NGS FACTs: Disclosure and Dialogue

It's all about letting people know what's been "put down the well."

The International Association of Oil & Gas Producers (OGP), an industry group comprised of some of the biggest oil and gas companies as well as national associations, has taken its publicly available information initiative on unconventional gas to another level. In addition to answering frequently asked questions about the exploration and production of unconventional gas, it has launched a new website for Europe's nascent shale gas industry called Natural Gas from Shale Fluid and Additive Component Transparency Service ("NGS FACTS"), to let people know what's in the contents of the "fracking fluid" being used in Europe.

According to the OGP's Rachel Bonfante, Deputy Director, EU Affairs, right now NGS FACTS lists information for six wells in Europe.

"But we hope by the middle of the summer there should be at least another 2-3 wells added. We are talking as well to companies who are not members of OGP - the smaller players - and we're really hopeful that they will also put their info on the site. Most of them have got the information on their own corporate sites, but we'd like to kind of consolidate the information so that Facts becomes the hub for Europe, so if a citizen in Italy or Sweden wants to find what's happening they can find it easily and in a central place."

Ms. Bonfante is insistent that NGS FACTS is a "live" site; "We're not complacent about it, we're very active to get the site up and running and get all of the wells that have been fractured in there. There's not a huge number of wells that have been fractured in Europe for gas from shale but we're determined to get them in."

She notes the confusion regarding wells that have been drilled with wells that have been hydraulically fractured, i.e. that the numbers are different.

Still, she says some companies are less than forthcoming about revealing what they hold to be proprietary information.

"If you look at the wells we've got on the site at the moment," she says, "more than 100 records of the chemicals used have been listed on NGS FACTS for the six wells listed on the site. Of these, only three have been described as “proprietary” and represent just one-hundredth of 1% of the fluid used in the six wells." [These are the correct figures.]

Given the mixed stance from the industry in North America regarding transparency for fracking fluid contents, the industry appears to be taking a more open approach in Europe.

"I think we've learned a lot of lessons," says Ms. Bonfante. "There are some states in the US where they are discussing whether or not companies should be allowed to, for example, claim confidential business information; in western Australia, for example, it's not allowed - you have to disclose everything, and the industry has been doing it there.

"As we've said before and on a number of other points, if that's what the regulation requires, that's what we will do. We certainly, as an industry, are very competitive and technical, and we do understand that there is some information that is commercially sensitive and, as a matter of principle, that is important. But that has to be balanced against the regulatory requirements wherever we find ourselves."

According to the OGP, "REACH," the European Community Regulation on chemicals and their safe use, is sufficient for regulating the chemicals used in hydraulic fracturing.

"We think it is," comments Ms. Bonfante. "We've been talking of course to all the companies who have the responsibility to register all the chemicals - we're talking with them about how they are doing it and we've been talking to the Commission as well about our experience with that. We're satisfied that the requirements are stringent and sufficient."

And regarding the entire sequence of exploration and production of unconventional gas, she says the OGP stands by the integrity of the process when the proper care is taken.

"We believe that the operations can be done, safely and sustainably, in Europe or anywhere else, and I think the key factor whenever people raise the idea of risks, is whether the well is drilled correctly, whether it's been sealed correctly using the cement and the steel. From our perspective as operators, when this is done correctly, when people follow the procedures and industry good practices, there should be no problem."

She continues: "When you look at the few incidents that have been reported in the US, you will see that those have generally been the result of poor well practices rather than anything related to hydraulic fracturing operations - that's a fundamental point to get across because there are a lot of misperceptions around that."

What's more, she notes that Europe's industrial sectors (like the chemicals industry) all see a risk if Europe does not at least conduct exploratory operations into shale gas in Europe, just simply because of the competitive advantage that shale gas has given the US.

Ms. Bonfante adds, "There's the risk that Europe's CO2 emissions rise if we carry on using coal and gas is not so much in the mix. But like any risk, if you do your preparation, follow the guidelines and practices, then the risks are completely manageable and we're pretty confident of that."

As to how willing communities in Europe affected by shale gas development are to shoulder the scale of industrial activity that takes place before a well is capped, she says that each community must take into account the pluses and minuses, while industry should highlight the potential security of natural gas supply, jobs and economic growth.

She explains: "There's no one response that will work for every community. For some, it's simply because the resource is there and they think it's valuable for the country or for the region where they find themselves; other people are interested in the jobs and skills that industry brings to a region.

"There's a big discussion in the UK about whether payments should be given to a community as a benefit for hosting so that the money actually stays in the community. So you'd have to ask the community what the benefit would be, but certainly in Eastern Europe the security of supply argument is more readily understood by people there than perhaps in other countries further west."

With those factors in mind, Ms. Bonfante explains why the OGP sees it as important that companies come forward and contribute to its NGS FACTS site, as disclosure has become a fairly well accepted principle in the industry.

"It is the way forward, the best way to address a lot of concerns, the best way to open up a dialogue with citizens, stakeholders, regulators, NGOs, whoever they might be," she says.

"I don't think the industry has got anything to lose, frankly speaking. It's all in our best interests to be out there, to get that dialogue going, to answer people's questions. The only way we can do that is through disclosure, through a lot of communication, and the benefits are there," says OGP's Rachel Bonfante.