Underground coal gasification (UCG): A new trend of supply-side economics of fossil fuels

China has a huge demand for energy. Under the present energy structure of rich coal, lean oil, less gas, limited and low-rising rate renewable energy, discussion focus is now on the high-efficient mining of coal as well as its clean-and-low-carbon use. In view of this, based on an analysis of the problems in the coal chemical industry and the present coal utilization ways such as Integrated Gasification Combined Cycle (IGCC), this paper proposes that underground coal gasification (UCG) technology is a realistic choice. By virtue of its advantages in many aspects such as safety & environment, integrated use of superior resources, economic feasibility, etc. this technology can serve as the front-end support and guarantee for coal chemical industry and IGCC. Under the present situation, the following proposals were presented to promote the development of this technology. First, R&D of technical products should be strengthened, a comprehensive feasibility study assessment system should be established, and the relevant criteria in the industry should be formulated. Second, precise market positioning of UCG products should be made with much concern on the integrated economic indicators of each product's complete flow scheme, following the principle of “Technical Feasibility First, Economic Optimization Followed”. Third, a perfect operation and management pattern should be established with strict control over high-efficient, environmentally-friendly, safe, harmonious & compact objectives in the whole industry chain. In conclusion, to realize the large-scale UCG commercial production will strongly promote the optimization and innovation of fossil fuels supply-side economics in China.