<<< Is the idea to cripple investment in these enormous resources until Big Oil can tie it all up? If so, who's in on it? >>>

Ssssshhhhh... someone might hear you.

@Forrest Gumpp: Is the idea to cripple investment in these enormous resources until Big Oil can tie it all up?

Nah, surely not. You are ignoring the downsides, and there are several.

As far as I can tell Underground coal gasification (UCG) is strictly experimental at this stage. If Linc pull it off on a commercial scale, they will be the first. Seeing Australian miners do this sort of thing makes you proud to be an Ozzie, and explains why we dominate world mining companies. Still, it could hardly be called be painted as business or government ignoring a sure fire winner.

Secondly, it is inefficient energy wise. From what I can tell about 1/2 the energy available is wasted compared to burning the coal in a conventional power station. If the coal is below 1000m, that doesn't matter as we could not get at it any other way, so you could hardly say the energy was "lost". But equally, if you are trying to get the most from a finite resource, you would not do it unless there is no other choice. And up till now, we have had a choice.

Thirdly, when hydrocarbons are produced in this way, the CO2 emissions from well to wheel are doubled. If you are worried about AGW this isn't good. Particularly as you have now increased the amount of available coal from the 1000 G ton figure Bazz and I were talking about earlier.

Hello Forrest Gumpp and thank you for your comments.

The view I have formed, like everyone's, is based upon a number of assumptions, and it is a healthy pursuit to regularly review the validity of those assumptions. I am more than happy to change my view if there is a valid reason to do so.

Firstly, I have no investments in the energy sector. Indeed I sold all of my shares and managed funds some years ago after concluding that our economic system was dysfunctional and heading for some long term re-adjustments on the downward side. I believe the next few decades have the potential to be rather nasty if we continue on with BAU. As my young children will live through this, I would rather that we approach this in a manner vastly different to how we currently are, namely denial.

Secondly, I had a good look at Linc Energy's website and the ASX today. From my reading, it does not appear that they have passed the development stage as yet. Hopefully they will, but like so many alternative energy projects, delays or performance less than expected is the norm.

Thirdly, if there 20kbpd plant is successful, that does not solve our liquid fuel problems, although of course it is a help. If we rely upon imports for say 60 or 70% of our liquid fuel demand in 2030, that will equate to 600 - 700 kbpd of imports, which I don't think on current trends will be available. This leaves a large shortfall.

Finally, Big Oil is not so big as it used to be. The National Oil Companies, the Saudi Aramco's and PEMEXs of the world, hold 90% of the worlds oil reserves. The NOCs are big oil these days.

Regards

Cameron Leckie

Cameron,
From what I have been reading just this morning, they have been
making changes to the process to improve the efficiency and it has
to be adjusted to the make up of the gas that comes up.
They are also together with a UK fuel cell manufacturer going to
install a 50KW fuel cell to use the hydrogen by product.

So all in an interesting exercise.

I too have largely bailed out of everything except energy related
investments.
The underground gassification process has been used in Russia for many
years and Linc bought the Russian company and aquired their technology
and I believe some of their engineers.
I think they still operate the Russian company.

Central Petroleum's 'The Good Oil', a 2.6 MB PDF file, is downloadable here:
http://www.centralpetroleum.com.au/files/Sep%202009%20Good%20Oil.pdf

Page 24 of the PDF document shows Central Petroleum's outline break-even analysis for both Pedirka Basin coal-to-liquids and gas-to-liquids conversion, if I interpret it correctly. It seems CTL and/or GTL commences to become viable for Central Petroleum at a crude oil price of around US $ 58 per barrel. The current price for crude is around US $ 83 per barrel.

Both Central Petroleum and Linc Energy in their respective projects envisage Fischer-Tropsch conversion of UCG synthesis gas (CO+H2) to liquid hydrocarbons. The catalysed Fischer-Tropsch reaction is exothermic. It is interesting that there seems to have been no mention of any proposal for recovery of this 'waste heat' in conjunction with GTL or CTL operations. On the face of it it appears as if such heat could be used in Organic Rankine Cycle powered electricity generation, or in desalination. Linc Energy, at least, clearly already sees UCG integrated with both CTL and quick response gas turbine driven electricity generation.

Given the linkage between potential Australian self-sufficiency in liquid fuels offered by CTL, and foreseen need to invest in electricity supply infrastructure to cope with increased demand, the AERA focus upon the need for increased imports of liquid fuels is doubly puzzling. Surely the Australian government can see that there is a plan B for liquid fuel security, if not for major export of value-added already refined liquid fuels to what, to all accounts, will be a short-supplied world. A plan B that could crystallise at any time now in terms of crude oil price levels making it viable.

Why is the Australian public being kept in the dark about liquid fuel supply security by its own government?



Other useful links:

Central Petroleum Ltd's home page: http://www.centralpetroleum.com.au/

Central Petroleum Ltd's helium prospects: http://www.abnnewswire.net/press/en/59986/Central_Petroleum_Limited_(ASX:CTP)_Potential_As_Global_Supplier_Of_Helium_Gas

http://www.centralpetroleum.com.au/files/newsroom/20060523%20Can%20GTL%20help%20Australia%20reach%20its%20fuel%20potential.pdf

The Central Petroleum Ltd newsroom: http://www.centralpetroleum.com.au/newsroom.php