The Scottish government's much-lauded fracking moratorium will allow highly controversial plans to exploit coal gas under the seabed near Scotland's coast to go ahead - despite ministers having powers to block the developments.
Ministers are now facing mounting pressure to close what is seen as a "gaping loophole" in the temporary ban imposed on new gas technologies last week. The ban covers fracking for shale gas in the central belt and mining for coalbed methane at Falkirk and Canonbie, but it excludes the related and equally disputed technology known as underground coal gasification (UCG).
Two private companies have advanced plans to gasify the coal that underlies large parts of the Firth of Forth and the Solway Firth. Between them they have five exploratory licences for the seabed off Musselburgh, Kincardine, Largo Bay, and in the middle of the two firths, plus an application pending for an area off Kirkcaldy (see table below).
One company, Cluff Natural Resources, founded by the multi-millionaire oil tycoon, Algy Cluff, is sending a consultant to have talks with Fife Council planners this week. The other, Five Quarter, is based in Newcastle and backed by an eight per cent investment from the UK's largest private landowner, the Duke of Buccleuch.
When the Energy Minister, Fergus Ewing MSP, announced the moratorium in the Scottish Parliament on Wednesday, he said that the Scottish government only had powers over onshore activities. "They do not apply to offshore activities such as those that I believe would be covered by UCG," he told MSPs.
But the government's Scottish Environment Protection Agency (Sepa) told the Sunday Herald that it would have to issue licences for UCG under at last two pollution control regimes. "It is likely that The Water Environment (Controlled Activities) (Scotland) Regulation and Pollution Prevention and Control (Scotland) Regulation 2012, amongst others, will apply," said Sepa's head of operations, Lin Bunten.
Sepa had met with the two companies, she said. "These were not part of any pre- application discussions, but to help us better understand the types of activities that this technology would entail and what regulatory controls may be required."
This has been seized upon by environmental groups and opposition politicians, who accuse Ewing of misleading parliament and the public. They point out that ministers could direct Sepa to refuse UCG consents, just as they did last week on fracking and coalbed methane consents.
"Failure to include underground coal gasification means theres a huge gaping loophole in the Scottish governments moratorium," said Lang Banks, director of WWF Scotland.
"Theres clearly going to be a role for Scottish regulators in the approval of these types of schemes, so it would be pretty simple for Scottish ministers to have effectively put a hold on them too. Failure to include UCG is bad news for people and the environment."
Gasifying undersea coal, which can involve heating it up or setting fire to it to help extract valuable gases, will emit damaging climate pollution, Banks argued. "In a worst case scenario, proposals such as this could even extend our use of fossil fuels, locking us into a high carbon world."
The Royal Society for the Protection of Birds (RSPB) pointed out that any onshore activities linked to UCG developments offshore would require planning permission from local authorities. Ministers could order councils to refuse applications during the moratorium, as they have done for fracking and coalbed methane applications.
"We are surprised that the Scottish government has excluded UCG, given many of the same concerns apply to this largely untested technology, like the risk of groundwater contamination," said Alexa Morrison, conservation policy officer with RSPB Scotland.
"We need to be very careful about these risks and make sure communities and our environment are protected, including internationally important wildlife in the Firth of Forth where plans to test UCG are currently being developed."
The Labour MSP for Mid-Scotland and Fife, Claire Baker, has written to Ewing demanding clarification on whether the moratorium covered UCG. Labour's proposed "triple-lock" system giving a veto to local communities with referendums would cover UCG developments, she said.
"The SNPs so-called moratorium turns out to be nothing of the sort," she declared. "Fergus Ewing has misled people in Fife. He has given a green light to UCG, yet he has the powers to halt it. He should use those powers."
Baker added: "Either the energy minister doesn't understand his own moratorium or he isn't willing to fully block unconventional gas. We cannot be left with a situation where UCG sneaks through the back door in Fife."
The position was confirmed by Fife Council's senior planning manager, Jim Birrell, who was aware of the UCG plans off the coast. "In addition to commercial licences, approvals are also required from other regulatory authorities such as the Coal Authority and Sepa," he said.
"We, as the local planning authority, would be responsible for granting planning permission for any onshore drilling operations and surface installations," he added. "We're due to meet next week with the planning consultant representing Cluff Natural Resources for a factual update."
The Coal Authority, which comes under the UK Department of Energy and Climate Change, disclosed that it had granted five conditional UCG licences to Cluff and Five Quarter, with a sixth pending. "A conditional licence enables a company to undertake works necessary to determine whether there is a viable project to take forward," said the authority's corporate manager, John Delaney.
