Underground coal gasification a possibility

Tim Bradner | Alaska Journal of Commerce

There is now an intense focus on securing energy supplies for Southcentral Alaska. Natural gas fields in the region, which have brought us cheap energy for decades, are being depleted. Southcentral Alaska utilities say gas production is likely to run short of our needs by 2014, and they are working on a plan to import liquefied natural gas.

Explorers are finding more gas in the region, but the pace of exploration so far is too slow to meet the need. There are new wind power projects planned, but these will make only small contributions. There is a promising geothermal prospect at Mount Spurr, a volcano southwest of Anchorage, but its commercial feasibility isn't proven yet.

As a long-range fallback, the state is working on a 24-inch pipeline to bring North Slope gas south to the Anchorage area, but that can't deliver until 2019 and it won't be cheap -- the project is estimated to cost $7.5 billion.

There is, however, one significant new energy prospect for Southcentral Alaska that hasn't gotten much attention. It should be included in the discussion.

This is Cook Inlet Region's underground coal gasification project in the Beluga coal fields west of Anchorage, on lands owned by CIRI, the Anchorage-based Native corporation. CIRI has been quietly pursuing its project, with drilling tests and geological and engineering studies, using its own capital.

At a time when everyone else has a hand out seeking state funds, CIRI's private-sector initiative is to be applauded.

Underground coal gasification is a concept not yet in commercial use in the U.S. but one with a long history in the former Soviet Union, where it was developed. There are commercial demonstration projects under way in Australia and South Africa, and work is also being done in the U.S.

Basically, gasification involves the controlled combustion of coal in the seam underground. The technical process is complex and proprietary but a chemical reaction produces "synthesis gas," a mixture of carbon monoxide and hydrogen, which is then brought to the surface.

Air or oxygen is injected into the coal seam by one well to allow the process to occur and the synthesis gas comes up a second well. The combustion is controlled by regulating the amount of air or oxygen. Cutting off the air shuts down combustion.

Synthesis gas is low energy. By itself it can drive a turbine in a power plant. CIRI is studying this as one way of using the gas commercially. A better prospect, CIRI believes, is upgrading the synthesis gas through another process to make a synthetic natural gas that would work in Enstar's system or be used in power plants that burn natural gas. One advantage is that the project is not far from existing gas pipelines on the west side of Cook Inlet.

CIRI's studies so far indicate that coal-based synthetic gas could be produced at prices competitive with newly discovered gas in Cook Inlet, and would be very competitive against imported LNG or gas brought from the North Slope by pipeline. CIRI also believes its project could be in production by 2016. There is potentially a large supply of this gas because there are huge coal reserves in the Beluga coal fields, many of them on CIRI land.

There are, of course, questions to be answered. First, CIRI must show that the process will work. Regulatory agencies will have to be convinced, and the public assured, that the bad stuff in coal, pollutants like heavy metals, for example, will remain sealed deep underground.

While there is now no regulatory requirement to sequester or capture the carbon dioxide the project would generate indirectly, CIRI says it would like to find ways to insure that the CO2, a greenhouse gas, isn't released into the atmosphere. One idea is using this gas for enhanced oil recovery in aging Cook Inlet oil fields, injecting the CO2 underground to produce more oil, but the feasibility of this must be determined. Another is injecting the CO2 into deep underground coal seams at the site, to store it permanently.

CIRI isn't the only company interested in underground coal gasification. Linc Energy, an Australian company exploring for conventional natural gas in Southcentral Alaska and for oil on the North Slope, is also interested in underground coal gasification. The company has a commercial demonstration project in Australia. It would like to develop similar projects in the U.S., including Alaska.

Linc Energy's approach to using the synthesis gas is different from CIRI's, however. Linc would use a process to make liquid fuels, an ultra-clean diesel or even jet fuel and gasoline. The company is using a processing technology developed in Germany in the 1920s and used commercially today by companies in South Africa, Malaysia and the Persian Gulf to make liquid fuels from coal and natural gas.

We should applaud these initiatives to forge new ideas. We need every option on the table in meeting our energy needs, and this should be among them.

Tim Bradner writes for an Alaska economic reporting service. He also consults for private clients and writes for business publications. His opinion column appears every month in the Daily News.