Oil and Gas Licensing (Hansard, 25 February 1998)

§ Mr. Battle

I am pleased to announce the award of 35 licences to 27 companies for onshore oil and gas exploration covering 120 blocks. Licensees will now need to obtain any necessary consents from local planning authorities, who will take account of any environmental concerns, and to agree access terms with landowners before carrying out on-site activities under these licences.

The round has attracted particularly strong interest from companies targeting the UK's gas reserves, including conventional natural gas and coal-related methane resources.

I would like to see coal bed methane reserves—gas trapped in coal seams—exploited wherever possible, particularly in coal which is unlikely to be mined but also from potentially recoverable coal where extracting the gas beforehand can enhance mine safety. I recently consented to the UK's second coal bed methane development, at Arns Farm in Fife, and I hope to see further projects brought forward for approval in coming years.

I am concerned that interest by companies in coal bed methane has been hindered by the present licensing system which was designed to manage conventional oil and gas exploration. So I have asked my officials to open consultation later this year on proposals for a new form of onshore licence designed to encourage the exploitation of both conventional coal bed methane and other forms of coal-related gas.

There would be environmental benefits from using the considerable quantities of gas from abandoned coalworkings which escapes to atmosphere, where it is seventeen times more potent as a greenhouse gas than the exhaust from burning it would be. Although unsuitable as feed to the national gas grid, this gas can be burned locally to generate electricity or to power industrial processes and is a resource which the Government are keen to see used.

All exploitation of coal-related gases is carried out in consultation with the Coal Authority and the operators of active mines in the vicinity. The safety of properties on the surface is also taken fully into account.

250W

The majority of all the awards announced today are in the East Midlands and south-east England, areas which both have previous oil and gas discoveries, including the recent oil find at Fiskerton Airfield near Lincoln, and a number of producing fields.

The awards cover 43 out of 50 applications received for licences—some of which competed for the same blocks. Seven applications still have issues outstanding but I have decided not to keep other applicants waiting and will make a further announcement when these issues have been resolved.