Coal Seam Gas Poised to Explode in Australia

Anglo Coal, one of Australia’s coal mining companies this September opened a 45.6-MW power plant at its Moranbah North mine in northeast Queensland that captures methane-rich coal mine gas and uses it as a fuel to generate power instead of venting it into the air. The plant is not unique in Australia, but its launch signals the maturity of a fledgling coal seam gas industry and its growing role in power generation.

The gas will be turned to power with fifteen 3-MW GE Energy Jenbacher engines. Energy Developments Ltd., owner and operator of the plant, will sell most of the plant’s output to the national grid. The project joins several other coal mine methane (CMM) and coalbed methane (CBM) power plants in Australia, including the 32-MW German Creek Power Project in Central Queensland and the 97-MW Appin/Tower Power Project near Wollongong in New South Wales—the largest currently operating reciprocating engine project.

Harvesting the gas for power production has its obvious environmental benefits: Methane, found naturally in coal seams throughout the world, has 21 times the greenhouse warming potential of carbon dioxide. Also known as coal seam gas, it poses a major hazard for underground mining of coal, and it must be continuously extracted to keep the methane concentration below its lower explosive limit—which is 5% by volume. This is typically done three ways: by drilling wells from the surface into the coal seam prior to mining (coal bed methane, which has a methane content of more than 90%); by extracting it from the mine itself while mining is under way (coalmine methane, which has a methane content of 35% to 60%); and ventilation air, which typically has very low concentrations of methane.

Australia—which produces 81% of its electricity from coal and harbors the largest coal export platform in the world—could lead the world in the development of the resource. According to an October study by the University of Queensland for coal company Peabody Energy, proven and probable coal seam gas reserves in that state are larger than liquefied natural gas reserves off the west coast of Australia. The nation already has A$18 billion of projects in planning, the study said.

Under the Queensland government’s 13% Gas Scheme introduced under the Cleaner Energy Strategy 2000, electricity retailers and large power users are required to source at least 13% of their power from gas-fired generators. The program was designed to diversify the state’s energy mix, moving it from coal to gas—and it has, driving an A$1 billion investment in the development of the state’s coal seam gas industry. Today coal seam gas accounts for more than 15% of gas production in the eastern states and more than 70% of production in Queensland.

And production is bound to keep growing, with coal seam gas becoming a concern with looming passage of the carbon pollution reduction scheme legislation, a cap-and-trade system of emissions trading for anthropogenic greenhouse gases. Coal mining companies in the nation are lobbying for more federal assistance under the proposed law, which is expected to be voted on by both houses of parliament by the end of November.

Coal seam methane power is also poised to grow around the world. Currently, projects exist in China, Germany, Japan, Poland, Russia, the UK, the Ukraine, and in the U.S.—where the largest project (88 MW) operating with a combustion turbine is located. In the U.S., where, like in Australia, climate change legislation is being debated in the Senate, the Environmental Protection Agency (EPA) is pushing industry to consider coal methane’s immense potential, saying it has identified some 400 abandoned coal mines that are still emitting methane. Data from the Mine Safety and Health Administration indicates, meanwhile, that nearly 250 million cubic feet per day of methane is emitted from 400 of the gassiest coal mines in the nation.

But, Australia’s biggest contender will likely be China, the world’s leading emitter of coal mine methane. The nation has been making major gains lately, announcing recently that as of July 2009, installed power generating capacity by coal bed methane had reached 484 MW, compared with 333 MW in 2007. The jump is tagged to the state council’s 2006 policy on coal seam gas, which prioritized grid supply of power generated with coal bed methane.

At the same time, it has been advancing technologies to increase installed capacities at power generating units that use coal seam gas as fuel. In early July, China started up the first phase of what is being called the world’s largest coal bed methane exploration project, the Ganghua gasification project in Jincheng, in coal-rich Shanxi province. It also kicked off the Sihe power plant in Jincheng City, southern Shanxi, a 120-MW coalbed methane-based project that uses 60 methane gas-powered generators made by Caterpillar (see "U.S. Commercial Service helps suppliers go global," March 2007).