The Third Energy public consultation event at Pickering was erm, turned out to be an absolute ball. Frack Free Ryedale, (FFR) were outside waving a banner. The PR team were happily on hand to walk and talk through the presentation.
How many people do Third Energy employ? Locally its just over 20, I think it goes up and down. Do pay attention to detail. This is the KM8 that we have already drilled ... it is the size of two football pitches 1.6HA. Oh, Is the size of the acreage to keep it under the limits? There are no limits, that is the size that we need.
Happy to tie up some loose ends; Where exactly is that site in relation to Flamingoland? Its quite a long way away ... how well do you know Kirby Misperton? As we wandered over to the OS map, I layed my cards on the table. I am very interested in fracking. Flamingoland, have they voiced any concerns? They would prefer us not to bring equipment in during their busy season.. So you have been in consultation with them? Yes we held a meeting with Flamingoland executives... three reps from Third Energy and four or five of them.. including Gordon Gibb? They were very professional ... So they had no objections with the busy season from March to October? No, apart from the bringing in of equipment during their peak season, July & August ... Gordon said as a local entrepreneur that as a new business everyone should be given a chance... I've given you a summary of what was said. How long have you worked for Third Energy? 6 months...
'Ello to David Robottom. We are the 100% owners of these licences. How many licences have you applied for in the 14th Round ? I can't tell you that, no comment. Oh, so your the responsible one then? As he introduced himself as CFO. Commercials and Legal. OK DR so how long have you been here then? Since September. So thats 6 months too then? And then Happy soon became Grumpy and started to protest about the protestors, What has that got to do with it? Is it really the fault of the public when the mis-information and confusion over the facts of fracking ...blah blah and came back with 'so you have an emotional investment' and went to make us all a cup of tea - very English. I'm not sure about your line of questioning, this event is about Third Energy not Davids career or our people, then DR offered personally to show me around ... (darn I didn't bring a coat).
The background scene as published in the glossy: Third Energy took over Viking Gas in 2011, they currently have 7 Licences from DECC, 4 onshore and 3 offshore. They are all on the DECC website. Our licence area covers gas fields in the Vale of Pickering, we have our own power generating station at Knapton. The station uses the gas we produce.
OK we can all read the glossys, lets see if the intimacies reflect, as the Doc very jovially whirls me around the room;
I'm very interested in your aquisition, I understand Viking have been successfully producing oil here for the last twenty years, but also that all the oil has gone? Correction! as Doc takes the lead; There was never any oil, it was always gas. And yes it is severely depleted. Has the conventional gas run out? Not quite. Viking was in business for over thirty years. We bought it as a conventional Gas Field in 2011. We've taken over a bunch of companies and Viking was one of them.
So, if the gas was severely depleted you must have bought Viking at a bargain, how much? Ha - all I can say is 'no comment'. How many 14th Round (DECC) Licences have you applied for ? Again 'no comment'. He won't be led astray.
Is there a farm out agreement in place with a large coporation eg Total, EDF? No we are a totally indpendent company, financed by a specialist Barclays investment trust. So when you bought out Viking (for an undisclosed sum) it was not your intention to 'frack' even though you knew the gas was severely depleted? I see what your getting at but, no, as an independent energy company we thought and think 'we can do this better than the previous owners'
So, you struck lucky then? - big (rather huge) grin. Let me show you: the usual media choose to compress the scale to get the 'picture' on the paper, here is the actually scale of what we are doing ...
