The stock-market listed company which owns licences for underground coal gasification (UCG) off Fife in the Forth Estuary has abandoned its full environmental risk assessment – including a public health risk assessment – and has now postponed its forthcoming planning application.
Cluff Natural Resources said in its interim results statement that a high level of political and planning risk – including grassroots SNP opposition – meant that it would now postpone this work.
Chairman Algy Cluff said; “While we continue to work with regulators and Halliburton on the technical aspects of the demonstrator project there are a number of external factors, including the on-going commission recently set up by the Scottish Government to review Scotland’s energy needs which is due to report in September 2015, a motion at the SNP Party Conference calling for the inclusion of UCG in its moratorium on onshore oil and gas and the Scottish Parliamentary Elections in May 2016, which have the ability to impact the development of the Kincardine Project.
“Accordingly we have deemed it prudent to await clarity on these matters before committing fully to, in particular, the expense of an Environmental Impact Study. As a result, work on a planning application will likely be postponed until after such time as the political situation is more certain.
“Preparatory work including site selection studies, modelling and design work are however well underway.
“Notwithstanding the above, we have been very active through our Chief Operating Officer, Andrew Nunn, in preparing the ground for the submission of a planning application in the Firth of Forth at our Kincardine licence which involves coordination and discussion with the various official bodies which direct such matters.
“I believe this has resulted in a much better understanding of UCG at local and national levels. It remains, therefore, our avowed intention to seek approval to install a pilot plant as soon as is practicable to generate limited production from the Firth of Forth before constructing Britain’s first UCG plant.”
The gasification of coal produces Syngas which a mixture of combustible gases composed mainly hydrogen, carbon monoxide, methane and carbon dioxide.
It can be fired directly with air in boilers to raise steam for power generation, used in combined cycle gas turbines (CCGT) or supplied to the petrochemical, steel or chemicals industry for the manufacturer of plastics, liquid fuels and fertilisers. Syngas can also be decarbonised, partially of completely, for UCG-CCS to be an effective low carbon solution to power generation.
Cluff’s Kincardine licence is located adjacent to the major petrochemical complex at Grangemouth, the Longannet coal-fired power station and a number of other energy-intensive industries – all of which could benefit from a new low cost source of fuel gas and petrochemical feedstock.
Cluff added: “The development of UCG in the Kincardine licence area would result in the creation of new jobs, help protect existing industry as well as create significant supply chain benefits.
“The emerging UCG industry has a significant role to play in unlocking the UK’s most abundant indigenous energy resource which, with the imminent closure of the last deep coal mines, is now otherwise effectively beyond reach.
“The deep offshore UCG projects being undertaken by CNR have significant environmental, safety, and when combined with carbon capture and storage, climate change benefits compared with coal mining and coal-fired power generation. We believe that UCG will help provide a cleaner energy, diversity of supply and energy security for the UK.”
However, a spokeswoman for Friends of the Earth Scotland commented: “Cluff’s change of mind is testament to the huge level of organised opposition to unconventional gas within the local communities around the Firth of Forth.
“Underground Coal Gasification is a highly risky technology that has caused widespread environmental damage in test projects around the world. The SNP conference is clearly heading for a very lively debate.
“With the threat of an imminent planning application in the Forth now lifted, it is certainly time for the Scottish Government to put a moratorium on this experimental technology so that the full health and environmental impacts can be assessed.
“Communities around the Solway Firth are also facing the possibility of Underground Coal Gasification from the company Five Quarter. They should be given the same safeguards as communities facing coal-bed methane extraction and fracking have been with the moratorium.“
However, Algy Cluff added: “Certain correspondence recently obtained under the Freedom of Information Act between myself and the Scottish Government make it manifestly clear that, as we see it, the interest of Scotland and of the development of UCG are synonymous. Indeed the same argument applies to the whole of the United Kingdom as our coal fired power stations are taxed into oblivion without any coherent policy being in place to bridge the disturbing gap between sufficiency and calamity.
In the six months to 30 June 2015 Cluff Natural Resources reported a loss for the period of £744,668 compared with a loss of £809,052 for the six months to 30 June 2014.
This reduction in expenditure reflects steps the company has taken to reduce its overheads, despite an increased level of activity across the business following the award of the company’s southern North Sea licences at the end of 2014.