Coal gas fuels African interest

The by-product of mining has long been regarded as a potentially dangerous nuisance for producers. But instead of flaring it, nations are looking at ways to turn it into a power source.

Where there is coal, there is gas – a deadly hazard to early miners, who carried canaries with them to warn of its poisonous presence.

Now, southern African countries hope to harvest this nuisance as a source of energy.

The region has plenty of coal. South Africa alone produces 225 million tonnes a year, exporting a third of it. Landlocked Botswana and Zimbabwe also have huge reserves, but the cost of railing it to ports makes mining it uneconomical.

In addition, the environmental danger it presents are now well documented, and it is among the world’s least favourite commodity. This means the regions’ coal industry has to look at alternative ways to survive, especially in a climate where commodity prices are on the floor.

“Coal miners are hanging on the edge and are facing tough decisions,” says Liz de Klerk, a Venmyn Deloitte mining advisory manager and coal specialist. “They are going to have to be creative, or shut up shop.”

South Africa has about 30 billion tonnes of mineable reserves, according to the Chamber of Mines, enough for another 100 years using current technology. The total resource, however, is three times that but much of it will probably stay in the ground as low prices, environmental concerns and uncooperative geology conspire against its liberation.

An alternative to scooping it out of the ground is to harvest the gas it produces.

This is formed when ancient plant material rots and is compressed over centuries, forming coal and gas. Crude oil is formed much the same way and, as with coal, gas has long been an unwelcome by-product of crude extraction; often this is flared to prevent it from building up to dangerous levels during the oil extraction process.

Coal miners now hope to harvest it rather than vent it out, using several different technologies. Gas can either be extracted via drill wells, much as it is in other areas such as Qatar or the United States; another way is to combust the gas, which in turn burns the coal seam itself, giving off a much larger volumes of gas. This is then harvested via another well, to be used on the surface. Harmful emissions can also be captured and returned underground for permanent storage.

“Now everybody is looking at this,” says Ms de Klerk. “We are seeing some of the bigger players with money and intent looking at these alternatives.”

Underground coal gasification (UCG) in particular is of interest to miners; it works by injecting air and steam, via a well, deep into the ground and igniting it. The gases given off by the combusted coal seam are extracted through another well, and can be used to run conventional turbines or stored for other commercial purposes.

Trials are already being carried out in Australia, a major coal producer, and Uzbekistan, with Russia and India also among those looking at the technology.

“UCG is a major ‘cleaner coal’ opportunity for us as some of our coal seams are uneconomic to mine due to poor quality, and sometimes depth,” says Professor Rosemary Falcon, an executive member of the Fossil Fuel Foundation of South Africa.

The foundation was formed a few years ago specifically to look at alternative coal-gas extraction possibilities.

The process will allow the monetisation of deep-level seams that are difficult to access; gas build up, the bane of coal miners, increases as pressure grows because of depth, but UCG turns it into a plus rather than a negative. Miners will therefore no longer be sent into the perilous depths; instead, energy extraction will take place entirely from the surface.

It also has environmental benefits. When the coal burns, it releases a synthetic gas, which mainly includes carbon monoxide, hydrogen, methane and carbon dioxide. The useful items such as methane and hydrogen are extracted at the surface, while the harmful elements will be returned underground for permanent storage.

Also, of course, there is little of the surface activity that frequently accompanies the open-pit mining usually associated with coal.

“Any chance to provide means whereby the environmental impact of coal can be reduced is most important in this country, because there is a serious lack of any significant CO2 storage on land,” says Ms Falcon.

The gas could be used for a variety of purposes but energy would be an obvious place to start, especially as it would eliminate the coal particulate pollution that now hangs heavily over South Africa’s industrial areas.

“Some of our power stations are burning coal with ash contents of between 35 and 45 per cent on average. This leaves tonnes of ash post combustion – UCG would leave such waste material underground,” she adds.

The country already has several projects ready to go. A pilot plant run by the state energy utility Eskom will soon be replaced by a full-scale coal to gas plant. Another is to be commissioned later this year by a private firm, Africary.

“We are very passionate about UCG and very excited about the clean and green power it will generate from coal,” says the Africary chief operations officer Peet van Wyk. The company plans to build a plant large enough to power 60,000 homes, tapping gas from coal beds in the Free State province.

Traditionally, this part of the country has depended on coal power plants in the north to supply power, sending it along hundreds of kilometres of electricity lines. With the country’s energy infrastructure in decline, placing a power plant nearer its customers is more practical than transporting from afar, Mr van Wyk adds. Regulatory approval is expected later this year.

The new technologies are not, however, without environmental issues of their own. Last year Australian authorities opened charges against Linc Energy for alleged contamination from its UCG facility west of Brisbane, claiming that the company poisoned up to 175 square kilometres of farmland.

Mishaps such as this have environmentalists pushing the case for renewables. Coal producers insist however that without huge outside subsidies, developing countries will turn to carbon-based energy.

“Coal will be the lowest cost energy source for Africa,” says Graham Kerr, the chief executive of South32, an Australian company that owns a portion of four coal mines in South Africa.

“Without support from the developed world, less developed countries won’t be able to afford the higher cost of carbon-free electricity.”

Power plants offer alternatives

Namibia, Botswana, Mozambique, Malawi, Zimbabwe and South Africa all have or plan to have coal powered plants under construction. Coal fired plants are especially interesting to countries that are short on electricity but have large reserves of coal that are too far from the coast to export.

“We call these ‘stranded assets’, says Louis Coetzee, the chief executive of Ireland’s Kibo Mining, which is developing a coal plant in Tanzania. “We have good grade coal inland, but it’s 1,000 kilometres from port and there’s not a business case to build a railway line. But with a power station we effectively export the value of the coal, as we can feed electricity to neighbouring countries.”

Kibo is also looking at cleaner technologies. “Any new plants are going to have to meet higher environmental standards, so we will be looking at technology that allows us to meet them,” Mr Coetzee says, adding that the single biggest emissions problem facing countries such as Tanzania now are the wood fires used for cooking and heating. “These are a big source of pollution and are also responsible for mass deforestation. Proper electricity connections will end this.”

In spite of the relative bullishness for coal in the region, some miners fear the international march to non-fossil fuel technologies will eventually overwhelm them. “I am wary about the day when the need for big power stations ends,” says Sipho Nkosi, the chief executive of the South African miner Exxaro. “The disruptive nature of solar and battery storage cannot be discounted. My feeling is this day is going to come sooner than expected.

“I am spending billions of dollars in capital investments and I can’t be sure that the end result will still be there in 20 years, or 50 years,” Mr Nkosi says.

Coal critics have also pointed to the disastrous mega power plant programme in South Africa, which is likely to conclude a decade late and billions of dollars over budget. Two huge coal plants are under construction in the north, but the delay has led to nationwide power outages.

Environmental concerns are also now high on the agenda. ”People want to know why we are using coal instead of cleaner alternatives. We have to take this into account,” says Tom Albanese, the chief executive of the Indian resource company Vedanta, which both mines coal and uses it in domestic power plants.