News

October 16, 2008

Carbon Energy Plans To Set The World On Fire

By Our Man In Oz

Underground conversion of coal to gas, in a safe and profitable way, has been one of the mining world’s “Holy Grail” pursuits for the past 70 years, without much success. In the next few weeks the latest attempt to prove the commercial viability of underground coal gasification (UCG) will reach a critical point as a small Australian company, with impeccable connections, “fires” its first substantial trial. In theory, Carbon Energy will burn a deeply-buried coal seam to liberate a range of gases at its Bloodwood Creek test site in Queensland, some gas will be suitable for power generation and some suitable as a feedstock for ammonia production. If successful, investors in the company will be delighted, especially the two biggest shareholders, the Australian Government’s science agency and the country’s biggest fertiliser producer, Incitec Pivot.

It’s the presence of the Commonwealth Scientific and Industrial Research Organisation (CSRIO) with its 18.6 per cent stake in Carbon Energy, and Incitec with its 11.2 per cent, which adds credibility to a process which has its fair share of doubters, and sets the company apart from two other UCG experiments in Australia. Common objections to UCG includes fears of groundwater contamination from burning coal underground, high levels of carbon dioxide being released and the conventional concerns...