Balanced Shale Gas Can Help Solve UK Energy Crisis, Say Consultants
Natural Gas Europe was pleased to have the opportunity to speak with three managers of Golder Associates: Robert van Wyngaarden, Global Oil and Gas Sector Leader, Henry Lang, UK Oil & Gas Sector Leader, and Sarah White, Global Client Marketing Leader. We investigated the role of consultancies in the shale gas industry at a British, European and global level. We also spoke about positive sinergies and positive consequences of shale gas. According to Golder Associates, shale gas has had the unquestionable effect of "raising energy security as an issue of energy management and energy demand." Golder Associates is a employee-owned organisation with 180 offices worldwide and more than 8,000 employees.
Do you see any unquestionable positive aspect of the on-going shale gas debate?
Henry - I think that it is making people consider overall energy supply and energy usage more. Hopefully, shale will become an effective component of the UK energy mix. And gas for the UK is an important component of our mix. I think that the same applies for the rest of Europe. But it certainly has had the effect of raising energy security as an issue of energy management and energy demand in the UK. And from that point of view is probably serving a useful purpose because otherwise there is a tendency for people to just switch on their lights and turn on their cooker and pay no or little regard of where that comes from. We in the UK need to have a very serious debate about energy because we are using more than we are going to be able to produce. There is a very real risk in the UK that in the next decade we will have energy shortages because there is not enough new generation capacity being built.
On another note, is it possible to evaluate the environmental impact of shale gas?
Robert - Shale gas is not this weird space alien, different cousin from regular oil and gas. It is still extracting hydrocarbons. What we are doing is we are going to the source of the hydrocarbon and extracting it, instead of waiting for it to come to the source and extract it differently. It is pretty much the same way you do things. You have to drill to characterize the resource, whether it is a pool or a shale reserve. Some of the things are different, but most of it is the same in terms of evaluating the environmental impact.
What’s the role of consultants in the shale gas industry?
Robert - I don’t think consultants play any more of a unique role in shale gas than they would in the overall oil and gas industry... We provide a critical role, in providing technical know how and expertise.
Can independent consultants’ validation pave the way to public acceptance?
Robert - The reason companies, smaller or larger, come to us is that we have good knowledge and expertise. Above all, we want to do independent, good quality science and advance our understanding of the issues and thus make better decisions. Accurate communication of the facts can pave the way for better public understanding.
Henry - Because consultancies are operationally independent, although we may be perceived as part of the oil company team, certainly I believe in the UK we have a role to play in helping communicate that shale can be delivered safely. There is a difference between when the operating company is a super major such as Shell or Chevron) – they have a much greater capacity and technical capability within their own organization. When you look at the smaller operators getting licences in the UK at the moment, consultants play a more important role because they bring skills to the team that the company does not necessarily have. We do provide services to the super majors and majors because we may have a niche expertise that they need, whether it is modelling or environmental expertise. In the UK, one of the advantages we have is knowledge and history which of the big round of conventional oil and gas exploration that dates back to the 1980s. Where the small companies are disadvantaged is that they don’t have large environmental or engineering teams in house. So they turn to the consultants for support.
But how independent can consultants be?
Sarah - We have to be, because it is our reputation. We sit behind a lot of these organizations and guide them in terms of the best approaches and best practices. We effectively have to be neutral. We don’t take a position on these things. You will not find us taking a position on the shale gas argument. We will deal with the factual information, so for instance the report by the IoD and the Geographical Survey Report. We will deal with the facts and correct facts. So for instance, there is a lot of incorrect information about how you deal with shale. Also there is a lack of knowledge of the geology of a particular area.
Henry - For sure one of the most important things is not just our credibility with the client, but it is our credibility with regulators. For us, our reputation is more important than any one contract with the client. There are projects and even clients we would not get involved in. We evaluate clients and projects.
Is it the same for every European country?
Henry - The development and the evolution of shale gas in Europe will demand consultancies’ support, particularly from organizations like us, which have the existing expertise and knowledge from the shale in the US. We can transfer that knowledge into Europe. Some of the permitting expertise is country specific, because you have to know the rules, the regulation and the social issues that relate to that country, whereas some of the subsurface technical issues are very similar from the US to here. The fracking process is very similar.
In this sense, what is the relation between the UK and the rest of Europe?
Henry - What we would like to see here in the UK is a development of the industry – it would develop slowly – it is not going to develop as in the US, the scale and the speed will be different. Standards and protocols that we develop in the UK, I think will set best and standards elsewhere in Europe. That hopefully will give business to companies like ours that have UK experience, skills and knowledge transferable to Poland, Ukraine and Lithuania.
Will you also work with local consultants?
Henry - If we have an office, we will use that office and local partners. If we don’t have an office, we will team up with a local consultancy that has that local, legal, technical and social component and we bring to it the technical knowledge of an international industry.
Sarah - Golder is a global organization and we work with small local partners that are important for specific projects. It is really important that we engage with the local communities. In that particular instance, we work with local partnerships as well.
Apart from the UK, Poland and Ukraine, do you see other business opportunities in Europe?
Henry - It is fairly well known that Lithuania is on the list. I think Romania. In France there is a moratorium – that is true. But my personal view is that the situation in France may well change as the politics change.
What is the role of Brussels in this process?
Henry - Brussels has an overarching role to play just as in the UK the government has an overarching role to play, whereas the actual decisions are made in planning terms at a County level. I think, within all regulatory authorities, the onus on them is to put the framework in place that will ensure that, if shale development does occur, it is done properly and it is properly regulated. We are lucky in the UK: there is a framework of guides and regulations that enable it to be controlled, so that if it is going to take place, it will take place in a managed manner. And that makes our job as consultants a lot easier if there is a regulatory framework to work within.
So does it mean that consultants are asking for specific laws on shale gas?
Henry - If there is a regulatory framework, it makes it a lot easier to do our job. If you go to a country that has no regulatory framework, it makes it almost impossible to gain consent if there is no framework or consent to apply for. So, where Brussels comes in is putting an overarching guidance in place. If they put that in place and the nation states implement it, I believe that then it helps with social acceptance. It would enable the industry to move forward with a Social Licence to Operate.
By Sergio Matalucci