Next year will mark 150 years since Wilhelm Siemens first suggested the idea of Underground Coal Gasification. And even though these years have seen great effort, ingenuity and achievement, UCG still has a distance to go before its broad commercial use becomes a reality.
So why are we not there yet? And when should we expect to see new UCG plants cropping up around the globe?
A long period of global UCG development spawned by the 1973 energy crisis was completed by the Rocky Mountain 1 trial in the US in 1988 and the European UCG trial in Spain in 1992. Following several years of lull and uncertainty, the Chinchilla UCG project in Australia marked the beginning of a new era of UCG development in Australia, New Zealand, South Africa, Europe, Canada and the US. Spanning almost 20 years, this latest stage of UCG development was distinguished by a prevalence of privately funded projects with a significant share of the capital raised from stock markets.
It appears that this latest stage of UCG development has suffered considerably from the drop in fossil fuel prices in the world markets, and from the global commodity market slowdown. Whereas the reduced oil and natural gas prices seem to have affected new and existing UCG projects by decreasing projected sale prices of UCG products, the corresponding precipitous drop in coal price robbed many UCG proponents of the revenue that was intended for investment into new UCG projects.
Michael S. Blinderman
Ergo Exergy Technologies, Inc.