Panel says no to commercial UCG industry

COMPANIES trialling a gas extraction process in Queensland will be asked to prove they can put out underground fires.

An independent scientific panel has made three recommendations to the state government about underground coal gasification (UCG).

The UCG process involves burning underground coal seams to produced coal gas, known as syngas.

Two companies, Linc Energy and Carbon Energy, have been running pilot UCG plants in Queensland.

The panel found they had been able to successfully harvest gas through underground combustion.

But it said the government should not allow a commercial UCG industry until the companies proved they could halt that combustion process once gas had been extracted.

In the meantime the UCG trials should continue, the panel said.

Natural Resources and Mines Minister Andrew Cripps said the panel had been complimentary of the trials using world-leading technology.

But the companies had yet to prove they could halt the combustion process in underground chambers.

"I encourage Carbon Energy and Linc Energy to continue working with the government to demonstrate long-term technical and environmental sustainability of their trial projects," Mr Cripps said in a statement.

Linc Energy is encouraged, rather than deterred, by the panel's recommendations.

Chief executive Peter Bond says the report is a positive step towards the commercialisation of UCG in Queensland.

The company had worked with the panel for four years and had already begun preparations for decommissioning of a gasifier at its Chinchilla trial site.

"We see that as a very straightforward process," Mr Bond said.

He warned the business case for UCG operations in Queensland now needs to stack up against its other ventures - invested in over the past four years - in South Africa, Ukraine, Poland and Russia.

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