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UK regulator’s role in CBM and UCG operations unclear

World Coal,

The new UK oil and gas regulator, the Oil and Gas Authority, which has been created following a review of the sector by businessman Sir Ian Wood, will have powers over onshore activities, including shale gas. However, it remains unclear what its remit will be in regards to other unconventional sources of fuel, such as underground coal gasification (UCG) and coalbed methane (CBM).

CBM has been trumpeted by Dart Energy, which is currently awaiting on a decision on its appeal to extract CBM from a site in Scotland, while also planning a number of CBM projects throughout the UK.

UCG, meanwhile, has been held up by Aim-listed Cluff Natural Resources as a potentially vital source of energy for the whole of the UK.

The company has a number of licenses to extract gas from coal deposits under the North Sea and Firth of Forth. It is also hoping to drill its first well within the next year, subject to planning permission.

“This has never been done before offshore and it would have considerable implications for this country,” Cluff Natural Resources boss, Algy Cluff, said, adding that the firm was in talks with refineries over potential supply deals.

It seems likely that the new regulator’s powers will cover licensing, rather than environmental issues. However, what role it might play in future licensing rounds for UCG and CBM permits and licenses has not been disclosed, or indeed clearly addressed.

“The government agrees that the new Oil and Gas Authority’s remit should extend to onshore and we will consider this in more detail with the onshore industry, focusing on how the new authority should deal with the exploration and subsequent production phases of new unconventional – principally shale – resources,” said a spokesperson from the Department of Energy and Climate Change.

Experts have suggested that a number of companies that may be interested in developing UCG or CBM projects in the UK are currently monitoring legislation and developments in the unconventional resources sector. Much attention has been paid to the outcome of a public inquiry into Dart Energy’s proposed coalbed methane (CBM) development at Airth, near Falkirk.

The Oil and Gas Authority is set to be headquartered in Aberdeen, Scotland. 

Written by Sam Dodson

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