Come across this good article from the Australian business journal outlining Len's background and mission. Len covers the misconceptions around CRIP and vertical drilling methods. It 'seams' if it works already, why try and fix it:
Dr. Len Walker, Managing Director and founder of Cougar Energy Limited, a Mel?bourne-based company listed on the Australian Securities Exchange (ASX symbol: CXY) and specializing in underground coal gasification (UCG) and electricity generation, met with IRJ on a recent trip to London U.K.
Walker met with us to talk about Cougar Energy?s latest developments, tell the story of how the company is ready to bring its UCG projects into commercial reality, and discuss the potential this exciting technology offers to the changing face of international coal mining.
Cougar Energy and UCG: A history
Walker has 25 years of experience spanning all aspects of UCG technology.
?I?m a civil engineer from Melbourne University by training. I won a scholarship in 1964 to come to Cambridge, England to do my doctorate in soil mechanics?geotechnical engineering. That?s an area which analyses the engineering behaviour of the soil underground. I then did research and lectured in Canada for 18 months before coming back to Australia and working as a consulting engineer for around 20 years specializing in this field,? he recalls.
?I also completed an MBA during this same time so by the end of the early 1980?s I had about 15 years engineering experience in this field, an MBA, and I was running a consulting firm of about 100 staff?an international company called Golder Associates. I ran the Australian division of that company for about 12 years, then left consulting engineering in 1983. One of my last consulting assignments was a feasibility study for the application of UCG technology at a particular coal mining site in Australia.?
?From then until the present, I have spent my time developing small resource companies. Initially I worked in the gold and oil and gas areas, using both my own funds and public-listed vehicles. During the 1980?s, when oil reached $40 per barrel, a lot of Western countries took note of UCG technology, and in particular the Russian technology, although the U.S. followed another line of research.?
?I became involved in UCG because of my technical background in evaluating site suitabil?ity for the process. I went to the United States in 1982 to review their work, and found out that there were very few people involved in the indus?try who had the geotechnical background that I had, which is central to application of the technol?ogy,? Walker says.
?There?s a significant difference between un?derstanding what goes on underground and what you do with the gas once it comes to the surface.?
Walker and two partners completed the feasibility study in 1982. One partner was a university professor (Ian Stewart) from New South Wales (Australia) who had become interested in UCG after an earlier trip to Moscow where he had learned about the technology. The other, a chemical engineer and friend of Walker?s (Ian Shedden), put the study together. Walker was responsible for all of the geotechnical work underground.
?Subsequently, over the following 10 years the other two passed away, so I was left as the last person in Australia representing the technology. Having met everyone in the States in the early 1980?s, I felt that I understood basic aspects of the technology and the factors involved better than many practitioners because of my background,? Walker says.
?I had read a lot about the early work in the Former Soviet Union (FSU) and the early American work during that time and I came to the conclusion that the Russians had done so much more work that it made everyone else?s contribution look insignificant. For example, by the 1990?s, the Russians had actually converted about 20 million tonnes of coal into gas using this technology. Throughout the rest of the world that total was less than 100,000 tonnes. So you can see that the bulk of the existing know-how comes from the FSU,? Walker says.
?All of this information led me to developing a strong interest in taking the technology into commercial reality, rather than focussing on more research work.? However, the 1980?s and 1990?s proved to be a difficult time to raise the seed funding to take UCG to that commercial reality.
?By coincidence, in 1996, I wrote a technical paper on UCG which was placed on the internet, and was read by a fellow in Montreal. He called me and asked what I knew about UCG and claimed to have a long background in the technology. His name was Michael Blinderman. In our first conversation, we argued for two hours and convinced each other that we were both ?obsessed? with commercialising the technology. His background was actually operating the technology and producing the gas in the FSU, something few people in the Western world had done. Because I had both geotechnical and commercial backgrounds, we came to an agreement that he would produce the gas and I would do everything else: set up the company, raise the money, find the locations and put the projects together.?
Walker and Blinderman, with his company Ergo Exergy Technologies Inc., have been working together for the past 13 years since that conversation. Ergo Exergy was formed in Montreal in 1994, and united a number of international UCG experts with long experience of operating large UCG facilities in the FSU. Based on that experience, the company had greatly improved on FSU UCG technology and eliminated many of its deficiencies.
The result of this partnership was the 1999 Chinchilla, Queensland project carried out by Linc Energy: the largest and most successful UCG demonstration test outside the FSU, carried out under strict environmental supervision.
