- Associated Press - Monday, March 24, 2014

CHEYENNE, Wyo. (AP) - A project that would produce gas by oxidizing an underground coal seam will be the subject of a state Department of Environmental Quality public hearing Wednesday in Wright that’s been scheduled at the behest of the U.S. Environmental Protection Agency.

An Australian company, Linc Energy, wants state and federal environmental regulators to reclassify 80 acres of the Fort Union Aquifer in order for the company’s coal gasification project near Wright to move ahead.

Linc proposes to pump air underground to oxidize 1,000-2,000 tons of coal. The process would produce “syngas” - made up of several gases including methane, hydrogen and carbon monoxide and carbon dioxide - for use as fuel or as part of industrial processes.

The project would tap the 24-to-30-foot-thick Wyodak coal seam 1,100 feet underground to produce up to 1 million cubic feet of syngas daily.

In order for the project to happen, however, the aquifer underlying the project zone would need to be reclassified from Class III, suitable for livestock, to Class V, a lower grade suitable only for mining and commercial uses.

The Wyoming Department of Environmental Quality supported the reclassification. Then in January, EPA officials told the state agency it needed to hold a public hearing and collect public comments on the proposal before the EPA would consider granting the change.

The hearing is set for 4-7 p.m. Wednesday at the public library in Wright.

Company officials didn’t return messages Monday seeking comment, but a group that successfully appealed the state Environmental Quality Council to review the project last fall said it remains opposed to the aquifer classification.

“We believe it would be illegal for DEQ to issue an aquifer exemption in this case, because the aquifer is good quality water that could be a future source of drinking water,” Shannon Anderson with the Powder River Basin Resource Council said Monday.

Department spokesman Keith Guille said by email the ultimate decision on the aquifer is up to the EPA, but the company has met all criteria for granting reclassification. Gov. Matt Mead spokesman Renny MacKay said the governor has met with Linc Energy officials and is following the project with interest, as it could add value to Wyoming’s coal.

Linc Energy has experimented with underground gasification in Australia but the project would be the first of its kind in Wyoming in several decades. The Lawrence Livermore National Laboratory experimented with underground coal gasification in the basin in three phases in 1976, 1977 and 1979. The Hoe Creek project gasified some 6,500 tons of coal.

Testing later revealed the project contaminated the site with substances including benzene, toluene and ethylbenzene, requiring more than $10 million to clean up.

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