Independent Review of Underground Coal Gasification - Report

10. Findings and Further Work

10.0 The evidence base available for this study is patchy and partial at best. Conclusions drawn from this evidence are also likely to be limited and thus some judgements are inevitable and necessary. This chapter points towards what can be concluded and recommends further issues for consideration.

10.1 Virtually all UCG sites have histories involving environmental or health and safety incidents. These incidents are not systematically or formally reported and catalogued. On the basis of limited available evidence, performance is neither particularly easy to assess nor easily seen as different from oil and gas exploration and production generally or other related industrial fields, especially in their early stages of development - e.g. losses of containment, gas releases, explosions, tank and bund failures, surface and groundwater pollution, liquid and solid waste management issues, etc. The context for these hazards and the risks resulting is different however when the areas of likely impact are in the populated zone and sensitive receptors of the environment around the Firth of Forth. The appetite for risk becomes crucial.

10.2 Some near-surface operations have had subsidence and seismicity events as well as gas and liquid release issues. Stories from shallow sites are concerning. Deeper operations, and those therefore more relevant to the Scottish context, are largely poorly documented.

10.3 Some operations and operators, otherwise seen as preparing very well for their operations, e.g. The Carbon Energy project at Bloodwood Creek (see Annex 3 and the 2014 presentation to the Queensland Government under Mallet, 2015 and Mallett and Ernst) still ended in failure, even if the terms of that failure - e.g. relatively limited environmental impacts and financial issues - appear of moderate magnitude, as far as robust and detailed information is available.

10.4 There have also been clear cases of worker and neighbour complaints and presentations of breathing difficulties and both eye and skin irritations suggesting exposure to poorly managed hazards. No rigorous HIA exists however in any active UCG location and no longitudinal data were found.

10.5 Commercial information is limited and suggests challenges faced by operators. Some companies, after trials and interrupted or terminated demonstrations, or even simply after seeking initial licence blocks and then observing deteriorating market conditions, have closed operations in these domains. Some have gone into liquidation, including, recently, Five Quarter in Scotland (March 2016) and Linc Energy in Australia (July 2016). In the absence of more comprehensive or robust audited information, there is simply anecdotal evidence of significant commercial challenges at some sites, even where some underpinnings from governments or major commercial companies was present.

10.6 The volatility of oil (and gas) price is commonly cited as a determining or constraining issue alongside the fundamental role of government support, both insufficient direct as well as necessary infrastructural investment, regulatory hurdles in particular excessive or overly-precautionary regulation requiring data and guarantees viewed as too much, unreasonable, too soon, etc. Generally a variety of pressures and challenges causing long times to full scale, profitable operation, inhibiting operational and commercial progress.

10.7 A number of sites have seen state or regulatory interventions, prosecutions for failures and state investigations/enquiries into operations and incidents. Largely as a result of incidents and often combined with local or general public pressure, UCG bans have been imposed in France, Germany, Queensland, New York State and HF bans might be assumed to have a collateral impact on UCG. Moratoria exist in Wales and Scotland as well as in Victoria pro tem. Elsewhere, the market alone, aided in cases by public opposition, has determined cessation or suspension or mothballing of activity.

10.8 At the beginning of this report, I referred at length to the Smith Shale Taskforce Report (2016 - https://www.taskforceonshalegas.uk/shale-gas-issues ). Its recommendations seem arguably largely appropriate to their as well as this remit. I disagree, specifically in the context of UCG, only essentially with their conclusion, especially in the light of the rest of the research involved in this case.

10.9 Given the uncertainties involved it is extremely difficult to see how a positive recommendation about UCG could be made: the lack of robust data, the lack of any comparable operational site or demonstration, the need for fully transparent piloting of not only the technology but planning and licensing processes and the achievement of zero-carbon or wholly offset GHG emissions, the monitoring and safeguarding (liability management etc.) for the long term required, reasonably, to provide public reassurance and effective technical demonstration in the context of contemporary Scotland, to say nothing of the public engagement required.

10.10 Other lessons from Australian experience

Discussions with a number of Australian regulators, lawyers, activists and commentators have produced some very useful insights. A number did not wish to be quoted, including government senior staff, in some cases given ongoing legal processes and in others due to political sensitivities, partly fuelled in turn by the economic and political focus still on the resources and high carbon economy there.

10.11 Work now completed in New South Wales ( NSW) brought particular insights. Professor Mary O'Kane, Chief Scientist and Engineer for NSW undertook an independent review of coal seam gas activities in NSW. I accept again that CSG is a different technology but the review's scope and findings are once more instructive. The Review was commissioned in February 2013, "in a climate of community unease". An initial report was provided in July that year and the final report published in September 2014.

