leigh creek energy underground coal gasification (ucg) demonstration plant...

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Michael Malavazos

Director Engineering Operations

Energy Resources Division

Leigh Creek EnergyUnderground Coal Gasification (UCG)

Demonstration Plant Project

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Outline of Presentation

1. Introduction

2. Leigh Creek Energy (LCK) UCG Proposal location and aim

3. What is UCG?

4. South Australian Regulatory Process

5. Challenges for Favourable UCG project

6. How does this proposal compare to these challenges?

7. Next steps

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What is this project? Read All About It:

http://www.petroleum.statedevelopment.sa.gov.au/__data/assets/pdf_file/0003/309360/20171220_-_Report_-_Leigh_Creek_Energy_PEL650_EIR_Rev3.PDF

• Leigh Creek Energy propose to construct and operate a small-scale Underground Coal Gasification (UCG) demonstration plant in the Leigh Creek coalfield (ex-mine site) in Northern South Australia.

• Site is located approximately 8.5 km from the nearest town Copley and 12km from Leigh Creek township

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Location: Leigh Creek South Australia

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UCG Demonstration Plant Project

• This facility will involve the construction of an above ground plant (and associated infrastructure) and the establishment of a single below ground UCG gasifier chamber.

• The gasifier chamber will be 500 m at depth and approximately 30m long and 15m high at the conclusion of operations

• The demonstration plant is intended to be operated for a short period of time (approximately 2-3 months) to ascertain the technical and environmental performance of the process.

• As this is an exploration activity, the syngas produced is required to be thermally destroyed on site in a thermal oxidiser.

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What is UCG?

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In basic terms:

Source: Camp and White, 2015: http://www.petroleum.statedevelopment.sa.gov.au/__data/assets/pdf_file/0006/299679/llnl-ucg-groundwater-report-2015a.pdf

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Gasification Reactions:

Source: Camp and White, 2015: http://www.petroleum.statedevelopment.sa.gov.au/__data/assets/pdf_file/0006/299679/llnl-ucg-groundwater-report-2015a.pdf

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Gasification Reactions:

Pyrolysis:When the dry coal reaches 200–500◦ C, volatiles are released and the coal turns to char:

Coal → Char + Ash + Hydrocarbons + CH4 + H2 + H2O + CO + CO2

Gaseous species migrate towards open cavity, where they participate in other reactions.

Oxidation/Gasification:Carbon-containing compounds in the char (C) react with injected oxygen:

C + O2 → CO2

2C + O2 → 2CO

C + H2O → H2 + CO (Valuable component of Syngas)

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Gasification Chamber

Source: LLNL Presentation November 2013, Brisbane

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Typical Syngas Compositions

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South Australian Regulatory FrameworkIn South Australia

Petroleum Exploration and Production Activities regulated under:

• Petroleum and Geothermal Energy Act 2000 (PGE Act);

• Environment Protection Act 1993;

• Natural Resources Management Act 2004;

• National Parks and Wildlife Act 1972;

• Aboriginal Heritage Act, 1988;

• Development Act, 1993;

• Work Health and Safety Act 2012;

• Public and Environmental Health (Waste Control) Regulations 2010;

• Environment Protection and Biodiversity Conservation Act 1999;

• Commonwealth Native Title Act 1994

Interaction between PGE Act and other South Australian Acts administered through Administrative Arrangements with respective agencies

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DEFINITION OF ENVIRONMENT

Includes:

• Land, air, water, soil

• Plants & animals

• Social, cultural and heritage features

• Visual amenity

• Economic and other land uses

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LICENSING AND APPROVALS PROCESS FOR EXPLORATION AND PRODUCTION ACTIVITIES• Stage 1 – Licensing

• Stage 2 – Environmental Assessment and approval of Environmental Objectives

• Stage 3 – Activity Notification and Approval

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STAGE 2 – ENVIRONMENTAL ASSESSMENT AND APPROVAL OF ENVIRONMENTAL OBJECTIVES

Environmental Impact Report (EIR)• Needs to consider all risks to the environment (definition provided previously) and

how these risks will be managed to sufficiently enable an informed decision to be made on the likely impact the activities will have on the environment.

Statement of Environmental Objectives (SEO)• Be prepared on the basis of the EIR and include:

• Environmental objectives to be achieved

• Guide on how objectives will be achieved

• Assessment criteria to measure objectives

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EIR AND SEO

• Developed in consultation with relevant stakeholders – e.g. landholders/ native title claimants and government agencies (DEWNR/AARD/EPA/ DPTI/ DOH/ SWSA)

• If approved the documents will be published on DPC website

• Reviewed every 5 years or as required by Minister

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SEO Approval Process

EIR & Draft SEO

APPROVAL

Environmental Significance Assessment

Statement of Environmental

Objectives

MEDIUM IMPACTPublic Consultation

LOW IMPACTInternal Govt Consultation

HIGH IMPACTEIS Process

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Regulatory Assessment Summary

• Leigh Creek Energy (LCK) submitted first draft of Environmental Impact Report (EIR) to DPC in late September 2017

• DPC consulted with its US independent expert on 28th September

• DPC identified need for additional information

• DPC visited Queensland EPA to review evidence related to Linc Energy allegations

• LCK drilled 3 additional wells for geotechnical data to supplement EIR

• Final EIR and draft SEO resubmitted in December 2018

• EIR and SEO released for stakeholder consultation and closed 28th

February 2018

• Submissions being reviewed and addressed by LCK/government

• DPC decision expected by early 2nd Quarter 2018

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Knowledge to date

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Independent Advice sort:

• David Camp, former UCG program leader at Lawrence Livermore National Laboratory, chemical engineer with experience in fossil fuel and underground technologies

• Josh White, geotechnical modelling researcher at LLNL, geomechanics/geotechnical engineer with experience in fossil-fuel-related technologies.

