

t os C

Figure 13. Once the cost of all the available tons are determined, a resource cost curve can be derived. Given a current sales price of $31.25/ton, about 3 billion tons would be economic. Any coal tons with a threshold price of $31.25 or less would be considered reserves. Thus, the block shown in fig. 12 at $26.18 falls into the reserves category. If the price were to increase to $35.00/ton, and additional 1.5 billion tons would added to the reserves category. It must be stressed, that the determination of reserves is an ongoing process that must be revalidated as market and mining costs, and other economic and technological factors change.

Current Sales Price ($/ton)

35.00

Reserves
4.5 Billion T. 3.0 Billion T.

@ $31.25/ton
30.00

$26.18

25.00 1.0 2.0 3.0 4.0 5.0 6.0 7.0

Billions of tons

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PRB Basin and Gillette Coal Field

Figure 14. This is the location of the Gillette Coal Field, Wyoming where the initial PRB coal assessment project is starting. The Powder River Basin (PRB) represents the single most productive coal basin in the US, producing nearly 40% of the nation’s coal. Just the Wyoming portion of the basin produced 403 million tons in 2005 (U.S. Bureau of Land Management, 2006). Furthermore, the announced additional coal development is significant. Peabody’s new School Creek mine (60 miles south of Gillette) alone is expected to come on-line in late 2008 producing 30 million to 40 million short tons/yr (Platts Coal Outlook, 2006).

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Current PRB Assessment Status
Current Database:
Original – New oil & gas wells – New CBM wells – 2,200 points 2,330 points 7,470 points

TOTAL – 12,000 points

Two Geologists for approximately one year About 4,000 points from WY Geological Survey Plan to complete Gillette coalfield assessment by Dec., 2006 Assessment of the north and northwest portions of the PRB will begin following completion of the Gillette coal field evaluation.

Figure 15. The current USGS PRB assessment status. When completed, the resulting database should provide one of the most extensive drill hole compilations for the PRB available to the public. The slides in this next section represent preliminary assessment work and may be modified for the final report.

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Current Assessment Status

Channel Area

Original Database (2002)

Current Assessment Status

Current Database

Figure 16. Comparison of the original Gillette coal field assessment coal assessment drill hole database (Ellis and others, 2002) to the current assessment database. The extensive drilling activity associated with coal bed methane (CBM) development has resulted in a relatively dense drilling pattern which, by itself, helps define the limits of a significant channel area where the coal beds are thin or absent.

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Preliminary Assessment Results
• •

Minor changes in coal bed correlations Major down-dip channel will be a restriction to surface mining

Figure 17. The preliminary interpretation of the massive amount of new data has resulted in several significant findings. Both are related to the channel geometry defined by the substantial amount of new drilling information.

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(USGS Miscellaneous Investigations Series, Map I-1959-B)

Previous Coal Bed Correlations

Anderson Coal Bed (Upper Wyodak, 1990)

Canyon Bed

(Lower Wyoda

k, 1990)

Line of Section

~10 Miles

Figure 18. A portion of a published NW-SE cross section through the channel area based on widely-spaced well logs (Pierce, F. W., and others, 1990).

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Correlation Changes with Infill Drilling (USGS Miscellaneous Investigations Series, Map I-1959-B)

Felix Bed

ed School B

ed Smith B

Anderson Bed

Canyon Bed

Channel Area

PRELIMINARY

Figure 19. Closer-spaced drilling reveals minor revisions in the coal bed correlations. Dotted lines indicate previous correlations. The Anderson/Canyon coal beds, which are the major beds in the current mining areas of the Gillette coal field split, thin, and (or) are absent in and immediately adjacent to the channel areas. The Smith coal bed thickens rapidly west of the major channel area Both the Smith and the Anderson/Canyon beds are all part of the Anderson-Wyodak coal zone after Flores and others (1999).

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Correlation Changes with Infill Drilling

Felix Bed

School Bed

Smith Bed

Anderson Bed

Canyon Bed

Channel Area

PRELIMINARY

Figure 20. Expanded view of infill drilling (fig.19) showing greater detail for the geophysical logs.

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East-West Cross Sections Through Channel area

W

E

l Schoo

h Smit

son de r An n nyo Ca

Xsect 3
Xsect 3

Xsect 2

N

Anderson Bed present

Xsect 1

Channel(s), “no coal zone”

Xsect 2

PRELIMINARY

Xsect 1

Figure 21. East-west cross sections through the channel confirm the scenario shown in figs. 19 and 20 where the Smith thickens and the Anderson/Canyon (Wyodak) beds are thin or absent westward. Drill holes with the Anderson bed present are displayed with a solid green dot to create a simple areal distribution map. Structural highs in the Smith coal can indicate the presence of an underlying Wyodak “no-coal zone” (Ashley, M., 2006).

