Chairman and CEO of Nordic Oil and Gas, Donald Benson, explains the lease is to the northwest of Drumheller and it encompasses about 10,000 acres. He says the process of coal gasification is not new, but only recently, it is again being explored.
“Twenty years ago there was so much natural gas around, you could produce huge volumes of it inexpensively and nobody thought about synthetic gas (which is what this is) and coal bed methane and shale gas,” he said.
He says the company has been exploring the potential of these leases for quite some time. He says the company had the leases through the 1970’s to the 1990’s. They recently reacquired them.
“We re very excited, we have a large proven deposit there. A historical evaluation came in at about 54 million recoverable tonnes, and 100 million tonnes in place. From the stand point of the underground coal gasification, I don’t know whether or not the numbers would be going up from the 54 million because the techniques that can be used,” said Benson.
He says the company is looking at different applications to produce the gas.
Benson said the basic model is two wells are drilled, connected laterally by the formation. In the source well, they inject oxidants and saline water. The other well takes up the products of oxidizing the coal. At the surface, these products are separated into hydrogen, methane and carbon dioxide.
He said this project has the potential to re-inject the carbon dioxide back into a selected formation, working as a carbon capture model.
“This is really green technology,” said Benson. “We see some really good possibilities of developing this coal in an environmentally friendly way.”
According to a release in March, the Alberta government, through the Alberta Energy Research Institute, announced that it was providing $8.83 million for a $30-million deep coal gasification project being undertaken by a Calgary-based company. It is expected the project will demonstrate the ability to produce environmentally clean synthetic gas from Alberta’s vast, deep, coal resources, with the future potential of utilizing the coal seams for carbon capture and storage.
Benson said because of the environmental benefits of the technology, the company is exploring the possibility of applying for grants or tax credits.
He says because the application process is not well established, it is difficult to nail down a timeline, he does see some spin-off for the local economy.
“We are very excited about the opportunities here, and this would lead to some jobs for the area. We can’t estimate what the numbers would be, but it would be a little more than just drilling a couple oil wells,” he said.
“We don’t rule out the fact that if for some reason, this wouldn’t work out that we would explore the possibility of getting a coal mine into production, but this is 21st century coal development in its infancy,” he said.
This would be the second underground coal gasification project in Canada, and one of only a handful in North America.
