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Coal Bed Methane

Volume 229: debated on Tuesday 27 July 1993

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To ask the President of the Board of Trade if the coal bed methane industry will be represented on the proposed energy advisory panel.

I shall make an announcement about the composition of the panel in due course.

To ask the President of the Board of Trade who will determine primacy of use for coal resources between coal mining and coal bed methane interests following coal privatisation; and what criteria will be used to determine primacy.

The Government's consistent policy is to ensure the largest economically viable coal industry which the market can support in the long term. The Government also wish to encourage the development of coal bed methane as a potentially significant energy source. Both these factors are being taken into account in planning for privatisation.

To ask the President of the Board of Trade if access in the future to the British Coal Corporation's geological data will be made available to the coal bed methane industry on a similar basis to that which oil and gas data is currently available to the industry.

As indicated in the White Paper "The Prospects for Coal", Cm 2235, we propose to establish a new public sector body to be known as the Coal Authority, which will be responsible for licensing coal mining activity. The Coal Authority will be required to make available to potential licensees and other interested parties records of past, present and planned mining and geological information in its possession, subject to commercial confidentiality and any reasonable fee that may be charged.

To ask the President of the Board of Trade what effect British Coal's claim to ownership of coal bed methane aborbed in coal has on the Department of Trade and Industry's right to issue exploration licences to companies intending to extract coal bed methane.

None. The Petroleum (Production) Act, 1934, vests all petroleum in the Crown. For purposes of the Act the definition of petroleum includes any natural gas, such as methane, existing in its natural condition in strata. Exploration licences granted under the Petroleum (Production) Act, 1934, allow the licensees to search and bore for petroleum, and get petroleum in the course of exploration.

To ask the President of the Board of Trade what progress was made at the recent meeting between his Department, the British Coal Corporation and the United Kingdom Onshore Operators Group towards resolving whether the corporation or the Crown owns coal bed methane absorbed in coal seams.

My officials chaired a meeting on 15 June 1993 between British Coal and the United Kingdom Onshore Operators Group aimed at achieving greater understanding of the principles surrounding the entry into the coal seams and their occupation and use for the purpose of extraction of coal bed methane. I understand that both parties found the meeting useful and I hope that further progress in detailed negotiations between the two sides will now be possible. While reserving its position on ownership of coal bed methane, British Coal undertook at the meeting not to charge a production-related royalty for such methane, in order to help facilitate the development of the new industry.