Australia’s Queensland state on April 18 banned underground coal gasification, a controversial process used to convert coal into gas.
Unlike fracking, which involves pumping fluid into coal seams to cause fractures, the method of underground coal gasification (UCG), by which unearthed coal is turned into gas, takes place entirely below the surface, raising concerns over water contamination and greenhouse-gas emissions.
The ban on UCG was initiated by Anthony Lynham, the state’s mines minister, who said he will introduce legislation by the end of the year to make it law.
Carbon Energy Ltd., a company that said it spent AU$150 million (US$115.23 million) over eight years developing UCG technology to use in the state, was considering a response to the ban.
Carbon Energy, whose stock dropped nearly 8% to less than 2 Australian cents on April 18, said it had passed every environmental and scientific test put before it over the past eight years.
Last month, Singapore-listed Linc Energy was charged in Queensland with causing serious environmental harm following an investigation into a gas leak at one of its UCG pilot plants after four employees fell ill with suspected gas poisoning.
Linc, whose shares have been suspended since late March, on April 15 sought voluntary ministration, a form of bankruptcy.
Proponents of UCG say the process is safer as there is no surface disposal of coal ash into the atmosphere, while detractors have raised concerns over contamination of groundwater and increased levels of greenhouse gases beyond those of natural gas.
“The potential risks to Queensland’s environment and our valuable agricultural industries far outweigh any potential economic benefits,” Lynham said.
In March, Wales imposed a moratorium on UCG, part of a precautionary approach, it said, toward the development of unconventional oil and gas resources, which includes a temporary ban on fracking. (US$1 = 1.3017 Australian dollars)