The coal rush
Eclipsed for years by its high-performing cousin natural gas, coal is making a comeback. In Southland, Otago, Waikato and the West Coast—including at Spring Creek underground mine, north of Greymouth seen here—rivers of coal are flowing out of the ground to meet a burgeoning demand for New Zealand’s most abundant fossil fuel.
It was surprisingly warm at the coalface, and quiet, too. I had arrived at crib time—smoko—so the mining machines were silent. Six men sat facing each other on two rows of plastic chairs in a sort of skip, eating their sandwiches. The only sound was the rhythmic sucking of water pumps, the sort of sound you hear in a milking shed. I toyed with that thought for a moment: mines as underground cowsheds, where the earth is milked for its minerals.
I was 240 metres underground and 3.5 kilometres from the entrance of Huntly East mine. Somewhere above me was lush Waikato farmland and the muscular Waikato River, both probably still foggy on this midwinter morning. Dion Pastars, Huntly East’s underground mine geologist, was showing me around the current workings, which lie on the western side of the river. The mine entrance is on the eastern side, where the town of Huntly stands. To get to the coalface we had crossed under the river.The only sound was the rhythmic sucking of water pumps, the sort of sound you hear in a milking shed. I toyed with that thought for a moment: mines as underground cowsheds, where the earth is milked for its minerals.
We had driven down the main tunnel in a “mule,” a Multifunction Utility/Logistics Equipment vehicle—basically a farmbike with a roof. At one point we had to pull into an alcove to let a continuous miner go past. Continuous miners are remote-controlled excavators that run on caterpillar tracks and use a rotating spike-studded cylinder to rip coal from the face. They move at a snail’s pace, so if you’re unlucky enough to be behind one that is being shifted from one part of the mine to another, you’re in for a long trip. Most mining roads are five metres wide, and continuous miners take up almost the entire width of the road.
Huntly East mine is operated by state-owned enterprise Solid Energy New Zealand, the country’s largest coal producer. Much of the coal that streams out of the mine on conveyor belts 24 hours a day is railed directly to New Zealand Steel’s Glenbrook steel mill, where it is used as a reducing agent in the ironsand-to iron smelting process. Some is blended with coal from nearby Rotowaro opencast mine to supply other industrial users, including the Huntly Power Station, which burns three million tonnes of coal a year and is the country’s biggest coal consumer.
When you’re underground, you tend to keep an eye on the roof. Especially here in Huntly, where the deep coal seams and the clay-rich rocks above them aren’t the most stable geological structures. The coalfield is crisscrossed with faults, and this places the coal seams under considerable pressure. Pastars pointed out areas where coal had fallen from the roof, leaving unhealthy-looking cavities, and described the coal in this part of the mine as highly fractured or cleated. “Black Weet-Bix” was the phrase that came to my mind. Every few minutes came the disconcerting rattle of falling flakes of coal.
In modern underground mining, the roof is held up not with the old-style wooden props but with roof bolts, spaced according to the structural integrity of the coal seam. The bolts, close to two metres long, are set into drill holes using fast-setting resin, and each holds a metal plate against the roof coal. A typical spacing is one bolt per square metre, but in parts of Huntly East the roof fairly bristled with bolts—up to eight per square metre.
At intervals, devices called telltales, resembling a pair of small fluorescent clock faces, had been installed. A telltale measures movement in the roof—telling miners what’s happening in the seam above their heads. Pastars wrote down the readings in a notebook attached to the wall of the mine. Every now and then he checked for carbon monoxide and methane, or “firedamp” as it used to be called, using a handheld meter called a Mentor—the high-tech equivalent of the miners’ canary.
In the main tunnel I had noticed rows of small sacks dangling from the roof. “Stone dust,” Pastars explained. In an explosion, the sacks burst and the finely ground limestone quenches any burning gases. Stone dust is also routinely sprayed on the roof and walls of the mine to reduce the risk of combustion.
