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e live in a world that relies heavily on fossilfuels - coal, oil and gas - for ourindustries, homes and transportationneeds. In the United States, coal alonesupports about 90 per cent of its power generation1.Similarly, Australian coal provides about 75 per cent ofits power2. Theory on peak oil has been discussed since the 1950sand although the United States is the world's thirdlargest oil producer, it still imports about 60 per cent ofits petroleum needs3. With leading nations and partydelegates to the United Nations Framework Conventionon Climate Change meeting in Cancun in December,the use of coal and oil, and its cousins in cleaner energyproducing technologies, are sure to be discussed toaddress the challenges of global climate change.I believe one of the cleaner energy producingtechnology cousins making its mark in coal-richcountries around the world is Underground CoalGasification (UCG). As a concept, UCG is not new.UCG operations have been underway in the FormerSoviet Union since the 1940s. Now, more than 60years on, one commercial operation, Linc Energy'sYerostigaz facility in Uzbekistan, is stilling producingsynthesis gas (syngas) to feed its nearby power station.Interest in UCG has penetrated the western world overthe past decade and there has been significantadvancement in the technology to prepare it forcommercial application. This phase of western UCGdevelopment has involved the application ofbreakthrough process control technologies andimproved site selection and drilling methodologies. Putsimply, on closer examination of UCG technology, thescience and economics behind it make serious sense.For those unfamiliar with UCG, the technologyUCG LEADSTHE WAYWPETER BOND, CHIEF EXECUTIVE OFFICER, LINC ENERGY LTD.094G-20 MEMBERS

Australia's Surat Basin hosts four successive UCGgasifiers, a Gas to Liquids pilot plant and world-classlaboratory, as well as oxygen injection and coil tubingdrilling equipment, and a wastewater treatmentfacility. Our work for UCG demonstration andcommercial operations on tenure in the Americanstates of Wyoming, Montana and North Dakota isramping up. We have sourced technical experts fromall over world for the development of UCG. Now withover 380 staff across Australia, the United States andUzbekistan, and the most advanced UCG technology inthe world, we are absolutely certain we can convertcoal, with no intrinsic traditional value, into a gas thatcan produce cleaner gas-fired electricity and syntheticdiesel and jet fuels.The commercialisation of UCG requires absolutededication and precision, and even more so in thepursuit of a carbon neutral energy economy. In the drivetowards the commercialisation of UCG, Linc Energy hasestablished several avenues for carbon solutions. In late2009 we entered into a partnership with the UnitedKingdom's AFC Energy to combine UCG with hydrogenfuel cell technology for the cleanest form of electricity.UCG is one of the most economical producers ofhydrogen, which is an ideal feedstock for fuel celltechnology. When used for power generation, fuel celltechnology is low cost and easy to maintain, with theonly by-product being clean, demineralised water.Following the world-first UCG and hydrogen fuel celltrial at the Chinchilla Demonstration Facility in Junethis year, the company has now acquired a 10 per centstake in AFC Energy. UCG certainly opens up new coalopportunities, so its combination with fuel celltechnology cuts a clear path to achieving the ultimatein clean electricity.More recently, we have been examining carbon captureG-20 MEMBERS095converts deep underground coal into syngas in the coalseam itself. There is no removal of the coal, norequirement for heavy infrastructure, or disruption tothe land. It all happens below the surface, sometimesup to 1,000 metres deep, but normally at depths ofabout 200 to 300 metres. UCG involves drilling aseries of wells deep into the coal seam. The coal isheated to 1,200 degrees centigrade and an oxidant,such as air or oxygen is injected. Heat, pressure andwater from the coal seam combine in the confinedspace to gasify the solid coal into syngas. Accessingsuch deep coal opens up a significant number of"new" resources for use. I firmly believe that UCG isthe best way to draw energy from traditionallyunrecoverable deep coal. In fact, the World EnergyCouncil suggests that UCG could potentially increaseknown world coal reserves by 600 billion tonnes4. Compared with traditional coal extraction such as opencut and underground mining, UCG carries a small landuse footprint and the land can easily be returned to itsformer use once the process is exhausted. Downstreamenergy products from the UCG process result in 25 percent cleaner gas-fired combined cycle powergeneration5and ultra-clean diesel and jet fuels with nosulphur and lower aromatics and particulates.Linc Energy is leading the way to commercialise UCGacross the globe. We own the only UCG commercialoperation in the world, Yerostigaz, which has beenoperating for nearly 50 years. In Australia, we havebeen operating demonstration scale UCG gasifiers forover 10 years to establish that the process is suitablefor western world conditions. Both of these operatinglocations have enabled us to understand UCGtechnology far better than any other entity in the world.Our UCG Chinchilla Demonstration Facility inAbove:Linc Energy'sUCG direction drilling forthe economic conversionof coal to cleaner energy.Lef t:Peter Bond?