Controversial coal-gas tech, banned in Queensland, holds hope for SA town
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An outback town in South Australia is waiting to see if the controversial underground coal gasification (UCG) technology that has been banned in Queensland will be the answer to reviving their flagging community.
Key points:
- The Leigh Creek Energy UCG pilot has ended, and its owner is considering an electricity supply tender for the SA Government
- The electricity supply contract was previously held by a $650 million solar thermal power plant that fell through last month
- The UCG technology, banned in Queensland after a trial in Chinchilla, sets fire to coal deep underground releasing a gas mixture
Leigh Creek Energy had been operating a UCG pilot plant at the former Leigh Creek coal mine for about six months, and is now considering tendering for an electricity supply contract previously held by a renewable energy project.
The same UGC technology was banned in Queensland after issues at Chinchilla in Queensland between 2007 and 2013.
The project has sparked hopes of a revival in the town which has experienced a significant downturn following the closure of its major employer — the Leigh Creek coal mine — in 2015.
At its peak in the 1980s, the town was home to 2,500 people.
Now fewer than 200 call Leigh Creek home.
But with the trial now over, locals will be forced to wait to see if controversial technology can revive their town.
UCG splits towns
UCG technology sets fire to coal deep underground, releasing carbon monoxide, carbon dioxide and hydrogen.
What is UCG?
- Underground coal gasification is a so-called “unconventional” means of extracting gas from coal seams that are too deep to mine. Coal is burned in situ underground and the gas produced is siphoned off through wells.
- It differs significantly from CSG production, which involves drawing enough water to reduce the pressure underground to release the naturally occurring methane in the coal seams.
- UCG technology was first proposed in the 19th century but was only adopted seriously after World War II in Russia and former Soviet client states.
- Benefits of UCG include the fact that landscapes remain relatively unscathed compared with conventional mining, emissions are low and the gas produced can be used for power generation or condensed to make liquid fuels such as diesel.
- Disadvantages of UCG are that it is sensitive to local geological conditions, expensive to set up, and the technology is highly specialised and poorly understood by regulators.
The gas mixture brought to the surface is called syngas.
Leigh Creek Energy said it would focus on using the gas for fertilizer production last year.
Long-term Leigh Creek local Darryl Bowshire said he hoped the technology would help rebuild his home town.
“It’s a great little town and I don’t want to see it die,” Mr Bowshire said.
“We can’t rely on tourism alone.
“People say it’s all about money, but it is about jobs as well. We need jobs here.”
He admitted that people in Leigh Creek and nearby Copley were split over UCG, but did not think it was a threat to the environment.
“I hope the technology goes to the next stage,” he said.
SA’s biggest gas reserve creates options
Leigh Creek Energy chairman Justyn Peters said the size of the gas reserve gave the company options.
“It is the largest uncontracted gas reserve on the east coast of Australia,” Mr Peters said.
“We have the opportunity to pump gas to the Moomba reserve and then across to the east coast of Australia.
“That’s very attractive and becoming more attractive each day. But it is a higher capital expenditure project.”
He also said the company was considering tendering for the supply of 100 per cent of the South Australian Government’s energy needs for 20 years — a contract previously held by a renewable energy project.
SolarReserve’s $650 million solar thermal power plant at Port Augusta fell through last month when the company could not secure finance for the project.
“We have the capacity to produce electricity and we can produce quite large amounts of it. We’re in discussions on that, but we can assure you we haven’t taken any steps formally on that yet,” Mr Peters said.
He said the company could launch both fertilizer production and gas export models.
The projects would cost between $1-2 billion, and external finance would be required.
“Optimistically the plants could be up and running in late 2022 and then any time on from there, depending on delays,” he said.
He said up to 500 local jobs could be created if the projects went ahead.
“You’re talking about getting Leigh Creek back to its peak if we get these projects off the ground,” Mr Peters said.
The company will decommission the pilot plant over 12 months, reporting environmental impacts back to the regulator.
The Leigh Creek Energy chairman said no breaches were recorded during the trial, with ongoing results to be published by the regulator.
Traditional owners to continue opposition
Not everyone is happy with the proposals, or the recent trial.
Some members of the Adnyamathanha community — traditional owners of the Leigh Creek area — have marched through Copley, near Leigh Creek, declaring the town “UCG-free”.
The Adnyamathanha Traditional Lands Association (ATLA) hold native title in the area and failed in a court bid to stop the project last year.
ATLA CEO Vince Coulthard said the trial’s end was a day to celebrate.
“The Adnyamathanha people welcome the news that the trial is over,” Mr Coulthard said.
“We have always been totally opposed to this project and now it’s time for healing.”
Adnyamathanha community member Dwayne Coulthard said he was happy the project had finished.
“The next stage now is to ban the risky technology once and for all. We don’t want our people and our land poisoned like the people of Chinchilla in Queensland,” he said.
“We will fight UCG every step of the way — whether it’s a proposal by Leigh Creek Energy or any other company.”
The area holds significant cultural heritage for the Adnyamathanha people.
In the dreaming story, Yurlu started a fire which created the coal at Leigh Creek.
Leigh Creek Energy said ATLA and the Adnyamathanha community would continue to be key project stakeholders.
Government remains open to technology
South Australian Mining Minister Dan van Holst Pellekaan said the State Government would consider UCG projects in the future.
“If Leigh Creek Energy want to do any more they would have to come back to the State Government for permission,” Mr van Holst Pellekaan said.
“What’s most important is that no permission is given to any company that might want to pursue it, unless that company can prove that they would undertake their activities without any harm to the environment or people.”
The Government’s electricity supply contract, launched by the former state Labor government, does not preclude non-renewable projects from applying.
The minister did not respond to an interview request on the issue of the tender.
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