This is the well - it is called a vertical well. Will it effect ground water? We are not concerned, take a look at the scale. Here is your aquifer at 600-800 ft. Conventional extraction is at 4000-5000ft. We have drilled our KM8 well down to 10,000ft. Oh you are joking, thats such a long way, how did you get down there? We drilled. Very expensive. This is where we frack, from 7000ft to the bottom. Oh so you've already had a frack? No thats where we intend to frack ... The hydraulic fracturing will take place between 7,000 and 10,000ft. We have five zones of shale depth sequences. See the dark brown intermitted with the light brown. The light brown is very tight sandstone, unlike our friends Cuadrilla on the other side of the Pennines who have an all shale sequence, we have a hybrid sequence. When you say Cuadrilla do you mean Igas? No, they are the ones that, shall we say, have hit the news. We intend to work bottom up. We already have 60m of laid pipe to extract the gas from this well to our Knapton power station. So, these are our five zones, we go from the bottom to the top; bang bang bang bang bang. Going bottom up - we frack that zone ... we can make electricty from this gas, there is an existing pipeline to our power plant. Which is great because we don't need to flare or vent. I am not allowed by law to flare or vent it ... without a permit. That is because of the methane escaping. A Govt. permit to flare or vent is for a very short period either 24 or 48 hrs. Even so, we don't need that. Methane is 21 times more potent than CO2..... apart from which it is a waste of gas. So here all we have to do is connect it up straight to the power station.
Are we gonna produce enough gas for a commercial proposition? Two considerations, the rate of connective volume and to measure the pressure, what happens to the pressure over time. This will tell me how much gas is connected to this well and how well it is connected, 10ft, 100ft, 1000ft, we don't know how far until we test it. We are interested in the absolute rate. If it is a small connected volume I have to drill more wells to get the gas out. Very expensive. Then we can decide how to space them out. If it has a small connective volume we can have one here and one there. The only way we can find out is through a long term production test. How long is long term? A few months.
About capturing the gas, who does it belong to? We don't own the gas, the Crown owns the gas. Another difference between here and the US - hence lots of wells dotted all over in the US the 'measle' effect, the landowner owns the oil/gas/minerals. Uranium I'm not too sure about though :-) Here the Crown owns it, we get a licence from the Govt to produce it. Oh, this was a question that IGAS failed to explain, please tell me more: The gas comes up the tube, reaches the surface then comes out. When its at surface here, the Tax man immediately takes his cut thats 62% on-shore. So, thats why the licence is between the Crown and us, only then, at this point does the transfer of ownership of the gas take place. We get 38% of the value. How is the price set? In the UK it is set centrally at NBP (National Balancing Point) this is set daily, its in trade magazines. The NBP today, because it is cold is say 55p/therm. Its just a supply and demand market, a bit like the stock exchange. It is a freely traded commodity. So anyone can do it? Yes, all you need is a buyers and traders licence and you can trade it. Really? Of course if you buy it, you have to be able to do something with it, so its mainly oil and gas companies. So its not a Mickey Mouse outfit then? No, its run by the oil and gas companies.
So OK, say you are successful, you have the 'equipment', (gush) you already have a licence? We have a licence to explore and produce in a given area, to get a fracking licence, we are answerable to four regulator bodies; the EA, DECC, HSE, Minerals & Waste Plan under NYCC. We need nine permits from between all of them. Gosh, really, how do you hope to do that? Thats alright, thats what we do, thats our day job. How long do you expect that to take? If I knew that ... I wouldn't be standing here (talking to me) I'd be Mystic Meg - no seriously between 4 - 6 months to get those permits. What about Ryedale District Council? To a degree, they are a marginal authority and not a decision maker themselves. They are a statutory consultee, NYCC have to consult them but they are not legally entitled to make a decision to ban fracking. Like York they are not allowed to ban it. The mineral planning authority for us in this area is NYCC - (One of my fellow directors ...) So they can get a moratorium and be seen to be political? Yes I'm afraid so.
OK so you've drilled this well, you have tested it, you have worked out its got X amount here, its commercially viable ... Everythings looking good! .. so then you think, oohh lets do another one... then what? Is it back to the drawing board? and schedulling? Yes - its a major job. A major problematic. So is that something you have looked at aleady? Thats in with the day job, thats what we do. To give you an overview, because we have 400 sq kilometers, 470 to be absolute. We need three or four wells dispersed over that acreage to prove and appraise the acreage. These are called appraisal wells. They will be single wells like this, ideally on existing well sites. And you already have them! Exactly, yes because of the conventional business, we are extremely fortunate we have those existing wells. Legacy wells. You already have four wells! No actually we have 8 wells but we only need four.
