The French Denial: Interview with Christophe Hecker

Christophe Hecker is a French real estate businessman passionate about the shale gas and oil developments and the energy boom as a whole. In a book released last March titled Global revolution and French denial written with his longtime friend, Alexandre Andlauer, a financial analyst and energy expert, he attempts to explain to a broad audience why France should follow the example set by the United States. 

Your book implied that France is losing out on an opportunity by refusing to explore its non-conventional resources. Can you explain why it’s an economic if not a strategic mistake? Or even a denial ? 

We are losing an opportunity to play a leading role in the world in terms of energy. France’s oil and gas industry is recognized with a genuine expertise. French companies like Vallourec, CGG Veritas are among the ones that invested the most in the shale gas revolution in the United States. We are destroying our own expertise by accepting to use it abroad but not in our soil. The day we will join other countries, because we will, we will depend on American companies and pay them to do the work our own companies could have done. 

We are also losing an opportunity at a strategic level. France imports near 100% of oil and gas we use from countries with low records on human rights or states that fund terrorism.

Regarding the economic benefits, I stay cautious because it‘s hard to have a reliable prediction in terms of job creation. All reports done in the past agreed that shale gas developments could definitely boost the economy adding up to 220,000 jobs. In the United States, direct and indirect jobs have been created. Moreover, lower energy costs give more leverage to the government to stimulate other industries. If it happens, it could help bring back economic growth in France. We must do exploratory drillings to know exactly if it’s achievable. 

What do we really know about the potential resources in France?

The studies showing potential resources in every country are made by the International Energy Agency (IEA) and the US Energy Information Administration (EIA). According to the United States Energy Department, France would have the largest amount of shale gas resources in Europe. Four years ago, the report predicted that with our resources, we could produce what we need for the next 100 years. The projection was lowered to 77 years in the latest report. That’s a lot. But to have specific figures and a clear idea of the potential, we need to do some exploratory drillings. In The United States, the drillings exceeded the early expectations. Sometimes there are  bad surprises as well.

In Poland, the first drilling operations lowered the expectations.

What about the cost of drillings? Is it worth it? 

According to the government buried report, each drilling would cost 20 million euros. It looks too much. In the United States, we shale oil drillings cost between 7 and 8 millions dollars and even 6 million dollars for the shale gas. I cannot believe that the cost will be three times higher in Europe. One and a half times more expensive is conceivable. It’s close to what Total told us. I could not give an exact figure but it’s probably between 10 and 13 millions of euros which is make a big difference in terms of profit. In the United States, the first drilling were two times more expensive than they are now. Technological advances and the experience have reduced significantly the costs. 

One of the top concerns surrounding shale gas developments is the impact on the environment. What is the real impact of shale gas developments on the environment according to your researches and your investigation?

Non-conventional hydrocarbons are fossil fuels so they have an impact on the environment by producing greenhouses gases just as most other industries. What you are saying in the book is that the risks are much smaller than the overstated vision we hear in France. 

The American experiment shows two sorts of risks: 

First, the seismic risk. When we frack at a depth of 3,000 meters, we crush the shale rock and disturb the rock mass. If the operation occurs close to a (natural) geological fault, seismic consequences can be felt on the ground. It’s exactly what happened in the United Kingdom during the first exploratory drillings. Local authorities were quick to respond and they implemented a ban of any hydraulic fracturing near geological faults. If the drillings do not take place in an area close to a natural fault, no seismic activities can be felt on the surface. The rock is fractured, or cracked to be more accurate. It’s actually few millimeters not thicker than a hair. Of course the seismicity is felt where the crack is made but with the intensity of a small earthquake measuring 2 or 3 on the Richter Scale. It is a similar to a passing of a subway except that is only felt to a depth of 3000 meters.  

