Coalminer to bury gas

By KENT ATKINSON

The country's biggest coalminer, state-owned Solid Energy New Zealand, is looking at literally burying its looming greenhouse gas problems.

Solid Energy, Government electricity generator Genesis Energy and the state-owned Institute of Geological and Nuclear Sciences are investing $1.75 million in finding a way to bury unwanted carbon dioxide produced when fossil fuels are burned.

Solid Energy chief executive Don Elder said the carbon tax due to be announced by the Government in 2007, for the Kyoto Protocol commitment period beginning in 2008, was likely to make coal-based energy production and electricity generation more expensive.

"Capture and storage of carbon dioxide offers the opportunity to avoid the carbon tax and directly reduce greenhouse gas emissions to the atmosphere," he said.

The technology involves capturing carbon dioxide from power plants, compressing it into a liquid and injecting it to more than 800m underground.

The main commercial demonstration of the approach has been in Norway, at the Sleipner Field, where carbon dioxide from natural gas production is injected below the seabed.

Across the Tasman, a survey has shown Australia has enough sites to bury its current carbon dioxide emissions, by compressing the gas to a near-liquid form and injecting it deep underground, for at least 1600 years.

But some scientists have criticised the approach as unproven, expensive and environmentally risky.

Rob Passey, of the School of Electrical Engineering at the University of New South Wales, said when Australia announced its programme last week that the technology was likely to be expensive, and if used on new power plants would lock Australia into coal dependence for 50 more years.

The Australian Business Council for Sustainable Energy has criticised the technique, known as geo-sequestration, as unproven and said even the coal industry believed it was more than 10 years away from commercial deployment.

The three New Zealand companies have formed a consortium to participate in a seven-year A$11 million research programme, which is run under the Australian Co-operative Research Centre.

Under the programme, the Australian Government matches research funding dollar for dollar. The New Zealand consortium will contribute A$250,000 ($277,870) annually for the greenhouse gas technologies research.

Solid Energy will contribute A$150,000, Genesis A$50,000 and Geological and Nuclear Sciences A$50,000.

The programme has also been supported by Shell, BP, ChevronTexaco, Woodside, Rio Tinto and BHP Billiton.

Studies will be carried out in universities and research organisations in Australia and New Zealand, with Canada, Japan, the Netherlands, Britain and the US participating through parallel programmes.

Genesis Energy chief executive Murray Jackson said that his company would investigate a CO2 extraction plant at Huntly.

Geological and Nuclear Sciences chief executive Alex Malahoff said his researchers envisaged permanently storing carbon dioxide from fossil fuels in deep geological formations such as coal seams, oil and gas reservoirs and deep saline aquifers.

"We need to demonstrate that geological sequestration is a safe, economic and environmentally benign option for New Zealand."

Energy options

* Solid Energy first announced its plans several years ago when it launched research into refining hydrogen gas from coal.

* The gas would be used in fuel cells which combine hydrogen and oxygen via a catalyst to convert chemical energy into electrical power, with heat and water the only byproducts.

* A pilot hydrogen plant operated by CRL Energy - the former Coal Research company - is widely seen as part of a strategy by the coal industry to develop technology to extract hydrogen from its coal reserves (for use in fuel cells) and to dispose of the "waste" carbon underground.

* From 2008, companies emitting carbon to the atmosphere, as the greenhouse gas carbon dioxide are expected to face financial penalties, such as the carbon tax.

* If our 10 billion tonnes of coal - equivalent to 50 of the original Maui gasfields - could be used to economically produce hydrogen gas it could give long-term energy security, according to Solid Energy.

* Critics say the money could instead be used to boost the generation of electricity from wind or the sun.

- NZPA