Safety is a big deal with miners. In the South Island, outside the gate of Stockton mine, on the West Coast, I had been heartened to see a large sign announcing the mine’s target of “No injuries to anyone, ever.” At Huntly East I was required to undergo a 40-minute “induction” before I could enter the mine. As well as watching a safety video I had to show I could put on and operate a full-face oxygen mask. Cellphones, cameras and even battery-operated watches are not allowed underground, as they are a potential source of sparks.
The dangers underground are real and not always predictable. In an area where a continuous miner was operating—called a “window” in North Island mining parlance but, curiously, a “garage” by South Island miners—Pastars pointed to an indentation in the wall the size of a breadboard. A few days earlier, a slab of coal had sprung out of that spot and hit a miner, putting him in hospital with two cracked ribs.
In some opencast mines I visited, I met people who vowed, “You’d never get me underground.” For their part, underground miners speak condescendingly of the “dirt-scratchers” who drive the big diggers and trucks of an opencast operation. One Huntly East miner told me his breed were the “mountain men of miners.” I found being underground, deep in the black womb of the Earth, vaguely soothing. I thought of Mole, in The Wind in the Willows, explaining the comfort of being in a place where “nothing can get at you.” Hap Hepburn, a 65-year-old pump manager in a mine near Greymouth, told me he had been underground when the 1968 Inangahua earthquake struck. He heard it rolling overhead like the roar of a river. There was safety that day being “down under”.
There’s a scene in an old Superman comic where the Man of Steel squeezes some lumps of coal in his hands to make diamonds. It’s a tantalising thought, turning something so common into something so valuable, but, sadly, it is chemically impossible. Diamonds are pure carbon, like graphite and buckminsterfullerene, the two other forms of naturally occurring carbon. Coal, no matter how high its carbon content (and it can reach 95 per cent), always has other elements present, the legacy of its vegetable origins. No amount of pressure, heat, or time can change a lump of solidified swamp into a girl’s best friend.
For all its lack of romance, however, coal (at times ambitiously called “black diamond”) is a more complex, versatile and economically important commodity than its flashy relative. Ask an organic chemist to describe coal and you might be given a definition like: “Coal is a 3-D cross-linked polymer consisting of aromatic ring systems linked by aliphatic carbon bridges or ether oxygen bridges.” Ask a geologist and you invite a lecture on peat mires and sedimentary basins, subsiding downwarps and regional transgression. An economist might draw attention to the fact that coal is the world’s most abundant fossil fuel, that it produces 39 per cent of the world’s electricity (more than double its nearest rival, gas) and that there is enough of it in the ground to power the planet for 150 years. An environmentalist might point out that human use of coal is responsible for one-eighth of the world’s carbon dioxide emissions.
The planet has around one trillion tonnes of recoverable coal. It has been estimated that if all this coal could be mined simultaneously and loaded into 100-tonne railway wagons, the train would stretch from Venus to Mars. If the same train were travelling at 80 km/h past a level crossing, a motorist would have to wait 810,000 years for it to go past.
New Zealand’s own recoverable reserves are estimated at around 10 billion tonnes—one per cent of the world total. So far, the country has mined just three per cent of the resource.
New Zealand’s coalfields are structurally complicated and generally difficult to mine, a fact that stems from the country’s active geological setting. While Australia, for example, has enjoyed a fairly sedate geological history—reflected in stable, uniform, easy-to-mine coal seams—New Zealand, perched on a tectonic plate boundary, has been led a merry dance over time. Eighty million years of geological upheaval has fragmented and pulverised many of the country’s coal deposits, tipped the seams on their sides, sheared and folded them and made extraction difficult.
However, had New Zealand not gone through this geological mill, we wouldn’t have the quality of coal that we do. Coal is classified by “rank,” a rank being the stage the coal has reached during its transformation from the original plant matter. Generally, the older the coal and the deeper its burial, the higher the rank. While much of the world’s coal was laid down as long ago as 350 million years—an era named the Carboniferous because of the amount of coal formed at that time—New Zealand’s deposits are much more recent, ranging from 75 million to 30 million years old. In theory, New Zealand’s youth means our coals should all be in the lower ranks—lignite and sub-bituminous coal. But a geological rollercoaster ride of deep burial followed by rapid uplift has enabled some of our deposits to “rise through the ranks” and become some of the hardest, purest and most valuable coals in the world.
