Ukraine’s Energy Options

By Wolodymyr Derzko

Prime Minister Victor Yanukovych’s recent announcement that Ukraine plans to open a dozen new coal mines by 2010 flies in the face of the government’s commitment to Renewable Energy Sources (RES). Yanukovych’s announcement was criticized by conventional hydrocarbon energy critics and local renewable energy promoters for its short-sightedness in long-term energy planning.

Ukraine’s energy strategy, outlined in a document called the Energy Strategy of Ukraine until 2030 was released last March by Ukraine’s President and Minister of Fuel and Power. It pays lip service to “renewables.”  The document upholds the status quo of the energy portfolio, maintaining the power and influence of the nuclear, coal, gas and oil sectors. This is in stark contrast to the USA and EU, which are developing multi-decade strategies for weaning themselves from hydrocarbons. According to draft versions, the target use of RES in Ukraine is only about 5 per cent of Primary Energy Consumption (PEC) in 2010 and 17 per cent of PEC in 2030. Comparable Western targets are 11 per cent for 2010 and 45 per cent for 2030.

Recent scientific and technical discoveries however, have opened up new strategic options for Ukraine that energy policy-makers should seriously consider.  Ukraine used to be not only the “Bread Basket” but also the “Gas Well” for the former Soviet Union. It was the largest producer of natural gas until the 1970s with a capacity of several hundred gas wells, many of which were abandoned when the Soviet Union shifted its energy investments to Central Asia and the Yamal Peninsula. It became cheaper to buy Russian gas and oil than develop a domestic capacity, a tactic many consumers and industrialists now regret.

According to estimates, Ukraine is sitting on about 11-12 trillion cubic metres of coal-bed methane, or natural gas–at least three times the amount of natural gas in Turkmenistan, Ukraine’s current principal supplier, and four times Russia’s Shtokman gas field.  But, these fields are fragmented and costly to mine. Due to government neglect of the scientific field over three decades, Ukraine lacks the financial investments, technical skills and expertise to develop this latent capacity.

The Government estimates that three billion cubic metres of methane escape from its coal beds, annually, raising environmental concerns that Ukraine is a major contributor to greenhouse gas warming and climate change. The country ranks as one of the world’s top-10 emitters of methane. The technology and expertise exist in the West to address this waste.

In October 2006, Ukraine’s Government began negotiations to allow Moscow and Florida-based Itera Energy to develop a pilot project for extracting methane in Ukraine’s Donbas coal-mining region.  Itera Energy, a Cyprus holding company, has successfully extracted coal-bed methane in the United States. However, it has a checkered and questionable past. It plans to conduct geological tests in selected Ukrainian mines to determine how much gas is available and the feasibility of capturing it.

The other option is to leave the coal in the ground instead of mining it and turn it into a “renewable resource.” No, that’s not an oxymoron.

US researchers have recently discovered that coal-based methane is not simply a remnant of ancient microbial activity on decaying plants, as generally believed by geologists.  It is now proven that natural gas is produced in real-time through the ongoing activity of naturally occurring anaerobic microbes (bacteria that live in the absence of oxygen). It has been shown that radio-labelled CO2 (carbon dioxide) introduced to coal core samples is converted to radio-labelled methane. This demonstrates that methane formation is biogenic, the result of a biological process occurring today.

Scientists believe microbial conversion of hydrocarbon deposits (coals, organic shales or oil) to biogenic methane, under careful management, may offer a new long-term solution to global energy needs. Researchers at the US Department of Energy’s Brookhaven National Laboratory have been exploring the use of bacteria to increase methane recovery from coal beds and how to decontaminate water produced during the process. In laboratory tests, various strains of these microbes have been shown to absorb contaminant metals, degrade dissolved organics, and break down coal in a way that would release trapped methane. In the field, microbial mixtures could greatly improve the efficiency and lower the associated clean-up costs of coal-bed methane recovery.

Ukraine has an enormous amount of buried hydrocarbon reserves, most of which cannot be extracted in an economical or environmentally benign fashion with current technologies and production practices. With coal left it in the ground, given the right set of conditions and circumstances, Ukraine has the potential to produce biogenic methane in a long-term, sustainable approach with amounts to last many generations, instead of decades.

Wolodymyr Derzko works in strategic planning and emerging technologies. Visit his blog, The Smart Economy at http://smarteconomy.typepad.com for more details about energy options.