Big Questions Remain
The Leupane Energy Hub and Industrial Park is a project that promises to supply multiple sources of energy from Botswana’s immense coal reserves. However, because crucial information is missing, project feasibility is cast into doubt while the need to focus diversification of Botswana’s energy mix on solar, not CBM, is clear. Special Correspondent DOUGLAS RASBASH scans Leupane for maladies and finds a whole host of them
The company that is primarily involved in the Leupane Energy Hub and Industrial Park is Botala Energy from Australia. Information can be seen here https://botalaenergy.com/projects/overview/.
Says the first statement: “Botala Energy Ltd (Botala) is a gas exploration and development company which aspires to be a clean energy producer using the coal bed methane (cbm) potential of the Serowe Project in Botswana and combining it with solar power generation. Botala is the operator and owns 100% of the Leupane Project.”
The Government of Botswana considers this project to be very important as part of its energy security and climate change strategies. However, the project is subject to criticism because of the dangers of the process, its viability, sustainability, and challengeable claims of providing clean energy from CBM.
Despite concerns, the Botala Energy Project was given the environmental approval by the District Environmental Coordinator (DEC), Tuelo Nkwane. Botala Energy itself is funded mostly from equities on the Australian Securities Exchange (ASX). Information is obtained from the listing report prepared by Botala for ASX of July 2024.
Permeability and porosity
This review will delve into the geological, petrophysical and gas content data provided, as well as the ongoing processes and expected outcomes. This item will carefully look at the main element of the project, which is to convert coal to methane or CBM for use to generate electricity. It will provide a technical overview and consider the economic and environmental considerations.
Factors influencing the technical feasibility of the energy project include the permeability and porosity of the coal seams, the volumes of water produced during dewatering, proximity to infrastructure, impacts on local ecosystems, water resources, and air quality and regulatory compliance with environmental laws and obtaining necessary permits.
A big question that remains is whether hydraulic fracturing will be needed to extract the methane at commercially acceptable levels. The coal seam in the Serowe 3-1a well is 38 metres thick, indicating a substantial volume of potentially methane-bearing coal. The Serowe seam was encountered at a depth of 360 metres and the Upper Morupule seam was found at 398 metres. The geological rock type is coal, suitable for CBM extraction due to its methane content.
A vital factor affecting viability is gas desorption, which measures the rate at which coal gas is released under ground. Measurements indicate values ranging from 2.41 to 1.9 cc/gram over a 4-month period, suggesting a consistent release of gas from the coal matrix. This metric is key to estimating the total gas content and production potential. Methane content in the gas is confirmed to be between 90-94%, which is favourable for commercial exploitation.
Probability of fracking
Another vital element to CBM is dewatering because the gas is released as water pressure in the coal seam is reduced. However, the rate at which methane is produced is tied to the permeability of the coal seam. So far Botala has not released data on permeability or water flow, which is critical in determining if hydraulic fracturing will be needed.
If water flow is low, the probability of fracking is high in order to improve gas flow. Should fracking be needed, the current EIA for the project will certainly need re-evaluation. It is not clear whether the EIA approvals obtained so far are conditional upon Botala providing this missing information.
Turning to climate change; methane has a global warming potential GWP of 28-36 times that of CO₂ over a 100-year period, making it a highly potent greenhouse gas (GHG). Furthermore, methane emissions contribute to ground-level ozone formation, which has harmful effects on human health and crop yields. Methane leakage undermines the climate benefits of using natural gas over coal if not properly controlled, as the climate advantage of using methane to produce electricity depends on low leakage rates.
Wellhead methane
Studies and reports from various CBM operations suggest that wellhead methane emissions can range from 1% to 10% of the total gas produced, depending on the efficiency of the extraction, handling and transport processes. For example, Powder River Basin, USA methane emissions are estimated at around 2-3% of total production; primarily from venting during drilling and completion activities, as well as from equipment leaks. Bowen Basin, Australia emissions typically range from 1.5% to 5% and in the Surat Basin, Australia emissions are reported to be between 1% and 4% but are said to be underestimated.
See image of wellhead methane being flared off in Australia https://reneweconomy.com.au/australias-methane-pollution-problem-is-outsized-and-probably-underestimated/. Can readers imagine this in Serowe?
China, by far the most dominant producer of CBM, underlines the issue of the control of methane emissions https://law.nus.edu.sg/apcel/wp-content/uploads/sites/3/2024/03/China-Methane-Briefing-APCEL-Mar-2024.pdf
To fully understand what the GHG emissions are from CBM electricity generation, it is necessary to combine wellhead GHG emissions to those of energy generation. Wellhead methane leakage should be converted to CO₂ equivalent (CO₂e) using a factor of 32 then combined with the CO₂ produced during electricity generation. The result is that 0.48 Gg (Gigagram = 1000 tons) of CO₂e is produced per GWh of electricity generated. With 5% wellhead leakage, using coal bed methane is the most polluting method of generating electricity as shown in the graphic, specially produced by The Botswana Gazette.
Infact, the Serowe CBM project will emit 33% more CO₂e per unit of electricity than Morupule B. For Botala to claim “to be a clean energy producer using the coal bed methane (cbm)” and the government to state that electricity produced from the Serowe Energy Project produces less greenhouse gases appears highly contentious because CBM can never be clean and GHG emissions are the highest of all energy sources.
A further dynamic from the CBM project is water management. Based on methane desorption rates and typical water-to-gas ratios, the water produced could range approximately from 1 to 15 million cubic metres. This wide range clearly needs to be narrowed in order to assess the project’s environmental impact.
The water generated from CBM is toxic, especially if fracking is used. It typically contains high total dissolved solids (TDS), inorganic ions, metals, hydrocarbons and organic compounds. If fracking is deployed, common and hazardous ingredients include methanol, ethylene glycol, and propargyl alcohol.
Notwithstanding issues concerning GHG emissions and water management, the final value of the energy projects lies in the unit energy costs. The unit cost of electric energy from coal to gas to electricity will be at least twice the cost of electricity produced directly using photovoltaics. This cost difference may well be even greater as the efficiency and effectiveness of PV improves. Apparently, there exists a power purchase agreement between BPC and Botala Energy. But this has not been made public and so Batswana do not know how much this electricity will cost.
Tremendous challenge
The Leupane Project is extremely capitally-intensive. The current ASX share price of just 0.072 AUD or 65 thebe shows that investors are not impressed with the project, the news of the environmental approval nor the claims made by company. There is no doubt that it will be a tremendous challenge for Botala to obtain the capital and liquidity needed.
The lack of both economic and financial feasibility for the project was pointed out to the DEC but treated as irrelevant. Why the Government of Botswana supports CBM electricity production – which will be at a higher unit cost and level of emissions than currently exists – is hard to fathom.
There remain many outstanding issues pending crucial information. It is obvious that the project feasibility is not at all clear. An obvious way forward is to focus diversification of energy mix to solar, not CBM.