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How Much Shale Gas Is There on Island of Ireland, Really? Here’s why that’s a critical question

As the Republic of Ireland (RoI) and Northern Ireland (NI) assess the possibility of allowing fracking for shale gas on the island of Ireland, we can learn from what others are doing to address this same question. One issue that has to be considered is what is the true value and scope of the shale gas formation that might be subject to extraction.

We have all heard industry boast of the wonders of the shale gas revolution in the United States, and we have seen some wildly high, and misleading, estimates of how much shale gas exists, and how much revenue, tax proceeds and jobs will be generated. These benefits, it is argued by supporters, outweigh any environmental and health risks from fracking. If the benefits are not real, then the equation changes significantly against fracking.

Pennsylvania (PA) is an example of a state where fracking has been warmly embraced by a conservative political administration, and has had some productive shale gas sites. In adjacent New York the Governor, a political progressive, has not yet decided on whether to permit fracking in all or part of NY.

In a recent program on “New York Shale Gas Potential: How Does It Compare to Pennsylvania,” at the New York Society for Ethical Culture, four experts from different specialties analysed PA’s geological and well production data and compared it to NY’s shale.

One of the particularly strong aspects of the program was that 3 of the 4 speakers formally worked for or with fossil fuel companies, and they knew the business and the game played by such companies: an insider industry perspective. What we learned was what the fracking industry already knows, how that knowledge is often distorted to promote the financial interests of the companies, and how limited shale gas formations can be, and often are.

Here were four experts, three from fossil fuel companies, providing hard science and economics on how the game is played by the fracking companies, including: the economics of drilling and production; what’s included in projected profits and what costs are conveniently left out; how many wells are productive and how productivity declines rapidly; how company value, and stock prices and executive salaries, are driven by how much reserves a company carries on its books, which requires drilling more and more wells, which decline rapidly, which in turns means more and more wells are needed to boost stock prices.

In addition, the geologist provided an analysis of what geologic conditions are necessary for a shale formation to be profitable, especially organic content, thermal maturity, thickness and depth.

Based on the collective analyses, they found that the wells that were productive in PA were those where the shale gas was deepest and thickest, with high carbon content and thermal maturity.

• Deeper formations were better because it allowed greater pressure to push up what gas there was – shallower than 3,000-4,000 ft below surface was not conducive to production

• Thicker gas formations made the expensive process worth while

• High organic content and wet gas are more valuable

In contrast they found that generally the shale gas formations in NY are thin and shallow, with less carbon content and unfavorable thermal qualities (gas is dry not wet), and will not provide sufficient financial returns to make fracking worthwhile. There is a very small area of NY, called the Southern Tier, across from the northern border of PA, where some fracking might be of marginal value. But even in this small area, there may not be sufficient economies of scale to justify fracking.

The experts noted that they were considering only the economics of the business, and that any fracking in even these Southern Tier areas, if allowed by NY, carried all the environmental and health risks of fracking. In addition, it was noted that the industrialisation from fracking extends far beyond well pads to sand extraction, pipelines, processing and compression facilities, wastewater operations and disposal.

When those opposed to fracking heard of these studies, the news was welcome, suggesting another, serious, hurdle for fracking in NY.

But, and there always seems to be a BUT. The nature and scale of the shale gas formations in NY may drive away the bigger, better-funded fossil fuel companies, as it appears to be doing already. These companies usually only play in the big leagues where big money can be made. Presumably they have large overheads in part from paying high salaries, relatively speaking, to their highly educated engineers and technicians.

The danger is that some of the wildcat, underfunded companies may stay in the game in hopes of drilling a lot of wells and striking it relatively rich with a few wells. That means many, many industrial wells, spread across the landscape, each with all the risks of contamination, methane emissions, and draining of water supplies. If only a few pay off, the others may be abandoned and remain as industrial ghost estates strewn across the Irish countryside.

These wildcat companies do not have the same expertise as the major players, and they often cut corners in safety and are careless in drilling and handling of wastewater. Many of the early serious problems caused by fracking in the US came from wildcat operations.

So the governments in RoI and NI, and certainly the citizens on the island of Ireland, need to independently assess the realistic value of shale gas formations on the island of Ireland and weigh the potential returns with the real risks. As the four experts in the New York program made clear, the ways the frackers value these shale formations is critical, as is the very specific geology of the shale formations.

We also note that in an earlier Report (May 2012) in this magazine, “The Irish EPA Preliminary Assessment of Fracking: A Good Start but a Long Way to Go,” on the EPA report on Fracking: Current Knowledge and Potential Environmental Impacts, we stated:

Perhaps the most important contribution of the report is its clear analysis of geological conditions and the implications for fracking in Europe, where shale gas formations exhibit more complexity than the relatively simple subsurface structures in North America. This is not surprising since the author, David Healy, is Senior Lecturer in Geomechanics in the Department of Geology & Petroleum Geology at the University of Aberdeen. Healy discusses the complex geology of rock fractures and the difficulties of predicting, or controlling, the impact from fracking operations on the existing fracture network in the subsurface, including the risks of creating new fractures or opening existing fractures other than those intended for the extraction of gas. This uncertainty in turn creates the risk of ground water contamination or seismic activity. In light of these concerns, Healy argues for the need for careful and detailed understanding, including mapping, of the subsurface conditions at any site being considered for fracking. Clearly such understanding must come before fracking is allowed to start at any site.

This assessment is particularly important since in the RoI and NI the government (unclear whether that means the NI devolved administration or UK) generally owns the mineral rights and is entitled to any lease payments, not property owners as in the US. So the governments reap the rewards, and the people pay the price.

Sources

The program was sponsored by New York Society for Ethical Culture and more than 50 local elected officials, community, environmental and faith groups.

The speakers were: Brian Brock, a geologist; Jerry Acton a systems analyst, formerly for IBM and Lockheed; Chip Northrup, an oil and gas investor and planning manager at Atlantic Richfield; and, Lou Allstadt, retired Executive VP of Mobil Oil Corporation. The Moderator was Anthony Ingraffea, Professor of Engineering at Cornell University.

For a video of the presentations, see

“Introduction” by Dr. Anthony Ingraffea                         www.youtube.com/watch?v=_WjZDEm6-ME&feature=youtu.be

“Inside the industry” by Chip Northrup                           www.youtube.com/watch?v=eD6rfQC1cEw&feature=youtu.be

“Shale Geology” by Brian Brock                                         www.youtube.com/watch?v=eD6rfQC1cEw&feature=youtu.be

“Forecasting Marcellus Productivity” by Jerry Acton    www.youtube.com/watch?v=q6aUIvaWYJE&feature=youtu.be

“Risk and Reward” by Lou Allstadt                                    www.youtube.com/watch?v=P8kS9U6YsnI&feature=youtu.be

 

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