10.12 "The Review drew on information from a large number of experts from around the world in a range of fields. It also consulted extensively with community groups, industry and government agencies.

"Having considered all the information from these sources and noting the rapid evolution of technological developments applicable to CSG from a wide range of disciplines, the Review concluded that the technical challenges and risks posed by the CSG industry can in general be managed through:

• careful designation of areas appropriate in geological and land-use terms for CSG extraction
• high standards of engineering and professionalism in CSG companies
• creation of a State Whole-of-Environment Data Repository so that data from CSG industry operations can be interrogated as needed and in the context of the wider environment
• comprehensive monitoring of CSG operations with ongoing automatic scrutiny of the resulting data
• a well-trained and certified workforce, and
• application of new technological developments as they become available.

"All of this needs to take place within a clear, revised, legislative framework which is supported by an effective and transparent reporting and compliance regime and by drawing on appropriate expert advice.

"Of course, as the technologies involved are applied in new regions where the detailed hydrogeology is not yet fully characterised, there could be unexpected events, learnings, or even accidents.

"This is common for new applications in the extractive industries and underlines the need for Government and industry to approach these issues with eyes wide open, a full appreciation of the risks, complete transparency, rigorous compliance, and a commitment to addressing any problems promptly with rapid emergency response and effective remediation.

"It also highlights the need to record and capitalise on the data and knowledge gained from CSG extraction activities in new regions and to take advantage of new technology developments which, if harnessed appropriately, can make CSG production increasingly safer and more efficient over time." NSW (2014)

10.13 The full final report from the Independent Review of CSG Activities in New South Wales and component links are referenced below. In considering this work, it is extensive and balanced and focused in its recommendations. It highlights issues of data availability, industry performance and crucially, trust; trust between operator, regulator and community in various dimensions.

10.14 It is fundamentally important too to note critical differences in context between NSW and Scotland - just as it is with the Queensland evidence directly relating to UCG. The CSG industry is more fully developed and experienced at operational scale; described as "mature". Even then accidents have happened. The receiving environment is different and arguably the sensitivities and impacts are different, as far as one can tell. The cultural environment and acceptance of the communities involved is different. There is at least some competition in the market place, now just two companies but formerly several more, not all with excellent reputations for their performance. There has been very significant reform in the last three years to the regulatory framework, the notion of a lead regulator, the NSW Environment Protection Authority ( EPA), the requirements imposed and the resources, in both quantum and quality made available to the regulators. Other facets of what Prof. O'Kane identifies as necessary, stand out in the Scottish context. Most dimensions seem possible to achieve but are not evident now.

10.15 Queensland evidence, specifically connected to a UCG demonstration programme is even more compelling. Depth and population context as well as basic geological issues are different but, in that resource-dominated economy, every plausible scope and support was suggested or given for the industry to do well, it seems. They did not. This is hard to ignore.

10.16 Unanswered Questions and Data Gaps: Areas for Further Work…

There is a series of areas for further consideration, research and challenge. This is particularly relevant if we are to balance precaution with a pro-active approach to problem solving and if tackling uncertainty is considered important in shaping future policy. Both dimensions influence the development of UCG and related policy following this review.

10.17 The aspects which follow are judgements based on a view of existing exploration, licensing and management arrangements, process and pollution abatement understanding, data availability, monitoring, public engagement etc. Surfacing existing data would in any case help address some of these questions.

10.18 I would in any case highlight the following:

10.18.1 Climate
Better background GHG monitoring is required, indeed as is monitoring of air quality generally. We do not have an adequately granular, scientifically well- or systematically located monitoring network. Nor do we have an appropriately robust time series for meaningful interpretations of most key pollutants ( CO ₂, CH ₄ etc.). Whilst point source regulated gaseous emissions are one concern, and generally better known, background and diffuse methane emissions are another matter. Methane data are particularly inadequate to allow effective judgements to be made on issues such as natural/seasonal variation from soils and agriculture generally, including the complicating and potentially worrying dimension of sewage sludge spreading and its introduction into the mix with geologic carbon/methane etc. Equally, ambient variations, degassing of peat, characterisation and clarification of routes for groundwaters, etc., or leakage from existing former mined areas or potential future leakage, all require consideration.

Therefore both ambient data and baseline studies would be needed before meaningful site and process based monitoring would be undertaken and meaningfully interpreted.

Additionally, I understand that DBEIS commissioned WS Atkins last year to look at UCG and particularly GHG gas emissions from UCG. This would allow comparison with other gas sources. This work has not yet been published. DECC indicated it suggested exploitation would not be consistent with energy policy or climate target objectives. The Atkins study could provide valuable information and could inform policy on support for and the place of UCG both in its gas make-up in respect to energy use and chemicals.