New Zealand coals show the full range of ranks, from dull brown low-energy lignite to lustrous black high-energy anthracite. Huntly coal sits midway along this spectrum. It is a sub-bituminous, or thermal, coal—“thermal” because its chief use is in the production of heat, either for direct residential or industrial use (drying grain or milk powder, cooking hops, and so on) or to fuel a steam turbine for electricity generation.
Broad coal classifications don’t convey the full picture, however. There are many subtly different sub-bituminous coal types in the Huntly coalfield. Some have less “ash” (the industry term for impurities) than others, some less sulphur. Even within a single mine the coal can show great variation. Nowhere is this more evident than at Stockton opencast, inland from the town of Granity, north of Westport. Stockton is New Zealand’s highest-producing coal mine, yielding 1.6 million tonnes in 2003. At any one time, Stockton may have 30 different coals available for extraction, including medium-rank sub-bituminous coals, high-rank bituminous, or “coking,” coals, used primarily in steelmaking, and semi-anthracitic, or food-grade, coals: the crème de la crème of New Zealand coals, used for such applications as activated carbon filters.
Like coffee roasters selecting from a couple of dozen varieties of bean, Stockton’s production geologists can point the excavators to specific sites to acquire the coal they need to meet a particular order. “We have a general spec for a customer, but they can ring up and say they want a different ash or sulphur content and we’ll match that,” said geologist Ed Radley.
Sometimes these different pockets of coal may lie as little as half a vertical metre apart in the seam, requiring skilful excavation to avoid mixing them up. For Stockton’s mine planners, one of the headaches of micromanaging such a diverse coal resource is finding somewhere to put the overburden—the cap of soil and rock which covers the coal seam. “You don’t want to dump overburden on top of an area you might want to mine some day,” Tony O’Connell, technical services manager, told me as he and Radley drove me around the sprawling Stockton site. Yet as coal prices rise, coal that was uneconomic to mine in the past because it was too deeply buried or too faulted becomes an attractive proposition. “We’re now looking at places that were walked away from 10 years ago, and saying, ‘There’s coal under there. Why did we cover it up?’”
One thing in Stockton’s favour is the stripping ratio (the ratio of overburden to coal) which can be as low as 1 to 1. The lower the stripping ratio, the less the amount of overburden that has to be disposed of. “Our fringe areas have a stripping ratio of 10 to 1,” said O’Connell. “Our limit will probably be 17 to 1, but with coal prices rising the way they have we may be able to go even higher.” Good mining practice dictates that the overburden cannot simply be trucked away and discarded; it has to be kept for later rehabilitation of the site.
O’Connell stopped the vehicle near Mt Frederick, one of the high points of the Stockton plateau. We walked to a ridge demarcating the edge of Solid Energy’s licence area. The views were stupendous: to the north, the whole mine site, spread out like a patchwork quilt of uncovered coal deposits; to the south, forest-clad hillsides leading towards the Paparoa Range; to the west, the townships of Millerton, Ngakawau and Granity, and, beyond, the Tasman Sea, glittering like silver.
Radley picked up a handful of coal. “This is some of the best coking coal in the world,” he said. “No ash, one per cent sulphur, high fixed carbon, swelling index 9.5.” He recited the coal’s vital statistics proudly, like a wine connoisseur describing a favourite vintage. And this, I realised, is the point: as with wine, all coal is not the same—there are a myriad variations stemming back to the particular combination of podocarps, ferns, bryophytes, lycopods and flowering plants which accumulated in those primeval peat swamps. Recognition of this fact has transformed the coal industry. The days of blindly hewing coal as an all-purpose commodity are gone. Coal is a specialist product, and a place like Stockton is essentially no different from a Starbucks outlet, except that it serves coal rather than coffee. Gourmet coal to go.
