Interview with Celtique Energie: Locals Recognise Shale Opportunities
While arm-wrestling between shale gas enthusiasts and detractors continues its momentum in the United Kingdom, Celtique Energie bets on West Sussex's potential. The company is willing to quantify the region's resources, investing in community engagement to gain the upper hand. Locals lament that drilling activities could endanger their wealth and their lifestyle, but companies argue that the explorations can be carried out safely. In particular, the firm led by Geoff Davies, which holds 19 exploration licences in five countries within onshore Europe, seems confident about the opportunities in Southern England.
Herein, Celtique Energie's CEO argues that potential drilling sites must be defined on geological considerations, not taking into account other factors like the wealth of nearby communities. West Sussex is considered a good place for exploration and production given its undulating land and natural woodland.
Davies also says that his company will fund any eventual incident and environmental impact, not waiting for insurance claims. Will these reassurances, combined with the on-going public engagement, convince local communities?
What steps is Celtique taking to ensure that stakeholders concerns in communities near the development sites are properly addressed? How do your plans for engagement differ from the approach taken by Cuadrilla Resources and IGas, whose efforts have met large scale protests?
Celtique Energie has committed significant time and resources to engaging in an open and transparent manner with the communities in Sussex in which it is proposing to operate. At each of our well sites we have held extensive two-day public consultation events, at which a number of local people have attended. In addition, we have provided a presentation and open Q&A to the local parish councils and elected political representatives; held monthly community surgeries enabling local people to raise any comments or queries directly with Celtique’s senior management; and more recently participated in a public meeting on one of our proposed well sites as part of a panel with elected politicians and regulatory agencies. We also operate a community information line and respond regularly to community enquiries as and when they arise. It is not for Celtique to comment on the engagement efforts of other operators. However, the industry as a whole recognises how important community engagement is, which is why the UK Onshore Operators Group published a Community Charter in June 2013 that identifies the steps operators are taking to consult with the communities in which they operate.
What about your efforts in the last weeks?
At this time we are focused on exploration sites at a few locations in West Sussex. The location of any future development sites will be dictated by a combination of suitable geology and locations considered acceptable to the consultation and planning process and the relevant Mineral Planning Authority.
West Sussex is one of the richest areas in the United Kingdom. What appeal is there for landowners to accept development when they perceive a risk for the value of their properties? In this context, is there a differentiation between how conventional and unconventional exploration is viewed?
The surface footprint of a well site in production is very small in the context of the value of the energy produced. West Sussex has undulating land and much natural woodland to screen operations for the temporary noise and visual impact during the initial drilling phase followed by long quiet periods of production. A production site can be supplement by planting additional trees and unobtrusive as evidenced by existing production sites in West Sussex.
The decision of any land owner to enter into a leasing agreement with an operator will inevitably be down to a range of factors and personal circumstance. It is the policy of Celtique not to comment on the commercial agreements it has in place with its land owners. However, from the conversations our senior management has had with the public at our consultation events and monthly community surgeries in West Sussex, it is clear that there are a number of people who recognise the significant benefits oil and gas production could bring to the region. These include job creation; direct and indirect investment in the area; and proving an important natural resource for the nation.
Should the GDP of people be a factor to take into account while selecting areas to test?
No, it should not. The areas of suitable geology do not correlate to GDP and in our view extracting the nation’s resources should not be restricted because some areas are wealthier than others. Operators already take into account a wider range of planning and environmental considerations when selecting prospective well sites, including access and transport infrastructure, proximity to ecologically sensitive areas, and availability of existing natural screening around the well site itself. It is ultimately the role of the relevant Mineral Planning Authority to consider all these factors and make a decision as to whether the proposed well site should be granted planning permission or not.
Cuadrilla's activities have seen seismic tremors and, reportedly, the release of radioactive wastewater. What assurances and standards of care in operations does Celtique provide?
