OK, so the decks are being cleared for the great British shale gas bonanza. “Don’t worry,” smile the politicians, “Cheap gas is on its way.”
How many times have we, the Great British Public, fallen for that one? And the biggest lie of the lot was nuclear energy; a lie that is once again being peddled albeit tinged with a little French panache.
Of course there won’t be subsidies, well not direct ones. Shades of: “Its life Jim, but not as we know it” to quote Star Trek. But a subsidy is a subsidy is a subsidy, even if it’s dressed up as something else.
So are we really going to fall for the cheap shale gas trick? Sadly, we probably will, seduced by stories of the incredible US shale revolution.
I’m not going to talk reserves numbers; let’s wait and see what British Geological Survey says about the subject in the next few weeks, possibly even days.
o Let’s assume that there’s lots of gas down there.
o Let’s assume that there will be a rush of companies keen to Klondike.
o Let’s assume the Treasury comes up with the tax breaks that are currently being talked about.
o Let’s assume that the new body being created to regulate the hoped-for bonanza hits the ground running.
o And let’s assume that environmental and planning laws are, shall we say, eased to enable exploration and exploitation to take place.
That leaves the Great British Public to contend with; oh, and the serious lack of rigs actually designed to carry out shale gas drilling efficiently (and safely).
We like the idea of cheap energy, but that doesn’t mean that we’re going to actually allow it to happen. Heaven forbid. Just look at the wars being waged around Britain against especially onshore wind.
Do you think the GBP will be any more hospitable to shale gas extraction?
I don’t think so.
o Who really wants a drilling rig as a neighbour?
o Who wants mini-quakes from hydraulic fracking?
o Who wants the risk of water table/aquifer contamination?
o Who relishes the idea of a gas escape?
o And so-on and so-forth.
I want to be proven wrong on this. But I can’t help but think that we will collectively seek to destroy the opportunity and then wonder why the hell gas goes on getting more and more expensive.
Another concern that I have is that, having expected to be overrun by companies eager to grab the shale gas prize, many people will end up being disappointed at how slow progress is quite likely to be.
This is because there is a serious lack of hardware, especially competent rigs anywhere in Europe where, incidentally, the shale gas race has slowed to tortoise pace.
Forget about shipping the kit across the Atlantic. European rules are already stacked against them.
Earlier this year, I did some digging around on behalf the International Association of Drilling Contractors’ excellent house journal, Drilling Contractor.
Dirk Schulze, CEO of KCA Deutag unit Bentec, and Joep Beyer of the wider KCA-Deutag; together with Joachim Buechner, MD of ITAG; Jean-Claude Bourdon of French company Dietswell; and Tom Pickering, independent consultant and chairman of the Unconventional Gas Conference in Aberdeen, are clear a European shale gas industry needs rigs that are Euro-compliant at the outset, compact, quiet, easily transportable and which are environmentally as responsible as possible are needed.
They do exist, but are like hen’s teeth, and a lot more development of both the rigs and their ancillaries is needed.
Bourdon went so far as to suggest that the conventional descriptions of rigs be altered as part of the process of changing public perceptions.
“We have been carrying out work on a new design at Dietswell. What is needed is something that can drill those wells near cities. I don’t want to use the terms of rigs or derricks anymore,” he told me.
“We need to leave the classical images of the oil industry behind. We are looking at a new generation of drilling rigs that look more like civil works equipment. This would be much more acceptable to the public, I think.”
KCA Deutag reckons that it is already in a good place with its successful Euro Rig family of designs of which a number have been built by subsidiary Bentec, and are operational.
However, CEO Schulze currently cannot see a run on rigs in Europe; ergo demand might be modest at best.
Pickering’s view is that, among the factors that will heavily influence design in Europe, including the UK, is highway infrastructure.
OK, we’re becoming increasingly conditioned to big things being trundled around our roads . . . wind turbines and the massive mobile cranes needed for their erection; but drilling rigs and frack-truck convoys?
“The issue is Europe is a lot about the road infrastructure and its ability to handle the tonnage of the main rig unit load,” Pickering said.
“That can mean a 60-tonne weight in just one load with, say, 14 tonnes per axle, which makes it a special load in Europe.”
I reckon it will be years before the UK produces more than token quantities of shale gas. Cheap? I don’t think so.