from Sunday Herald, 07 April 2013
Controversial plans to exploit underground gas in central Scotland could be stymied by problems with the quality of the gas, the Sunday Herald can reveal.
The troubled Australian company, Dart Energy, has applied for planning permission to mine up to 60 billion cubic feet of coal bed methane at Airth near Falkirk. It has signed a £300 million deal with Scottish and Southern Energy (SSE) for the supply of gas over the next seven years, and has said it hopes to start delivery before the end of this year.
But the Sunday Herald has seen evidence that the calorific value of the gas, which is crucial in determining its price for consumers, is unlikely to be high enough for the national grid. Dart has been warned about the problem by independent consultants.
The company has been told that the gas may need to be blended with higher-quality gas on the grid, which, if permitted, would have cost implications. Or the gas could be enriched by adding propane, a high-risk process that is not included in the company’s current planning applications.
According to experts, enrichment would mean importing nearly a hundred tonnes of propane every day, in three large tanker deliveries. It would also require part of the site to be regulated by the UK government’s Health and Safety Executive as a “major accident hazard”.
Dart declined to directly answer questions about calorific value, though it insisted that its gas would be saleable. Critics, however, claimed that the gas quality issues could be the “final straw” for the Falkirk development.
Stirling Green councillor, Mark Ruskell, accused Dart of “fuelling suspicion” about its gas development plans. “If the gas requires further treatment then it makes a mockery of the current planning applications under consideration by two councils,” he said.
“It's clear that a moratorium is required at the very least until the planning system is able to address all the concerns that unconventional gas developments are raising.”
Dart’s applications to Falkirk and Stirling councils to sink 22 wells at 14 sites have prompted more than 700 objections to date. The councils have postponed consideration of the applications, which will not now be heard until next month at the earliest.
The average calorific value used in the calculation of Scottish gas bills is currently over 39 megajoules per cubic metre. But insiders say that that the calorific value of Dart’s coal bed methane will be less than that, and will require treatment or blending.
“If these allegations are true they cast a major cloud over Dart's much delayed planning application and the economics of their coalbed methane scheme,” said Mary Church, campaigns co-ordinator at Friends of the Earth Scotland.
“Local people will be appalled to learn that they could face three tankers of highly explosive propane passing through their communities each day. Dart needs to come clean on the full scale and all the potential pitfalls of their plans so that the councils can make a proper decision on whether to let the application go ahead.”
Last week Dart announced a 70% cut in jobs in Australia, and its share price halved. Gas exploitation in Scotland remains the company’s “flagship” development.
But the low quality of the gas “could be the final straw for this uncertain development”, argued Church. “This is the last thing Dart's investors will want to hear.”
Scotland Gas Networks, a distribution company 50%-owned by SSE, confirmed that gas for the national grid had to be of a certain calorific value. “We would certainly be looking for the gas to come up to the required standard and we are probably in discussion with Dart about this,” said the company’s assets engineering manager, Barry Mackay.
Dave Lander, a gas consultant with 30 years experience in the industry, agreed that the calorific value of methane would need to be boosted or the gas blended before it could be distributed to homes and offices. This was important to prevent consumers from being overcharged, he said.
A spokesman for Dart Energy said: “As with all commodities, the gas company will buy Dart’s gas at its value and we are committed to the current planning application as we have been over the years.”
In a statement in January, Dart suggested that its gas was ready to deliver. Test results showed that each of its wells could achieve flow-rates of up to a million cubic feet of gas a day, according to the company’s chief executive, John McGoldrick.
This story was followed up by Scotland on Sunday.
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