Two events caused this backward-forward look which, in itself, is actually a rather nifty way of introducing one of the players rumoured to have once been interested in Australian UCG, the Russian oligarch, Roman Abramovich – more on him later.

The first recent development actually occurred last month when the self-proclaimed leader of Australian UCG, Linc Energy, said it was de-camping for greener pastures in China, Indonesia, Europe, or anywhere other than Australia.

The second development was the debate that sprang up last week about the fate of the Organisation of Petroleum Exporting Countries, which is being hammered by flat-to-falling oil prices as the US unleashes the full firepower of its shale revolution and reclaims a role as one of the world’s (if not THE world’s) biggest oil and gas producer.

Perhaps it is only The Slug who can see the connection between UCG, OPEC and US shale, but if you look closely you can see the relationship, which is the price of oil (and gas) and how rising production is driving down the price, with the inevitable consequences for high-priced sources of energy, such as UCG.

Exactly 12-months ago, and with the knowledge of what has been happening more recently, it was pointed out in this column that the involvement of Abramovich in Linc’s UCG projects near Chinchilla in Queensland was a highly unlikely development.

Heavily promoted by the spin doctors working for Linc at the time the visit of the Chelsea owner was more a picture opportunity that developed after senior Linc executives managed to convince the rich Russian to take a trip down south to see what was on offer.

Abramovich, in keeping with the famous two-headed eagle which is the symbol of old Russia, must have looked backwards to see how Linc, and the other Australian UCG proponents, had hit a few environmental and permitting snags with the Queensland Government – and then looked forward to see what was happening with the price of oil and gas.

Somewhat prophetically The Slug suggested in a column posted on November 12 last year that Abramovich was an unlikely participant in the Australian UCG sector and was probably just on a wheel-kicking visit, or thought it was time he gave his private jet a work-out.

Whatever the explanation it is history that the Russian came, looked, (backwards and forwards) and went home without leaving any cash behind to fund an expansion of Linc’s high-risk UCG work.

Today, it is Linc that is following Abramovich and leaving Australia because, to not beat around the bush, UCG at a time of flat-to-falling oil and gas prices simply does not make commercial sense because of the heavy up-front capital commitments and the heavy environmental clean-up cost.

For anyone unfamiliar with UCG it is what it says: coal burned deep underground to give off gas that is piped to the surface for conversion to liquid fuel. In theory, it works well. In practice, it is a very expensive way to make liquid fuel.

Abramovich, who is certainly a lot smarter than The Slug (and an awful lot richer) did pretty much what was expected and decided to stick with easy-to-produce sources of fuel.

Linc persevered, for a while, until the company’s founder, Peter Bond, last month pulled the plug on the Chinchilla project after sinking $270 million into UCG trials and said he was off to try the technology elsewhere.

It is hard to not wish him the best of luck, and equally hard to not add that he will need it because it really does not matter where you try experimenting with UCG technology there will always be the spectre of an oil and gas glut hanging over the head of all high cost fuel sources.

OPEC, like Abramovich, can see backwards and forwards, and as an organisation it is adjusting to a new world of oil priced at $US100 a barrel, and less.

Once the organisation that dictated oil supply (and therefore the price of oil) OPEC has become just another player in the game, an important player, but nothing like it used to be thanks to the high and rising volumes of oil and gas being produced by non-OPEC members.

UCG, a frightfully expensive fuel making process, is doomed to go the way of all high-cost fuel sources, surviving only as an interesting footnote in the history of liquid fuels.