The Canadian government has awarded $285m (£165m) to a flagship "clean coal " gasification project that promises to burn coal without extracting it from the ground.
The nascent technology, which is to be deployed by Canadian firm Swan Hills Synfuels, aims to produce a gas that can be burned cleanly above ground, generating energy from coal without the need to dig it up.
The technology works by driving oxygen down to a coal seam and igniting it. Under high pressures, the oxygen, coal, and saline water react to form a gas that is about one third methane and two thirds hydrogen, along with some carbon monoxide and carbon dioxide.
The gas is drawn to the surface via another well, where the carbon monoxide is converted to hydrogen and CO2, allowing the CO2 to be removed.
Under the proposed plans, the CO2 captured by the project will be used in the Swan Hills area for enhanced oil recovery, increasing conventional oil production in Alberta while permanently sequestering the CO2 underground. Meanwhile, the synthetic gas generated from 20 pairs of wells will be used to power a new 300MW gas-fired power plant.
The C$1.5bn project will aim to reach depths of up to 1,400m, deeper than previous underground gasification projects.
Construction on the sites is set to begin in 2012 with production starting from 2015. The power plant component of the project will be built, owned and operated by an energy firm that is yet to be selected.
"This transformative project is a whole new way to generate clean electricity, using Alberta's vast, deep stranded coal resources," said Swan Hills Synfuels president Douglas Shaigec. "We are using an innovative approach with proven technologies to deliver secure electricity, with a quarter of the emissions produced by coal-fired power generation today, and just over half those of natural gas-fired generation."
Shaigec said that in the long term, the economic viability of the project would be boosted by a strong price on carbon emissions. "We're not too particular about how that takes form ultimately, so long as we see a more level playing field [for] projects that practice capture and storage of CO2," he said.
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