Xinhua reported that an Australian company has begun testing technology that generates power from coal while leaving the coal underground.

Cougar Energy is developing an underground coal gasification project 10 kilometers south of Kingaroy in southern Queensland. UCG is the process of extracting coal from the ground through its transformation into a combustible gas for power generation. It can also be used in the production of diesel, fertilizers or chemicals.

Mr Len Walker MD of Cougar said that UCG syngas from underground coal seams was estimated to be up to 50% cheaper than natural gas.

Mr John Henderson manager of UCG projects at Cougar Energy said that fuel efficiency was also high with 75% of the energy content of the coal being retrieved compared with only 5% from coal seam gas extraction.

He said that it has a low environmental footprint and is the safest method of extraction, with no open cut or underground mining required and minimal ground disturbance and waste water production. He added that Cougar will have a feasibility study underway by the end of 2009 and plans to commission a pilot program in the Q1 of 2010.

Mr Henderson said that if the project was successful it could lead to the establishment of a 400 MW base load power station capable of producing power for around 400,000 homes over 30 years.

(Sourced from Xinhua)