25th September 2008
Uncivil service
The idea of a Welsh Sovereign Wealth Fund got a big Western Mail thumbs up today - and the kind of tepid response from the Welsh Civil Service that we used to get in the Raj-like days of the Welsh Office. However, I’m sure that Ieuan will be more receptive to the idea than the predictably negative prose of another stolidly anonymous Assembly Spokesperson (”the unelected in pursuit of the unelectable”) suggests. An LCO may not be the right technical solution as there would probably need to be an amendment to the Coal Industry Act 1994 and the Petroleum Act 1998. There would probably also need to be an amendment to the Government of Wales Act 2006, and an explicit agreement that the Westminster Government wouldn’t simply use Section 120 of the Act - which gives the unilateral right to the London Government simply to re-appropriate any monies received by the Welsh Government - to recoup the royalties. These are detailed issues that are best looked at by the Holtham Commission on Funding and Finance and I am writing to the Chair to ask if he will meet me to discuss them.
But if we will the end, surely we should be able to will the means. These are, after all, substantial sums we are talking about. A kind of Objective One without the form-filling. Eden Energy, the Australian company that has entered into a joint venture with the Welsh-based Coastal Oil and Gas Ltd, to explore the potential for coal-bed methane in the South Wales Coalfield - the largest coalfield in the UK - expects big things from the licenses it already holds for exploitation of Welsh gas reserves. The South Wales coalfield is the gassiest in Europe. A report prepared for the company by RISC Pty Ltd estimates CBM resources of between 380 and 680 petajoules from the PEDL 100 license area that the company holds. DBERR estimates 1 petajoule will be worth approximately £5 million by 2010. The PEDL 100 area therefore has the potential of generating between £2 and £3 billion. This represents 20-25% of the company’s licenses for the South Wales coalfield, so this joint venture alone could be looking at realising, on an upper estimate and given rising prices, a total of £15 billion. And that’s without considering the potential for other companies in as yet unlicensed areas.
Ieuan, I’m sure, will want to tap into that potential, whatever excuses the nay-sayers come up with.
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