?There are now at least six companies listed on the Australian Stock Exchange which are promoting Underground Coal Gasification, of which Linc Energy was the first,? Walker says.
Walker founded Linc Energy in 1996, but lost control of it in 2002.
?It was my founding of that company, the raising of funding, and the formation of my partnership with Michael Blinderman as the UCG technology provider to create the Chinchilla test which operated between 1999 and 2002, that has triggered off the current high level of interest in the technology.
And so we reach Cougar Energy today. Walker?s second company was founded to use the same technology to realise commercial projects and finish off the work he began with Linc Energy.
Cougar Today
Today, Cougar Energy has three projects. The first and most developed is the Kingaroy project in Queensland, Australia.
?We have 73 million tonnes of coal resource established and will be starting production of gas in February 2010. That?s part of a three year plan to build a 400 Megawatt power station. The first stage will be about 200 Megawatt, a year later we?ll expand that to 400 Megawatt. We?re planning on that being commercial and producing electricity early in 2013,? Walker says.
?We have a second project also in Queensland near a town called Wandoan where we have over 300 million tonnes of coal, and we?re planning a mixture of power generation and conversion of the gas into chemical products. This gas, which is called syngas, can be converted into diesel fuel, methane gas, fertilizer, ammonia and a whole range of other products.?
Cougar?s third project in South Gippsland, Victoria, Australia, is a lignite coal project with drilling plans already in place. In short, Cougar plans to bring all three projects into commercial production over the next five to six years. It may seem quick, but as Walker points out, ?we?ve been working on this for a long time.?
?We?re also in negotiations for a number of other projects, including through our subsidiary Cougar Energy U.K., which has one definite project in Pakistan, a number of agreements in India, and a number of possible projects in Europe. There?s an international flavour to the overall corporate development,? Walker says.
UCG: tried and tested
One of the misconceptions surrounding UCG is its supposed status as a ?new energy technology.?
?That?s a real issue for debate,? Walker explains. ?It?s been proven to be viable over many decades in the Former Soviet Union. The Americans reviewed all of the Russian work in 1976. At that time, they estimated the replacement value of all of the work that had been done in the FSU was US$10 billion in 1976 dollars. To be contemplating new research programmes to try to reinvent the technology will, in my view, always be a waste of time which will delay the commercialization of the technology.?
?The requirement is to translate known technology into commercial western terms and that?s what I?ve been building towards for the last 25 years. The Chinchilla test was the first serious test of the Ergo Exergy technology under western environmental conditions and was approved all the way through with no environmental queries whatsoever, verifying that the technology is ready for commercialization.?
Walker says that part of the difficulty in conveying the benefits of the technology actually results from his lengthy experience and familiarity with UCG. ?It?s all new to most people including governments, bureaucracies, environmental agencies and others. One of my tasks is to convey the understanding that it?s not new, it has been done before, and the Chinchilla test satisfied any uncertainties. There are now projects under discussion or development in India, Pakistan, New Zealand, Australia, Chile, South America, in the U.S.A, in Canada, Viet Nam and more,? he continues.
?All of these potential projects are active whereas even five years ago they didn?t exist. It?s a timing issue. My interest was too early but it?s current now because of many other factors such as energy security and CO2 emissions.?
But other misconceptions about the technology also exist, and it is therefore plain to see why education is such a big part of Walker?s mission both inside and independently of Cougar Energy today. One such myth in the information received by newly interested parties is inaccurate reporting related to the two separate methods in UCG: the inseam borehole (CRIP) technology developed in the U.S.A., and the vertical drilling method which harks back to the Former Soviet Union.
?Contrary to popular reporting, the Russians used inseam boreholes as well, so it is not unique to the CRIP system. I visited the former Soviet Union operating site for the first time in 1997 and they had been operating inseam drill holes for at least 40 years.? Walker explains.
Walker says that the technology developed by his UCG partners at Ergo Exergy Technologies Inc. is generally flexible in using both vertical and inseam injection and production holes as dictated by specifics of the coal geology of a given coalfield, while the CRIP system involves both the injection hole and production hole being inseam.
?The distinction between the technologies is not really inseam verus vertical drillholes in principle. The most important factor in assessing the two technologies in my view is that, within the former Soviet Union, the technology akin to one being used by Cougar has been used to gasify 20 million tonnes and operated at commercial scale, whereas the CRIP system has gasified less than 50,000 tonnes,? he explains.
