Australia urged to develop 'fuel of the future' By Pip Courtney for Landline Updated 1 hour 47 minutes ago Linc Energy's UCG pilot plant, located at Chinchilla on the Darling Downs. (Pip Courtney, ABC TV Landline) Video: Landline: Fuel of the Future? (Landline) Map: Chinchilla 4413 One of Australia's richest men claims the technology exists to dramatically reduce the country's vulnerability to international oil price shocks and even become an exporter of transport fuel. Mining magnate Peter Bond says Australia could be self-sufficient in diesel and jet fuel if state and federal governments permit the commercialisation of underground coal gasification (UCG). "We can be the Wal-Mart of energy. This could actually put peak oil for this country off for two generations," he said. "It's definitely one of the fuels of the future." But there are fears from farmers that the process could have harmful environmental and health impacts. UCG, a Soviet-developed process, involves burning deep unmineable coals on site at a temperature of 1,200 degrees Celsius. Gas produced by the burn can then be converted into synthetic fuels. There are billions of tonnes of stranded coals in Queensland. "The fact that you're coal rich and oil poor means that you can isolate and insulate your economy from having to pay out a fortune for Middle East oil," Mr Bond said. For nearly seven years Mr Bond's company Linc has been piloting the UCG process at its $70 million demonstration plant at Chinchilla, west of Brisbane. "We gasify coal really cost effectively from stranded coal 100 to 150 metres under the ground," Mr Bond said. "We can produce a barrel for $30." Linc says it is the only company in the world to combine UCG and gas-to-liquids (GTL) processes in one site. "I get a buzz from standing here knowing that the coal is being gasified under our feet and going across to the GTL plant, and several minutes later is turned into diesel," Mr Bond said. "I love the concept of being able to unlock billions of tonnes of energy of stranded coal. I used to be a coal miner and it just makes sense." Contamination scares The Queensland Government has approved three pilot UCG projects but last year two of them, Cougar Energy based at Kingaroy and Carbon Energy near Dalby, had contamination scares. Cougar was shut down and Carbon Energy has just been allowed to reopen with stricter controls. The highly publicised contamination events seriously damaged the fledgling industry. "There is no doubt in the case of Kingaroy that they made a mess of it," said Ian MacFarlane, the Federal Opposition's energy and resources spokesman. "It was either a mistake or a complete PR disaster, one of the two. People have lost confidence in it." Mr Bond says the scare "certainly doesn't help" the industry. "Any black mark is a black mark but at the end of the day we are a growing industry, an emerging industry, and as such you have to take all comers," he said. A government report into the three pilots has found no problems with Linc Energy however. "This project was identified as being the world leader in the UCG process," said Stirling Hinchliffe, Queensland's Mines Minister. 'Exciting opportunity' To put a positive face on the technology, Mr Bond last month put coal derived diesel from Linc's plant into a car and drove it 6,000 kilometres from Chinchilla to Perth in Western Australia. "It's a huge moment. This is the first time in Australia we've ever filled up a car with synthetic fuel," he said. Mr Hinchliffe has shown enthusiasm for the project, saying "everyone is interested in alternative fuel supplies in Australia". "This is a genuinely exciting opportunity to see the UCG process proven up, if that is possible," he said. Mr Bond met federal Energy Minister Martin Ferguson in Canberra, who is also optimistic. "I first started talking to Peter when I was back in opposition and I thought geez, this looks promising in terms of an alternative fuel strategy," he said. Australia spent $16 billion last year importing petroleum. "By 2015 that [deficit] could blow out to $30 billion a year. For that reason these UCG ventures are very important in the overall debate about Australia's energy security," Mr Ferguson said. "Peter Bond has taken substantial risks to get Linc to this point, to have this road trip to prove the value of synthetic fuel in Australia. "The trip has proved the capacity of us to create a new industry in Australia and in doing so to resolve our supply-side problems in terms of energy security from a transport point of view." With a personal fortune estimated at nearly $600 million, Peter Bond is Australia's 10th-richest man. A former coal miner who went from working in mines to owning them, he believes UCG can transform Australia's energy landscape, and even rival the booming billion-dollar coal-seam gas industry. He says if UCG gets the go-ahead in Queensland, Linc could have a commercial plant in Chinchilla within five years. "A commercial plant is over 22,000 barrels a day - that is, 7 to 8 million barrels a year - and that's a good start to Australia regaining some of its own fuel independence," Mr Bond said. He says there is enough coal at Linc's 4,000 hectare property to feed one plant for 80 years. 'Pretty scary' While the Queensland Government is yet to allow UCG to move beyond the pilot phase, Queensland's farmers are calling for caution. Unnerved by the Kingaroy scare, rural lobby group AgForce say it is worried about UCG's impact on underground water aquifers as well as the possibility of land subsidence. "It is all happening underground. Everything that goes on, from the lighting of the fire to the extraction of the gas and the inter-aquifer relationships, is all well hidden away out of sight," spokesman Drew Wagner said. "We don't know what the impacts will be. What we are reacting to is pretty scary. "These are not simple chemical compounds. These are highly carcinogenic. They are highly dangerous contaminants that once released in the groundwater could end up anywhere." But Mr Bond says UCG is safe and caution is being taken. "We don't do anything that could possibly hurt the water table or contaminate the aquifer in any way whatsoever," he said. "We manage everything in such a way that there is no environmental damage." A final report into the UCG pilots is due to be handed to the Queensland Government in November. "We look forward to getting an answer. I think in time we will get the positive answer but it will take work," Mr Bond said. Mr Bond is risking millions on the UCG industry, but he did not get rich without taking a few chances. "The combination of taking something that is possible and turning it into a reality is very exciting for an entrepreneur and to do it on a global scale for what UCG can do for you is a rare opportunity," he said. "It is a small Australian company that has turned into something bigger. It is one man's dream that has turned into something bigger. "It's all been done here at the back of Chinchilla and I think that's a great story."
Friday, April 8, 2011
Well here's a dumb idea!
Considering Australia's longest running coal fire has been going for 6 000 years just how are they going to keep this one under control?