Canadian firm to take clean coal underground

A Canadian company that plans to colve the problem of coal-based carbon emissions by burning it underground has emerged from stealth mode with $8.5m (£5.7m) in funding.

Laurus Energy is hoping to use the funds to advance its work on underground coal gasification projects in North America.

The company received the series A funding came from Mohr Davidow Ventures. The technology, which it is licensing from Ergo Exergy, involves burning coal in situ underground by pumping air into an injection well. The burning process creates synthetic gas, known as syngas, that is recovered via a second production well. This can then be used to fuel power plants, or can be turned into natural gas.

Newly-appointed Laurus Energy chief executive Rebecca McDonald argued that the technology resulted in a relatively minimal environmental impact and could be deployed low expense compared with other carbon capture systems.

"Critical to this is carbon capture and sequestration," she said. "We can capture carbon, and either put it back into the earth, or find other uses for it."

Carbon created by burning the coal is piped to the surface with the syngas, but can then be sequestered in appropriate underground locations or used for enhanced oil recovery. The process also avoids the disruption of conventional mining, and leaves an area almost exactly as it was found, she added.

McDonald would not provide exact capital costs for the installation and operation of the plants, but she said that even with currently low natural gas and oil prices, the technology would still be competitive, especially as it will not be in production immediately.

Details of the licensing agreement with Ergo were also withheld.

Laurus Energy is currently pursuing operational permits in a small number of US states, and in the Canadian province of Alberta, which has been struggling to reconcile the high production costs incurred by its tar sands industry with the low cost of oil. The company is likely to build its own power plants and operate as a merchant energy provider, or as a direct supplier to other companies under power purchase agreements, McDonald said.