Cuadrilla's Mark Miller - Standing in the Media Storm

2011 was a momentous year for UK independent Cuadrilla Resources. Catapulted from relative obscurity outside of the industry, to finding itself a household name after a potentially massive gas discovery and then encountering earthquakes during hydraulic fracture activity, the company has rarely left the spotlight since.

Rather than shirk the interest shown in its activities, the company has instead continued to engage government, media and the public in a dialogue about the benefits and dangers of its activities.

At the forefront of the media storm, CEO Mark Miller has continued to encourage discussion, meet with interested parties and openly debate the merits of an activity that threatened, only recently, to cast him and his company in a villainous role.

Fresh from a European Gas Conference Awards nomination for Executive of the Year, Natural Gas Europe spoke to Mr. Miller to reflect on an eventful year and to discuss Cuadrilla’s activities in 2012.

Natural Gas Europe: Good morning, Mr. Miller and thanks for speaking with us.

Mark Miller:  Good morning.

NGS: To start on a very positive note, undoubtedly the research you had already done with Cuadrilla had indicated that the prospective nature of the Bowland shale was quite good. Did you expect to encounter such positive results?

Miller: We certainly went into it hoping for a large volume of gas in place, but it beat our expectations for sure. It’s really due to the fact that the formation’s so thick. We just didn’t realise there were so many, in fact 3,000 feet of gas-bearing shales. We were pleasantly surprised.

NGS: Unlike other industry players who’ve been combative when dealing with the public and the media in the past, Cuadrilla seems to have been very forthright in addressing questions from your opponents. Has that been to your advantage, do you think?

Miller: It certainly has, yes. We spend a lot of time engaging with the public and giving site tours and working with the media and with the anti-shale opponents, so it’s definitely been a positive for us.

NGS: And do you take on board some of their concerns or the criticisms?

Miller: We listen to all concerns and when we can make a small change to the operation that allay some fears then we do it. But I think when people have a chance to look at our process and how we do things, a lot of those issues go away, and we get a lot of compliments after a tour on how clean and safe-looking the operation is.

NGS: Being the leader in undertaking shale gas activities in the UK, you were undoubtedly ready to address concerns about shale gas, but have you been surprised at the extent of opposition and protest that you’ve encountered?

Miller: Not really. It’s really at no different level, I think, than what we’re used to in North America. There are people who fundamentally disagree with using fossil fuels and we can respect that opinion. What we want to do is focus on the issues that they have with their concerns about groundwater and seismic tremors and the different things that they have concerns with, and just make sure that they understand that the process we’re using really mitigates these.

NGS: This time last year, you probably couldn’t have predicted how far into the limelight Cuadrilla would have been thrust. How have you dealt with that?

Miller: We haven’t paid a lot of attention to it but we do face the unique situation that we are the only shale gas operator in the UK, and one of very few in Europe. So, we do get a lot more attention from both sides—the opposition and people who have an interest in what we’re doing, a genuine interest on what we’re finding and how we arrived at our resource estimates. There ends up being a lot more meeting time and discussion time. We just keep up with it and when people want to have a chance to sit down with us, whether they’re pro-shale gas or against it, we make the time of them.

NGS:  And were you expecting that kind of reaction going into it?

Miller: Initially not, no.

NGS: I know it comes up frequently with an awful lot of people I talk to on shale gas—the movie Gasland: how has that impacted on the reaction and your operations?

Miller: It’s had a very large impact. That made a very big change for the awareness of people over here and we spend a lot of time discussing Gasland with people because there are some things just fundamentally wrong and some things are right. We have spent our time talking about the things that are real in that movie but demonstrating that we as an industry understand how those kinds of problems can occur and taking [that] into account when we do a wellbore design and a wellbore construction.

There’s really nothing when you watch Gasland that can’t be explained very easily and taken into account when you construct your well. We discuss that with people, show them we’re not just here as an industry to deny all of the bad events. We point out to people that when you see these kinds of things, these kinds of issues where someone can light their water tap, it’s very easy to explain and it’s very easy to prevent.

NGS: You mentioned there were a few things that were fundamentally wrong with Gasland. Could you give me an example of one or two?

Miller: There’s been a lot of studies on some of the events filmed in Gasland and they clearly show that the picture of people lighting their water tap on fire, and particularly the one in Colorado, the famous one that ends up on all the news clips, that was naturally occurring gas. That was known for years in advance of making that movie that it was naturally occurring gas, the gentleman’s water well was in a gas zone. When they made the movie, they knew that.

There was one about the fish kill in Pennsylvania, and it was suggested that it was due to a gas well, but when it was studied, it was due to a mine dumping acid-water into the stream.

The third one was the high benzene levels in Dish, Texas that they alleged everyone was sick because of that. But when the health agency went in and actually studied that, they found benzene levels in people’s bloodstreams were no higher than the rest of the nation and that the ones that had the highest amounts of benzene were smokers.

