Companies developing concepts for large underground coal gasification facilities in the UK are considering suspending their projects due to climate change concerns and unfavourable public perception of the technology.
According to Cluff Resources, one of the companies planning to exploit UK’s reserves of coal to produce gas for power plants, it is highly unlikely these undertakings will take off in the next five years.
Due to its similarities to controversial shale gas fracking, the coal gasification technology, if deployed, will probably incite protests of environmentalists.
"The opposition to fracking has caught the government and companies drilling for shale gas by surprise, and it is taking up a lot of their executive time,” said Cluff Resources’ chairman Algy Cluff. “Accordingly, we need to explain the absolute difference between fracking and the offshore coal gasification technology."
Like fracking, underground coal gasification requires injecting of a mixture of compounds into the ground to release gas that can be used in power generation. Both techniques create toxic by-products that must be retrieved from the processing site and disposed of in controlled conditions
Coal-to-gas projects involve boring mostly into thin seams deep offshore that are not exploitable by conventional means. A mixture of air, oxygen and steam is injected underground, leading to combustion of subsea coal reserves.
By contrast, fracking unlocks natural gas through high-pressure injection of chemicals, sand and water at land-based sites.
Cluff, who helped pioneering the development of Britain's offshore oil and gas industry in the 1970s, said underground coal gasification sites could use much of the pipeline infrastructure already in place to transport the gas and would be much less disruptive to rural communities than fracking for shale gas.
In addition to Cluff, four other companies are currently exploring the possibilities and have been issued altogether 21 licenses for coal seam blocks.
However, additional permits will be needed from a range of government agencies before drilling and production can start.
First experiments with coal gasification were run in the USSR in the 1930s. However, after the Second World War, the technology was shelved due to then abundant resources of cheap oil and gas.
Rising gas prices as well as the advancing technology of the recent years have revived the interest in the technology with four projects currently underway in Australia, China, South Africa and Uzbekistan.
Britain produces around half of its natural gas from the North Sea, and that figure is likely to fall to around 25 per cent by 2030, according to government estimates, increasing its dependence on imports from Norway and Qatar.
"We are potentially talking about a second North Sea here (in terms of gas production from coal). It's far too big an opportunity for government and energy majors to ignore," Cluff said.
To make the technology more sustainable, the firms foresee the carbon dioxide released during the process could be pumped back into subsea storage tanks and depleted gas wells.
The combined amount of CO2 this technology produces while burning coal in deep seams underground and using the gas produced for power generation, is twice as high as that of a conventional gas-fired power plant
Carbon capture and storage has thus been the key requirement of the UK government to approve of this technology. However, carbon capture and storage presents many technical obstacles and is so far seen as rather costly.
Excluding the carbon capture and storage technology and the carbon permits, the combined cost of coal gasification and the subsequent power generation would amount to some £44/MWh, according to a recent EU-funded report. Cost of conventional gas power generation in the UK amount to £40 per MWh.
Many critics say the technology would be even more carbon intensive than conventional coal mining.
But Cluff and other operators believe UK’s strict regulations, use of deep offshore coal seams, carbon capture, good management and regular monitoring would assure the technology to be deployed without polluting air, water or soil.