A solutionist approach to unlocking and monetizing coal-bed methane potential in the new Zimbabwe

Abstract

Coal bed methane (“CBM”) is an unconventional natural gas formed during coalification and trapped within coal seams. Historically, CBM was regarded as a dangerous waste product of coal mining. As a result, technologies were developed to capture this gas so as to ensure mine safety. Since then, CBM has been used primarily as an energy source and is regarded as being a cleaner source of energy in comparison to other hydrocarbons. Development in CBM production in the USA, Canada, Australia and China unlocked its other potential as a source of liquid fuels and for industrial and agricultural use. In sub-Saharan Africa, development in CBM is relatively novel. Interest in exploiting the gas was necessitated by the regions’ dire need of electricity. To meet the regions demand, CBM projects have been implemented in countries such as Botswana and South Africa, however, Botswana has the most successful project thus far. In view of various reports indicating the abundance of CBM in Zimbabwe, this paper shall delve into giving an overview of what CBM is, how it is extracted, what geological factors are necessary to economically recover CBM and how reserves can be proven in order to be incentivize investment into Zimbabwe’s CBM industry. In order to foster development of CBM, geological, environmental, operational and technical issues should be taken cognizance of. Thus, the legal and fiscal framework in a country should typically reflect the unique features of CBM. This paper shall discuss these features using illustrative case studies of how they have been dealt with in other jurisdictions. Central to this paper is an economic analysis of the factors that are needed to facilitate and ensure the commercial viability of CBM development. It is against this backdrop that Zimbabwe’s current CBM industry is examined. The aim of the paper is to analyse what economic benefits Zimbabwe could realize through CBM development and whether or not Zimbabwe’s current environment incentivizes CBM development. As a new kid on the block, Zimbabwe has infrastructural impediments to facilitate commercialization of CBM. Other obstructions are legal, fiscal, environmental, political, and economic. In order for Zimbabwe to realize the full potential of its CBM resource, a framework has to be put in place which facilitates this. In the penultimate, this paper shall make recommendations as to how best Zimbabwe can deal with the obstr