Gas extraction ‘could bring £6bn to Scots economy’

Controversial plans to extract gas from below large swathes of Scotland could be worth almost £6 billion to the economy and create almost 5,000 jobs, a new report has found.

There are plans for a first offshore project at Kincardine. Picture: Creative Commons

Scotland would benefit from being “first mover” in the field of Underground Coal Gasification (UCG), according to a report commissioned by Cluff Natural Resources which wants to develop the first offshore project at Kincardine, near Fife.

But the move has come under fire from environmental campaigners who say the technique has a “disastrous” track record and branded the report “fantasy economics”.

The report, which was compiled by Biggar Economics, finds that converting underground coal into gas could generate £12.8 billion for the UK economy, with about 45 per cent being retained in Scotland.

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Almost 12,000 direct and indirect jobs would be created, with thousands more supported in the chemicals industry. Nearly 5,000 of these jobs would be in Scotland and more than 1,000 in the Firth of Forth area, the report said.

Algy Cluff, Cluff Natural Resource’s chief executive and chairman, said: “The findings of this report highlight the huge potential of the development of a UCG industry in Scotland and the UK.

“UCG has a vital role to play in the diversification of the UK’s energy mix and security, and this report demonstrates how the development of UCG would create significant benefits for both the Scottish and wider UK economy.” An initial project at Kincardine could contribute about £603 million extra to the UK economy, 71 per cent of which could be retained in Scotland, providing up to 830 jobs in its creation and supporting about 350 jobs over a 30-year lifetime, according to the report.

Other UK UCG projects could generate £5.6 billion extra for the UK economy and support an average of 3,300 jobs, peaking at 6,100, with 40 per cent retained in Scotland.

Report author Graeme Blackett, of Biggar Economics, 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.

“There are major advantages in being the first movers in this technology, and becoming a world leader.”

The process sees coal drilled and mixed with oxygen to produce a fuel-gas mixture called syngas, or synthesis gas, which can be used to power boilers and turbines and is supplied to petrochemical, steel and chemicals industries.

The Scottish Government has currently imposed a moratorium on fracking while investigations are carried out to assess its safety. Fracking involves drilling down into the earth before a high-pressure water mixture is directed at the rock to release the gas inside.

Now grassroots activists in the SNP have formed a group to demand the moratorium on fracking be extended to UCG.

Dr Richard Dixon, director of Friends of the Earth Scotland, said: “Cluff is playing fantasy economics with these figures. UCG has a disastrous record wherever it has been tried and doing it underwater adds a new danger to something already wildly experimental.

“The Forth is valuable to people and wildlife - risking UCG beneath it just isn’t worth it.”