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Vast coal deposits lying deep beneath the North Sea will be burnt in situ to generate up to 5 per cent of Britain’s energy needs, under new plans approved by the Government last week.The UK Coal Authority has awarded licences to Clean Coal, an Anglo-American company, to develop five offshore sites for a technology called Underground Coal Gasification (UGC).

The method, which has not been used on a commercial scale in the UK, although it is widely used in Australia, taps the high energy content of coal while doing away with the costly and labour-intensive need to mine it first.Rohan Courtney, a former director of Tullow Oil who is chairman of Clean Coal, said that the potential for the technology was enormous.

“There are enormous amounts of coal lying beneath the North Sea which have never been accessed,” he said. “This technology is going to open up the industry again in the UK.”The sites approved for use stretch up to 10km offshore from Sunderland, Grimsby and Cromer on the shores of the North Sea, Canonbie, near Annan in Dumfries and Galloway on the other side of Scotland, and Swansea Bay, outside the entrance to the Bristol Channel.

The combined coal reserves are estimated to be at least one billion tonnes, equivalent to more than one sixth of all the coal consumed in an average year around the world. Global consumption of coal is about 5.8 billion tonnes a year. Total consumption in the UK is about 80 million tonnes a year.

The technique uses two bore holes drilled into a coal seam. The injection well is used to ignite the coal and keep it burning by pumping down oxygen to supply the fire. The other is used to extract a methane-rich synthetic gas that can be used to generate electricity by driving an above-ground power station.

Mr Courtney said that polluting carbon dioxide produced from the burning process could be stripped out and backfilled into the cavities created beneath the surface using a technology that was easier than the carbon capture and storage (CCS) method that is proposed for use by power stations. However, the methane gas produced will also emit carbon dioxide when it is burnt.

Catherine Bond, chief executive, said that Clean Coal planned to conduct seismic and bore-hole surveys over the next 12 to 18 months. If the surveys produced promising results, commercial operations could begin in 2014-15, with each site costing an estimated $250 million (£152 million) to develop.

The projects are likely to prove controversial because the sites are close to big population centres, such as Swansea and Grimsby. Ms Bond said that the Environment Agency would need to grant permission for the projects before drilling could start and that a public relations campaign was planned to inform local people about the technology and how it worked.

She said that the underground fires could be extinguished easily by pumping water down the injection well or by restricting the flow of air.Opposition to the process in Australia has been modest because the onshore sites lie in remote areas, far from areas with large populations.UGC technology was invented in Britain about a century ago but has been refined recently through the use of advanced seismic technology and directional drilling developed by the oil industry.

Ms Bond said that UGC had become commercially viable in Britain with the advent of this new technology and because high oil prices had improved the economics.Enormous deposits of coal are known to lie beneath the North Sea, extending from onshore deposits that have been mined in Britain.

Offshore exploration for oil has also shown the presence of coal in many areas. Ms Bond said that, within 20 years, UGC could supply a large amount of Britain’s power needs, with some projects being developed far offshore using former oil platforms.

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