Tim Moore, Solid Energy’s research manager, said that characterising the company’s coal resources across all its mining areas is now fundamental to its operation, “because the coal you might previously have sold into the thermal market could go for a much higher price in a specialist market, such as activated carbon.” The company scrutinises its various coals for trace elements (such as germanium, a vital component of hydrogen fuel cells), reactivity, fluidity and a host of other characteristics, then sends its marketing people out to look for niche markets requiring those specifications. “In the past, mining has been a tonnage game,” said Moore. “We have to stop looking at coal as coal and think of it as a carbon source.”
Which means thinking of an operation like Stockton not as a coalmine but as a carbon boutique.
In an old joke, a snooty housewife telephones her coal merchant to place an order. “My good man,” she says, “send me half a tonne of your finest coal, s’il vous plait.” The quick-thinking coal man retorts, “Would madam like her coal à la cart or cul de sack?
The irony is that the very thing that makes the joke funny—the idea that coal, and the people associated with it, could have panache has come to pass. At $100 a tonne, West Coast coking coal is no longer a bulk commodity to be dumped into the nearest market, but something to be parcelled out and sold to discerning customers.
And who are the customers of the new carbon boutiques? For the higher ranks of coal, the clientele is primarily overseas steelmakers and other metallurgists, but also the manufacturers of speciality products such as molecular sieves, medical filters, vitreous moulds and other objects which make use of the enormous reactive surface of activated carbon. (Under a microscope, activated carbon looks like a bath sponge. One teaspoonful of it has the surface area of a football field.)
Apart from the very highest ranks, most coals are sold as blends—again, a bit like coffee. Ed Radley explained: “Blending is mixing a coal with a better spec than needed with a lesser grade. It allows you to optimise the price you can get across your whole production range. For example, you might be able to get 20 per cent more for an activated-carbon-producing coal sold on its own, but using that premium coal in a blend might let you use up three times as much low-grade coal and make a bigger profit overall.” So selling coal has more than a hint of Schweppesmanship about it: the art of being a good mixer.
Before the early 1970s virtually no coal was exported from New Zealand, yet in 2003 coal exports made up nearly half of the 5.17 million tonnes of coal produced from the country’s mines.
“These are exciting times for coal exporters,” said Ian Hustwick, marketing manager for Roa Mining Company, the country’s largest private export mining operation. Roa digs around 100,000 tonnes of coal a year from its underground mine behind Blackball, but plans to lift annual production to 250,000 tonnes over the next couple of years.
Hustwick was telling me about Roa—a joint venture he helped set up between Christchurch-based Francis Mining and a Swiss equity partner—as we drove up a steep switchback road through native forest. Every few minutes, when we came to an especially tight blind corner, Hustwick would call on his radio-telephone to warn vehicles coming down to watch out for us. The hairpins all had names, so Hustwick would say things like “Ute at Grizzly going up” or “Horseshoe going up.”
We crested a ridge and dropped down into an open area with a cluster of rough-and-ready buildings: a communal shower and changing room, a couple of offices, an equipment store and a simple laboratory for conducting coal analyses. Overhead, a pipe carried a coal-and-water slurry from the mine to a washing plant, where impurities such as rock are removed. The process involves passing the slurry through a tank of water containing a suspension of a mineral called magnetite. The specific gravity of the suspension is such that coal floats but rock sinks.
Roa produces an ultra-low ash, high-quality bituminous coal. The entire output of the mine is barged to Australia, some for blending with lower-ranked Australian coals to achieve a desired specification. “They provide the steak, we add the salt and pepper,” said Hustwick. Most of the coal ultimately ends up in Europe, for the activated carbon market and for the manufacture of silicon.
“The future is very bright for West Coast coking coal,” Brent Francis, Francis Mining’s general manager, had told me when I met him in Christchurch. “The market has swung upwards by two to three hundred per cent in the past 12 months, and we can’t increase production fast enough. It’s gone from a buyer’s to a seller’s market.”
It was half-past two. A shift change was due at three. Despite all the advances in mining technology that have happened since men hewed the coal seams in these hills with picks and the broad, rounded shovels known as “banjos” a century ago, the traditional eight-hour shifts have been kept: day shift (7–3), night shift (3–11) and dog shift (11–7).
