SFGI's questions are indeed good ones and yours is an excellent,...

SF

GI's questions are indeed good ones and yours is an excellent, punchy reply.

All of us individually must have expectations for our investments in the emerging technology of ucg. Mine were sorely tested in the months that followed LNC's and CNX's burns when nothing material (imo) seemed to be emerging to match the "build up" to those burns. Both sp's are well off their highs as a result imo.

In light of the lengthy interview at

http://www.australianbusinessjournal.com.au/cougar-energy/

I reckon I have been harsh on LNC and CNX ... if Len's reasoning is correct, it takes significant time (as in many years) and money (as in 100's of millions min imo) to reinvent the wheel. R&D is commendable and break through innovation when it happens is wonderful. As an engineer I applaud R&D and LNC's and CNX's efforts.

Len simply contends that reinventing the wheel is costly and delays commercialisation ... it is hard to argue otherwise imo and it appears to be playing out. CNX for example are going to spend a few yrs getting confident with 5MW then maybe 20MW before moving to something of a commercial scale. How is that going to look to investors in 2 yrs time if CXY are mid construction on a 200MW project?

So, with reference to the above article, GI's questions are good within a paradigm of "R&D action must mean progress ... and the more R&D the more there is progress". Maybe it doesn't matter if there has only been refinement and tweaking of a long established technology in the next Ergo enabled UCG burn ... maybe the future gains are only ever going to be incremental and maybe they are to be measured in cost reductions of the produced syngas.

In a crude way, ucg is only a burning cavity of coal deep underground that you cant see but that you can gauge by input an output parameters. After the burn you can probably assess its efficiency in terms of the % of coal combusted by geophysics and sampling investigations ... the differences in the technology delivery to initialise and maintain the burn in all reality are probably minor in terms of efficiency.

Hey, a 2010 VW is still recogniseable from a 1950's VW and both are capable of transporting driving around the city. If they were both reliable and one costs $5k and the other $40k and were owned by couriers which courier would get the best return on capital?

The argument distills to incremental gains to a tried and tested technology or breakthrough gains by developing a new technolgy ... very different risks and very different outcomes.

Cheers
Dex