Turning underground coal into gas could generate some £13bn for the UK economy, according to a report compiled on behalf of a firm looking to build the UK’s first offshore underground gasification plant in Scotland.
The assessment by economic consultancy Biggar Economics suggested the project proposed by Cluff Natural Resources (CNR) to be possibly built near Kindcardine, Fife, would deliver some 830 jobs in the construction phase and support about 350 jobs over its 30-year lifespan.
The project itself could contribute about £603m extra to the UK economy, the report suggested, 71 per cent of which could be retained in Scotland.
Overall, the report said 11,900 direct and indirect jobs could be created if the coal gasification technology is given a go-ahead with thousands of additional jobs in the wider chemical industry benefiting from the developments. Almost 5,000 of these jobs would be located in Scotland.
"The findings of this report highlight the huge potential of the development of a UCG industry in Scotland and the UK,” said Algy Cluff, CNR chief executive and chairman.
"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."
Other UK UCG projects could generate £5.6bn extra for the UK economy and support an average of 3,300 jobs, peaking at 6,100, with 40 per cent retained in Scotland.
"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,” said Graeme Blackett, of Biggar Economics, the author of the report.
"Subject to the robust planning and regulatory processes that we rightly have, there are major advantages in being the first movers in this technology and becoming a world leader."
The technology, however, faces opposition from environmental campaigners including WWF Scotland, the Scottish Greens and an SNP faction which has united under the name Smaug (SNP Members Against Unconventional Gas) to convince the Scottish Government to extend its moratorium on fracking to encompass UCG.
"In a worst-case scenario, Cluff's proposals could even extend our use of fossil fuels, locking us into a high-carbon world," said WWF Scotland director Lang Banks explaining the organisation’s stance which considers fossil fuel schemes such as UCG a distraction from efforts to develop clean renewable energy.
The Scottish Government has been working with the Scottish Environment Protection Agency and other regulators to assess the technology and has been criticised by Scottish Conservative energy spokesman Murdo Fraser for "’dragging its feet on this issue’.
"It needs to recognise the benefit, particularly for communities in central Scotland which will be suffering with the closure of Longannet power station," he said