Coal-to-Liquids in Australia

While there are no established commercial Coal-to-Liquids (CTL) plants operating in Australia, there are a number being evaluated. Conventional coal-to-liquids projects involve mining the coal, gasifiying it and then converting the gas to a liquid fuel. Some Australian projects being considered are investigating the possibility of side-stepping the costs of mining the coal by igniting underground coal seems and extracting the gas for processing. Others are based on mining coal prior to gasification.

Projects under investigation
Some of the CTL projects being investgated in Australia are by:
 * Linc Energy which has proposed to develop a "commercial Underground Coal Gasification (UCG) to Gas to Liquids (GTL) operation" in the Arckaringa Basin.
 * Carbon Energy
 * Cougar Energy
 * Blackham Resources
 * Altona Resources Arckaringa Coal-to-Liquids and Power Project
 * Monash Energy – a joint venture between Shell and Anglo
 * FuturGas Project, South Australia is a proposal by Hybrid Energy Australia for a 300 megawatt brown coal fired power station. In November 2007 it was stated that the project would be subject to a two-year feasibility study. The project has a notional commissioning date of 2015. The company states that the project "will include the development of both a coal-to-liquids conversion facility and a low-emissions power generation plant which will comprise the FuturGas facility - as well as next generation technology that will capture, transport and store carbon dioxide emissions from the FuturGas facility. The exact order and timing of the Project will be determined following the completion of the current Feasiblity Study and the FuturGas Environmental Impact Statement (EIS) during 2011. The specific location of the FuturGas facility will be determined by the results of the Feasibility Study."

The Economics of CTL
Shell is one global oil company that has invested substantially in CTL technology and has developed plants in China, Malaysia and the Netherlands. In July 2008, the Executive Director of Gas and Power for Shell, Linda Cook, told the Australian Financial Review that while the company had proven the technology works, the economic viability of them is not guaranteed. "What's not proven is more on the commercial side and whether you can afford to do those two technologies back to back and have it economically attractive," she said.

"You have to build a coal gasification plant and a gas-to-liquids plant, so [it's] very capital intensive. It would work economically in a place where you have low construction costs, where you are relatively close to market, and where you have a lot of low-cost coal reserves. So you can see maybe Australia has some of those ingredients ... On top of being capital intensive, it is also Co2 intensive and I think in todays environment one has to figure into the development of a coal-to-liquids project a means to offset the Co2 emissions associated with it," she said.

Political Support
Martin Ferguson, the Minister for Resources and Energy, is an enthusiastic backer of CTL proposals. In February 2008 he proclaimed that ""Energy security is absolutely critical to Australia’s economic prosperity and [that] I believe coal-to-liquids and gas-to-liquids will play a major role in Australia’s energy future."

Spaeking at a coal-to-liquids conference, Ferguson urged those attending to "work closely with my Department to develop a CTL and GTL Action Agenda that addresses industry barriers, the options to overcome them and a policy framework to build a sustainable industry for the future."

Related SourceWatch Articles

 * Australia and coal
 * Australian Coal Association

External Articles

 * Martin Ferguson (Minister for Resources and Energy), "Speech to the 3rd Annual Coal-to-Liquids and Gas-to-Liquids Conference", February 26, 2008.