Residents started writing letters to the Energy and Utilities Board, demanding a cumulative-effects assessment. After dismissing a local manager who had riled residents, EnCana's local vice-president, Stacy Knull, promised Ernst that the company would be more up front about its plans. Ernst accepted his invitation to speak to EnCana employees about the importance of full disclosure.

Ernst pinned up posters at the community store announcing the latest CBM developments. One of them announced that EnCana was prepared to disclose its plans for the next five to 10 years, and promised to stop hiding behind “inappropriate and dishonest consultations.” Ernst put the name and phone number of the co-ordinator of a local landowners' group, Norma LaFonte, at the bottom of the poster. Days later, LaFonte received a letter from a Calgary law firm threatening a lawsuit for defaming EnCana.

On Oct. 21, EnCana finally held an open house, which drew more than 200 people. The company served beef on a bun, gave out EnCana tuques and videotaped the entire process. “That was very intimidating,” says guest-house owner Alana Bowker. Taylor told the restless audience that CBM wells were indeed planned for Rosebud, and that EnCana wanted to drill another two to three wells per section on its 42 sections around Rosebud, at a cost of $50 million. (In fact, Alberta government reports showed that EnCana had begun drilling CBM wells in the area in 2003.) None of the locals left feeling any better. The next day, the headline in the Drumheller Valley Times read, “Rosebud residents not too happy with EnCana's plans.”

During a tour of EnCana's facilities before Christmas, Taylor and Knull admitted that the company's consultation process at Rosebud had been inadequate. “We are looking for feedback on our plans and how we can do it differently,” Taylor explained. He says the threatened lawsuit has “disappeared.”

At another public meeting in Rosebud in early February of this year, EnCana asked the community if “there were different ways of working together.” Some landowners pointedly replied that the industry might try respect and honesty. Others asked for reliable information about the impacts on land and water. Representatives from EnCana promised to work “in whatever way the community sees as the best way.”

Shortly afterward, the Wheatland Surface Rights Action Group, which represents more than 100 farms south of Rosebud, made a presentation to Alberta's standing policy committee for energy and sustainable resources. The group argued that existing regulations weren't designed to handle CBM projects composed of thousands of wells. They noted that adding all the compressor stations needed for the Horseshoe Canyon play—one for every seven sections - will “forever change the landscape.” All in all, the current CBM activity was “already in conflict with cultivated agricultural land,” and “sterilizes future potential use.”

Mike Gatens, CEO of CBM pioneer MGV and chairman of the Canadian Society or Unconventional Gas, agrees that many companies haven't been transparent with communities about their long-term plans. The industry probably needs a best-practices tool kit, he says. “It's a two-way street. It's about respect and understanding. Let landowners see the plans and react to them.

Let's show them that we are willing to work with them.” But even if the industry gets on consistently good terms with landowners, some doubts hang over the future of CBM. One is just how big it will be; estimates vary wildly.

One of the less rosy views comes from Jon Baker, CEO of Trident Exploration Corp., a Calgary-based firm that has focused solely on CBM since it was founded in 2000. Baker recently told a Calgary audience that Alberta government estimates of 66 trillion cubic feet of gas in the Horseshoe Canyon were wishful thinking. He predicts that only 10% of the world's coal seams will yield commercial gas. “It's R&D work, and it's high-risk.”

Some industry veterans even think CBM will turn out to be economically borderline. One observer, who has tracked gas production from 300 CBM wells in the Horseshoe Canyon, said investors should approach with caution. “There is a bullish enthusiasm out there that smells a lot like a tech bubble.”

To date, Horseshoe Canyon is one of the lowest-producing CBM plays in North America. “The quality of our coals just sucks,” adds the observer. “CBM is still a science project in Alberta.” Contrary to enthusiastic claims from some investment houses, production from CBM wells is already declining significantly - 35% in the first year. Production to date has been economically marginal. EnCana, for example, recently reported it was producing no more than 27 million cubic feet a day from its CBM wells.

An environmentalist, like Julian Darley, director of the Post Carbon Institute in Vancouver, would say that the pursuit of marginal gas sources is just a Band-Aid on a hemorrhage. Describing CBM projects as “stupid and dangerous,” he says such developments mask the reality that Canadians should be preparing for the day gas pipelines run dry. Instead of investing massively in CBM, he says Canada should build an energy policy that reduces demand, conserves gas and supports renewable sources of energy.

Dave Hughes, the coal specialist with Natural Resources Canada, thinks CBM development is necessary in the short term to avert a gas shortfall, but he seconds some of Darley's concerns. By his figuring, it would take the annual addition of 33,000 CBM wells of typical output to replace the overall decline in gas production.

