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Media Coverage

Underground Coal Gasification – A Future For King Coal?

20 December 2012
European Oil and Gas
Given that the world's largest producers are now located outside Europe, it is easy to forget that coal still accounts for a major part of the EU's electricity production and vast reserves still exist across the continent. Interest in this vast resource has been revived in the UK and further afield based on technology developed over a century ago which may enable coal to be exploited in a less environmentally deleterious way and breathe life into once-forgotten mines. With the global concern over climate change and energy security high on the political agenda, underground coal gasification technology ("UCG") may now have come of age.

How the process works
Rather than extracting coal from the pit in the time-honoured fashion, UCG enables energy to be generated deep underground by burning the coal in situ in the coal seam. At a very basic level, the process works by drilling boreholes into the coal seam and injecting a mixture of water/steam and oxygen down a pipe to ignite and partially combust the coal. Gasification products (known as syngas) are then extracted through another pipe.

The extracted gases include a mixture of carbon monoxide, carbon dioxide, hydrogen and methane which can be processed to provide fuels for a range of end uses, including power generation, transport and chemical feedstocks.
The gas can also be processed to remove carbon dioxide, thereby providing a source of energy with minimal greenhouse gas emissions.

Perhaps surprisingly, the technique is, by no means, a new one. UCG was first discussed by scientists over a century ago but, while the concept itself may seem relatively simple, the development of a working system on a commercial scale has been feasible only in a small number of cases.

One of the key benefits of UCG is that it can enable coal to be exploited in previously inaccessible seams of coal in closed or working mines. The process can also be used off-shore, making it attractive to countries such as the UK with substantial resources under the North Sea. There are also economic benefits to be had for those able to acquire a technical mastery of the process and export associated technology overseas.

A short lesson in the history of UCG
The gasification of coal in situ was first developed in the former Soviet Union during the 1930s. The process had come to the attention of Lenin some years earlier. Lenin had published an article in Pravda which he described UCG as "one of the great triumphs of technology".

The Soviet UCG programme was later championed by Stalin and led to the development of a UCG method capable of extracting commercial quantities of coal at a number of sites across the former Soviet Union. One of them, in Uzbekistan, is still producing coal to this day. However, the programme was significantly downsized and lost its momentum in the 1960s, when large reserves of natural gas and oil were discovered across Russia.
A number of other trials have taken place in Europe, notably in the UK which embarked on UCG trials in the 1950s in shall coal seams in Derbyshire, only to be abandoned.

Further trials in the US during the 1970s proved that drilling techniques from the oil and gas industries could help to control the process and greatly reduce the cost. During the 1990s a major trial took place in Spain co-sponsored by a number of EU states. This was the first to demonstrate that UCG wells in deep coal seams could be successfully constructed.

In economies such as China where coal is the main energy source, there is now considerable interest in UCG with around 16 projects in operation. Other important regions of activity include New Zealand, South Africa, USA, Eastern Europe, India Indonesia, Vietnam and Pakistan.

Managing the environmental impact
Regulating emerging energy technologies presents tough challenges for regulators. The risks to workers, the public and the environment are not well understood in hard-pressed regulatory bodies and they are only now beginning to put in place a framework for assessing and controlling risks.

Compared to conventional coal-fired power, proponents of UCG argue that it can greatly reduce the environmental impacts associated with coal mining at the surface, including coal combustion, the disposal of mining waste, air pollution from coal dust, mercury contamination and the emission of sulphur dioxide and nitrous oxides (responsible for acid rain and smog). However, there remain risks notably through the potential for groundwater or surface water pollution by chemical substances used in the UCG process.

Australia is at the forefront of a new wave of UCG technology but a pilot project in Kingaroy, Queensland recently caused controversy after traces of benzene and toluene, potentially cancer-causing chemicals, were found in groundwater near the plant.

There are also concerns about the impact on local communities from noise, air and dust pollution, subsidence and the risk of mine collapse.

Putting safety first
Mining safety is back on the public agenda and the mining industry accounts for around 8% of fatal accidents in the global labour force according to the International Labour Organisation. The world-wide focus on the rescue of the Chilean miners trapped deep underground and other recent mining tragedies have helped to bring mining safety back under public scrutiny.

While attention often focuses on countries with the most chequered safety histories, safety is a crucial issue for the development of UCG in the UK and Europe. Arguably since fewer personnel are needed to work the coal seams underground in UCG facilities, it presents more limited occupational safety risks. However, there remain serious concerns associated with the possibility of underground fire and explosion. This is exacerbated by the high combustion temperatures (up to 1000˚C) and the use of oxygen and other combustible products deep underground, or by syngas leakage at the surface.

In addition, the rapid development of novel or hybrid processes – UCG combined with hydrogen fuel cells, for example – is another major challenge for regulators. On the other hand, proponents argue that the development of new technologies gives the opportunity to "design-in" safety features at an early stage.

The regulatory framework in Europe
Any entity wanting to establish UCG operations will require a range of regulatory permits and licences. These include licences from the relevant coal authority, which will often be granted on a conditional basis until all other relevant consents are in place. Typically, operators will need to demonstrate that they have the necessary finance to fund the operations of the mine and any associated liabilities. In the UK where there is considerable interest in UCG, around 18 conditional licences have now been granted.

Most new facilities will also require planning permission and for large-scale facilities this can involve consultation with a range of interested parties and local residents. Operators will also need to secure any minerals or surface access rights.

Coal gasification, syngas refining and all large fossil fuel powers stations will require environmental permits. In European states, this will require the use of "Best Available Techniques" to help prevent and reduce emissions and the impact on the environment as a whole. Establishments storing large quantities of dangerous substances are also regulated under a Europe-wide scheme to reduce and control the risk of major accidents.

In addition, most large power stations and energy-intensive industrial installations are required to participate in the EU's flagship scheme to reduce greenhouse gas emissions – the EU Emissions Trading Scheme. This has led to concerns over "carbon leakage" whereby energy energy-intensive industries relocate to other jurisdictions to avoid the EU's tough carbon rules. Whether this will deter potential UCG developers, remains to be seen.

Clean coal – myth or reality?
Governments across Europe are in agreement that tackling climate change is one of the major energy challenges facing the world today. Any resurgence of the coal industry will therefore need to be coupled with significant investment and research into clean technologies, such as carbon capture and storage ("CCS"), to reduce the massive production of greenhouse gases associated with burning coal.

CCS involves capturing C02 at its point of production, compressing it and then injecting it into underground geological structures where it can be stored securely and permanently. It has the potential to reduce emissions from power stations and other industrial installations by around 90%, but the technology has yet to be deployed anywhere in the world on a large scale.

Many in Europe's strong green lobby have long-suspected that the "clean coal" campaign has always been more PR than reality. There are also fears that many coal-intensive economies will not invest sufficiently in clean technologies and will continue to use the existing infrastructure of carbon-emitting powers stations to harness its energy potential. But with the need for stimulation in many ailing economies and the possibility of gaining the competitive edge, the time may now be ripe for the development of UCG.

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  • Surinder Sian
    PR Executive
    T +44 20 3130 8120

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