qld agreement closer, page-12

Gasification projects 'face tougher standards'

BY:ANDREW FRASER From: The Australian July 10, 2013 12:00AM


THE proponents of one of the two underground coal gasification companies currently conducting trials in Queensland claim the government is now demanding a higher standard of proof that the project will not harm the environment than for other resource projects in Queensland.

On Monday, the Queensland government released a report on the UCG industry in Queensland that recommended that the trials currently being run by Linc Energy and Carbon Energy continue, but they not be allowed to proceed to commercial production until they can prove that underground chambers can besuccessfully "remediated" through a decommissioning plan.

UCG involves burning off coal deposits while they are still underground. The technique is not widely used overseas.

Carbon Energy requested a trading halt on Monday after the report was released.

It said it agreed that a decommissioning plan for underground coal reserves should be developed.

"However, the requirement to demonstrate decommissioning before a commercial facility can commence reflects a 'no-risk is acceptable' approach which sets a higher standard than that applied to other resource industry projects in Queensland," the company said.

The company said it agreed with most but not all of the report, noting that it had conducted further work since being asked to supply information 12 months ago.

The company said it had ceased all gasification at the trial site as a prerequisite for the decommissioning phase, which has been under way since October last year, and had also engaged with the government on the draft framework for decommissioning.

"It should also be noted that decommissioning of UCG has already been successfully demonstrated in the US," it said.

Carbon Energy said it was confident that it could remediate areas burnt underground. Its shares rose 0.3c to 3c yesterday after trading resumed