Hughes notes that the Canadian Gas Potential Committee, a group of geoscientists from government and industry, calculates that it took about 100,000 exploration wells to discover the first two-thirds of Western Canada's gas reserves, which lay in some 28,770 pools. It didn't take much energy to bring this gas to market, Hughes adds. He figures that the remaining third of our gas will be found in 70,000 mini-pools that will require more than 200,000 wells. Much of this gas will be subeconomic, and will likely take big inputs of fossil fuels to find and extract. “What is the full-cycle energy cost for these unconventional fuels?”

In Rosebud, EnCana has recently promised to shut up its noisy compressor station with a “community gift” – the construction of a $100,000 enclosure over it. Ernst is not impressed. As of press time, the enclosure wasn't built. “EnCana has made a lot of promises. Will they keep this one? I still believe I'll be living with noise.”

And so the debate has begun: Should Alberta take the bloom off its Rosebuds or plan for a future with limited supplies of natural gas and declining gas revenues? “If we want a secure energy future,” warns Hughes, “Canadians are going to have to deal with these issues practically instead of emotionally.” But no one, above all the citizens of Rosebud, believes that's going to be easy.

Andrew Nikiforuk is a Calgary writer and a member of the Livingstone Landowners Group

MEANWHILE IN B.C.: PROMOTION, BUT NO PRODUCTION

If coal bed methane development is in its infancy in Alberta, it's positively embryonic in British Columbia. No matter that B.C.'s Liberal government has pushed the resource. No matter that analysts say B.C.'s coals are arguably better quality than Alberta's. The infant industry has encountered one setback after another, including U.S. opposition and stubborn economic obstacles.

But you can't say the B.C. government hasn't tried hard enough. Four years ago, it targeted royalties from CBM as one solution to its then-$33.6-billion debt load. Based on estimates that the province likely harboured 90 trillion cubic feet of gas in its coals, the Ministry of Energy and Mines put up a For Sale sign. Even at a 20% recovery rate, the paper bonanza promised to yield a giant pool of gas for domestic and export markets for 25 to 75 years.

To entice investors, the government consulted with industry for a year and then offered royalty incentives and streamlined regulations. In 2003, the government also passed the Coalbed Gas Act, which declared, to the chagrin of 600 owners of coal rights, that gas in coal belonged to the Crown and not the owner of the coal. (In Alberta, coal rights bestow gas rights.) Bright government pamphlets advertised Vancouver Island, the Peace River area in the northeast and the Fernie Elk Valley area in the southeast as key regions ripe for drilling.

Despite all the hype, companies have pursued only a dozen experimental projects. So far, none has brought any gas to market, thanks to a host of technical challenges including groundwater, the remoteness of sites and lack of infrastructure. Compared to Alberta, “It's definitely a different economic animal,” says David Molinski, assistant deputy minister with Energy and Mines.

It is also disappointing. On Vancouver Island, a small firm called Priority Ventures drilled a test well in 2001 with bullish hopes of supplying the Island's gas needs for 25 years. But three years later, the B.C. Securities Commission fined company president Neil Swift for making false and misleading statements to investors. Drilling is on hold.

In 2004, the government created an international incident by announcing the sell-off of coal leases in the Flathead Valley, just south of Fernie. Fearing that water pumped from CBM wells could affect the watersheds of Montana's Glacier National Park, the state's then-governor, Judy Martz, demanded that British Columbia conduct a comprehensive environmental assessment. When the government refused, citizens on both sides of the border took their case to the media and the industry umbrella group, the Canadian Society of Unconventional Gas.

Unrepentant, the government held its auction last August. Having added up the formidable environmental and social costs, industry simply stayed away. As the industry surmised, B.C. - the Left Coast - promises far more community and aboriginal resistance to drilling than free-enterprising Alberta.

Shortly after the Flathead episode, the province's CBM hopes received another setback when EnCana announced that it was suspending its 17-well project in Elkford, near the Alberta border, until it could find a partner with expertise in horizontal drilling to share risks and costs. EnCana reported, however, that water from the site could be handled easily.

Molinski, who is an energy economist, notes that many of the setbacks simply reflect the “technical challenges” of the resource, and that all oil and gas companies in the province remain interested in CBM's potential. He concedes, however, that “it is definitely a goslow approach to commercialization.”

BILLION, TRILLION…HOW MUCH GAS IS THAT?

• 1 cubic foot fills a basketball
• 1,000 cubic feet heats a home for two days
• 1 million cubic feet heats five homes for a year
• 1 billion cubic feet heats all homes in a town for a year
• 1 trillion cubic feet heats all gas-heated homes in Canada for one year