- 1. There are concerns that shale gas wells will industrialise the countryside. How will INEOS avoid that happening?
- 2. Fracking is seen as controversial. Should we believe what we hear?
- 3. Does fracking cause earthquakes?
- 4. What about water contamination?
- 5. Will fracking cause air pollution?
- 6. Why should the public trust you?
- 7. How big does INEOS want to be in shale gas in the UK?
- 8. Why does the UK need shale gas?
- 9. Will UK shale gas reduce the cost of UK energy and gas?
- 10. How many jobs could be created by INEOS SHALE?
- 11. Can the local community trust you?
1. There are concerns that shale gas wells will industrialise the countryside. How will INEOS avoid that happening?
INEOS Shale will look to reduce the surface impact of its operations as much as possible.
In the early exploration stage there is very little surface impact due to the short term nature of the activities:
- We will acquire and analyse 2D and 3D seismic data to understand the geology better
- We will drill a small number (up to 19 in total across the three regions) of vertical core wells to extract samples of the rock for analysis of its structure and gas content
The next phase is the appraisal stage which is a longer term operation but will still have a low impact at surface
- Following interpretation of the seismic and core data, if it is positive, we may want to test the production potential of the shale rock at a similar number of sites (up to 11 in total across the three regions) which will involve drilling one or possibly two horizontal wells at each site and fracking them
- Only once all that data is gathered and analysed can we begin to consider a production development
If the exploration and appraisal phase yields encouraging results we will enter into the production development phase and will aim to concentrate wells on as few pads as possible as far as the geology of the shale rock and technology existing at that time allows. Until that specific knowledge is with us we can only make intelligent estimates of what might be required.
Our current view is that in a licence area of 10km by 10km completely clear of above and below ground constraints, we could extract gas from across the whole area by using ten well pads each hosting 10-12 horizontal wells. We can also envisage a scenario where if it is preferable and feasible to utilise fewer pads with a greater number of wells per pad. Of course the realities of the UK landscape and geology will undoubtedly constrain activities and reduce the number of wells and well pads in any given area.
Geology constraints: The shale layer is unlikely to be uniform in its shape or structure and once we have the seismic and core well data we will find that some parts of our areas under licence are not worth drilling and fracking because the rocks are not going to yield enough gas to make it worthwhile or there are too many faults in the rock.
Surface constraints: We will not be drilling in urban areas or designated areas such as sites of special scientific interest. There are a whole host of other considerations we have to take into account in deciding on what is or is not a suitable location for a site, but these two are the largest.
So the end result is that developing the maximum number of wells and well pads in any 10km by 10km area is not possible given the surface and subsurface constraints. We anticipate that less than half of a given area is developable when the surface and subsurface constraints are taken into account.
Hence, real developments will see a smaller number of well pads, with a smaller number of wells on some of them. Some areas will not be viable at all, either because of the geology, or because the surface constraints make development sub-commercial.
It is also important to note that once drilling and fracking operations have ceased at a particular site, due to landscaping and site placement within the contours of the surrounding countryside, visibility of a production site becomes negligible, especially from ground level.
All sites will also have to be assessed and approved through the Local Authority planning process.
2. Fracking is seen as controversial. Should we believe what we hear?
There has been a huge amount of misinformation about this industry online and in the media. For instance, the Gasland movies, which show gas coming out of household taps, has no basis in fact and it has been shown that this is actually naturally occurring methane, not associated with shale gas production. The USA has been fracking for thirty years and has hundreds of thousands of wells which are perfectly safe. The UK will have a tight regulatory regime to make sure that the industry is strictly managed. INEOS is also very confident we can do this safely.
INEOS is used to dealing with highly complex petrochemical plants and we have some of the world’s leading shale gas experts on our sub-surface team so we are well placed to ensure very high Safety Health and Environmental standards across all of our operations.
3. Does fracking cause earthquakes?
The process of fracking is designed to produce a network of very small fractures in gas or oil rich rocks to provide a path for it to be extracted from a well bore. This is a carefully controlled process, conducted between 1 and 5 kilometres more below the surface. Done properly, people should not notice this activity at the surface. Let’s remember, a million wells have been drilled in the USA and there have been very few problems.