Lets say our 'ship has come in', so to speak and we have a viable economic project ... walk this way ... we know that for two reasons. One we have historic drilling data and two we have used seismic sonar. The terminology is 'shooting seismic' you can map the different horizons, so you know where the shale gas is. Commercial development, first of all we own our pipelines, and, we can drill wonderful lateral wells.
What it means is that we can have twenty wells on the one site, so we're not disturbing 20 land owners, we have one site. I only need a dozen of those wells to be economic, the disruption to the environment is minimal. This is the size of the well. You are joking - (it looks so tiny) Is that it? Takes a photo for perspective of scale. I always thought they were huge ... no, this is it, though they are very deep obviously. Amazing.
This is the casing. The casings are concentric and sit inside each other. It gets narrower as it goes down. The first one 26" is the widest one and goes down about 200ft . It gets narrower as it goes down. The next one a thousand feet or so. The next one 6000 ft say, 9.5" and the rest of it - made of steel - special steel. Not steel from Sheffield then? Alas no. (The smart Canadian joins the discussion) ... It has specific tensile properties, wall thicknees, compression strength, torsile strength ... comes in grades. Is it a bogg standard drill piece of equipment? It comes in 40ft lengths, the clever bit is the threading and joining it together ... There is a lot of technology in the threads. We're getting into too much detail... (Bashful) This is a standard well, either conventional or non-conventional we construct the well in exactly the same way. I just want to know what the differences are? Very little. Completion practices. But its not going to go just straight down ... its going to go along ... don't they have to go along a horizontal? No, this one is a vertical well. Thats the casing, what these things do is stop the hovering, and, furthermore they isolate the bit in the middle from the formation out here - so they isolate the bit in the middle to protect the formation from whats going on. Is it pure portland cement ? No there will be additives. BTW its ductile not tactile ... (is blushing while furiously scribbling notes) A bit like plasticine gives it flexibility. We don't add aggregate. Expandable as well , the pressure is pushing down so it fills every orifice, both ways, it stops the hole from collapsing but also protects the environment , this bit goes deep, depending on the geology. You have to know how deep you are going ... a whole science of engineering working together. This is 3.52" (thinks I am about to feint ... as the penny drops ) This is the Crux of the matter, in a conventional field the gas will come up naturally. Because the rocks we are considering are very tight, thats why we have to frack, to encourage it to come out (irony); So just a bit of a wobble and it releases it? It comes up the 3.5" tube.
Perferations in the 7" casing, typically this is just the conduit to get the gas to surface. You perferate just below it, it is an open end, hang that into the anulus dangled just above it. So it goes up and down its not static? Basically the gas can only come up there. Doh, Igas didn't explain it at all. That rides on top of the perferated ... its called a donut ... these are safety zones ...
