By BEN NEARYCHEYENNE, Wyo. (AP) a¿¿ A state review panel opened a hearing Thursday on an environmental group's challenge of an application from an Australian company that wants to turn coal into gas at an underground site in northeastern Wyoming. The Wyoming Environmental Quality Council hearing is considering an application from Linc Energy to allow it to open a test facility at a site about 8 miles northwest of the town of Wright. The company intends to pump air into an underground coal seam to feed an oxidation process that will generate gas. The Powder Basin Resource Council is protesting, saying the process threatens to pollute groundwater. The Sierra Club and Wyoming Outdoor Council also have filed objections. Don Fischer with the Wyoming Department of Environmental Quality testified Thursday that the aquifer in the vicinity of the mine site isn't a source of drinking water. While Fischer said the water quality in the area of the test site is good, he said the agency proposes to grant Linc Energy permission to disturb only a small portion of it. He said the entire test site covers about 80 acres at a depth of about 1,100 feet. Mark Rogaczewski, a DEQ district supervisor, said the company intends to flare off the gas produced at the site. He said the company regards the operation as a test, adding it will be much smaller than a full-fledged production facility. Shannon Anderson, a lawyer for the Powder River Basin Resource Council, told the council in her opening statement that DEQ has proceeded with approving a license for Linc Energy, "in spite of the unproven nature of underground coal gasification and the many questions and concerns that exist." Anderson said during a recess in the hearing that she expects it will last at least through Friday. She said the project promises to affect water in the Fort Union Aquifer, which supplies water to Gillette and Sheridan.
Anderson said she believes Linc Energy will seek to develop other similar projects on a commercial level if it's successful with the test plant.Spokesmen for Linc Energy declined comment, saying they didn't want to discuss the project while the hearing was ongoing. The company has developed coal gasification plants in Australia. Linc Energy has stated on its website that the underground coal gasification technique promises cleaner and less expensive energy than importing foreign oil. The process involves pumping air into coal seams where oxidation produces sp-called synthesis gas. The gas can be used as fuel or for industrial processes.