It is the view of the Royal Society and Royal Academy of Engineering that this issue can be managed safely and the UK has put in place strict regulation to ensure this. Extractors are required to monitor seismic activity and stop operations if anything above 0.5 on the Richter scale is recorded. This is hundreds of times below the energy level that can be felt by humans, and is more strict than standards for coal mining and geothermal energy.
4. What about water contamination?
These wells are between 1 and 5 kilometres below the surface, far beneath the aquifer. They should be designed to prevent contamination.
The rare examples of water contamination in the US were caused by issues such as poor well design, poor disposal of process water and poor capping of wells at the end of useful production; none of which will occur in the UK, because of the development of the technology; lessons learned from the US and the strict regulatory regime that will be in place control the shale gas industry.
5. Will fracking cause air pollution?
The Environment Agency has already said it is not expecting any major air quality issues from shale gas production in the UK. Of course there will be some disruption when the wells are drilled but these will be for a short duration and they can be properly mitigated. UK regulators tightly monitor the build quality and operation of oil and gas wells so there should be no problems if the wells are constructed correctly.
The main gases produced from dry shale gas exploration are methane and nitrogen. Methane is safely used everyday within our homes, for heating and cooking. The management of methane, across is transportation, use and storage is well understood and tightly regulated within the UK. Drilling for natural gas has been undertaking safely for some 40 years, both onshore and offshore, in the UK. We know that by using established industry engineering designs and procedures throughout our drilling operations, we can safely manage methane. In the case of Nitrogen, this is an inert gas present in the air we breathe, approximately 78% of dry air is nitrogen.
6. Why should the public trust you?
INEOS is one of the world’s biggest chemicals companies. We are used to running huge petrochemical complexes safely. We have some of the world’s leading shale gas experts on our team who collectively have drilled thousands of wells. We believe that the combination of our expertise as a global petrochemicals company and their expertise in shale gas makes for an unbeatable combination.
7. How big does INEOS want to be in shale gas in the UK?
We want to become a leader in UK shale gas development because we believe it is the only way for UK manufacturing industry to stay competitive. INEOS is one of very few businesses that can use shale gas as both a fuel and a feedstock and we are already spending hundreds of millions of pounds to import shale gas from the USA. We also know that UK shale has the potential to make up a significant proportion, if not the totality, of UK gas requirements going forward. This means the UK could have energy security for the first time in many years.
8. Why does the UK need shale gas?
In Germany, for instance, industrial energy prices are capped. Twenty years ago, German and UK manufacturing each accounted for 23% of GDP. It’s still the same in Germany today but the UK figure has declined to 11%. That’s a collapse in UK manufacturing and a lot of it can be accounted for by our uncompetitive energy costs. To be able to compete, we need UK shale gas and this country has huge reserves of it. We know if we don’t address energy costs for heavy industry, it will cease to exist in the UK.
9. Will UK shale gas reduce the cost of UK energy and gas?
Gas prices in the US are now around a third of European gas prices. The UK needs gas for energy for homes, schools and hospitals – for example, 83% of UK homes currently have gas central heating and many cooking stoves run on gas. UK manufacturing needs gas as a raw material, and desperately needs competitive priced energy – the UK is losing jobs to the US where they have cheap gas.
Locally sourced shale gas will improve security of supply and lessen the risk of high and volatile prices due to uncertainty about gas imports.
Moreover if the UK can help lead the development of shale gas in Europe then there is a real prospect of prices falling in the medium to long term.
10. How many jobs could be created by INEOS SHALE?
The amount of jobs that INEOS Shale will create is dependent on how many licences we manage to obtain. But speaking more generally, a recent report estimated that the shale gas industry could directly create 6,000 jobs and support between 64,500 and 74,000 in the UK alone (IoD 2013 & EY, 2014).
11. Can the local community trust you?
Yes. We may be new players in the shale gas industry but INEOS has a very good safety record within the chemical industry and we now have some of the world’s leading fracking experts working for us.
We operate in communities across the UK where we actively engage in open dialogue. We see no difference here and we will be open and transparent in all of our plans related to the development of any shale gas operations.
We also strongly believe that the communities above our shale gas operations where we are successful should share in some of the financial benefits, in addition to the wider community benefits brought by additional skilled job opportunities.
Given this and the fact that the regulator will be watching the industry very carefully, we think the public can be completely reassured.