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One of the Last Great Untapped Reserves of Low-Cost Energy

Cost advantages reported by proponents of underground coal gasification (UCG) are so great that efforts to commercialize the technology are being applied in Australia, Asia, Europe, Africa and North America, even where natural gas prices are below $4/MMBtu. Ten new projects have been announced this year, for a global total of 51 projects in various stages of development; eight projects are operational.

UCG offers an amazingly low-cost avenue to monetize vast amounts of coal cleanly and cheaply. There is little doubt that its usage will grow as developing countries such as India, Bangladesh, Poland, and China work to provide low-cost domestic energy to their markets. UCG offers a means to tap the 90 percent of reserves too deep, thin or low-grade to mine, representing perhaps one of the last untapped reserves of cheap energy.

Several simultaneous breakthroughs in seismology, directional drilling and downhole equipment have converged to make UCG possible. Once gasified, the coal can be used to make diesel, gasoline, lubricants and many other petrochemical fuels and products. It is purportedly cleaner than traditional methods of mining because ash is left underground and safer because miners stay out of harms way. Costs per MMBtu range from US$2.00 to US$3.06, according to three recent studies, well below shale gas production costs.

UCG developers face significant challenges in winning government and public support, however. Past demonstration projects have led to environmental problems. This report reviews the industry and economics, presents key trends, discusses risks and profiles each of project.

This purchase includes:

2011 Market Assessment Report: Underground Coal Gasification - Published Oct 2011
PDF Download
102 Pages
Database of Statistics of 51 UCG Projects Worldwide
Excel (.xls) Download
51 projects in all stages of development. Data fields include Location, status (developmental, construction, regulatory, financial), operators, owners, products, Zeus-assigned completion probability, year announced, feedstock, conversion technology, application(s), vendors, key contacts, estimated capital costs, and start-up year.

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Included:	2011 Market Assessment: Underground Coal Gasification Published October 2011 PDF Download Database of UCG Projects Worldwide Excel (.xls) Download

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Table of Contents

1. Introduction
2. Background
3. Economics
            3.1 LLNL Cost Estimates
            3.2 Oxygen Supply
            3.3 Gasification
            3.4 Synthesis Gas Cleaning
            3.5 UCG-to-Power
            3.6 UCG-to-Liquids
4. Market Review
            4.1.1 Australasia: Australia
            4.1.2 Australasia: New Zealand
            4.2.1 East Asia: China
            4.2.2 East Asia: Mongolia
            4.2.3 East Asia: Vietnam
            4.3.1 South Asia: India
            4.3.2 South Asia: Pakistan
            4.3.3 South Asia: Bangladesh
            4.4. West Asia: Uzbekistan
            4.5.1 East Europe: Bulgaria
            4.5.2 East Europe: Hungary
            4.5.3 East Europe: Poland
            4.6 United Kingdom
            4.7 Africa: South Africa
            4.8.1 Americas: United States
            4.8.2 Americas: Canada
            4.8.3 Americas: Chile
5. Project Profiles

Table of Tables

Table 1-1: Eight Key Trends of the UCG Industry
Table 2-1: Eight Operational UCG Projects, Operators
Table 3-1: Estimated UCG Capital Costs by Project, Product Type
Table 3-2: 2007 Lawrence Livermore National Laboratory UCG, IGCC Cost Estimates and Comparison
Table 4-1: Announced, Under Design, Under Construction, and Operational UCG Projects as of October 2011, Including Zeus Completion Probability Assessment

Table of Figures

Figure 1-1: UCG projects are operating, under construction or proposed in 17 countries. The most are surprisingly in Australia, where natural gas is abundant and inexpensive.
Figure 1-2: As world living standards rise, energy consumption will double to quadruple, depending on whether per-capita consumption rises to European or North American levels. Huge new supplies of energy will be needed. UCG is one of the last remaining low-cost resources, which if managed environmentally, could supply vast amounts of energy.
Figure 2-1: UCG was first envisioned as a means of fully depleting mines after they had been mined by laborers.
Figure 2-2: In 1935, engineers learned that by introducing oxygen and steam on one side of the seam and withdrawing syngas from the other, the coal could be synthesized cost effectively.
Figure 2-3: Between 1946 and 1996, five industrial and two pilot UCG projects operated in the U.S.S.R., four of which gasified lignite and three, bituminous coal. Some 15 million tonnes were gasified to 50 billion cubic meters of syngas.
Figure 2-4: In 1961, this UCG facility near Angren Uzbekistan, commenced gasifying a sub-bituminous coal seam at a depth of between 100 and 250 meters and ranging between 3 and 24 meters thick. It is the longest operating UCG facility.
Figure 2-5: UCG is achieved through drilling a series of wells utilizing the latest long-reach and horizontal drilling and completion techniques, according to BCG Energy Ltd, an Aberdeen-based developer. The injection well provides steam and oxygen to the coal face while the production draws the raw synthesis gas to the surface for cleaning and conditioning.
Figure 3-1: Synthesis gas provides multiple energy and chemical solutions, including an energy carrier for power generation from combined-cycle gas turbines to the use of the hydrogen and carbon monoxide as building blocks to produce diesel, gasoline, jet fuel, etc. and chemicals, such as methanol, olefins, hydrogen, and ammonia.
Figure 3-2: Capex of new power plants indicate a natural gas combined cycle power plant beats the cost of a UCG integrated gasification combined-cycle plant. However, UCG beats the economics of any configuration of coal-fired surface facilities.
Figure 4-1: Linc Energy’s Chinchilla plant is the world’s only operating UCG to GTL facility.