Coal gasification is gathering steamMathew Murphy May 25, 2009 IT IS a technology first developed in the 19th century and encouraged under Joseph Stalin's Soviet Union. Now a few Australian companies are attempting to prove that underground coal gasification (UCG) is more than just a promising idea but a technological and financial reality.
Len Walker's Cougar Energy is one of those companies. It is preparing to develop a demonstration plant in Kingaroy in Queensland with a pilot burn and initial construction expected later this year. If successful, it will be ramped up to a 400-megawatt plant powered by UCG and feeding back into the electricity grid by 2013.
UCG works by injecting oxidants down a production well and over non-mined coal seams. The combustion effect results in gas, which is transported up a second well where it can be used as a chemical feedstock or as fuel for power generation.
Dr Walker, who has been working on UCG for more than 25 years, says the technology allows stranded coal to be used without mining and in a cost-effective way. "There is no question of financial viability around UCG. The cost of production of the gas is pretty low," he said.
Linc Energy, the company founded by Dr Walker in 1996 before he moved on to Cougar, is another that is in the process of exploring UCG.
Last month, federal Resources Minister Martin Ferguson opened Linc's Chinchilla demonstration facility in Queensland.
Unlike Cougar, Linc hopes to use UCG to convert coal to liquids, producing up to 20,000 barrels a day, or the equivalent of 10 per cent of Australia's current fuel consumption.
Linc's chief operating officer Stephen Dumble said that would require a billion-dollar investment. He said Linc would conduct a full feasibility study next year on a commercial plant, with a final investment decision in 2011.
"With the world coming at or post-peak oil, there is going to be an ever-increasing demand for liquid transport fuels," he said.
"What UCG does is enables you to use coal that is uneconomic for mining and allows you to avoid about 40 per cent of the capital cost of a coal to liquids plant because you don't have to mine the coal and set up the infrastructure," Mr Dumble said.
Alexander Klimenko, a UCG expert at the University of Queensland, said that if the oil price continues to climb, countries that have UCG technology could be insulated against having to import the costly crude.
He said there was "no doubt that countries which have UCG will be advantaged over countries which do not".
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