Water contamination is another concern if you consider that a hydraulic fracturing to a depth of 3000 m depth can rise to the water tables which are located at a depth of a 300 meters. Any geologist can explain that a fracture cannot have a length of 2700 m and get to the water tables. In the United States, a 2014 study performed on 20,000 wells shows that the average length of cracks is around 300 meters far from reaching the waters. On June, 5 the U.S Environment Protection Agency released a  survey showing not link between hydraulic fracturing and water tables contamination.

Will lower oil prices hurt shale gas and oil production in the United States? In this environment of uncertainty, is it a concern for the industry's future prospects?

When we saw the prices go down at a fast pace, we were wondering how the industry could survive and still make profit. By improving the efficiency and the technology, they were able to stay competitive. They are no risk that the production will decline in the coming years especially in the Marcellus shale, Pennsylvania because of impressive technological advances. I am not concerned about it. In some areas, the cost price is 1 dollar per 1 million of BTU. That’s pretty remarkable even if it’s still far from the market price whom is between 2.5 and 3 dollars per 1 million of BTU.

There are now less oil and gas rigs than before but the wells keep producing not just for the United States but for the global market. Terminals for natural gas liquefaction (LNG) are being built on the east coast of the United States to export resources towards Europe. Meanwhile, The Panama Canal is being redesigned to ensure the exportations to Asian countries. The United States will soon become a major gas exporter.

Is this book trying to convince French people and their representatives in Congress? How did elected officials react to your book? 

It’s the ultimate goal we have in common with the Non-Conventional Hydrocarbons Center (CHNC) which opened recently (link). We also met Total non-conventional department executive director who give us some insights on the subject. We would love change people minds but the fact is that a vast majority of citizens are not familiar, rightly so, with energy concerns.

There are 3 things we must do to have a meaningful debate: 

First, people should not forget that coal still represents 40% of the world electricity production whereas the widespread belief that this is an energy of the past. Second, many people assess that nuclear power is the only answer to all our problems but we should remember that it’s a subsidized source of energy. If we were to pay the energy bill with the nuclear energy market price, the costs will be much higher for French households. Third, a forced march toward an energy transition with an energy mix including 50% of green sources of energy is almost impossible in a short term. Germans made the choice of abandoning nuclear power plants and developing clean energies. It cannot be considered as a success. They are now burning coal like never before to produce power. 

We handed out to French Representatives copies of the book outside the National Assembly as they were examining the energy transition bill. A representative from the former UMP right wing party recently re-branded Les Républicains contacted us for a one hour one and one conversation in his office. For the first 45 minutes, he was focusing on wondering which lobby or private interests was behind our project. It’s unbelievable to see the level of paranoia in this debate. We wrote and published ourselves the book.

Will shale gas developments impact the 2017 presidential race? How can we overcome the political and sometimes ideological gridlock we have in France surrounding the debate over shale gas?  

I am convinced that the shale debate will be an issue during the next presidential race. It’s hard to avoid the subject. Many countries are considering shale gas developments and change their legislation that could make drilling operations possible sometime in the future. We are the only country that sticks to his position.

Both Former French President Nicolas Sarkozy and his main challenger to be the conservative candidate Alain Juppé are in favor of explorations. If Les Républicains (ex-UMP) wins in 2017, the debate will likely be re-open with the willing to allow exploratory drillings. But it’s still going to be hard to actually make it happens because opposition forces within the French society and in Congress. Regarding Nicolas Sarkozy, he is totally schizophrenic. As President, he signed into law the anti-fracking bill and now he is running again for his old seat he backs down by saying non-conventional hydrocarbons are a chance for the country. That’s amazing. As of today, the discussion is not about policies but about pure politics on the right and on the left. 

Two representatives from the two major parties, Christian Bataille and Jean-Claude Lenoir shared this assessment but they are up against opponents who use fallacious arguments. We have a lot of work to do but it’s necessary. The United States is a leader, China starts producing its own shale resources this year and could get more affordable energy costs. Europe could be left behind and the whole economy will suffer from it. 

Kevin Bonnaud