BP manager Kendal Umscheid estimates that there are about 250 billion cubic metres of gas underneath the 300 square kilometres licensed to BP by the province of B.C.

BP has set up its first test well in B.C. to explore the possibility of extracting methane from coal in the Rocky Mountains of the province's southeast.

The company is spending $100 million over three to five years exploring methane reserves in coal deposits in the Elk Valley south of Sparwood, in the province's southeast corner, close to the interprovincial boundary with Alberta.

BP manager Kendal Umscheid estimates that there are about 250 billion cubic metres of gas underneath the 300 square kilometres licensed to BP by the province.

"If this whole area was economic and met our expectations, there'd probably be enough gas in this area to power the Lower Mainland of B.C. for around 30 years," Umscheid said.

He said the white derrick anchored by a large platform over the test well is just the beginning of methane development in the region, where surface deposits of coal were mined over decades.

The coal believed to have methane locked inside is far deeper in the ground.

However, the process that is used to extract the gas has raised concerns about water contamination and other potential environmental damage, according to opponents like Ryland Nelson, Southern Rockies program co-ordinator for the environmental group Wildsight.

'A lot of unknowns'

"There's a lot of unknowns with coal-bed methane," Nelson said of the extraction process that BP has developed over the past 30 years. "It is still a new industry and everywhere they've had wells there have been disastrous consequences on the water, wildlife and people that live in the regions … they're still figuring out the techniques to do this."

Nelson doesn't trust BP, the company responsible for an undersea well that has been gushing oil into the Gulf of Mexico since April.

He plans to join demonstrators scheduled to protest the project in the streets of Fernie, southwest of Sparwood, Wednesday evening.

Bill Bennett, the province's new energy minister and the MLA for the Kootenay East region that includes the test site, acknowledges that coal-bed methane extraction has led to water contamination in the U.S.

The problems with the process are highlighted in a U.S. documentary called Gasland that had its Canadian premiere in Fernie this week. The film reports that there have been 1,000 contamination incidents in six states linked to coal-bed methane.

"They've had really bad experiences in Wyoming and some places in New Mexico and Colorado," Bennett acknowledged.

B.C. rules ban water discharge

But, he said B.C. changed its rules a few years ago to ban the discharge of water produced from coal-bed wells onto the surface of the land.

"So I think it's covered in B.C.," he said.

The process has environmental and economic benefits, Bennett said.

"Coal-bed gas is the cleanest form of gas available, so if the government and industry can find a way to extract this clean green fuel from the ground then why wouldn't we do it?"

B.C. stands to earn up to $2 billion in royalties if the methane reserves prove to be what BP predicts. In addition, the project would create 250 new jobs.

BP is already one of the largest coal-bed methane producers in the world. Its 3,700 wells in the San Juan Basin of Colorado and New Mexico currently produce 25 million cubic metres per day.