We work within a highly regulated industry and require approvals from the Department of Energy and Climate Change, the Health and Safety Executive, independent well examiners, and we need to obtain multiple permits from the Environment Agency. Celtique has committed to adhering to the highest health and safety standards and use best industry practice to ensure against all ecological and environmental risks across all our exploration wells. Our Health, Safety Environment and Community Management Systems are detailed on our website.
As importantly, our ability to continue in business across Europe relies on maintaining an exemplary reputation. Our investors have insisted as a condition of investment that Celtique’s chief executive personally signs up to an Environment Charter of good practise “that do not sacrifice either long-term environmental stability or human welfare for short-term financial gains, and that benefit the communities where the underlying businesses operate”. The company will therefore rectify and fund any incident and environmental impact and not wait for insurance claims. The insurance cover is a standard industry requirement and given the low subsurface risk nature of this venture the insurance premiums are low cost. However, we will also take out extensive insurance to include third party liability, control of well, spillage, seepage, and clean up prior to commencing any physical operations.
Celtique Energie is a private company. Can your company’s structure increase the chances to successfully explore for shale gas? Not having shareholders to please, do you think that private companies can theoretically go for more risky projects?
It is not appropriate for Celtique to speculate on the motives of other operators. However, as part of the permitting process in the UK companies are required to satisfy the Government and licencing bodies as to our technical and financial capability as part of the licence award process. We were similarly required to satisfy the governments of France, Germany, Switzerland and Poland as to our capacity to operate. These governments, in turn, scrutinise the funding and relationship between the parent company and subsidiaries and planned licence work activity as part of this process. Companies such as Celtique would therefore not be granted permission to explore if the relevant regulatory and licencing organisations felt that it was not a responsible operator.
What is your personal assessment on the present debate about shale gas? Is it increasing population’s awareness of British energy difficulties?
There is no doubt the UK needs to increasingly import more oil and gas and the transition to non-fossil fuels will take decades. I believe this is well understood and accepted by most people. Indigenous production of both conventional and shale-based hydrocarbons makes good economic sense for the nation in terms of job creation, the balance of payments, taxation contribution and provides the nation security of supply.
But people remain concerned.
It is clear there are a number of people living near the proposed well sites that have concerns about the immediate impacts on their area. Equally there is a significant amount of misinformation and scaremongering being promoted online and social media that is unfounded and needlessly raising tensions on the ground. Ultimately it is the responsibility of both industry and government to address these concerns and highlight the fact that onshore exploration and production has taken place safely and efficiently in the UK for a number of decades.
Is the shale gas debate increasing public opposition also to onshore hydrocarbon projects?
It is clear that in the areas where onshore exploration is on-going, there is scope for both industry and Government to increase its engagement with local communities and clarify what is involved in the exploration process and what is not. Unfortunately a number of people are unaware that over 2,000 wells have been drilled onshore in the UK to date, and in the case of Sussex there are already a number of conventional wells producing safely, quietly and efficiently for many decades. As part of this process, the industry also needs to address the scaremongering and misinformation that has been promoted by certain activist groups who are fundamentally opposed to onshore exploration in the UK or in their region.
Apart from the legitimate tensions with environmental groups, what are the main difficulties for the shale gas industry at the moment?
Our current focus is on securing planning consent for exploratory data acquisition wells within its licence areas in order to quantify the potential nation’s resources.
All in all, what is your personal view of UK's energy policy?
Clearly this is a challenging time for the UK’s energy policy, with North Sea production declining year-on-year and the country now importing over 40% of its energy from abroad. It is for that reason that the senior management team at Celtique firmly believes that it is in the nation’s interest for companies to undertake exploratory work, subject to the relevant planning and environmental permits, to prove what untapped indigenous oil and gas reserves are present. If these reserves prove significant then there will be a number of benefits to both local communities and the wider public. These include reducing the UK’s reliance on energy imports from abroad, significant job creation and investment in the areas of production, business rates for local councils and central taxation.
Sergio Matalucci