10.18.2 CCS
Without a functioning CCS system - collection, transportation and injection/storage - accessibly close to the point of generation of syngas and with a clear understanding of its long-term effectiveness, UCG is hard to operate as a GHG balanced or carbon neutral net activity. If UCG cavities/panels were to be used for gas storage, issues of fit with the timing of UCG active processes needs to be studied and tested. Also, given the likely infrastructure and other investment costs for a CCS system, this highlights the need better to understand how the costs would be met and what sort of ownership model would apply. It appears, given experience relating to the UK and EU CCS competitions and their exemplars in Peterhead and Longannet, that £1Bn was an inadequate sum to deliver the investment needs of the cases. Practical, costed, smaller models would be desirable to explore. Norwegian experience and the potential to deliver functioning systems in China might lead to more practical and cost-effective solutions for Scotland.

10.18.3 Energy Policy/Issues
Understanding the costs of a pilot and full operation of UCG would help the consideration of the policy trigger points, were the technology to be revisited. A number of interviewees commented on the oil (and gas) price as a trigger and even noted c >$60/b for extended timescales as a possible level for viability.

Given the infrastructure issues raised above, and the costs entailed, the commitment to CCS and UCG would seem ill-advised if a decarbonising economy continues to be required for climate and energy policy reasons. Therefore, consideration of how to avoid lock-in of fossil fuel energy systems, policy and infrastructure were UCG to be progressed would be beneficial.

10.18.4 Geology
The general stratigraphy and disposition of the coal measures and their overburden is fairly well understood from historic mine plans and bores. It is evident however that in all relevant areas and relating to the CA conditional licence areas in particular, there is a need for greater bore density, for deeper ground water understanding and for consideration of the disposition of fault structures affecting the main seams prioritised for UCG use.

10.18.5 Regulation and Land Use Planning
Consideration of Best Practice worldwide would be advisable, not least to simplify, speed up, make affordable and make fair and effective any future arrangements. The mapping and construction of a coherent framework for regulation delivered by the RoadMap ( SA DMITRE 2012) operated in South Australia merits some consideration. This has given industry considerable confidence and has proved a starting point for concerned communities and partner bodies and stakeholders. It is not perfect however, and the Scottish context might arguably require a more balanced approach.

A Land Use Permission
The planning model for such projects as UCG would be expensive in time and money for proponents, defenders, public bodies and public alike, especially where contested. It must be asked if a process such as the Dart CBM Inquiry is an efficient and effective model for assessment in such cases. If so, it determines a burden and a timetable, although at present it has not yet concluded. If not, there is significant scope for improvement.

B1 Regulation, including Licensing, Licence condition (and ambient) monitoring/ compliance assessment all appear complex, partial and burdensome and present scope for simplification, enhanced inter-connection and better focus on the important outcomes sought. The number of parties involved seems excessive but given their different duties, roles and capabilities, a thorough mapping exercise and consideration of a simplified, prioritised and more coherent approach set in an overarching clarified mission and operational framework for delivery would be beneficial.

B2 Dealing with losses of containment, incidents, etc. Given experience worldwide, failures have occurred. Neither licences nor regulators and certainly not operators appear to have been capable of, or appropriate for, addressing these or indeed avoiding them. This would merit dedicated and separate consideration. That way, experiences, such as from the US, Canada, France, Australia and South Africa, could be learned from, licences and ex ante environmental statements and related effort (including monitoring and protective arrangements) could be robustly in place and their effectiveness reported regularly to the public and other stakeholders. Similarly both routine and emergency handling of Air Pollution, Land Contamination, Surface and Ground Waters, etc., would be factored in.

C Health issues. There is a rich literature on HIAs but no HIA of UCG operations. This need and gap should be addressed.

10.18.6 Community
Community engagement processes and arrangements are widely known and addressed in the literature. The scope for research into the status quo, public expectations of potentially good arrangements, suitable participatory models for planning and operation, setting up and operating public benefit trusts and other related arrangements would all merit consideration. In addition, processes for development and provision of objective information and establishment of neutral processes to allow dialogue and engagement tackling the existing lack of trust in operators and even some concerns about the "educational" leadership offered by companies or government would have to be explored as a starting point for any journey towards allowing UCG to progress.

10.18.7 Operations and Technology
In conjunction with geological issues, there is a need to demonstrate the actual likely displacement and changes of level post-combustion and what impact these cavity closure/collapse (subject to hydrostatic conditions, etc.,) events might have on local seismicity and whether or not these would reach the seabed or the land surface around the Forth. While monitoring on land is easier to install and that would affect the Brora, Canonbie and Midland Valley areas, sub-estuarine instrumentation would be more challenging. The application of conventional oil and gas monitoring technology might well address this but would merit expansion. Process management, control and surface monitoring and reporting arrangements for activities at depth would also likely be required.

