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Licensing, Regulatory and Enviromental Risk Management

Licensing of UCG is perhaps the greatest outstanding uncertainty for the promoters of UCG projects.

Existing license regimes, allow access for exploration and production of the coal under a National Coal Mining Act or they give authority to extract gas and oil from reservoirs usually under the pre-existing Hydrocarbon Legislation. Where the two acts exist, side by side, as in the UK and Australia, the Authorities are suggesting that licensing under both types of legislation will be required.

The UK has slightly modified this position, by stipulating, at least for the initial applications, that if it can be proved that the hydrocarbons are produced as a result of gasification, the Coal Industry Acts are the determining legislation. It is for the applicant to prove that no natural hydrocarbons are extracted from the process, and each case will be considered on its merits. Europe however, has also recently introduced the concept of a Strategic Environmental Assessment (SEA) to which all extraction processes will be subjected. An SEA for UCG is likely to be required.

The United States, in contrast, takes the position that the licensing of coal covers all types of extraction, and UCG is considered no different to conventional or open cast mining. The UCG process, however, still has to meet the stringent requirement of the Environmental Protection Agency (EPA) and guidance notes for UCG, dating back to the original trials of the 1980's, have been prepared.

India has developed a special licensing regime for UCG, and is in the process of allocating blocks of coal specifically for exploitation by UCG. The details of the UCG licensing was announced at the CoalTrans conference, in New Delhi in March 2008, and still has to be tested with the applications now coming forward from the State and Private Companies. Other countries such as China, South Africa and Canada appear to have approved UCG trials without any major difficulty although the details of the licensing process have been well publicised.

UCG, since 2005, has entered a new phase of intense activity, driven partly by the rapid increase in gas and oil prices, and the knock-on effect on imported coal prices. Technology, security of supply, economics and the CO₂ capture and storage benefits of UCG are some of the other factors that are pushing UCG rapidly from the demonstration to the commercial stage. Finance for projects is at last becoming available, and as projects move to the approval stage, regulatory and legislative issues, described above, are now at the forefront of UCG development issues. The lead countries in UCG over the past five years have been China, Australia and the UK. However, newcomers, such as South Africa, India and Eastern Europe are challenging this position. Furthermore the United States is now back as an active participant in UCG research and commercialisation.

The UCG Partnership works proactively with governments, regulatory authorities and NGO's to assist in the formation of comprehensive licensing for ucg. We provide non partisan information to ensure the safe global deployment of UCG and to encourage best practice from all members involved in the extraction of energy from coal using UCG technology.

Environmental Risk Management

The burning of coal can lead to the creation of minor constituents, NOx, SOx, and particulates but these are virtually eliminated by gas cleaning in todays modern coal plants, which have to meet stringent emission levels. The environmental impacts of a UCG process are visual, acoustic, and include air emissions and groundwater effects. The inherent environmental benefits of UCG are the simplicity of surface plant, the absence of coal storage and transportation, and the ability to remove minor polluting constituents such as SOx, particulates and heavy metals from the production syngas.

Like any geological extraction process, the geological and hydro-geological risks of UCG have to be carefully managed. Control has advanced considerably since the early UCG trials and all UCG processes now have active management of the operational conditions in the cavity to ensure an inward flow of groundwater and to prevent gas seepage. Site selection is also very important to achieve the necessary separation from ground water pathways and the isolation of the cavity by means of naturally occurring impermeable geological strata.

The European Groundwater Directive although not specifically written with UCG in mind, is likely to require that the groundwater surrounding the process is declared permanently unsuitable for other purposes like irrigation or animal consumption, and that the hydrogeology surrounding the process is monitored and modelled. Strict controls are imposed on the by-products of combustion produced underground, and the models will need to address the close interdependence between combustion control and contaminant fate and transport. Contaminant risk and product gas quality need to be integrated in prediction models to assess the environmental and economic constraints of potential UCG sites. Work to date has established that UCG in deep coal seams, in so called "permanently unsuitable water" are likely to satisfy current and future European ground water regulations.