So, a lot of those kinds of things made it into Gasland. And in general, Gasland really took some bad examples and did a great job of convincing the population that watched that that we, as an industry, really don’t know how to handle these problems and we’re not environmentally concerned, and it couldn’t be farther from the truth.

NGS: That must be frustrating for you going into a conversation knowing that that’s the image someone has in their head of you as a company.

Miller: It is frustrating, but it’s really just taking the time to explain what we do that would prevent something like that happening, and that becomes the easy part. So when we invite people to the well site to show them our drill rig and show the operation, we also spend about an hour  in a small office we have out there showing diagrams of wellbore and showing how you can get gas in groundwater if you don’t construct the well right, but how easy it is to do the job right and how easy it is to repair the problem if natural gas gets into water wells. So it really does put a lot of concerns at rest when they have a chance to talk to us.

NGS: Going into the hydraulic fracturing near Blackpool, water contamination would have likely been the big issue. Were you expecting the earthquake and seismic activity that came with it?

Miller: We weren’t expecting it. In fact, we’re one of the few companies in recent decades that have documented anything to do with seismic activity associated with the frack treatment so, while they’re very small and they caused no damage, they did make the newspaper headlines and we had to address that to really put the public at ease who were working with us. We worked very closely with the council and the local residents to show them what steps we’ll take as we go forward, and we’re starting to see in them a confidence in us and hydraulic fracturing. And I don’t think it’s going to be an issue in the long run.

NGS:  Have you had any indication from the Department of Energy and Climate Change as to when you can expect a resolution?

Miller: We’re working closely with them. I think we have one more meeting with them around the end of the month. We expect that a decision will be made some time in February or possibly in March. I feel positive about that decision but that’s really theirs to make.

NGS: And from Lancashire, Cuadrilla is continuing to move ahead in the Home Counties, in Sussex, Surrey and Kent, with conventional gas exploration. How does what you have learned in the past few months impact the activities you plan to carry out there?

Miller: First I want to correct that. We’re not actually planning on doing anything down in Sussex. We attended a meeting there last night to explain that to the public. We have licences down there as we do at different areas around Europe and someone had looked at a planning permission we had put in to build a site, a well site that we’ve had built for two years, and started really making an issue that we were coming here this month to drill. Some of the concerns of the people were the same as what we hear in Lancashire, and we had an opportunity at the meeting last night to discuss those very things. One of the things we pointed out to everyone is that our focus right now is up in the Bowland shale. And there’s a lot more licence areas across Europe that we may or may not get around to doing. Right now our focus is on the Bowland shale and not down here.

NGS: I know your COO Eric Vaughn had a traffic light system, but besides that, how are you safeguarding against environmental problems?

Miller: That’s actually something that’s used in Holland and in Germany for water disposal wells and issues of seismic activity. It’s a modified system so when we do a two-hour injection for hydraulic fracturing, we’ll use this traffic light system.

Additionally, what we’re going to do when we start back up is pump smaller volumes of fluid into the ground. There’s a direct correlation between the amount of fluid and the likeliness of seismic activity. But to be clear, there’s always a very low level of seismic activity, thousands of times smaller than anyone could feel any time that you inject water into tiny fractures in the rock. It’s been understood by the industry for decades. It’s never really been a problem. What happened in Blackpool is unique and different because it was a certain geologic combination there of steeply dipping beds and faults and we feel that, when we pumped our frack treatment, that it got some water in a fault plain and it relieved a stressed fault. And it may be something we never see again. But between the traffic light system and the changing our jobs, making them smaller, we’ve probably reduced the probability of a reoccurrence by tenfold or a hundredfold.

NGS: In light of the nomination for the European Gas Conference Awards, is there anything in particular you’d like to say to an audience?

Miller: You’ve asked a lot of questions about the PR and connecting with people. When I look at our efforts, the public generally has three questions and very sensible ones:

When we’re going to do something, the first question is, is it safe?

Secondly, communities want to know what’s in it for them? If you bring those activities here, what benefits does it bring to the local population?

And the third thing is, can we trust the company? Whether it’s Cuadrilla or another company.

We focus our communication efforts on answering those three questions. And in all our public engagement activities, we believe that’s the only way to build community confidence in what we are doing.

And regarding the nomination, I am honoured to be considered for the award. But it is important to mention that the success and achievements of Cuadrilla must be credited to a team effort rather than a single person. We have a great technical and operations staff on board, and we are supported by an excellent group of PR consultants. So if I was to be receive the award, I would accept it as an award for the entire Cuadrilla team.

Learn more about Cuadriila Resources its website LINK    The European Gas Conference and Awards are being held 24-27 January 2012, Vienna  LINK