The Minister for Resources and Energy, Martin Ferguson AM MP, has launched the world's first coal-to-liquids demonstration plant to use Underground Coal Gasification (UCG) technology.
Linc Energy's demonstration plant near Chinchilla in Queensland is producing clean synthetic diesel and jet fuel from gas sourced from deep underground coal reserves. First production was achieved on 14 October 2008.
Minister Ferguson said: "Australia is coal and gas rich, with hundreds of years of reserves. Technologies that convert coal and gas to ultra-clean diesel and jet fuel have the potential to replace Australia's declining oil reserves and make us self-sufficient in liquid transport fuels once again.
"A domestic synthetic fuels industry would reduce - and maybe even one day remove - our growing trade deficit in petroleum products which last year grew to almost $15 billion."
Minister Ferguson said: "This technology unlocks energy from Australia's significant stranded and uneconomic coal reserves and has the potential to dramatically reduce Australia's dependence upon imported oil and refined products."
Not only could this technology increase Australia's energy security, it produces environmentally friendly fuels containing almost zero sculpture and no aromatics and has a carbon footprint comparable with the production of conventional fuels.
The Australian Government is encouraging the development of coal-to-liquids in Australia through its election commitment to use the $500 million National Low Emissions Coal Fund to support projects generating minimal carbon emissions which utilise our extensive coal resources.
The work undertaken through the Fund's national carbon mapping and infrastructure plan will provide real benefits to the coal-to-liquids industry.
Minister Ferguson said: "Australia has enormous potential as a coal-to-liquids producer and an economically viable and environmentally sustainable coal-to-liquids industry would not only increase Australia's energy security, but also provide jobs, exports, revenue and economic growth, particularly in regional communities.
"Similarly, gas-to-liquids could open up new opportunities for development of Australia's vast northwest gas resources and east coast coal seam methane resources, complementing the potential of Australia's well-established LNG industry."