CSG v. UCG - head to head - Linc Energy responds ...

Excerpt from Linc Energy media release:

7 August 2008

RESPONSE TO INACCURACIES IN THE AUSTRALIAN NEWSPAPER ARTICLE OF 7 AUGUST 2008

This announcement is in response to an article on page 19 of The Australian newspaper today in relation to Linc Energy Limited’s (ASX : LNC) ongoing Underground Coal Gasification (UCG) activities in Queensland.

The article contains a number of inaccurate statements concerning the status of Linc Energy’s discussions with the Queensland government regarding approval of its production tenures in the Surat Basin and environmental assessment.

So as to correct the public record, Linc Energy notes the following:

• The allegation (quoting an unnamed “spokeswoman” from Minister Wilson’s office) that there is a 3 year moratorium on the granting of UCG production tenures in Queensland is untrue.

• Linc Energy is continuing with the normal process for tenement approvals in relation to its planned commercial operation at Chinchilla.

• The Queensland government is fully aware of Linc Energy’s plans and, despite lobbying from the coal seam gas sector, has not mandated a moratorium on the granting of production tenures for UCG.

• Since the commencement of Linc Energy’s UCG trials at Chinchilla in 1998, the Company has been regularly supplying data, including groundwater monitoring data, to the Queensland government’s Environmental Protection Agency. In that time, Linc Energy can clearly show that not only does UCG not have a detrimental impact on groundwater, but that Coal Seam Gas
(CSG) production is coming up as the biggest groundwater issue of the Surat Basin (reference “Company Dilutes Truth” article – Chinchilla News & Murilla Advertiser 31 July 2008 and “Why Qld Farmers are Dam Worried – Queensland Country Life 31 July 2008).

• Linc Energy’s UCG and Gas to Liquids (GTL) project at Chinchilla was declared a project of State significance in 2007 and as such the Company has been voluntarily undertaking a comprehensive environmental impact statement process since that time. Whilst this process will provide additional information to the government, Linc Energy has never been required to undertake any “new demonstration trials” by the Environmental Protection Agency.

• To date, no coal seam gas producer has provided an environmental impact statement to the Queensland government so as to allow a detailed assessment of the environmental impact of their production process, particularly with respect to its effect on groundwater and surface
contamination.

• In terms of the reference to incompatible industries as in one industry must succeed at the expense of the other, this statement is also incorrect and inaccurate. For example, the Queensland Gas Corporation (QGC) are suggesting they are targeting 7255PJ of CSG for their future project/s. QGC also admit that Linc Energy’s main site in Chinchilla contains only
approximately 32PJ (on a 2P basis) of CSG. If the entire 32PJ was removed from that CSG total, the multi-billion dollar UCG industry Linc Energy is proposing would have a minimal effect of less than 0.5% on QGC alone. Yet in return, Linc Energy has the potential to create a minimum of approximately 210.000.000 barrels of oil (on the coal area that QGC admits to housing only
32PJ of CSM potential) over a 30 year period.

• Assertions of incompatibility between CSG and UCG are not accurate. As is the case between CSG and underground coal mining, the question is not one of incompatibility, but one of best use of resource.

• The article fails to make reference to any other of Linc Energy’s significant UCG activities in other parts of Australia or the world.

See - Linc energy media release.