Duru can says that, on average, the carbon footprint of UCG-based power generation should be 20 percent lower than power generation via the pulverized coal-fired power plants that predominate in China, thanks largely to the avoidance of methane emissions from coal mining. It could cut carbon emissions in half if equipment to capture and store the plant’s carbon dioxide exhaust is added—an option that Durucan says is under consideration for the U.K.-Chinese project.
This summer’s investigations will provide more specific data on the project’s likely greenhouse gas benefits. It will also assess the risk posed to groundwater. Burning and gasifying coal underground produces carcinogenic by-products such as benzene. Durucan says groundwater contamination is “a concern that one must consider,” but one that can be managed by “how one controls the gasification process and pressures.”
Others have a mixed assessment of UCG’s potential impact on water supplies. Doug Shaigec, president of Calgary-based UCG developer Swan Hills Synfuels, says the U.K.-Chinese project could benefit China’s arid coal regions if it exploits nondrinkable saline water formations to supply the water consumed by the gasification process—something Swan Hills plans to do at its 1,400-meter deep, CAN$1.5-billion ($1.6-billion) UCG project in Alberta. However, he says, proximity to aquifers could be a deal-killer for shallower UCG proposals. “We do not believe that it is appropriate to practice UCG in freshwater aquifers,” says Shaigec.
Groundwater concerns appear to have killed Cougar Energy’s UCG pilot project in Queensland, which the state’s environmental authority shut down last summer after the project’s gas production well ruptured and Cougar reported trace levels of benzene and toluene in groundwater. Cougar has contested the shutdown, and issued a statement this week asserting that “there have been no concerns with water quality in local water bores.”
But some industry sources back the regulator’s decision. “That is Queensland doing their job as they should do it. It wasn’t a knee-jerk reaction,” says Julie Lauder, CEO of the UCG Association, a Surrey, U.K.-based industry association.
Even in China, which has a less developed system of environmental enforcement, shallower projects may face scrutiny. Cougar Energy announced late last month that local authorities had requested “further technical and environmental details” on the 200-meter deep coal seam and 400-megawatt power plant it proposes to develop in Inner Mongolia’s Wu Ni Te coal deposit with Inner Mongolia DeTailong Investment Energy. Cougar says the project, once slated to begin this spring, would now be delayed another two to three months.
Lauder says that aggressive regulation will ultimately protect responsible developers of UCG technology. As she puts it: “At this stage of the game, a bit of bad press can affect everybody.”