In the technologies of UCG, UK has a lead in the underground process, the geological selection of sites, environmental issues and the processing of UCG product gas. Offshore UCG, if successfully developed, would use much of the expertise in platform design and servicing that already exists in the UK to support the oil and gas industry. The market potential for offshore technology would be very significant; for example, Japan has large offshore coal deposits. A co-ordinated policy on the export of UCG technology could result in a demand for UK equipment and services
Algy Cluff predicts North Sea coal bonanza Commodity investors seeking North Sea exposure typically turn to the oil and gas majors and second-string explorers, not the minnow trying to un-tap the energy potential from offshore coal. But mention oil industry legend Algy Cluff, and the ears of even seasoned investors prick up. Best-known as a pioneer of North Sea oil in the 1970s, Mr Cluff is busy again. He's set on exploiting the energy potential from the thick bed of coal deep beneath the seabed through a process called Underground Coal Gasification (UCG). His latest venture, Cluff Natural Resources (CLNR), has now been awarded five near-shore licences and some analysts believe the potential is massive.
Few bet against Mr Cluff. After discovering the Buchan Field in the North Sea four decades ago, Cluff turned his hand to mineral exploration in Africa before branching out into alternative energy through CNR.
"This all started many years ago when I was looking for oil in the 1970s," Cluff told Interactive Investor. "I realised how much coal there was in the North Sea, but, because I was looking for oil, thought no more about it until I came back from Africa a couple of years ago and thought that in light of the energy problems we have here...and the huge concentration of energy, the coal merited examination."
The UK is in a "chronic" energy crisis, Cluff says, due to declining North Sea reserves and an increasing reliance on gas imports. While he admits there is no "silver bullet" to solving the problem, he believes that he holds an option that could provide "enormous" consequences for the UK - deep UCG.
"It is quite a dangerous situation for the country to find itself in," says Cluff. "There is a massive energy deficit and we see ourselves as going a long way to meet that energy shortfall."
When you are dealing with fossil fuels, you are dealing with campaigners, but it [UCG] is certainly less controversial" Algy Cluff
And while some investors may be cautious about the upcoming Scottish referendum, the oil baron believes that CNR could be even better positioned to succeed if the Scots vote "yes".
"I think it will be easier. Scotland will have an energy problem, it probably has one now. They may be more ruthless in addressing the planning issues, because at the moment they have got depleting revenues from the North Sea, so I am not saying this is a solution, but it will have a major impact on Scotland's future," he says.
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