Using underground coal gasification (UCG) to extract synthetic gas, or syngas, is a potential game changer for South Africa’s energy sector, as it could provide a cleaner alternative fuel source, says commercial law firm Cliffe Dekker Hofmeyr mining and minerals director Jackwell Feris.

He highlights that South Africa has about 242-billion tons of in situ coal resources and reserves. However, only about 66-billion tons are deemed recoverable and, owing to the depth of some coal seams, about 25% of this coal is considered uneconomical to extract using conventional mining methods.

UCG, however, involves igniting coal underground with a controlled flow of oxidant gas, such as air and water. The ignited coal is converted into syngas, which can be used directly as a fuel source or in conjunction with other fuel sources, such as natural gas, used to power gas turbines to generate electricity.

“Experts have stated that syngas generated from about five-million tons of coal would be able to run a 200 MW power generation facility for 20 years,” Feris notes.

He argues that UCG could potentially create significant economic benefits for South Africa, as the technology has a lower operating and implementation cost when compared with conventional coal mining, making it a cheaper fuel source to generate electricity.

Feris highlights that the improved energy recovery of coal, owing to the extraction efficiency of UCG processes, eliminates additional operating costs associated with mining, such as stockpiling, reclaiming and transportation.

UCG also has a number of environmental benefits, compared with traditional coal mining, such as less greenhouse-gas emissions, fewer surface disturbances and lower fuel and water consumption, he adds.

However, Feris says there are concerns that UCG processes will contaminate underground water, as is feared will occur when extracting other unconventional gases such as shale gas.

He adds that UCG technology also reduces the amount of underground infrastructure required for the extraction of syngas and removes people from unsafe underground conditions.

Regulatory uncertainty remains an obstacle for the development of a UCG sector in South Africa, Feris points out, adding that clarity concerning licensing and environmental framework is particularly important for developing the sector.

He argues that no synergies exist between the Mineral and Petroleum Resources Development Act, the National Environmental Management Act and the National Water Act when dealing with UCG, stating that a coherent system must be developed to ensure the issuing of licences is not delayed, owing to policy uncertainty.

“UCG will require similar technical regulations to those regulating petroleum exploration and production, as various technical matters relating to the manner in which the technology is used to extract syngas are similar to those in that sector.”

Further, clarity is needed on resource and reserve valuation standards, which are necessary to secure funding from investors and financial institutions, Feris states.

“The difficulty is that the physical resource in the ground is coal; however, what is being extracted in syngas, which makes it unclear as to what resource and reserves must be reported in terms of the South African Mineral and Resources Committee codes,” he adds.

Creating a clear regulatory framework will enable government to encourage investment in the UCG sector, which will bring “South Africa a step closer” to realising some of its economic objectives set out in the National Development Plan, Feris notes.

“There are already signs that government recognises the potential of delivering much-needed energy security. Therefore, exploiting uneconomical coal reserves . . . using UCG technology and specifically including UCG technology in the request for information for the design of the gas-to-power programme could prove to be viable,” he concludes.