There is no doubt that Northern Ireland's lignite deposits are of high quality and constitute a natural resource of considerable potential value in this small, peripheral part of the European Community. Whether or not one or more will be used commercially and, if so, when depends on an interacting complex of economic, social and political factors. In purely economic terms, use will be effectively determined by lignite's economic competitiveness as a fuel dor electricity generation and on the relationship between capital and fuel costs. The economics of other possibly viable products such as lignite briquettes will be heavily dependent on the use of by-products of electricity generation, most notably surplus heat. The availability of lignite offers an alternative fuel option to those charged with formulating the Province's energy policy. If, as now seems likely, it is no longer a serious competitor for the power station planned for the mid-1990's, it most certainly is a competitor for the early part of the next century. This is particularly so in view of its low sulphur content which is about half that of Scottish coal on an energy equivalent basis. Lignite also offers security of supply at predictable prices, an important advantage, and thus carries a premium over coal, oil and natural gas which are imported at prices determined wholly exogenously. As the Province has by far the highest rate of regional unemployment in the United Kingdom, one argument advanced for the use of indigenous lignite is that its use in electricity generation would create much needed additional employment — an estimated 400 jobs being associated with the mining operations needed to support a 450 MW power station. But the Coagh example shows that other considerations must be taken seriously. It is extremely unlikely that the lignite in this area will ever be worked unless local attitudes change dramatically or there is some national fuel crisis which would over-ride local opposition. It is difficult enough developing lignite without having to contend with such strong resistance at the local level. This study has shown that certainly in the Northern Irish context it is highly important for the policy makers not only to consider the economic factors involved in choice of an energy fuel but to work closely with local communities and the various environmental bodies, to take their perceptions, right or wrong, into consideration.