Underground coal gasification market forecast strong growth over the next decade

The underground coal gasification (UCG) market has been forecast strong growth over the next decade as the technology progresses to a commercial scale and allows companies and governments around the world to profit from the vast untapped coal reserves that will become accessible via underground coal gasification.

As a consequence, the value of the global UCG market has been forecast to hit a market value of US$570 million by the end of 2012.

UCG, as a concept, has been around for over a hundred years. UCG is a method of converting unworked coal - coal still in the ground - into a combustible gas which can be used for industrial heating, power generation or the manufacture of hydrogen, synthetic natural gas or diesel fuel. It has the potential to significantly increase global coal reserves used for power generation and gas-to-liquids processes.

Key factors contributing to an increase in interest in the UCG industry over the past few years include a combination of high oil prices, increasing global energy demand, and technological improvements, especially in directional drilling, which have led to a number of countries seeing increasing investments in their respective UCG industries.

The potential energy supply from UCG is so vast that the technology could rival the shale gas revolution. Because UCG developers can target coals that are deep, of low grade and in seams too thin for economical mining, the technology could increase recoverable reserves threefold.

Currently there is only one commercial plant, which has been operating for over 50 years, but several pilot projects equipped with the latest technology have been running for several years now and first modern commercial UCG projects are about to enter the final phase of commercialisation.

Demonstration projects and studies are also currently under way in a number of countries, including the USA, Western and Eastern Europe, Japan, Indonesia, Vietnam, India, Australia and China, with work being carried out by both industry and research establishments.

For more information on the underground coal gasification market, see the latest research: Underground Coal Gasification Market

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