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Comparison of Anderson Bed - 2002 Study and Current Assessment
CURRENT ASSESSMENT
Preliminary Isopach Anderson Bed

2002 Study Anderson/Wyodak Bed

Correlations Incomplete
Major channel in Upper Wyodak Coal Seam

Minor Channel

Channel Edge
Wright

Coal Thickness

200 ft. 160 ft.

120 ft. 80 ft. 40 ft.

Anderson Bed present

0 ft.

PRELIMINARY

Figure 22. Comparison of a preliminary isopach map from the current assessment and that from Ellis and others, 2002. It is obvious that the total coal resources in the final assessment results will be impacted by improved delineation of the channel areas. The end results should provide a more realistic appraisal of the available coal resources.

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Overburden Isopach Gillette Coalfield (Upper Wyodak)
(2002 Study Anderson - Wyodak Bed)

Figure 23. Overburden isopach for the Anderson/Wyodak bed (Ellis and others, 2002). Fortunately, much of the major channel lies in areas of deeper cover in the western portion of the coal field.

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Gillette

Stripping Ratios Gillette Coalfield (Upper Wyodak)
500 ft. Overburden 1000 ft. Overburden

(2002 Study Anderson - Wyodak Bed)

Wright

Current Assessment will include models down to 10:1 Stripping Ratio

Figure 24. Stripping ratio map for the Anderson/Wyodak bed (Ellis and others, 2002). We plan to conduct an economic evaluation of the Gillette coal field down to a 10:1 stripping ratio during the current coal assessment.

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Powder River Basin Study Areas
Gillette coal field Birney-Custer-Recluse coal fields (BCR) Sheridan-Birney coal fields

Figure 25. Once the Gillette coal field portion of the PRB is completed, the assessment will move to the north and the northwest into the Birney-Custer-Recluse (BCR) and Sheridan-Birney coal fields.

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North-South Cross-Section BCR Study Area

BCR Area

Gillette Area

Figure 26. The coal beds including the Anderson and Canyon beds tend to thin northward from the Gillette coal field; however, more coal beds are generally present.

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Major Coal Bed Distributions in the BCR

Anderson Isopach
• Maximum thickness = 86’

Canyon Isopach
• Maximum thickness = 98’ • Good extent • Significant areas with thick coal

Pawnee Isopach
• Maximum thickness = 48’ • Good extent

Knobloch Isopach
• Maximum thickness = 79’ • Good extent •Truncated to south
PRELIMINARY

Figure 27. Although the coal beds are generally not as thick and widespread as those in the Gillette coal field, significant coal resources are present in the BCR coal field.

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PRB Coal Resource Assessment Summary
Extensive CBM and additional oil and gas development, especially in the Gillette coal field, has provided an unprecedented amount of down-hole geological data. Better definition of channel/no-coal areas that form barriers to mining will be possible. These additional data will provide a more robust evaluation of the single most productive U.S. coal basin. The Gillette coal field assessment, including the mining economic evaluation, is planned for completion by the end of 2006. The geologic portion of the coal assessment work will shift to the northern and northwestern portions of the PRB before the end of 2006 while the Gillette engineering studies are finalized.

Figure 28. PRB Assessment Summary.

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References
Ashley, M., 2006, Wyodak Coal, Tongue River Member of the Fort Union Formation, Powder River Basin, Union Wyoming: "No-Coal Zones" and Their Effects on Coalbed Methane Production; Search and Discovery Article "NoSearch #10094, http://www.searchanddiscovery.com/documents/2005/ashley/index.htm http://www.searchanddiscovery.com/documents/2005/ashley/index.htm Ellis, M. S., Molnia, C. L.. Osmonson, L. M., Ochs, A. M., Rohrbacher, T. J., Mercier, T., and Roberts, L. N. R., 2002, Evaluation of Economically Extractable Coal Resources in the Gillette Coal Field, Powder River Basin, Wyoming; U.S. Geological Survey Open-File Report 02-180, 48 p. Flores, R.M., Ochs, A.M., Bader, L.R., Johnson, R.C., and Vogle, D., 1999, Framework geology of the Fort Union coal in the Powder River Basin; Chapter PF, in U.S. Geological Survey Professional Paper 1625-A, 40 p. Pierce, F. W., Johnson, E.A., Molnia, C.L., and Sigleo, W.R., 1990, Cross-sections showing coal stratigraphy of the southeastern Powder River Basin, Wyoming: U.S. Geological Survey, Miscellaneous Investigations Series, Map I-1959-B. Platts Coal Outlook, 2006; v. 30, No. 11, http://www.platts.com Rohrbacher, T. J., Luppens, J. A., Osmonson, L. M., Scott, D. C., and Freeman, P. A., 2005, An external peer C., review of the U.S. Geological Survey energy resource program’s economically recoverable coal resource program’ assessment methodology—report and comments: U.S. Geological Survey Open-File Report 2005-1076, 21 p. methodology— Open2005U.S. Bureau of Land Management, 2006, Powder River Basin Coal Production; http://www.wy.blm.gov/minerals/coal/prb/PRB_coalpro.htm

Figure 29. References

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