An estimated 550 billion tons of federal coal remains unleased in the Powder River Basin straddling Wyoming and Montana - enough to match the nation's current annual appetite for the next 493 years, according to a federal report released this week.

If and how that titanic resource will be recovered remains a technical, economic and political challenge, however.

According to estimates based on U.S. Geological Survey figures, 95 percent of the resource is too deep to mine by conventional methods.

John Wold, chairman and CEO of GasTech Inc., said his company is seeking to establish underground coal gasification in the Powder River Basin.

"The need here in America is for development of technology to get that 95 percent. It's that simple," Wold said.

The Bureau of Land Management and two other Interior Department agencies recently completed an inventory of the Powder River Basin coal resource as directed in the Energy Policy Act of 2005. The document is intended to help inform the public and congressional members as they consider energy policy matters.

The report indicates that 89 percent of the coal is available for leasing under various restrictions, and 11 percent remains unavailable to leasing.

Not highlighted in the report is what methods can be used to recover Powder River Basin coal that resides deeper than 500 feet, a depth that some believe will test today's conventional strip mining industry.

Wold said GasTech expects to announce a partnership soon to launch a pilot project testing underground coal gasification. The process involves drilling into the coal seam to manipulate it, then pumping the refined product to the surface for electrical generation or the production of liquid fuels.

"In America we have 28 percent of the world's known coal resource," Wold said. "We have shown very little imagination at the government level or private enterprise level for bringing this huge opportunity to fruition."

Wold said underground coal gasification addresses safety concerns for both surface and underground mining. It's believed that conventional underground mining won't work in the Powder River Basin because geologic structures overlying the coal wouldn't sustain if the 80-foot-thick seam were mined.

Interior's reserve estimate of 550 billion tons of coal in the Powder River Basin does not include some 11.6 billion tons already under lease or nominated for lease for conventional strip mining. Some of those lease parcels target coal more than 400 feet down, according to the Wyoming BLM.

That means some mines in the Powder River Basin see the potential to mine coal at a 5 to 1 ratio, which means removing five units of overburden for every one unit of coal. So mine operators must come up with innovative ways to limit surface disturbance, which could prove a challenge.

In its 2003 "Coal Planning Estimates Report," Wyoming BLM estimated annual production could increase up to 646 million tons. That level of mining would triple the amount of surface disturbance recorded in 2003, when the industry mined 360 million tons.

According to the Western Organization of Resource Councils, economically recoverable and "leasable" reserves in the Powder River Basin are about 50 billion tons. At the current rate of production - 435 million tons annually - that's enough to last about 115 years.

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@casperstartribune.net.