Australia: Secret to cheap petrol is coal

A $5 billion proposal to turn some of Victoria’s abundant brown coal into diesel moved a step closer after the State Government revealed it was about to grant a mining licence to the company behind the project.

Energy Minister Theo Theophanous told The Sunday Age that the project aimed to produce about 60,000 barrels a day of high-quality diesel fuel at a much lower cost than present world prices.
The entire project should be operational in 10 years.

The project has the backing of Shell and the big mining company Anglo American.

A key aspect of the project, promoted as “clean energy”, would be the minimising of greenhouse gas emissions by separating the carbon dioxide from the brown coal and storing it underground — a project known as geosequestration.

About $1.5 billion of the $5 billion project would be spent on the geosequestration process, Mr Theophanous said.

The project would be one of the world’s biggest carbon dioxide capture and storage projects, with the gas stored deep underground in the offshore oil and gas fields in the Gippsland Basin.

The Age