?This distinction is most important to us, and is why we at Cougar are working with the Ergo Exergy technology. It?s the only one which has been expanded and developed at commercial scale and there are significant differences between doing an isolated test of 10,000 tonnes of coal, the biggest CRIP test in the U.S., and a commercial project which might be gasifying one million tonnes a year. My UCG partners are the only ones who have managed an operating plant on a commercial scale.?
?Why reinvent the wheel??
When you consider the monumental sum of $10 billion 1976 dollars invested in UCG in the Former Soviet Union, and the years of successful testing and usage of UCG associated with these funds, plus additional testing in the USA, it seems backtracking and retesting this well-examined technology is futile.
Walker says that much of the worldwide interest in UCG today stems from the Chinchilla project, despite the years of successful testing and documented findings presented by the work which took place within the FSU. And this is for a very good reason. Despite unprecedented scale and wealth of experience gained in the FSU operations, Chinchilla project has demonstrated that Ergo Exergy technology provides for a much more consistent production of gas of a better quality, at a very low cost and without negative impact on the environment.
?In the U.K., a group called the UCG Partnership strongly promotes Underground Coal Gasification there. It?s on the government?s horizon and there are one or two projects being discussed using coal that is very deep, which will be very difficult to commercialise. Our interest is in coal generally shallower than 400 metres, but the general discussion in the U.K. is focussed on coal at 600 or 700 metres which is extremely deep, and is unlikely to be economical for a considerable period of time. We?re looking at possible projects where the coal is considerably shallower,? Walker says.
?Worldwide, there is an enormous amount of coal shallower than 400 metres and predominantly the work that has been done successfully, particularly in the FSU and the U.S., is at depths shallower than 400 metres, so there?ll be technology aspects of drilling, testing and operating at more extreme depths which will require new techniques to be developed.?
Herein lies Cougar?s interest in those shallower projects and Walker?s appreciation for the work completed in the FSU.
?My attitude has always been that the Russians have done it all before, so why try to reinvent the wheel?? Walker says.
In fact, Stalin originally introduced UCG in the 1930?s as a socialist objective because the technology requires no mineworkers to enter the underground mine.
Add other current factors to this goal, and it is easy to explain the new interest in this old technology.
Cougar and UCG today
Reinventing the wheel? No. Enjoying a time of rejuvenated interest? Absolutely. Walker says that Cougar?s handling of the global financial crisis and the surge of interest in UCG today has put the company in a prime position from which to realise commercial production on their three projects.
?We were fortunate that because we?re listed on the stock exchange, our funds come from placement of shares. Whether it was good luck or good sense, we had raised money before the crisis really hit, so it didn?t affect us at all. Now that the crisis is passing and issues of climate change, energy efficiency and energy security are all very topical, it?s a lot easier to raise money for technologies like this,? he says.
?In September and October, we raised a total of A$16.6 million. This was in two blocks of eight million. The first was raised through a share placement to institutions in Australia, and the second block which followed a couple of weeks after was an offer to existing shareholders. They took them up with enthusiasm, so we now have A$13 million in the bank to see us through to next year and ignition of the coal, and to undertake feasibility studies, then raise funds for the Kingaroy power plant project.?
Walker says that announcing gas production is the really exciting next step for Cougar today.
?Once we start producing gas, everyone gets a lot more comfortable because the words are met by reality. For us, this is the most significant thing to watch for in our coming announcements. You will see on our website that Kingaroy plant construction will be complete by December 2009, the plant will be commissioned in January and February 2010, and we should have ignition and produce gas by the end of February 2010,? he says.
When the Kingaroy project is successful, all of the knowledge gained there can be transferred to the next project.
?That?s a fairly easy thing to do. The Kingaroy project?s capital cost is about A$500 to A$600 million. The projects we might envisage at Wandoan and in Victoria are probably billion dollar projects, so that?s 10 years work, really. In parallel to that, we?re looking at developing international projects as well,? Walker says.
?The whole purpose of the company is to use this technology to develop commercial projects. It?s simply to translate this goal from the first project to enable us to develop a succession of projects.?
Walker, with Ergo Exergy?s technology support, founded Cougar 3 years ago to finish off 25 years of work and experience by bringing the company?s UCG projects into commercial production. While at first, Cougar?s six year goal of commercial realisation for the Kingaroy, Wandoan and Victorian projects seems steep, educating both media and modern interest alike that this is a proven and working technology is a pivotal dual goal. With misconceptions righted and current interest properly directed, the international potential for UCG is truly exemplified by Cougar Energy today.
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