Luca Tech feeds coal-eating microbes to make gas

Rather than drill more holes to get natural gas, Luca Technologies wants "grow" more gas in existing wells.

The Golden, Colo.-based company has developed a process to generate and then extract more natural gas from depleted coalbed methane wells by injecting water, microbes, and nutrients into the coal seams.

The company is now pursuing permitting in Wyoming's Powder River Basin to expand pilot testing of its technology, said CEO Robert Pfeiffer. He anticipates that Luca will get permits for larger-scale pilot projects of "restoring" existing wells in the next four to six months, he said.

Luca, which is one of many start-up companies pursuing technologies to make fossil fuels cleaner, has acquired 1,350 coalbed methane wells, which have been sold by their original owners because they are no longer productive enough.

The company's technology stimulates a natural process in which bacteria underground digest coal and make methane, the main ingredient of natural gas. Luca pulls up the water from existing wells and injects microbes and nutrients, which gets the bacteria to "eat" more coal and produce methane.

"It's almost like fertilizing the lawn. We're helping the biogenic natural gas process," said Pfeiffer. "The whole basin is already made by this same microbial life we are working with today."

The potential of tapping this stranded natural gas in coalbed methane wells is significant, according to Luca, which raised $76 million in equity in late 2008.

"Farming" natural gas from used wells in the Powder River Basin in Wyoming and Montana alone could produce more gas than the annual consumption in the U.S., said Pfeiffer. Microbes have converted one-hundredth of 1 percent of the coal into methane in existing wells. Luca has reached 3 percent conversion in its labs, which would not happen in actual wells but it reflects the potential of the process, Pfeiffer said.

Alternative coal technology
In the quest to find cleaner and domestic sources of energy, natural gas has many supporters in the U.S. It burns much cleaner than coal, in terms of carbon dioxide and other air pollutants, and the U.S. has large supplies underground.

But there are growing concerns over the environmental impact from tapping the natural gas stored in shale rock. New York state earlier this week approved a temporary moratorium on one type of natural gas drilling in shale, which involves a process called hydraulic fracturing, or fracking.

Luca's process, developed by biotech engineers and oil and gas industry professionals, has nothing to do with fracking and, the company says, is environmentally benign. The microbes it uses are naturally occurring, as are the nutrients and minerals it adds to stimulate methane production.

But the company has hit hitches in its efforts to expand, based on concerns over the potential impact to the fresh-water aquifer in the Powder River Basin, one of the world's most productive coal reserves.

Local conservation groups and landowners opposed Luca's plans to develop more wells in Wyoming, and Luca recently changed its tactics in seeking permits. Instead of working through the state oil and gas commission, it is now working through the federal Environmental Protection Agency and state environmental agencies, said Pfeiffer.

"We are inventing a new industry and we need to invent new regulations. We want to be very careful that water use and microbes are safe to habitat and lifestock or irrigation," he said.

Through the permitting process, Luca plans to disclose the nutrients and concentrations it uses at its existing wells. (A list of Luca's "microbial stimulation ingredients" can be found here.)

Outsiders who have commented on Luca's process have called it promising but it's unclear whether the technique can be done cost-effectively. Pfeiffer said that the company is not yet profitable because it is still investing in its process but individual well projects are profitable through sales of gas into pipelines.

In addition to patenting its process, Luca Technologies has sought to purchase drilling rights for land in the U.S, both in Wyoming and Alabama. "We have quite a large block of wells that controls a rather large resource of coal in the ground with well bores and infrastructure...to move natural gas," Pfeiffer said.