METHANE production tests will begin underground after mining company Regal Resources secured another two-year permit.
The Department of Primary Industries has approved the company’s bid to renew its coal exploration licence over a 17,000-hectare area surrounding Mount Cottrell, Eynesbury, Exford and Balliang East.
Known as EL4507, the licence previously stretched from Altona to Geelong’s outskirts but expired in September.
In its renewal application, Regal said it would continue exploring brown coal beds and piloting its patented underground coal-to-liquids technology.
Above-ground tests will continue at a pilot plant in the You Yangs before possible trials at two new sites between Exford and Mount Cottrell.
The licence’s renewal came under attack from the state’s leading environmental lobby, saying Regal’s technology of converting low-rank coal into a crude oil substitute, by pumping steam into the coal beds to liquefy them, was “unproven and risky”.
Environment Victoria campaign director Mark Wakeham said recent problems with underground gas fields in Queensland had fanned fears about underground fires and emissions seepage.
“When you’re doing things underground, it’s at depth and out of sight and you can experience serious problems, particularly when dealing with a gas-like methane,” he said.
“This is an industry that’s very poorly understood, so proceeding without knowing the risks of leakage or underground combustion, it’s probably a bad idea.”
Regal director Rohan Gillespie said the company was conducting pilot testing but had not yet trialed the technology underground.
He said the patented technology was far removed from controversial “fracking” – forcing water, sand and chemicals into a coal seam at high pressure to force cracks to extract gas – and would not pose problems.
Mr Gillespie said the company would seek to allay concerns when it met with Wyndham Council to outline its plans for the two-year permit. “We think it can be done without adverse impacts, we wouldn’t be contemplating it otherwise,” he said.
