Resources Minister Dr Anthony Lynham announced the ban yesterday, just three days after Linc went into administration, a move widely seen as aimed at avoiding paying for any clean-up near Chinchilla.

Queensland has form for banning new forms of energy extraction, having enacted a moratorium on kerogen shale oil last decade, a rule that has subsequently been relaxed, although kerogen shale extraction remains uneconomic, even at near $100/barrel oil prices.

"The potential risks to Queensland's environment and our valuable agricultural industries far outweigh any potential economic benefits," Dr Lynham said yesterday.

"We have looked at the evidence from the pilot operation of UCG and we've considered the compatibility of the current technologies with Queensland's environment and our economic needs.”

He said UCG activity simply doesn't stack up for further use in Queensland, which is already the home to thousands of CSG wells across agricultural regions.

Welcomed

Lock the Gate Alliance activist Drew Hutton hailed the move, saying UCG had been proven to be dangerous and polluting.

"I told the State Government these technologies should be banned six years ago - it's a no-brainer that burning coal underground and shale oil are a bad idea," he said.

"I'm pleased that the State Government has finally decided to agree with me to help protect Queensland landholders and farmers, their land and their water."

He said UCG, which is the practice of extracting gas from deep coal seams, via oxygen or ignition, had caused water and beef contamination at Kingaroy, and at Hopeland near Chinchilla, it led to the contamination of 30,000 hectares of land with dangerous gases, after catastrophic failure of Linc’s underground gasifiers.

“This technology has failed repeatedly in Qld and it is simply too dangerous to accept,” Hutton said.

The UCG trials in Queensland were suspended more than five years ago when carcinogenic chemicals were found in low levels in several water bores, but while Linc and Cougar Energy (now Moreton Resources) were found to be likely responsible for contamination, Carbon Energy’s Bloodwood Creek received a clean bill of health.

For Lock The Gate, Carbon’s plans to still develop a full-scale UCG project at Kingaroy were dangerous.

“Underground coal gasification has failed catastrophically in two of its three trial projects in Queensland over the last decade,” Hutton said.

“No-one would jump in a car that fails 70% of the time, so why should landholders have to put up with a technology that is so demonstrably unsafe?”

Rebuke

The move to ban UCG has earned a swift rebuke from Carbon and the Queensland Resources Council.

Carbon chairman Chris Rawlings described the move as “anti-innovation”

He said the ban was completely unexpected, and was delivered without consultation despite recent meetings being held with the company and the government’s acknowledgement that Carbon had worked openly and transparently with government.

“Carbon … has spent more than eight years and $150 million successfully demonstrating its innovative and unique keyseam technology, initially developed by the CSIRO, in a process set by the government, with oversight by an independent scientific panel,” Rawlings said.

He said the process was peer reviewed, including by a former Australian chief scientist and the Qld government’s own chief scientist, and found that UCG could be conducted in a manner that is acceptable socially and environmentally safe when compared to a wide range of other existing resource-using activities

Further, he said Carbon had successfully rehabilitated its Bloodwood Creek trial site by the end of 2014, expecting that proving a site could be cleaned up would be the final hurdle in the process, and its own development lease was renewed by Dr Lynham just four months ago.

Dr Rawlings said the government’s decision consolidated the three pilot technologies under UCG, which was unfair, and the company was seeking urgent meetings with Queensland Premier Annastacia Palaszczuk to “pursue formal recognition of the successful completion of the ISP recommendations”

Carbon says it has passed every environmental and scientific test put before it over the past eight years by three successive Queensland governments and “has been praised for the quality and diligence of the comprehensive trials”

The QRC said it was disappointed by the intentions to ban UCG immediately, with no consultation.

“This unexpected announcement of another commodity ban without the release of the triggering evidence can only raise concern for business confidence and investment in this state,” the QRC said in a statement.

“That the government has made this decision to forego 1000 potential construction jobs, as well as maintaining hundreds of manufacturing jobs in the state due to low cost gas, suggests the serious concerns it had.

“That no signoff has been received on the completion of the Independent Scientific Panel process denies Carbon Energy the opportunity to commercialise its technology in other jurisdictions with different UCG policies, and is hopefully an administrative matter to be quickly rectified.”

Linc Energy

Linc was recently committed for trial in the District Court on five counts of wilfully and unlawfully causing serious environmental harm.

It is the largest and most expensive case ever handled by the Queensland Department of Environment and Heritage Protection, and has been partially responsible for new chain of responsibility laws will provide new powers to require that contaminated sites must be cleaned up

The Singapore-listed Linc relinquished control of its Australian business to PPB Advisory as voluntary administrators on Friday, in a move green groups said was taken to avoid facing the damage caused by its experimental plant at Chinchilla

Linc faces up to $56 million in fines over the Chinchilla contamination, although the company has denied all the claims, saying the evidence against it is “circumstantial”

“We want to see Linc Energy and their former Chair Peter Bond held accountable for the far-reaching impacts of underground coal gasification on farmland at Hopeland,” Hutton said.

“We are calling on the Queensland government to act urgently so that they do not escape their responsibilities by going into liquidation.

“We want to see the Queensland governments proposed Chain of Responsibility Bill passed through Parliament this week, and applied to ensure that Peter Bond and others are required to cover the clean-up of the site and to pay any penalties that may arise from the court prosecution, as well as covering any remedies sought by affected landholders.”