Chris Benfield
An electricity company is applying for a licence to turn coal into gas by setting fire to it underground, the Yorkshire Post can reveal.
And a planning application for what is being called "The Coalmine of the 21st Century" is being prepared for submission before the end of this year – provided there are some signs of Government support for the idea.
And there could well be, because the Department of Trade and Industry has read the same optimistic report about underground gasification as the electricity company.
The report says a £15m demonstration of underground coal gasification (UCG) could kick-start a new lease of life for British coal, as a source of cheap and clean energy for 100 years.
It says UCG would dovetail so well with plans for capturing carbon dioxide emissions – to stop them adding to global warming – that coal could become one of the most environmentally friendly fuels, instead of one of the dirtiest.
And the manufactured gas would be cheaper and cleaner than the natural gas we now import – a reversal of the situation which killed off "town gas" in the 1960s and 70s.
One big obstacle is public unease at the idea of starting underground fires, to break the coal down, and the report explores the idea of using seams under the sea in Scotland's Firth of Forth for a demonstration project. It says the experiment would be practical in both engineering and political terms.
There is coal under the Humber which could be accessed in a similar way – either using redundant oil rigs or by diagonal drilling from the shore.
But supporters of UCG hope that once the latest technology is shown to be as safe as they say, planning authorities will allow onshore extraction
The man who owns most of our remaining mines, Richard Budge, is sceptical about UCG. But he does believe gasification is the future. A new company he has set up with Russian partners, Powerfuel, will resume mining at Hatfield Colliery, South Yorkshire, next year, and gasify the coal on the surface, to fuel a new pit-head power station, from 2010 or 2011.
They will get a bit extra for their electricity because they will capture most of the CO2 which comes from fossil fuels.
Gasification makes it relatively easy to separate out unwanted elements before burning.
And Mr Budge thinks the Government and the oil firms will soon invest in pipelines into the North Sea, so waste gas can be fed into dwindling oil wells – to keep it out of the atmosphere and to pump up the underground pressure, so more oil can be extracted. The UCG report, from Heriot Watt University, Edinburgh, anticipates the same new market for CO2. But even without it, there would be ways of getting rid of the gas.
And even without bonuses from saving CO2 emissions, underground gasification would be an economical way of producing both fuel and feedstock for the chemicals industry, according to the calculations by Edinburgh professor Brian Clark.
The Yorkshire Post reported in January that he was work ing on the report, funded by the university, the DTI and power company Scottish & Southern – which has already declared its faith in coal by buying and upgrading Ferrybridge power station. He delivered it in March and the Yorkshire Post has now obtained a copy. It says: "A successful development in the Firth of Forth could lead to widespread adoption of near-shore UCG on the North East coast of England, South Wales and around the Mersey."
And it says suitable coal would last much longer than known reserves of "natural" gas.
Scottish & Southern said it was pursuing the Firth of Forth possibility but it was too early to say more.
However, it has told the Coal Authority – custodian of the Government's mineral rights – that it wants a licence to extract coal by gasification. The company is also drawing up plans for the necessary infra-structure and looking into the long-term reliability of underground CO2 storage.
It will make no commitments until the Government has made its energy policy statement this summer.
However, that policy will be influenced by the Energy Review the DTI is currently writing and Prof Smart's upbeat report on UCG was an important part of the evidence gathered.
Potential investors want the Government to clear up uncertainties about what permissions would be needed for a UCG project and what subsidies might be available.
One contributor to Prof Smart's report was Michael Green, a mining consultant and member of an international pressure group in favour of UCG. He ran an EU experiment in Spain, in the 90s, which apparently proved it is possible to perform UCG so deep in the ground there are no risks of affecting life on the surface.
He said: "We have had discussions with industrialists and Government agencies in a number of areas which might be suitable for UCG projects, including Yorkshire and the North East. The interest is there but investors want clarity over licensing to planning and ground-water regulations to emissions trading."

Technology of the future
The world has 200 times as much coal as it burns in a year at the moment but only 40 years' worth of oil.
Lenin said in 1913 that UCG was the technology of the future and Russian experiments with it were copied in several countries, including the UK, through the 20th Century.
But most used shallow seams caused pollution problems. The new wave of interest is in deep UCG.
Gases have been successfully captured and held underground for more than 25 years in Canada and the US.
The best prospect in the Firth of Forth is probably off Musselburgh, just east of Edinburgh. But local attitudes mean it might be necessary to drill from the opposite shore, in the coal county of Fife.