In his office, mine manager Andrew Holley picked up a photograph in one of his big coal-blackened hands. It showed the portal of Paparoa Mine circa 1910, with 20 or 30 men posing beside it—a typical shift. In today’s incarnation of the mine (“Roa” being short for “Paparoa”) there are just six men per shift. Continuous miners and monitors (the latter used for hydraulic mining, in which jets of high-pressure water blast coal off the face) have reduced the manpower needed underground.
According to one analysis of the New Zealand coal industry, in 1936 it took 4257 workers to produce 2.2 million tonnes of coal, while in 1995 it took 740 workers to produce 3.5 million tonnes. Part of that productivity increase can also be attributed to an increase in opencast mining, which yields bigger tonnages per worker. Before 1940, less than 10 per cent of New Zealand’s coal production came from opencast mines. Now the proportion is greater than 80 per cent.
Machines may have changed the face of mining, but it still requires human hands to put in the roof bolts and set the explosive charges. The risks of mine collapse, outbursts of poisonous gas and fire remain real for those who toil below the surface, so, as I drove away from Blackball, I stopped outside Taylorville to pay my respects to those who died in the 1896 Brunner mine disaster—an explosion which took the lives of 65 men and boys who were underground at the time. A statue of a coalminer holding a lamp marks the spot. Someone had just placed fresh flowers at his feet.
It’s easy to forget the role coal has played in the shaping of our nation and our world. Few of us burn coal in our homes any more. Its nouveau chic export status notwithstanding, coal seems like yesterday’s fuel, and images of soot-smeared miners from a distant century. Yet we all—wrote George Orwell in The Road to Wigan Pier—“owe the comparative decency of our lives to poor drudges underground, blackened to the eyes, with their throats full of coal dust, driving their shovels forward with arms and belly muscles of steel.”
One part of the country where the sharp tang of coal smoke can still be smelt on winter’s nights is Southland. It’s hardly surprising: more than 70 per cent of the country’s recoverable coal is in Southland. Most of it takes the form of lignite, a lowly fuel which occupies the second-lowest rung on the coal ladder, one rung up from peat. (Curiously, peat is technically a type of coal, and is defined as such in New Zealand’s Crown Minerals Act.) In lignite seams you can still see leaves, bits of tree branch and pockets of yellow resin—million-year-old reminders of coal’s plant origins.
New Vale Coal extracts 250,000 tonnes of lignite from two mines just west of Gore. The business has been in the Highsted family for 65 years. “My grandfather used to mine coal in winter and cut flax in summer, when there was no demand for coal,” said Paul Highsted, who manages New Vale along with his parents and two brothers. “Now there’s a huge demand in spring and summer from the dairy factories.”
In his grandfather’s day, 90 per cent of the coal produced ended up in fireplaces and stoves, and only 10 per cent was used in industry. Now the percentages are reversed. It’s not just the dairy industry that wants a cheap energy source for heating. Hospitals, sawmills, swimming pools, freezing works, grain driers, tanneries and breweries are all supplied by New Vale and other coal companies in the region.
The question on many people’s minds right now is whether coal should be seen as an energy solution not just for domestic industry but for the country as a whole.
At first glance, coal is a slam dunk. Insufficient gas reserves have been located to meet the expected growth in energy demand over the next 20 years. The prospects of new large-scale hydro development have been dealt a body blow with the abandonment of Project Aqua. Other renewable energy sources such as geothermal, wind and solar appear unlikely to provide sufficient capacity quickly. Nuclear is out of the loop for socio-political reasons. Yet there is enough coal to satisfy the country’s energy requirements for centuries.
But coal comes with a serious environmental price tag: emissions, the gases produced when coal is burned. There is no real problem with the small but toxic amounts of nitrogen and sulphur oxides—known in the industry as NOX and SOX—which are released on combustion. Along with particulates, these can be trapped and removed by units called scrubbers. The problem is CO2. Because coal is the most carbon-rich of the fossil fuels, it produces the greatest amount of CO2 when burned.
