In this final piece for November’s Focus on Energy, Mike Shipley from Derbyshire Speaks:
UCG, the Underground Coal Gamble
I heard something very interesting from a man who came to check my gas meter. He told me that the Government was not allowing new housing development to be connected up to the gas mains, because gas was in short supply. Yet Gideon Osbourn has said that 30 new gas fired power stations are to be built in the UK.
So what does Gideon know that he’s not yet telling the house builders? We suspect that fracking is not going to be the gas bonanza that the industry is hyping it up to be. With it unproven in the UK, building our energy future on frack-gas would be reckless even by the standards of the ConDem Coalition. But, gambler Osbourn holds two cards in his hand, and at least one of them he believes is trumps.
This second card is Underground Coal Gasification, UCG. An unproven technology designed to use proven reserves. Britain’s wealth was built on coal and some believe that King Coal is about to come back from the dead and endow great riches for a select few. All private wealth, most of which will head off shore so as not to bother the tax man too much.
The Government is currently issuing licences for UCG to private companies. That is, they are handing over a national resource to private developers with no discussion as to whether this is in our collective interest. These are described as ‘Conditional Licences’, and are available on application for a very modest fee. The companies that are taking the licences are mostly overseas registered and have no prior experience in UCG. Indeed experience with this technology is scant, most pilots to date have ended in either financial or technical failure.
UCG involves the partial combustion of coal where it lies, using high pressure steam and oxygen. A combustible mixture of methane and carbon monoxide and carbon dioxide known as syngas is then forced back to the surface for further processing. A joint EU project in Spain that the UK [under Labour] helped to finance exploded and was abandoned. An Australian venture suffered a similar fate and the Queensland Government put a moratorium on further developments. But, desperate to find the fuel for their gas powered energy future, the ConDems have flung the UK’s doors open to this unproven technology to be handled by inexperienced companies. Recipe for Disaster?
In terms of energy policy this is a disaster that we will have to pay for with rising bills and footing any insurance claims made against the bankrupted companies who will walk away from their failure. But in terms of wealth creation, it is set to be bonanza time. Development costs will be largely paid for by the tax payer. The new energy companies will be floated with glossy prospectuses and, having Government backing they will draw in high levels of venture capital, their executives and share holders – often the same people, getting huge bonuses and dividends. If the technology works and the UK’s coal reserves can be gasified, the potential revenue is huge, but this will not be used to build a sovereign fund, as Norway did with its North Sea oil, but will be used to enrich the already wealthy.
Is opposition to UCG just sour grapes because some people will get very rich? No, our opposition to it is because it is a fossil fuel that will accelerate Climate Change and leave a clean up legacy that we will all have to pay for. Paying lip service to the UK’s climate change commitments to reduce Carbon emissions, the Government is telling the companies involved, that they must capture the carbon dioxide produced. Carbon Capture and Storage [CCS] is another unproven technology and the UK’s only pilot project at Longannet in Scotland closed because no one was prepared to pay for it. So the industry won’t be expected to use what isn’t available, and anyway CCS is only expected if the gas is used to generate electricity. If the gas is used for other purposes, to make liquid fuels for examples, then CCS will not be required. Therefore UCG releasing carbon dioxide in the syngas and also when the syngas is burned. Its warming potential will end up being the same as burning the coal in power stations. It is not a clean technology, once again the Government is being deliberately misleading about the full impact of its energy strategy. It is failing to address Climate Change and failing to secure affordable energy for all. It’s real focus is on economic growth, at any cost, and private wealth creation.
Because of the high global value of liquid fuels and the growing uncertainty about oil reserves, the real plan for UCG gas is for liquid fuel. That is the big prize. Moreover, in the interests of profit, it will be sold on the open market to the highest bidder – and that will not be the average British subject. And if this is the outcome, where, we might ask, is Gideon going to get his gas from for his 30 power stations? Where we get it from now, on the open market, where prices will be for ever rising. This Government’s energy policy and its dash for gas builds in continual price rises for the domestic customer and does nothing to address fuel poverty.
Mr Osbourn is indeed a gambler. He is staking everything on getting the economy growing again. Growth is the only policy he has, and growth needs energy. He totally fails to realise that in a world of declining resources and changing climate, conventional growth fuelled by conventional fuels can no longer be sustained. We now live at a time of transition, forced upon us by our over exploitation of global resources in the name of growth and wealth creation. This Government is failing to acknowledge this fact and is recklessly gambling with our future by desperately throwing the last fossil fuel card onto the table. It may pay out for a minority, who will take the money and run, leaving the mess that they have created for us to clean up.
This blog was inspired by Mel Kelly’s article ‘Theft of Austerity Britain’s Coal’ published by frackingfreeireland.org. My thanks to Danni Saxton-Turtle for additional research
[Mike Shipley November 2013]