By this time next year, Five-Quarter expects to be starting work on its ï¿½30m underground coal gasification (UCG) demonstration plant.
Two years ago, academics from Newcastle University secured licences from the UK Coal Authority to gasify underwater coal reserves off the North East coast.
They formed Five-Quarter to commercialise their concept and Dermot Roddy – Science City professor of energy and a director of the Sir Joseph Swan Centre for Energy Research – will become its third full-time employee in September.
He said: “I have had six years at the university and thoroughly enjoyed it. But I’ve spent most of my life in industry; we have a piece of work we need to do and I want to devote more time and energy to doing that.” Roddy will be joining chairman and chief executive Harry Bradbury and financial director Chris Blaxall as they look to drive forward the creation of a major new industry in the region.
While the first UCG trials were conducted in the Durham Coalfield 100 years ago, it has never reached maturity despite several global initiatives.
There are demonstration facilities in the US, Canada, Australia and China without any large-scale commercial breakthroughs.
But Newcastle-based Five-Quarter believes its ability to utilise horizontal drilling techniques from the oil and gas industry will give it a world-leading edge.
Roddy said: “We are developing a cost-effective method and are making progress with the drilling equipment in conjunction with some experienced industry talent.
“We have revolutionary ideas. We are certain no one has the same ideas and these can reduce costs and make the process viable.”
Newcastle-based Five-Quarter has the licence for a 400sq km area of the North Sea, stretching from the mouth of the River Tyne up to the Scottish border.
It is also looking at new licences in the region including further south, off the coast at Sunderland.
Five-Quarter is talking to landowners, onshore planners and geotechnical people about locations for a processing and power plant to use the gas created from the UCG process.
The demonstration facility will be able to produce 10MW of power which is enough to power 5,000 homes.
If this proves successful, the potential exists for the creation of a major new industry in the region.
Five-Quarter envisages creating a scalable business which, if capable of achieving full potential, could create hundreds of new North East jobs.
When operating at full capacity there could be around six drilling crews with up to 50 people in each crew. More than 1,000 more staff will be employed in land-based production and processing operations in up to six onshore power plants.
Prof Paul Younger, formerly of Newcastle University and now at Glasgow University, is one of the founders.
He said: “This is a sunrise industry for the North East which will create and sustain thousands of high- technology jobs which can use the coal-mining knowledge and skills of the region.
“Three-quarters of the North East coal reserves are still underground. North East technology will be able to free this gas, creating a whole new industry from scratch.
“There is enough gas in this field to power the world for the next five years.”
Roddy said Five-Quarter was involved in discussions with investors in the UK, Europe the Middle and Far East.
He continued: “We are talking to lots of potential large-scale customers who want to know what they can do with the type of products that we produce.
“Some of the interest is in taking the syngas, some in developing technology partnerships and others in taking the technology overseas.
“But first of all they want to see a small-scale demonstration project performing in the North East.
“We expect to be able to make a start on the project by next spring.”
Despite being a technology with a 100-year pedigree, there are still concerns over the large-scale commercialisation of UCG.
Kuldeep Varma, a director of process engineering at Hypro Engineers in India, is a chemical engineer with first-hand experience of UCG technology after two years with Linc Energy at its UCG facility at Chinchilla, Australia.
He said: “No one has made any money out of UCG. For decades it has promised a lot and never delivered.
“For a technology to commercialise it needs to be robust enough to be applied everywhere and anywhere, with certainty. UCG fails miserably on robustness.
“The technology is so dependent on geology, very specific geology, that it fails in most places.
“Where it works, it does perform. But most sites are not suitable for UCG. In my research and technical opinion, I would hold all global developments in UCG and concentrate on other means of utilising underground coal.
“Most UCG trials in the world have failed in delivering things that commercialisation needs; control, predictability and the ability to perform over extended periods.”
Roddy, who previously ran the Petroplus crude oil refinery on Teesside, countered: “There have been problems with costs, but this trial will allow us to deal with the issues as they arise.
“We believe the technology we are developing is inherently commercial.”
Converting raw coal still in ground into gas for heating
Underground coal gasification is the process of converting raw coal that is still in the ground into a combustible gas that can be used for high-value products such as heating, power generation or the manufacturing or fuels.
As opposed to surface gasification, underground coal gasification uses the coal cavity itself as the reactor for the process.
This involves the drilling of two wells into the coal bed. The first well is for injecting oxygen and steam. With the supply of oxygen limited, the coal is partially oxidised, forming a gas that still retains around 80% of the original energy content of solid coal.
This syngas – a combination of hydrogen carbon monoxide, carbon dioxide and methane – is then recovered from the second well for use in power generation or conversion into liquid fuels.
There are two different UCG methods that have shown promise so far with the first involving the drilling of two vertical wells with pathways between them.
The second method involves the creation of inseam boreholes using oil and gas technology that allows for a mobile injection point throughout the process.