The actual figure (called the “emission factor”) for sub-bituminous coal—the type of coal that is burned in a power station—is 91,000 tonnes of CO2 per petajoule (PJ). One PJ is the amount of energy produced by burning 44,000 tonnes of sub-bituminous coal (or 28 million litres of petrol or 26 million cubic metres of Maui gas). Thus burning one tonne of coal produces just over two tonnes of carbon dioxide. This means that the Huntly Power Station is venting some six million tonnes of CO2 into the atmosphere a year.
The emission factor for gas is approximately half that of coal, which is why the government, conscious of its obligations under the Kyoto Protocol, favours gas over coal in its forecasts of the country’s future energy supply—despite doubts that sufficient new gas reserves will be found to replace the rapidly dwindling Maui field.
The coal industrybelieves it can dealwith the problem of high emissions through a combination of carbon trading offsetting carbon sources with carbon sinks—and the novel technology of carbon sequestration: capturing the CO2 emitted during combustion, condensing it to a liquid and storing it underground in geological structures such as depleted oil or gas reservoirs. Although carbon sequestration hasn’t been proven on a wide scale, and has yet to be attempted in New Zealand, it is widely regarded as offering the best hope of stabilising and ultimately reducing the level of CO2 in the atmosphere.
This is not a view shared by the environmental movement. At any mention of coal, the Greens see red. “Burning coal is the fastest way to bring about disastrous climate change and cannot be seriously considered if New Zealand is to maintain its commitment to the Kyoto Protocol,” stated Green Party co-leader Jeanette Fitzsimons in a recent speech. The stark choice facing New Zealanders, says Fitzsimons, is between “joining the Kyoto wreckers with accelerated energy demand fuelled by coal . . . or developing renewables, and playing our part in a new planetary momentum for survival.” In other words, dirty old coal has no place in the future of clean green New Zealand.
For its part, the industry cautions about putting too much faith too quickly in vogue renewables such as wind and solar. “Renewable technologies aren’t cheap enough to meet mass consumer needs at the moment, and may not be for another 50 to 100 years,” argues Solid Energy’s Tim Moore. “Nor have their environmental ramifications been looked at critically. Take solar power. It’s portrayed as environmentally friendly, but what do you do with all the cadmium and lead from the photovoltaic cells? Harnessing the tides, on the other hand, has the potential to damage whole seashore ecosystems.”
Moore sees coal as “a short- to medium-term energy solution while we’re in this period of transition.” Most people I spoke to in the industry emphasised the role of coal as a transitional fuel, tiding the country over until renewables can assume the heavy lifting required for a modern, energy-intense economy.
Chris Baker, chairman of the Coal Association of New Zealand, comments “A pragmatist who has NZ Inc’s best interests at heart would recognise that the development and uptake of technologies that significantly reduce CO2 emissions from coal use will take 20-plus years. During that time and beyond, coal will continue to be a vital component of developed and developing countries’ economies.”
Sustainability, security and cost—these are the three factors people need to weigh up when thinking about New Zealand’s near-term electricity options, said Andy Matheson, Solid Energy’s general manager of energy developments, in Christchurch. Renewables offer environmental sustainability, but not security of supply (intermittency is a problem with almost all renewable forms of energy) or cost-effectiveness. Coal, while romping home in terms of security and cost (even with the addition of the proposed carbon tax from 2008), is environmentally challenged.
While not downplaying climate concerns and other environmental issues, Matheson and others highlighted the economic implications of the country’s energy choices. The thrust of the economic argument is this: We’re a small, isolated country, far from our overseas markets. Cheap energy enables us to negate our geographical disadvantage as we add value to the products we sell to the world. If energy prices rise too high, we lose our competitive edge.
On the environmental score, Matheson believes the coal industry has been unfairly tarred by outdated images of belching smokestacks and pollutant-leaching mines. “People don’t realise that around Christchurch there are a couple of dozen major coal-burning industries—the hospital, breweries, tanneries—and there’s no smoke coming out the stacks. It’s crystal clear.”
I was reminded of a flight I had taken over the Huntly coalfield. I had asked the pilot to take us close to Huntly Power Station so I could look into its two cherry-topped chimneys, which dominate the Waikato skyline. There was not a wisp of smoke coming out, just an invisible plume of carbon dioxide rising into the atmosphere.
