A COMPANY seeking to extract gas from coal under the Firth of Forth has been accused of holding Scotland’s environment “to ransom”.

Cluff Natural Resources, who have licences to explore the possibility of underground coal gasification (UCG) in three sites in Scotland, wrote to the Scottish Government at the time of the moratorium on fracking, asking if their operation would be affected by the temporary ban.

In a letter to Communities minister Alex Neil, Algy Cluff, the company’s chief executive, said his company “has already committed to invest a significant amount of money”.

He added: “We anticipate that future investment in a commercial UCG operation in the

Kincardine area would exceed £250 million.”

Responding, Alex Neil said that UCG was not covered by the fracking moratorium.

WWF Scotland director Lang Banks said: “No company should ever be allowed to hold Scottish ministers or Scotland’s environment to ransom like this. This latest revelation again highlights why plans to burn coal under the sea should be a non-starter, and why the Scottish Government must extend its moratorium on unconventional gas extraction to include underground coal gasification.”

Currently, Cluff Natural Resources and Five Quarter Energy Holdings both have licences to explore UCG. Cluff is looking at sites under the Firth and Forth, Kincardine and in Largo Bay.

Five Quarter is also looking at a location under the Firth and Forth and a site in Musselburgh.

Although the licences are reserved to the UK Coal Authority, who are part of the Department for Environment and Climate Change in Whitehall, there are a number of other bodies who must agree before any firm is granted a licence for UCG.

Local authorities must give planning permission, the Health and Safety Executive must approve certain aspects of the operation and the Scottish Environmental Protection Agency must certify that any operation does not affect the quality of the water.

Responding to the publication of the letters, which were uncovered by the investigative journalism website The Ferret, the Scottish Government said they were “clear that the development of new energy technologies, such as underground coal gasification, must be consistent with our environmental objectives and we will continue to take a careful approach to such developments”.

A spokesman for Cluff Natural Resources said UCG was “a tremendous energy opportunity” for Scotland and added that there were no “inherent risks” involved in the extraction process.

“Ten years of publicly funded independent research was commissioned by the Department of Trade and Industry and concluded in 2009,” the spokesman said.

“Its message was that there are no inherent risks associated with the process or the technologies employed in deep offshore UCG so long as site selection and process-management procedures are in place.”

Yesterday, Tihe Herald revealed that the SNP’s trade union group has submitted a resolution to the party’s annual conference in October calling for a total ban on unconventional gas extraction.

Speaking to BBC Radio Scotland’s Good Morning Scotland, Tommy Sheppard, SNP MP for Edinburgh East, said: “Underground coal gasification to me is a more problematic technology than fracking because it involves going into disused coal seams and applying not only high pressure but very high temperatures, and I think the potential for something going wrong is much more considerable than it is with fracking.”

A spokesperson from the Scottish Environment Protection Agency said they had met with Cluff and Five Quarter but they had “not been consulted on any underground coal gasification planning proposals”.