1. Underground Coal Gasification: A “game-changer” for climate protection? 3 rd China Energy and Environment Summit (CEES) Beijing, PRC August 20-21, 2010 Mike Fowler Climate Technology Innovation Coordinator Clean Air Task Force

2. Clean Air Task Force is a non-profit organization dedicated to reducing atmospheric pollution through research, advocacy, and private sector collaboration. MAIN OFFICE 18 Tremont Street Suite 530 Boston, MA 02108 (617) 624-0234 info@catf.us www.catf.us www.coaltransition.us www.aceiii.org OTHER LOCATIONS Beijing, China Brunswick, ME Carbondale, IL Columbus, OH Washington, DC 2

3. Outline About CATF The need for carbon capture and storage (CCS) The great barrier for CCS: cost The potential benefits of underground coal gasification (UCG)  The cost of coal power with UCG with CCS could be less then cost of conventional coal without CCS  Other benefits include: reduced mining, reduced drinking water consumption, reduced emissions of sulfur dioxide, etc. Importance of environmental management for UCG  Protection of groundwater from contamination 3

4. About CCS at the Clean Air Task Force (CATF) CATF is an energy and environment NGO with headquarters in the United States. Our work addresses:  Greenhouse gases and climate change  SO2, NOx, particulate matter, and toxic air pollution  Related environmental issues We are a small specialty organization founded in 1996  20 technical staff, policy and business experts, and attorneys CCS is a core focus for CATF. Our CCS work includes:  Expert workshops  Innovation policy design  Facilitation of large “pioneer” CCS projects Costs of CCS will limit speed and extent of deployment Underground coal gasification could “change the game”  Potentially significant cost reductions for coal power with CCS  Potential for low-cost substitute natural gas (methane) 4

5. Source: CATF (2009) from DOE/EIA (2007) Slide 5 Background 1: Huge quantities of low-carbon electricity will be needed Will the world converge here? With electric vehicles?

6. Source: CATF (2009) from DOE/EIA (2007) Slide 6 Background 1: Huge quantities of low-carbon electricity will be needed World electricity demand, with electric vehicles?

7. Studies by MIT, Stanford, EPRI, PNNL, NCAR, and University of Maryland suggest substantial roles for fossil fules with CCS, renewables, and nuclear power MIT ModelStanford/EPRI ModelPNNL Model Source: United States Climate Change Science Program, 2007 Slide 7 Background 2: CCS will be essential to meet this demand

8. Relative cost of electricity (LCOE) estimate for fossil power generation (“Nth plant” US basis); CCS could add ~80% Source: DOE/NETL (2007) 8 Background 3: Costs of adding CCS to new power projects are significant +80%

9. UCG can produces inexpensive raw synthesis gas  $1 - $3/MMBtu (see GasTech, 2007; ENN, 2009) UCG can enables high efficiency power generation when integrated with combined cycle gas turbine (“CCT”)  45.4% HHV w/o CCS (AMMA, 2002) Technology is commercially available to clean up syngas and removal CO2 at manageable cost Result: Potentially game- changing CCS costs UCG could change the game for fossil power with CCS 9  Oxidant  Syngas Coal Rock (e.g., shale) Potable Aquifer Rock (e.g., shale) Rock Rock/Clay Image: CATF (2009)

10. UCG with CCS could compete with conventional coal without CCS Estimate by the NorthBridge Group and CATF based on proprietary data for a proposed UCG project in North America 10 Cost of UCG integrated with 80% CO2 removal and syngas combustion in CCGT could be LESS THEN conventional coal without CCS Cost of UCG to produce substitute natural gas with CCS also could be very attractive, especially in China

11. In the US, UCG could increase coal supply by 300%-400%. The same could be true of China (though this requires study) Source: DOE/NETL Presentation, September, 2008 11 UCG could also significantly increase domestic energy supplies

