Sure, there's hundreds of years of coal left in the Powder River Basin. But less than 10 percent of the 510 billion tons can be harvested by conventional surface mining methods, according to industry officials.

So what to do with the rest? Pressure-cook it underground.

A Casper-based company has joined forces with British Petroleum to spark an entirely new industry of subterranean coal gasification, piggybacking off the coal-bed methane industry's network of roads, well pads and pipelines.

BP is analyzing a location for a pilot facility to demonstrate the technical feasibility and environmental compliance of underground coal gasification. If successful, production could ramp up to a 500- to 1,000-megawatt power plant and/or 10,000 barrels per day of liquid fuel production, according to GasTech.

The underground coal-gasification industry could include a half-dozen of these types of facilities.

"To maintain this standard of living we enjoy, we're going to have to go nuclear, eventually. In the meantime, we have to use coal. We have got to have a new energy technology, and we think it is underground coal gasification," said John Wold, chairman and CEO of GasTech Inc.

An estimated 400 to 500 years worth of coal remains in the Powder River Basin in Wyoming and Montana, according to federal officials. Yet, draglines and shovels might be able to expose less than 10 percent of the resource.

Within 12 years, half of the Powder River Basin's annual production could come from coal seams deeper than 500 feet, scratching the bottom of surface mining technologies in a region where loose overburden and massively thick coal seams obliterate any chance of applying underground mining technology.

Surface mining will likely continue for many decades in the Powder River Basin, but the big harvest will likely come through a series of wells, according to Stephen P. Morzenti, president of GasTech.

"(Underground coal gasification) is a technology that allows us to convert coals, that are too deep to mine, into an energy source, into electric generation or a number hydrocarbon formulations," Morzenti said.

How it works

GasTech holds lease to about 13 billion tons of state coal within 125 separate state "school" sections scattered through the center of the basin. Each section encompasses about 100 million tons of coal -- enough to support a commercial-scale project.

The idea is to drill down to the coal and inject air into a water-sodden coal seam. Under pressure, the steam and oxygen gasifies the coal, producing hydrogen, carbon monoxide, methane, carbon dioxide and other gases. The pressurized gases are brought to surface through a production well and separated for a variety of potential uses.

A likely scenario would be to direct CO2 into pipelines for enhanced oil recovery within the Powder River Basin. Methane would go into the existing network of natural gas pipelines and be marketed throughout the country. This kind of an operation would resemble a common gas processing plant connected to a series of injection and production wells.

The gases could also serve as a feedstock for liquid fuels or electrical generation. A "modest" gasification project could produce about 10,000 barrels per day of liquid fuels. The raw "syngas" from in-situ gasification of one township section could run a 200-megawatt power plant for 50 years, according to GasTech.

Powder River Basin coal seams are thick, ranging from 10 feet to 100 feet thick, which means gasifying the resource could result in significant subsidence on the surface. To minimize subsidence, Morzenti said, engineers would likely gasify coal in a "room-and-pillar" manner, consuming about 65 percent of coal in an area and leaving 35 percent as pillars.

As the coal-bed methane industry moves from the east side of the basin westward, underground coal gasification operations could follow using much of the same infrastructure of wells, gathering and transportation pipelines.

Financial case

State officials say underground coal gasification provides a viable pathway through a regulatory environment that is evolving toward the capture and sequestration of CO2 -- the greenhouse gas blamed for global warming. The Wyoming Business Council put up $500,000 for a 2007 technical and financial feasibility study of underground coal gasification.

(Access the report at http://www.wyomingbusiness.org/pdf/energy/WBC--Report--061507--SPM.pdf)

"We've got a lot of coal in Wyoming that just isn't mineable. So it just made sense to see if it was technically feasible to get to that coal, and do it environmentally," said Tom Fuller, manager of the Wyoming Business Council's business and industry division.

Fuller said the $500,000 will be paid back if GasTech takes the technology to commercial development. The report concludes underground coal gasification in the Powder River Basin is "economically feasible," and even economically favorable compared to gasifying coal in an above-ground plant -- at least 30 percent more economical.

An "air-blown" gasification process results in a "syngas" with a low British thermal heating unit value -- about 150 Btus per square foot, according to the state report. An oxygen-blown system produces a higher Btu syngas -- about 300 Btus per square foot because there is less dilution by nitrogen.

Analysis of an air-blown system suggested that the yield would be enough syngas to power 200 megawatts of electricity for 20 years and only consumer .27 square miles of a coal seam, according to the report. This type of an operation would cost $58.3 million to build and $13.5 million to operate on an annual basis.

Advocates say underground coal gasification is far more of an efficient use of the coal resource than burning it for electrical generation. For starters, there's no waste stream; ash remains in place while non-combustible products are marketed to the chemical industry.

The cost of drilling for underground coal gasification pales in comparison to the cost of surface mining, and transportation costs are limited to pipelines and power lines.

Compared to coal-bed methane production, underground coal gasification generates 300 times more energy per ton, according to GasTech.

Current research

Linc Energy Ltd. successfully completed a pilot project at Chinchilla Australia using underground coal gasification to produce a high-quality liquid fuel. Similar pilots are being planned in China and India.

"This is catching on around the world, but this is the only project in the United States right now," Morzenti said.

There have been more than 30 test trials throughout the U.S., several of them in Wyoming, including ARCO's Rocky Hill trial near Wright in 1978. That test, in the Wyodak seam, was considered a technological success but did result in some groundwater contamination. Three other trials at Hoe Creek in Campbell County targeted the shallower Felix coals. Other trials were conducted near Hanna and Rawlins, according to the Wyoming State Geological Survey.

Morzenti said lessons learned from those trials and from decades of successful in-situ uranium mining can be applied to underground coal gasification to prevent groundwater contamination. The strategy is to target coals at least 500 feet down so there's more hydrostatic pressure on the coal than the pressure of the gasification.

"There is no water discharge. We want that water table to be as high as possible, because that's the containment on our pressure vessel," Morzenti said.

Another advantage to underground coal gasification in Wyoming is that previous trials established a regulatory framework at the Wyoming Department of Environmental Quality to oversee the activity.

Another potential Wyoming player in underground coal gasification is MidAmerican Energy Holdings Co., the energy arm of investment mogul Warren Buffet. The company purchased 8,500 acres in Johnson County containing a large block of the Lake DeSmet coal resource. MidAmerican, parent company of utility company Rocky Mountain Power, said it has no current plans for the property, but the resource is considered a good candidate for underground coal gasification.

In the meantime, GasTech is confident that with BP, a pilot project will be launched in the near future.

"We're very anxious to take this to commercial development," John Wold said.

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@trib.com.