Which is worse: the emissions you can see or those you can’t?
In New Zealand, a combined quest to both reduce unwanted emissions and optimise the coal resource is driving coal research on several fronts. Much of it involves either turning coal into gas or harvesting the gas that is held in coal seams. When coal forms, methane is given off as part of the coalification process. Some of it escapes, but, because of coal’s huge surface area to volume ratio, significant quantities are trapped in the pores of the coal seam. That gas (known as coal bed methane or coal seam gas) stays within the seam as long as it remains under pressure. In general, the deeper the seam and the higher the coal rank, the greater the quantity of gas.
Technology for capturing coal bed methane has been developed overseas, and is now being adapted for New Zealand conditions by coal-research organisation CRL Energy. The method of extraction, CRL Energy researcher Sarah Pope explained, is to drill to the coal seam, extract the groundwater to release pressure on the coal and let the gas come out. It generally takes several years to capture all the available methane in a coal seam, after which the seam can be mined. Or, if the seam is too deep for economical mining, it can be used for CO2 sequestration—a neat reciprocity, I thought: taking one gas out and putting a different one back. CO2 can also be used earlier in the process to pressurise the seam, speeding up the methane extraction.
Another ingenious way of tapping the energy of coal without mining it is to ignite it underground and collect the gas that is given off. Underground coal gasification (UCG) has been used since the 1930s in parts of the former USSR to supplement natural gas in power generation. It is a below-ground variant of the technology of coal gasification, which provided gas lighting for cities in the 19th and early 20th centuries. Given the increase in gas-fired generation worldwide over recent years and the rising price of natural gas, the process looks set to gain a new following in these energy-strapped times.
UCG involves drilling a series of injection wells into the seam to carry oxygen and water to the coal, which is ignited. A further set of wells conducts the synthesis gas, or syngas (mainly hydrogen and carbon monoxide) emitted by the burning coal to the surface, where it is processed.
The attractions of UCG are its reduced environmental impact compared with mining and the opportunity it provides to exploit unmineable coal, of which there are truly vast quantities. It is estimated that in the US alone there may be 1.6 trillion tonnes of unmineable coal—more than the total world reserves of accessible coal.
A large component of the unmineable coal resource is coal left in situ during underground mining. In New Zealand, with our especially thick coal seams, underground mining using continuous miners may extract as little as 20 per cent of the available coal. Dean Fergusson, Solid Energy’s technical and resource acquisition manager for North Island operations, told me that because of the depth of the coal at Huntly East and the weakness of the overlying rock they have to leave up to 30 per cent of the coal in the roof to provide a stable tunnelling environment, along with a generous amount in the floor to stop the 70 tonne machines sinking into the clay.
“It’s the Oreo method of extraction,” said Tim Moore. “Take out the icing but leave the cookie behind.”
UCG, of course, gets the cookie. Putting the three processes together—methane extraction before mining, mining, then UCG to mop up the leftovers—would make for a highly efficient use of the coal resource. The empty coal seam would then become available for long-term CO2 storage.
Syngas is a versatile product. It can be used directly for industrial heating, combusted in gas-fired turbines for electricity generation or used as a chemical feedstock. The hydrogen component of the gas can also be separated off for use in fuel cells. This last option fits with other hydrogen developments that, many pundits believe, will revolutionise the world’s energy economy.
I came face-to-face with that revolution on a small scale, admittedly—at CRL Energy’s hydrogen facility in Lower Hutt. There researchers Mark Boniface, Ramon Brown, Tony Clemens and Steven Pearce are preparing to make New Zealand’s first batch of hydrogen from Southland lignite in a fluidised bed gasifier they have been building over the past two years. The gasification process involves reacting lignite with a little oxygen to produce a carbon char, which then reacts with steam and ultimately forms hydrogen and carbon dioxide.
