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September 6th, 2012

Underground Coal Gasification

by Andrew Price, President & COO

An underground coal seam has been on fire in Centralia Pennsylvania since 1962. With no way to extinguish the fire, private homes were taken by the State of Pennsylvania under eminent domain and abandoned. Proponents of a little used technique to harvest coal - underground coal gasification - hope to harness the forces behind the Centralia disaster to revolutionize how we utilize coal. Underground coal gasification involves setting deep underground coal deposits on fire and harvesting the resulting “coal gas” for use in power plants and industry. The Centralia fire was set when the town’s volunteer fire department conducted a routine burn at the town landfill. The landfill was located in an abandoned coal surface mine. The fire traveled underground – but near enough to the surface to receive ample oxygen - and continues to burn unchecked.

The US has the largest coal reserves in the world. The process of extracting coal is both dangerous for the miners and damaging to the environment. Every year miners die in underground mining accidents. Surface mining leaves enormous scars on the earth. Leaving the coal in the ground could reduce the risks to miners as well as open up coal deposits that are much too deep to mine with conventional methods. Some estimates put the amount of coal available to gasify at more than 5 times the amount accessible to conventional mining technology.

Current low natural gas prices and plentiful deposits of coal within easy access of surface mines are both brakes on near term development of underground coal gasification. As reported by Bloomberg’s Christopher Martin in Coal Greens Love Buoyed by Shale Gas Hydraulic Fracking, the Lawrence Livermore National Laboratory puts the cost of coal gasification at close to $6/MMBtu. Natural gas and conventional coal are currently priced at about ½ this level. The same technological innovations that have opened up vast new natural gas deposits, however, are also lowering the costs of underground coal gasification. As a result, firms including Peabody Energy – the largest coal producer in the US – are pursuing leases on deep coal deposits for possible gasification in the future.   

Some environmental groups are cautiously optimistic about the technology – urging additional study before widespread commercialization. As with natural gas fracking, groundwater contamination is a concern.

Thousands of coal fires may be burning around the world today. By some estimates, 120 million tons of underground coal burns each year in China alone, and a fire in Australia has been burning for 6,000 years. Underground coal gasification would seek to avoid a Centralia repeat by harvesting only deep coal seams and closely controlling the flow of oxygen.

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