It would be extremely useful, indeed arguably, essential, to take at least some of the site list at Annex 3 and obtain full site histories, copies of licences, performance reports and incident logs and analyses, consider monitoring data for the plants, surrounding impact areas etc. and check the EIAs against long term ambient and other site and operations characteristics. Indeed again, without this, statements that suggest the plants and operations were working satisfactorily, efficiently and cleanly simply cannot be verified, or disputed, with confidence. This is unsatisfactory, especially if confidence is to be achieved in the operator, the regulator or the minimised and acceptable impacts on the environment, community, workers and their respective health. The full loading of methane, CO ₂ and other GHGs on the national account, and indeed the planet, can also not be assessed objectively or accurately.

10.18.8 Liabilities management and life cycle/monitoring/end of process arrangements.
There has been very little consideration of liabilities issues and there are long standing concerns from communities, regulators and academic observers that monitoring arrangements, oversight of sites and bonds are frequently inadequate in themselves and or inadequately policed and enforced, resulting in unmanaged risks and transfer of financial and environmental burdens to the public and the public purse. This must be addressed.

Monitoring of the end of life phase of an operation is technically feasible and, provided baseline work was conducted adequately, and oversight of long-term reassurance is also adequate, results can be interpreted and acted upon.

10.19 Other Issues

Emergency Preparedness and Security

10.20 Accidents and emergencies happen. Where gases and explosion risks are involved, adequate demonstration of safeguards and management practices and resourcing are required and would generally be taken into account by HSE. Other regulators, including SG itself from a civil contingencies perspective would be expected to work alongside blue-light services to provide robust arrangements. Given the still experimental and unproven nature of UCG in the Scottish context. This would require appropriate effort.

10.21 In the contemporary world and for the foreseeable future, terrorism and other criminal and disruptive activities need to be borne in mind in relation to UCG operations. It would appear advisable to ensure dialogue with the appropriate authorities under the 2004 Civil Contingencies Act. Category 1 Responders as well as engagement with HSE and SEPA to ensure flood risk as well as CoMAH requirements were taken into account. Whether or not a UCG operation and the surface syngas plant are considered critical national infrastructure, the likelihood is that CoMAH, Pipeline Safety, REPPIR and IED/ IPPC regulations would apply to these elements, the connecting and distributive pipework to points of use, as well as setting some of the conditions applying to transport operations bearing connected materials - inputs, wastes and products. The involvement of pressurised and flammable gases as well as other hazardous materials would suggest careful assessment of their flows and stocks and appropriate hazard management arrangements being set in place. Were surface operations to be sited within existing CoMAH sites, arrangements would likely be most readily and easily applied.

References

Civil Contingencies Act ( CCA) (2014)
https://www.gov.uk/guidance/preparation-and-planning-for-emergencies-responsibilities-of-responder-agencies-and-others
http://www.gov.scot/Publications/2012/03/2940/8

EEA (European Environment Agency). (2013) Late lessons from early warnings: science, precaution, innovation. EEA Report No 1/2013. EEA,
http://www.eea.europa.eu/publications/late-lessons-2

Goldstein BD. (2001) The precautionary principle also applies to public health actions. Am J Public Health; 91: 1358-1361.

NSW (2014) Final Report of the Independent Review of Coal Seam Gas Activities in NSW. Report by the NSW Chief Scientist and Engineer.
http://www.chiefscientist.nsw.gov.au/reports/coal-seam-gas-review/csg-background-papers
http://www.chiefscientist.nsw.gov.au/reports/coal-seam-gas-review/initial-report-july-2013
http://www.chiefscientist.nsw.gov.au/reports/coal-seam-gas-review/final-report-september-2014

SA ( DMITRE) (2012) RoadMap for Unconventional Gas Projects in South Australia. Energy Resources Division (Goldstein, B. et al.)
http://www.statedevelopment.sa.gov.au/upload/mineral-and-energy-resources/Roadmap_Unconventional_Gas_Projects_SA_12-12-12.pdf

Scottish Government. (2015) Statutory guidance on the general purpose of the Scottish environment protection agency and its contribution towards sustainable development. Edinburgh: Scottish Government,
http://www.gov.scot/Publications/2015/03/8062/1

Stirling A. (2014) Making choices in the face of uncertainty: strengthening innovation democracy. In: Peplow M (ed.) Innovation: managing risk, not avoiding it. Evidence and case studies. Annual report of the government chief scientific adviser. London: The Government Office for Science, 2014, pp.49-63