The CRL group fleshed out the hydrogen vision for me. “The end goal is to have the world economy running on renewable energy sources, with hydrogen and electricity as the carriers to move the energy around. How do we get from where we are today—a largely petroleum-based economy—to that renewable future? It is generally recognised that making hydrogen from fossil fuels will be an important part of that transition, while the cost of renewable technologies is reduced. Countries will move towards the hydrogen goal using whatever energy resources they have at their disposal. In New Zealand we could use wind or hydro to power electrolysers [which crack water molecules into hydrogen and oxygen], or we could use our vast reserves of coal. At the moment, you can make hydrogen by gasifying coal much more cheaply than you can using a wind turbine and an electrolyser.
“One of the big questions being asked around the world is whether to make hydrogen from natural gas or from coal. The New Zealand situation is this: we’re sitting on a lignite resource that has the energy equivalent of 50 Maui gas fields. Are we going to hope we find enough new gas or are we going to use a resource we know is there? In terms of production costs, once you add in the cost of sequestering the CO2 you produce as a byproduct there’s very little in it between coal and gas. And with the price of gas predicted to rise, while lower-rank coals are forecast to remain stable, to us it seems pretty obvious which direction the country should take.
“And even if the hydrogen economy doesn’t happen, gasification of coal is going to be a critical component of future electricity generation because of its energy efficiency. Coal-fired generation is unlikely to get much beyond 45 per cent efficiency, while advanced IGCC [integrated gas combined cycle] generation is predicted to rise as high as 60 per cent. Coal gasification should therefore be seen as an enabling technology that leads to efficient, non-polluting production of hydrogen and electricity.”
It turns out that Southland’s lignite is particularly well suited to gasification because it is highly reactive at the lowish temperature (800-1000° C) at which a fluidised bed gasifier operates. “Our lignite is 1.5 to 2 times as reactive as Australian or German brown coals,” said Clemens. I thought back to my visit to New Vale, standing in the rain next to huge piles of steaming lignite chips. Lowly lignite, the hydrogen source of tomorrow’s brave new energy world.
On a Metal Catwalk several storeys up amid a labyrinth of stainless-steel pipes, I caught a glimpse of what may be New Zealand’s near-term energy future. Genesis Energy CEO Murray Jackson opened an inspection port on one of the boilers at Huntly Power Station, letting out a blast of heat, and I squinted at the inferno inside. A stream of pulverised coal as fine as talcum powder was squirting into a sea of orange flame—the calorific heart of Huntly’s 1000 MW power plant. A few years ago, these giant steam boilers were fired by natural gas. Now, with the gas supply tightening up and prices rising, the pendulum has swung back to coal. Indeed, Genesis Energy has announced it is examining the feasibility of adding two new 400 MW coal-fired turbines to its set-up.
“King Coal is back on top,” said Jackson, who took the top job at Genesis Energy when the company was created in 1999 as part of the tripartite split-up of the Electricity Corporation of New Zealand. Jackson’s background is coal-fired generation in Australia. There “King Coal” was never deposed. Over 85 per cent of Australia’s electricity supply is fuelled by coal—two-thirds from black coal (sub-bituminous) and one-third from brown (lignite). In this country, just five per cent of electricity generation comes from coal, a figure the industry is adamant must rise if New Zealand is to achieve anything resembling energy security.
Don Elder, Solid Energy’s chief executive, has said coal could contribute 20 per cent of the nation’s electricity supply by 2015. The government, meanwhile, remains pro-gas—at least in public. Privately, there are signs that coal may be gaining favour in Wellington. The same day I visited the Huntly Power Station 20 politicians had been through the plant, Jackson said. Many of them had asked, “How soon can you start building another coal-fired station?”
Ten billion tonnes is a lot of coal. In energy terms, New Zealand has been bequeathed 10 times the global average in the amount of coal it has per capita. Think of it as a term deposit account that has had millions of years of solar investment go into it. The account has come to maturity and is ready to be cashed up.
Do we want it? The green lobby says, “Leave it in the ground. Coal and climate don’t mix.” The coal industry says, “We can deal with the CO2. Don’t squander the nation’s energy advantage.”
In the 1970s, the US coal industry had a slogan that ran, “Coal is America’s ace in the hole.” For all our desire to present a clean, green face to the world, coal could be this country’s trump card, and a bridge to a strong energy future.