In a grassy clearing, well-heads, buildings and pipelines cover a few acres. On the other side of the world, hundreds of acres of earth are upended by draglines and transported by huge dump trucks. Despite the contrast, both sites are accomplishing almost the same thing.

At the first site, an underground coal gasification project in Australia, coal is burned in place and the resulting gas used to generate electricity or converted into diesel. The other site is a coal mine in the Powder River Basin of Wyoming and Montana — a region that could soon see more operations like the Australian one.

Underground coal gasification (UCG) is one of a handful of techniques being tested across the West to make coal — the cheapest, most plentiful fuel around — more palatable to a carbon-constrained world. Researchers are also trying to capture and sequester carbon from conventional coal plants, and to gasify coal in power plants and then capture the carbon. But these techniques cost considerably more, UCG proponents say.

Environmentalists approach the technology with a mix of pragmatism and wariness. A recent Clean Air Task Force report called UCG a "promising technology" with "potential advantages" that warrant large-scale federal investment. But other groups are skeptical. Shannon Anderson of the Powder River Basin Resources Council says, "We want to be sure our folks and their water supplies are protected."

The Soviets first developed underground coal gasification during the 1930s, and the process has been used commercially in Uzbekistan for decades. In the late '70s and '80s, the U.S. conducted 33 pilot projects in Wyoming, Washington and other states. But a couple of them contaminated groundwater, and after energy prices dropped in 1986, the government pulled funding.

A few years ago, though, the Department of Energy's Lawrence Livermore National Lab reinvigorated its UCG research program. Today, it's providing technical expertise to Cook Inlet Region Inc., which hopes to complete a UCG facility and power plant in southeast Alaska by 2014. In Wyoming, Australia-based Linc Energy and Casper company GasTech Inc. are working on a pilot project that could produce gas within two years.

Most of the massive coal reserves on Western federal land lie more than 500 feet belowground, too deep for traditional mining. UCG works at depths of up to 2,000 feet, and a 1999 U.S. Geological Survey study estimates that it could reach 60 percent of some 510 billion tons of coal remaining in the Powder River Basin.

In the basic UCG process, two wells are drilled into a water-saturated coal seam. One injects air, the other recovers the gas produced; a horizontal shaft connects the wells. The coal seam is then ignited; as it burns along the shaft, it produces a gas primarily composed of hydrogen, carbon monoxide and methane. At the surface, the gas is piped to a refinery, then processed into natural gas or liquid fuel.

UCG avoids most of the surface impacts of mining. In most cases, no external water source is needed, and about half the sulfur, mercury, arsenic, tar and ash released by burning coal stay underground. Conventional coal power plants release all of those pollutants, either into the air or as aboveground waste.

The carbon dioxide given off by underground coal burning is cheaper to capture than that emitted by surface burning, because it comes to the surface under pressure and thus needs less additional pressurization to liquefy it. The liquid carbon dioxide can be used in oil fields to increase production, or, if and when large-scale carbon storage is proven, it can be stashed underground.

When carbon dioxide is separated out before the gas is burned in a power plant, total emissions are about 25 percent lower than from a typical natural gas power plant. With carbon capture, UCG "opens the possibility for the cleanest possible coal," says Julio Friedmann, director of Lawrence Livermore's carbon management program.

Some environmentalists are leery, though. "We understand folks want to get at these huge underground seams that can't be mined now," says Anderson. "But we think the history (of the projects) speaks for itself." The process could contaminate aquifers with toxic substances like phenol and benzene, cause uncontrollable underground fires in coal seams, and result in land collapsing into the cavities left behind, she says.

These problems can all be avoided, says John Wold, GasTech's president, if the coal seam has a geologic "roof" that isolates it from other aquifers, and is kept at a pressure lower than that of the surrounding material, so that gases are drawn in rather than dissipating out. There's no risk of runaway fires, according to Friedmann, because when you quit pumping air into the burning coal, water rushes in. Subsidence can be controlled by leaving some coal in place to support the earth above.

The capital costs of building an underground-gasification facility are 25 percent lower and its operating costs 50 percent lower than those of another "clean coal" technology, the integrated gasification combined cycle plant, in which coal is processed in a separate gasifier. And retrofitting an existing coal-fired plant for carbon capture significantly reduces efficiency and increases electricity cost. UCG is also cheaper because the coal doesn't have to be mined and shipped. However, UCG will never be able to compete with low-cost natural gas, says Friedmann. But if natural gas prices stay over $3 or $4 per million BTU, he says, interest in UCG will surge: "It's a very important technology for the U.S."

And potentially for the whole planet. Although significant research, training and investment are needed before UCG could be deployed widely, India and China are developing their coal resources at full tilt. "(Those countries) are very reluctant to spend extra money on controlling carbon," says John Thompson, director of the Clean Air Task Force's coal transition project. "But you could get electricity from UCG with full carbon capture and sequestration at the same price as from an uncontrolled new coal plant. That's a game-changer."

For more information:

Clean Air Task Force report: Coal without carbon: an investment plan for federal action (PDF)

Lawrence Livermore National Laboratories:  Fire in the Hole: Underground coal gasification may provide a secure energy supply and reduce greenhouse gas emissions (PDF)