Scot-Govt. coal-gas moratorium triggers energy developer to scupper plan for up to 1,000 new jobs in Fife

Cluff Natural Resources shows the Company's Largo Bay Offshore Area, consisting of a licence area of 7,796 hectares.
Cluff Natural Resources shows the Company’s Largo Bay Offshore Area, consisting of a licence area of 7,796 hectares.

The plan to create around 1,000 new jobs in the Scottish energy sector has been scuppered after the company behind the scheme today announced a total halt to all spending on the development in Fife.

Cluff Natural Resources had planned to build the UK’s first deep offshore underground coal gasification (UCG) plant at Kincardine by accessing coal beds deep under the sea-bed in the Firth of Forth.

Instead, the company has now switched spending to developing UCG projects in northern England  – where the political climate is much less hostile than that in Scotland 

In Scotland, the SNP government last year imposed a moratorium on UCG energy projects, along with shale gas exploration.

UCG is a process which involves targeting ‘stranded’ coal reserves and converting it into gas in-situ. It offers the potential for the UK to unlock the energy potential of the vast amount of the country’s un-mined deep coal.

But even though Cluff Natural Resources believes the moratorium will be lifted next year – after the Scottish general election to Holyrood – the company today called a total halt to spending on its Kincardine coal-gasification project.

Chairman and Chief Executive Algy Cluff said: “Cluff Natural Resources has moved its primary focus from its underground coal gasification assets – in particular, the development of its Kincardine Project in Scotland – to developing its portfolio of five conventional oil and gas licences in the Southern North Sea.

“This was precipitated by the introduction of a moratorium on UCG in Scotland in October 2015 – despite previous assurances we had received from the Scottish Government. “

The moratorium will remain in place, pending a government study and public consultation, which is expected to conclude in spring 2017.

Cluff Natural Resources has a total of nine UCG licences in the UK, of which six are based in England and Wales – and are therefore not subject to the Scottish moratorium.

Cluff added: “While we are confident that the evidence in relation to UCG will result in the moratorium being lifted, we have stopped all expenditure related to the Kincardine Project and are now focussing our attention outside of Scotland – in particular in the North East of England – where  the political situation is more favourable with regards to UCG and where considerable support exists for investment in energy and industry with a view to regeneration.

“With no debt or major work commitments, Cluff Natural Resources is also in a comparatively strong position to take advantage of opportunities which may arise given the current challenging oil-price environment.

“So we were extremely pleased to be able to announce the completion of an independent assessment of the prospectivity of our portfolio of Southern North Sea licences which confirmed the excellent potential associated with previously acknowledged discoveries as well the significant upside that exists. “

In 1975, Algy Cluff was involved in the discovery of the Buchan oil field. It was one of the first discoveries made in the UK North Sea and is still producing to this day.

  • The coal-fired Longannet power station in Fife is due to close within weeks with the loss of more than 200 directly-employed staff. It is expected the economic fall-out of the closure will lead to another 800 supply-chain and support industry jobs in Fife this year.

See also: Scottish Energy News 21 Sept 2015

Independent report forecasts Scots-led 12,000 coal-gas jobs bonanza and £13 billion UK economic boost

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