Synthetic gas producer Carbon Energy Ltd (ASX: CNX) said on Thursday that the emerging underground coal gasification (UCG) technology should not be dismissed outright in the wake of a failed UCG project in Queensland ordered shut down by the state government this month amidst cases of water contamination on the Kingaroy site.

Carbon said that its UCG project at Kogan in Queensland's Darling Downs should not be judged in terms of Cougar Energy's apparent failure on its own processing site, as the company expressed confidence that the technology being employed on the Kogan project should ensure the creation of clean energy.

The company added that it is currently complying with state government's directive of undertaking environmental evaluation on its site following the scare created by the Cougar water contamination and so far, managing director Andrew Dash said that no problems have been identified on the Kogan site.

Mr Dash said that Carbon is using different processes and procedures, which the company deemed as a step advanced from models anywhere in the world, stressing that "we have very sophisticated modelling tools and processes for making sure that we extract the energy efficiently and in an environmentally responsible manner."

He said that the company so far has proven that it is implementing a quite efficient and environmentally sound operation as backed by the information that they have compiled and provided to the state government, which is "entirely consistent with what we would expect for an operation of this kind."