12. Region/TrialLength (days)Gasified (tonnes)DepthPeriod FSR/Various1000s15 million +Shallow1930s+ China/abandoned minesn/d 1950s+ US/Hanna34314,800Shallow1970s US/Hoe Creek1175,920Shallow1970s US/Princetown12320Intermediate1970s US/Rawlins10610,000Shallow1970s US/ Tenn. Colony1974,500Shallow1970s US/Centralia & Tono291,800Shallow1980s US/RM115014,150Shallow1980s EU/Thulin6711Deep1980s EU/El Tremedal12240Deep1990s US/Carbon County(n/d)800Deep1990s NZ/Huntley1380Shallow1990s AUS/Chinchilla (R1)90032,000Shallow1990s AUS/Chinchilla (R3/R4)Active2,000Shallow2008+ SA/EskomActive(n/d)Deep2007+ CHN/ENN GroupActive25,000+Intermediate2007+ AUS/Carbon EnergyActive(n/d)Intermediate2008+ CAN/Swan HillsActive(n/d)Deep2009+ AUS/Cougar EnergyActive(n/d)Intermediate3/2010+ Commercial activity is accelerating

13. US (Alaska) – CIRI/Laurus Canada (Alberta) – Laurus South Africa - Secunda (Sasol) Vietnam - Red River Delta (Linc) Pakistan - Thar Coal Field (2x) Chile - Mulpun (Carbon Energy) UK – 11 separate UCG licenses issued recently India - Multiple sites US PRB, US Midwest, New Zealand, … Many more projects are planned around the world Carbon Energy UCG site near Dalby, Queensland, Australia, November, 2008. The reactor was active 200m below this spot. Photo by Mike Fowler. 13

14. Source: LLNL (2010) Item UCG- CCGT, no CCS UCG- CCGT, Partial CCS IGCC, no CCS NGCC, no CCS PC-sub, no CCS SCPC, no CCS Raw Water Usage (gpm/MW e ) 2.94.964.511.310 Even with partial CCS, UCG and a CCGT could use less than half the raw water of a conventional coal power plant without CCS, and less than an IGCC without CCS. 14Slide 14 Possible advantage of UCG: Reduced water consumption

15. Carbon beds have demonstrated 99.9% mercury removal on coal syngas Carbon beds are much less expensive than activated carbon injection on conventional coal plants (~1/10 th on cost of electricity basis) Carbon beds produce less waste than activated carbon injection on conventional coal UCG could take advantage of this technology to reduce mercury Carbon beds for mercury removal at Eastman coal gasification facility in TN Slide 15 Possible advantage of UCG: Reduced mercury emissions

16. Source: CATF from various sources Slide 16 Technology exists for UCG to approach natural gas Possible advantage of UCG: Reduce air pollution emissions

17. Source: Carbon Energy (2009) Slide 17 Possible advantage of UCG: Use less surface land

18. Coal Bed Producer Injector  Advances ~2 ft/day 400 – 1000 F 1000 – 1650 F >1650 F Gas Losses Tars & oils Heat Water Example Gas Composition (% vol, Queensland Site, Air-Blown) H2H2 COCH 4 CO 2 N2N2 H2OH2OHHV MJ/m 3 18.06.07.016.035.616.56.6 But… UCG is a complex coupled chemical and geophysical process Source: Adapted from DOE/NETL Presentation, September, 2008, and AMMA, 2008 18

19. And in China, as elsewhere, protection of groundwater is vital  Site selection is key Coal at intermediate or greater depth Preferably below potentially viable water resources Isolated from surrounding strata (good roof and floor, horizontal isolation) See DOE/LLNL guidelines (in preparation)  …so is site operation… Safer linking methods (e.g., in-seam drilling) Eliminate/minimize gas loss –Maintain gasification pressure below local hydrostatic pressure –Real-time monitoring of pressure, pH, trace compounds in surrounding strata –Real-time monitoring/verification of mass balance closure Geophysical/geochemical monitoring, process simulation, and control  …and proper module closure is important Limit postburn pyrolysis and steam/pressure buildup Clean the cavern 19

20.  RM1 1987-1988 near Hanna, WY Project included GRI, DOE, Amoco Production, WRI, and EPRI  Environmental protection focus Thinner, deeper coal seam (Hanna No.1, 30 ft thick, >350 ft deep) Stable overburden and underburden Detailed pre-test geologic and hydrologic characterization Hydrologic sampling and monitoring during and after the burn Operational control Post-burn cavity venting and flushing  Result: No water resource damage Sources: Boysen et al (1998), Davis (2008) 20 An environmental success in early US program – Rocky Mountain 1

21. Thank you! Mike Fowler Climate Technology Innovation Coordinator Clean Air Task Force 18 Tremont Street, Suite 530 Boston, MA 02108 (617) 624-0234 ext. 12 (voice) (617) 624-0230 (fax) mfowler@catf.us www.catf.us