What is UCG?

Underground coal gasification (UCG) is the process where synthetic gas is created by igniting a coal bed and restricting air supply in order to burn off consumables. Oxygen is pumped into the burning coal bed through a well, and the simultaneously created fuel gas is removed via a separate well. Carbon dioxide (CO2), carbon monoxide (CO), hydrogen (H) and methane (CH4) are produced creating a gas of variable, low-heat content.

A brief history of UCG

According to Linc Energy, technical research on UCG began in Australia in the late 1970s, when the company in conjunction with various university professionals conducted feasibility studies through to the 1980–90s.

However, take up of UCG in Australia until recently was slow due to established and low-cost conventional coal-fired plants, and LNG processes. Additionally there were environmental and safety risks associated with the new technology that could be costly, such as upward migration of contaminated groundwater to potable aquifers due to thermally-driven flow away from the burn chamber, and migration of volatile organic compounds in the vapour phase into potable groundwater. Without the gas demand that exists in the current climate, conventional gas extraction was at the time, more economically sound.

In 2011 a worldwide increase in gas demand and prices coupled with a carbon conscious market has also led to a revision of the best methods to obtain this fuel economically and environmentally.

The benefits

According to Cougar Energy, air pollutants typically associated with traditional coal mining are generated in far fewer quantities during the UCG process. The company states that these include particulates from dust generated by mining, coal processing and ash handling; diesel exhaust from largescale mining equipment; and nitrous and sulphur oxides from blasting. Products from the UCG process are all contained in pipes, and emission control devices can be easily applied to recover or destroy contaminants. In a commercial scale operation, equipment could be installed to remove and recover sulphur to be sold as a by-product. Large-scale soil disturbance is therefore avoided with UCG because it accesses coal by drilling wells deep into the ground.

This means that land use could continue after, or even during, UCG operations.

Looking Forward

UCG is in early stages of development, unlike the wellestablished CSG industries of Queensland and New South Wales. However CSG and UCG are potentially in conflict over the same land and the two technologies are incompatible to the extent that UCG producers are looking to burn the coal resources from which CSG producers want to extract gas.

Additionally, mining leases are granted under the Petroleum and Natural Gas Act, and UCG leases are granted under the Minerals and Resources Act. Such was the case for Linc Energy and BG Group, who both had leases over the same area near Chinchilla. The Queensland Government decided in favour of CSG.

A mines department report on the viability of UCG is to be presented to the Queensland Cabinet no later than 2012. If the report is unfavourable to UCG practices, on-going constraints or even prohibition of UCG activities could be recommended.

Current UCG projects in Australia

Pedirka Basin Clean Fuel Production Project

Central Petroleum and Allied Resources are proposing to construct a Clean Fuel Production Project in central Australia, with an accelerated development towards a UCG to gas-to-liquids (GTL) project to produce clean transport fuels and/or other value added products.

• The agreement between Central Petroleum and Allied Resources will initiate a global search for funding and technology partners to plan and build an initial $A7.5 billion 60,000 bbl/d project in the Pedirka Basin.

• The project intends to use both UCG and GTL technology

• The project partners are considering building a pipeline to Darwin and South Australia as a development concept, to pipe an estimated 60,000 bbl/d for domestic market and export.

Bloodwood Creek UCG pilot power plant and demonstration facility

Carbon Energy is designing a pilot-scale power plant at Bloodwood Creek between Dalby and Chinchilla in the Surat Basin, Queensland. The project will involve a 5 MW plant and a 25 MW demonstration scale facility built adjacent. • This first phase of the overall project was completed in 2010.

• Carbon Energy has signed an off-take agreement with Queensland Government-owned Ergon Energy to supply the local electricity grid.

• In March 2011 successful initiation and commissioning of syngas was produced from Panel 2 at its Bloodwood Creek UCG Power Plant near Kogan in South East Queensland.

• The 5 MW plant demonstrated that the dual lateral design is optimal for managed gasification and is suitable for commercial scale application.

• Carbon has said the scoping study for the second phase 25 MW plant is still progressing.

Kingaroy UCG Power Generation Project

Cougar Energy plans to build a 186 MW syngas fuelled power plant in Kingaroy, with plans to expand to a 400 MW plant.

• Construction of the trial project began in September 2009 and in March 2010 the coal seam was successfully ignited and syngas production commenced.

• In January 2011 the Queensland Government halted operations at Cougar's alleged UCG Power Generation Project due to groundwater contamination.

• At the time of writing, the Queensland Government Department of Environment and Resources (DERM) has released a statement stating it is upholding the decision to stop Cougar from UCG trialling at Kingaroy.

• Cougar has disputed the claim of contamination and in accordance with the Environment Protection Act will seek an internal review of the decision by DERM.

Linc Energy UCG Power Generation Project

Linc Energy has proposed a UCG power generation project in South Australia to commercially combine its UCG and GTL technologies.

• Linc awarded a pre-feasibility study conducted by UHDE Shedden and Sinclair Knight Merz in 2010 for the gathering of data for UCG syngas processing and infrastructure required for the project scope, as well as the potential for power generation and transmission.

• The company plans to dispatch power generated from UCG syngas to the national electricity market to service South Australia, Victoria and New South Wales.

Linc Energy's Chinchilla demonstration plant

UCG operations began at Linc Energy’s demonstration plant in Chinchilla in July 1999 with the first UCG trial field, Generator 1. The first synthesis gas (syngas) was produced later that year. Since that time, Linc Energy has developed another three generators. Construction of the GTL demonstration plant to produce cleaner fuels from UCG syngas began in October 2007 and the first liquid hydrocarbons were produced on the 14th October 2008. During construction, a laboratory was established on-site to complement the development of Linc Energy’s technologies.

• Linc Energy operates its Chinchilla Demonstration Facility under Queensland Government Mineral Development Licence (MDL)

• The facility boasts four UCG generators and GTL production runs of up to 150 consecutive hours

• An on-site laboratory allows immediate gas and product analysis for process improvements

• The facility remains an important R&D centre as Linc Energy looks to establish its first commercial operation, planned for South Australia.