A new company called Laurus Energy claims it has found the cheapest way to deliver clean power in North America. The company is using underground coal gasification which accesses coal that lies farther underground than the 100-meter-or-less depth that conventional coal mining technology can access. Laurus can use a technique of drawing gas from the coal in a way that is cleaner than natural gas.

“This is lowest cost, cleanest power source in North America,” says Erik Straser, partner at Mohr Davidow Ventures, who led the $9 million investment into company.

Laurus owns exclusive rights to the technology for use in North America. So far the technology has been used by government energy agencies in countries in South Africa and Uzbekistan. Ergo Exergy is the company that owns the technology and licenses it out to different global operators. It was founded by Michael Blinderman, who also co-founded Laurus. Simon Maev is another co-founder at Laurus.

The process involves drilling holes in coal deposits, and sucking gas up through those holes and across a distance of up to several football fields. Once the gas reaches the surface, the carbon dioxide (CO2) is siphoned off, and sold to oil recovery companies wanting it for their own processes. The rest of the gas, which has significant doses of methane and hydrogen, goes to fuel a power plant. Cleaner than natural gas. and much cheaper because the process avoids spending the hundreds of millions of dollars on a gasifier, you can see a demo of the process here.

Laurus’ power will be about 75 percent cheaper than the lowest cost solar alternatives, and about half as expensive as natural gas, Straser says.

The company has hired Rebecca McDonald, an energy executive who ran large divisions of Houston’s BHP Billiton Petroleum as chief executive. Straser, who sits on the board of Laurus, said he wanted to announce the company’s CEO before talking about Laurus publicly. His firm, Mohr Davidow Ventures, invested in April.

To be clear the process still exploits a non-renewable source of energy and will not reach full production until 2011. However, it does exploit coal seams that are between 200 and 1,500 meters below the ground which is reportedly impossible to mine.