The possibility of a controversial coal burning project in the Firth of Forth looks to have faded further after its funding flickered out.
Cluff Natural Resoucres (CNR), the company behind the venture, has decided to channel resources towards its projects south of the border.
The firm said the main reason for its action was the Scottish Government moratorium on unconventional gas extraction.
CNR, owned by Algy Cluff, had hoped to put £250m into the building of Britain’s first deep offshore underground coal gasification scheme (UCG) venture, believing it could create hundreds of new jobs and secure the UK’s energy supplies for decades.
It has licences – but no permission – for UCG at Largo Bay, Kincardine and Dysart.
This process involves turning coal into gas by injecting oxidants into coal seams and pumping the product gas to the surface.
However, it has never been tested offshore before and opponents fear a possible environmental catastrophe, with the sites being so close to local communities.
CNR had already announced it would be deferring its bid for planning permission until after next year’s Scottish Parliamentary elections, and that no work would take place in the Largo area for around a year.
Andrew Nunn, CNR’s chief operating officer, told the Mail: “We have stopped investing in our three Scottish licences and will reconsider our plans, pending the outcome of the moratorium process. “This has meant terminating significant contracts with a number of Scottish consultancies, contractors and advisors, and re-directing those funds to our southern North Sea conventional gas assets and reviewing our UCG options in England.
“We still believe UCG has a lot to offer Scotland and that the moratorium will eventually be lifted, if the Scottish Government has the resolve to maintain its evidence-based approach to policy making. We certainly intend to maintain our UCG licences during the moratorium and will appraise the situation if, and when, the moratorium is lifted.”
Friends of the Earth Scotland director Dr Richard Dixon said: “Communities around the Forth will be celebrating the news that Cluff NR has put all work on hold on its flagship underground coal gasification scheme at Kincardine. The fight is not over but the Scottish Government’s moratorium has given communities breathing space to work on getting a permanent ban on all unconventional fossil fuels.
“Cluff’s change of priorities is a major tribute to all those who have campaigned against its plans for a dangerous experiment in one of Scotland’s most important waterbodies. Sadly, what is good news for Scotland is bad news for England, where Cluff will now try more actively to develop UCG schemes.”