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Publicationshttp://www.petroleum.statedevelopment.sa.gov.au/projects/prj_leigh_creek_energy_isg

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Hazard Screening Checklist: http://www.petroleum.statedevelopment.sa.gov.au/__data/assets/pdf_file/0006/299679/llnl-ucg-groundwater-report-2015a.pdf

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Hazard Screening Checklist: http://www.petroleum.statedevelopment.sa.gov.au/__data/assets/pdf_file/0006/299679/llnl-ucg-groundwater-report-2015a.pdf

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Hazard Screening Checklist: http://www.petroleum.statedevelopment.sa.gov.au/__data/assets/pdf_file/0006/299679/llnl-ucg-groundwater-report-2015a.pdf

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Key Identified Risks• Loss of containment due to loss of well integrity

• Migration of chemicals of potential concern away from gasifier

• Gasifier pressure exceeding surrounding groundwater pressure

• Direct escape from the gasifier through drill holes or transmissive faults

• Gasifier chamber growth intersecting potential migration pathway

• Increase in permeability of surrounding by mechanical stress changes and fracturing (including significant gasifier chamber collapse)

• Migration of COPC from gasifier chamber after decommissioning

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Key Identified Risks• Loss of containment due to loss of well integrity

• Migration of chemicals of potential concern away from gasifier

• Gasifier pressure exceeding surrounding groundwater pressure

• Direct escape from the gasifier through drill holes or transmissive faults

• Gasifier chamber growth intersecting potential migration pathway

• Increase in permeability of surrounding by mechanical stress changes and fracturing (including significant gasifier chamber collapse)

• Migration of COPC from gasifier chamber after decommissioning

• Risk mitigation focus: COPC loss of containment into atmosphere • Low/insignificant risk to any aquifers

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Ideal Chamber Behaviour

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Reality

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Possible paths for gas and contaminant transport

Source: LLNL Presentation November 2013, Brisbane

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Stress changes can induce fractures and permeability

Source: LLNL Presentation November 2013, Brisbane

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Source: LLNL Presentation November 2013, Brisbane

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Geology and Hydrology

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Geology and Hydrology: Telford Basin Cross Section (North – South)

Area of interest for understanding

groundwater risks

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Geology and Hydrology: Registered water bores

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Plateau between Upper and Main Series Coal Pits

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Additional Geotechnical Data

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Playford 2, 2A and 2B

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Playford 2, 2A and 2B

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Playford 2, 2A and 2B

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Independent Geo-mechanical Assessment

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Ikon Science Report Review Status:

• Ikon main conclusion:Rock strength for both the mudstone that overlies the proposed pilot UCG chamber and any pre-existing faults within the mudstone are highly unlikely to be affected by planned and controllable operating conditions within LCK’s proposed pilot UCG chamber.

• DPC-ERD continue to review this report along with other new data acquired from Playford 2, 2A and 2B drilling and Alinta archives.

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Rock and Fault Strength Analysis

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Proof of all this will be in the performance!

So how do we demonstrate that we have containment?

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Source: LLNL Presentation November 2013, Brisbane

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Source: LLNL Presentation November 2013, Brisbane

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Monitoring Plans: Essential Part of Stage 3 Approval

Tarp: Trigger Action Response Plans

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Proposed Monitoring

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Next Steps

• Public submissions on EIR and draft SEO closed on 28 February

• DPC-ERD forwarded submissions and its own comments to LCK

• DPC-ERD review and collectively respond to all submissions

• LCK to submit its responses and revised EIR/SEO if necessary

• DPC-ERD will assess and decide on approval or otherwise of SEO

• If substantial changes made, revised EIR and SEO re-consulted on

• If decision is made to approve SEO it will be gazetted

• LCK will then proceed to Stage 3 of approval process

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STAGE 3 – ACTIVITY NOTIFICATION AND APPROVAL

Activity Notification includes:• Detailed technical activity information

• Fitness for purpose details of: wells, surface facilities, monitoring plans etc.• Risk assessment documentation

• Landholder information (Notice of Entry)

• Work Area Clearance

• Any other material required by DPC to ensure it has comprehensive information on the proposed activities.

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Stage 3 Approval: Gasifier Hazard Analysis

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Stage 3 Approval: Surface facility Hazard Analysis

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Questions

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For more information contact:Michael Malavazos, Director Engineering Operations:Mob: 0401 121 666; ormichael.malavazos@sa.gov.au

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Additional Slides

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Well Construction Practices

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Telford Basin – Geology and GAB Boundary

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