"It does not enable a company to undertake UCG operations. UCG companies will need to obtain all necessary approvals from planning authorities and Sepa before a project could become operational."
The Scottish government did not deny that it had the powers to include UCG in the moratorium. "Many of the relevant powers remain with Westminster, though the technology has not been used commercially in Scotland," said a government spokesman.
"We will work with Sepa to ensure we have the appropriate controls and regulations to protect the environment. We have taken a careful, considered and evidence-based approach to unconventional oil and gas and fracking."
He added: "We will continue to take an evidence-based approach to the development of new energy technologies, which should give security and confidence to the people of Scotland that such resources would be developed in an environmentally safe and satisfactory way."
This is fiercely disputed, though, by Friends of the Earth Scotland. "The environmental and health concerns associated with fracking are very similar to those of UCG," said the environmental group's head of campaigns, Mary Church.
"The Forth and Solway firths are vital for tourism, nature and industry, so the last thing they need is a dodgy new energy process threatening widespread toxic pollution. It's not right that communities around the firths are faced with exposure to risks already ruled out in other areas."
GREEN CAMPAIGNERS ACCUSED OF BEING 'ANTI-EMPLOYMENT'
A leading figure in the coal gas industry has lambasted environmental campaigners for being against fossil fuels, against manufacturing and against employment.
Dr Harry Bradbury, chief executive of Five Quarter, one of the companies that wants to gasify coal under the seabed around Scotland, launched an angry attack on green activists. He also criticised the Scottish government for ignoring the advice of its own experts when it announced a moratorium on onshore gas developments last week.
"The very fact that the green lobby is in favour of expanding the moratorium is a clear indication of their anti-fossil fuel stance, which translates to being anti-manufacturing and anti-employment," Bradbury told the Sunday Herald. "We can all go back to sackcloth and ashes."
He compared environmental demands to extend the temporary ban on fracking and coalbed methane to include underground coal gasification (UCG) to the controversy over Andy Murray's fianc'e, Kim Sears, swearing during a tennis match in Australia. If you were upset about that, he suggested, by the same logic you would ban all ball sports.
It was "simple-minded" for environmental groups to argue in favour of renewable energy sources like wind and solar instead, he argued. They could only provide electricity, which accounted for just 18 per cent of the UK's energy needs. "We need gas, and we need renewables," he said.
Bradbury, whose company has three exploratory licences for UCG in the Forth and Solway firths, stressed that it was a completely different process from fracking. Called "deep gas winning", it used sophisticated chemical engineering and pyrolysis to flush out gases like methane, carbon monoxide and hydrogen trapped in rocks.
He expressed concern about the impact of the Scottish government's moratorium on employment at Grangemouth."They are flying in the face of all the expert advice they themselves asked for," he said. "It's a complete nonsense".
Dr Stuart McIntyre, an energy and economics lecturer at Strathclyde Business School, pointed out that the commercial development of UCG depended on making carbon capture and storage work. "Progress in this area has been very slow," he said.
"Until we have carbon capture working at industrial scale, we wont be able to exploit UCG at any kind of significant scale for electricity generation. So while licenses have been granted for UCG exploration, that doesn't mean that extraction activity is actually taking place."
McIntyre contended, though, that new, affordable sources of gas were needed. "If we cannot develop new domestic sources of gas supply, we will become even more dependent upon imports of gas from abroad, raising energy security concerns," he said.
"If we are serious about minimising the environmental impact of fossil fuel extraction, we ought to be taking a truly global perspective. We should compare the environmental impact of domestic extraction to the environmental impact of importing our fossil fuel needs from abroad."
When approached by the Sunday Herald, Cluff Natural Resources initially promised to comment, but then declined to say anything. In November it said there was an estimated 335 million tonnes of coal under the 3,687 hectares of seabed it is exploring off Kincardine.
In January, it announced it had hired planning consultants to progress the project, and would be seeking planning consent. "The project will comply with all relevant planning, permitting and environmental protection legislation," the company said.
EXPLORATORY LICENCES FOR OFFSHORE UNDERGROUND COAL GASIFICATIOn
Company / location / status
Cluff Natural Resources / off Frances, Kirkcaldy, Firth of Forth / application
Cluff Natural Resources / off Kincardine, Firth of Forth / granted
Cluff Natural Resources / Largo Bay, Firth of Forth / granted
Five Quarter Energy / central Firth of Forth / granted
Five Quarter Energy / off Musselburgh, Firth of Forth / granted
Five Quarter Energy / Solway Firth / granted
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