IGas Energy Plc: Getting to the Subsurface

Andrew Austin, CEO, IGas Energy Plc, had a simple message for the delegates in attendance at Unconventional Gas Aberdeen 2014: if the industry didn't do the surface issues correctly, didn't get the social license to operate, get local communities behind the industry's activities, then no one would ever be able to figure out if the subsurface worked when it came to unconventional gas.

Given the UK's North Sea experiences, he painted a picture of how offshore operations did not have to deal with neighbors.

He offered, “We operate at over 110 sites across the country and that means we've got an awful lot of neighbors, an awful lot of people watching how we behave: how our lorry drivers are behaving through to how we're behaving with the Health and Safety Executive, the Environmental Agency and others. You absolutely have to be upfront with how you operate.”

IGas, said Mr. Austin, operated more onshore oil and gas fields in the UK than anyone else, with production in the East Midlands, Wheel Basin, Moray Firth and in the Bowland Shale.

He reported that IGas' current production was around 3,000 boe/day, at around 90% of that oil.

Gas from shale was something that had received a lot of press attention, noted. Mr. Austin, who observed, “I think we've seen support across the political spectrum, from the Labour Party and from the Conservative Party, and from the Liberal Democrats – you have to remember that (Secretary of State for Energy and Climate Change) Ed Davey is a Liberal Democrat and so the level of his support for shale is very encouraging. In fact, all three party conferences passed resolutions in support of safe extraction of shale gas, and it's role in the decarbonization of the economy.”

First-mover advantage had lead to growth in Aberdeen, he said, adding that the Onshore Operators Group had issued a supply chain benefits study would soon be released.

“Many people ask me 'do we have the supply chain to be able to carry out shale gas appraisal?' And I think at the appraisal level we do: it's expensive, but there is the kit out there, the expertise to be able to carry out the appraisal level,” he explained. “There clearly is a huge opportunity once we get into the production phase.”

Unconventional gas also offered opportunities for skills development, he said, offering that IGas was working with colleges and institutes of further education to make sure it had the skills and could offer well-paying jobs.

Regarding security of supply issues, Mr. Austin said while the UK would be able to import LNG, energy from indigenous supply would be crucial going forward.

“The events in the Crimea over the last couple of weeks have reemphasized and redoubled politicians' beliefs in the importance of indigenous supply of energy,” he commented.

Tens of thousands of direct jobs were also likely to be created from the industry, Aberdeen being a prime example.

He also spoke about IGas' good health and safety track record and noted the 58-day long public consultation process for any application to drill, with a number of regulatory bodies involved in the process.

“It is a long process,” he said, “but, you have to go through through that process to earn the right to drill, and we do not speak against that process because it needs to be there to give people that confidence. In time, once that confidence has been established, it will be the job of governments to ensure that that can be simplified and reduced to make an efficient process for the industry.

Companies complaining about it, said Mr. Austin, would not help the situation.

It was possible to operate in sensitive areas, he said, offering an example of drilling in close proximity to housing.

“While we live on a very crowded island, we are dealing with very thick sections of shale, and because of that we have the opportunity to look at pad drilling and potentially extracting significant amounts of gas from single sites,” he said.

Regarding the “social license to operate, Mr. Austin presented an IGas community farm project.

Of community engagement, he said, “Talk talk talk to people. It's really important to do it well, from the beginning and to keep doing it all the way through the process.”

The Government, he reported, was very helpful in offering volunteer experts from various agencies. “I think they are really important to show there is a regulatory framework in place, because it's too easy for detractors to turn around and say 'oh, it's not a regulated industry, it's only just arrived' etc. etc.”

Government, he said, had a good role in instilling confidence in people.

Meanwhile, he said public meetings were hard work, especially at open forums where the most extreme views often ended up the ones being discussed. “We are of the view that, wherever possible, you should do exhibition-led things where you have a significant number of employees in the audience that can stand and talk to people about issues. It's no good just putting your PR company up there – you need to be there and do it yourself,” he opined. “People want to talk to the people that are doing the work.”

He also spoke of environmental baseline monitoring, making mention that IGas had worked with Ground Gas Solutions to monitor a site that was built on top of a peat bog, which meant a significant amount of biogenic gas was already in the area.

Showing operation sites with reinforced security fences, and even razor wire, Mr. Austin said that security did have an impact on cost, but was important, to guarantee the safety of employees, contractors and even demonstrators. “The biggest concern of demonstrators on the site, is that they might hurt themselves, and we can't allow that to happen.”

Protester tactics, he said, were mostly non violent, typically walking slowly in front of trucks to slow down the operation, with everyone videotaping everyone else. “Lock-ons,” he explained, were protesters embedding themselves in concrete, which must be cut through. Cycle locks are also used, he said.

“We obviously respect the legitimate right to protest, however the disruption it causes to the local community by slowing up their vehicle movements up and down the roads is not very acceptable. As operators, it's important to remember the police's job is not to defend you, but to defend the rule of law and make sure it's upheld at all times,” concluded IGas' Andrew Austin.