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Minister hints at easing of moratorium

Ewing extends fracking ban to other gas extraction plans

Fergus EwingThe Scottish government has delivered another blow to supporters of unconventional gas by extending its moratorium on fracking to underground coal gasification.

UCG – a process which extracts gas from coal without the use of fracking – will give the government more time to consider the potential impact of the technology, according to energy minister Fergus Ewing.

Mr Ewing, however, seemed to keep the door open to allowing UCG by saying the government should “never close our minds” to new energy technologies.

Consultation will continue through to spring 2017 but any planned projects will be hit by the ban.

The temporary prohibition will be a blow to Cluff Natural Resources which has been working with Haliburton on UCG projects in the Forth of Firth. It was hoped that because the original ban applied to onshore projects anything retreived from under the Forth would be excluded.

Cluff recently produced independent research which suggested thousands of jobs and £12.8 billion could be added to the UK economy by developing a UCG industry.

The study by independent economic consultancy Biggar Economics said it would provide 1,000 jobs in the Firth of Forth area, where the Longannet coal-fired power station is due to close, and 5,000 in total across Scotland.

Graeme Blackett of Biggar Economics, author of the report, said: “Scotland is a hydrocarbon and energy-rich country, and this could be an important new industry on a UK- wide basis, supporting many thousands of sustainable jobs.”

UCG is seen a means of fuelling a new generation of gas-fired power stations and that the gas could be used as a feedstockfor the chemical industry, including the Grangemouth complex.

But the Scottish government wants more research and is consulting widely on the issue. In today’s statement Mr Ewing said: “Ministers have held meetings with representatives of environmental non-governmental organisations, community groups, industry bodies and local government.

“Those meetings have helped us to prepare for the research and public consultation processes. As a result, we have planned a robust and thorough research process and a wide-ranging and participative consultation process.

“The public will understandably wish to study the outcome of the research process and thus the public consultation will not begin until the findings of the research process have been published.

“Scotland’s moratorium into onshore unconventional oil and gas extraction was welcomed by both environmental campaigners and industry representatives. It will remain in place as the research and public consultation is undertaken.

“We should never close our minds to the potential opportunities for Scotland from new energy technologies – but we must also ensure that community, environmental and health concerns are all fully taken account of.

“The research we propose in this timetable will give all interested stakeholders important information to allow a more informed debate during the public consultation.”

Algy CluffAlgy Cluff, executive chairman and chief executive of Cluff Natural Resources, said: “There has been a prolonged period of political uncertainty around the Scottish Government’s position on UCG. Both next week’s SNP conference and next May’s Holyrood election have clearly played their part in creating this difficult political climate.

“As a consequence, in our interim statement to shareholders in August, we announced our intention to hold further investment until the picture was clearer. Now that we have a degree of clarity, we will make decisions about the future priorities for Cluff Natural Resources.

“We have to date made significant investment in the UCG project at the Firth of Forth, and believe the benefits the UCG process would bring to Scotland in terms of jobs, economic value and energy security are too great to be missed.

“It would also help address our looming energy gap – when Longannet closes next March it will take with it the capacity to generate more than three quarters of the electricity required by Scotland.

“We will work with Professor Campbell Gemmell, who has been appointed to lead the Scottish Government’s examination of the issues and evidence surrounding UCG.

“Given that the UK Government carried out a decade’s worth of research into the viability of UCG between 1999 and 2009, at considerable cost to the taxpayer, the evidence base for proceeding with the process already exists.

“The evolutionary development of UCG from its initial deployment in the 1930s clearly shows that appropriate site selection, design and operational controls result in an operation where the environmental risks are fully mitigated.”

‘We would urge the Scottish Government to reach a positive conclusion on the potential of UCG as quickly as possible, allowing Scotland to become a world leader in this exciting and lucrative area.’

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