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Virginia Energy board approves two sealed-gob coal-bed methane units for Keyrock Energy
Summary
The Virginia Department of Energy board approved two petitions from Keyrock Energy LLC to create sealed (gob) coal-bed methane drilling units after testimony from company geologist Morgan Pate about capture, flaring and carbon-crediting; both petitions passed by roll-call votes with recorded abstentions.
Morgan Pate, a geologist with Keyrock Energy LLC, told the Virginia Department of Energy board that Keyrock drills into sealed mine voids to capture methane, meters the flow, flares the gas and submits verified emissions data to the California Air Resources Board to generate carbon credits.
The board met in Big Stone Gap on Dec. 17. Keyrock representatives Brady Mills and Pate presented two separate petitions: docket VGOB24-1217-4300 (Silgab/Keyrock DeepMind 20/DM 26) and docket VGOB24-1217-4301 (Keyrock Wolfson No. 1). For the Silgab unit, Pate said the proposed unit covers about 852 acres, would be drilled to roughly 536 feet, and has estimated reserves of about 750 MMCF; projected dry-hole costs were given as roughly $118,000. For the Wolfson unit, Pate said the proposed unit covers about 388 acres, would be drilled to about 530 feet, and has estimated reserves near 700 MMCF, with similar cost estimates.
Pate described the company's practice: "We pipe the gas through a set of instruments that measures flow methane, barometer ... and then we send the gas to a flare and incinerate it," and he said the recorded data are verified by non-Keyrock entities before being submitted to the California Air Resources Board for credit generation.
Board members asked technical questions about how much methane is actually recovered. Pate replied recovery varies by seal integrity and proximity to surface; at another deep-mine project he cited observed surface methane concentrations ranging from about 40% to 90% across a yearly cycle. Board members also questioned lease and royalty arrangements; Pate said Enervest (EnerVest) holds the gas rights for the site and Keyrock provides monthly reports but handles payment of royalties on an annual basis.
The board took separate formal votes on each petition. For VGOB24-1217-4300 a motion to approve passed on roll call with multiple "yes" votes recorded and one abstention recorded in the transcript as "Atlet abstain." For VGOB24-1217-4301 the motion to approve also passed on roll call; the transcript records a member abstaining (appearing as "Allen" or similar in the roll call), with other board members voting in favor.
Each petition sought voluntary pooling of 100% of unit interests, named Keyrock as operator, and included the company's assertion that approval would prevent waste and protect correlative rights. The board recorded each approval and the meeting proceeded to staff updates and adjournment.
Next steps: the approvals permit Keyrock to proceed under the terms presented; no further board conditions were recorded in the transcript.