Lets talk about fracking... It stays down there for a number of years and you suck the gas up. Standard oil field practice, there is nothing secret about the process. We are very privileged to have this rare photograph, there is the seven inch casing gone thru a coal mine. You wouldn't normally see that. That is pit rock and there is the frack - less than an inch, you could measure it in mm's. And that small thing is what is worth a lot of money? Well, hopefully! Using the frack fluid, 99.5% water, and the other half percent Increases the pressure, to perforate it, eventually the rock gradually fracks - it is a very controlled process, it is not an underground explosion! Doc continues; What you are creating is two wings, two fracks if you like. How do you know its going to frack just like that? Because we know in geology which direction it is going to propagate, 180 degrees, the stress regime is which direction it will frack in. 180 degrees, thats what we are trying to achieve. Two wings if you like, say like a butterfly. It won't always do that it depends what the rocks are like at 7,000 ft down but we know enough to get pretty close. Here comes the clever bit, the pressure from the top of the well creating the frack from fluid is pumped down, if you took the pressure off the frack closes, so what you do is you mix the other half % contains some other chemicals ... propadop ... in our case a very high quality sand with grains all the same size ... you pump that into the frack, when you release the pressure, when you reduce the pressure at the surface, the frack will close around the 7" perf.... So, what you have created is a conduit for the gas to come out filled by the sand grains. The sand grains have more permeability than the shale rock.... that improves the quality of the gas coming out. ... A preferred channel is achieved for the way of the gas to come out. Two in fact - the butterfly anology is a good one... The gas flows into the most natural channel. And then back up into that steel tube ... Now, the question is at what rate? The 64 million dollar question as they say. Very very thin buttefly wings, extend out each side very thin the frack could could be ... to achieve utterly funky ... each side ... 40 ft ... a funky horizontal frack. The first frack was in 1948.
We want to see this commercial. Now supposing ... what we do is frack here - (back to the scale) you bend the probe and you drill, you bend the drill, drill out horizonally to 1km to 2km, utterly funky ... we are using the same mother-bore hole. So we can frack from the same hole, bum bum bum bum bum .... coming back here but at 5 levels - up to 2km outwards. Because I am summising .... say I can frack from this end ... all from this high producing surface - we hope.
Each of the mother boreholes has maybe 4 or 5 laterals so thats up to 80 laterals from this one pad, thats why we dont get the Texas 'measles effect'. Ding dong
Thats why we start at the bottom, the water or frack fluid is used and recycled as it goes up each level. By the time it reaches the highest level there is very little water/fluid to recycle. When we finish the five we will have a small amount of residual water. How do we get the water to the site - It comes from the mains. Is it fresh water ?- no it can be seawater, brine etc ... For us it comes from the mains, we are not bringing in or using tankers, we are pumping it from the mains from Knapton power station. Pipes, not trucks.
So the residue water ... there is some flowback. So when Flamingo Land talk about equipment they mean the pumps and one rig and the pipes.... when we are at the exploratoy stage we will tanker away the residue fluid, it is a relatively small volume. We have to get approval for that to a registered site and be treated in a registered manner. We think for this job there will be about 32 trucks. The important bit - the frack only takes a couple of hours, an hour or two. The actual frack for each zone only takes about 2 hours to frack. The whole thing is over within two hours, thats why it is do-able. No nightime noise.
What about the noise, doies it exceed 90 decibles? For a very short period of time when applying pressure. There is no noise from the frack, the noise is from the pumps. So there is not going to be explosions? No, as you see you are building it up over time. So you frack it and then you flow it.... Say a day or two, maybe a week ... How long do you intend to be on each? Suck it and see. The whole thing is about six weeks in total in elapsed time. So thats six weeks testing from start to finish. Once the six weeks is over ... we get a pump, what we call a christmas tree - its 6ft high with valves (as baubles) and thats what remains on site for the lifetime of the well (no rigs) - we reckon about twenty years hopefully twentyfive.
Its the drilling and the fracking that costs the money. The first six weeks, for exploring, no testing, then the rig takes 60 days and goes somehwere else. Each frack an hour or two here ... It costs a lot of money and then we produce it, at the power station. The fracking process takes about six weeks but is very intermittent with a maximum of only 2 hrs per frack.
So the oil price slump? - How will this impact on fracking? In the UK there is a seperate market for oil and gas, prices are determined independently. So yes the oil price has gone down say literally halved. The gas price is softened by 20 to 30 % Because the gas price in the UK is essentially driven by power generation.... so they, the gas producers are not going to be spending more or less because of the oil slump? ... No you can't retrofit an oil to gas generation station. There is some correlation between oil and gas but it is not a one to one relationship. You can't switch from you to another very easily.
Say DRAX who started life as a coal fired station are converting to biofuels, thats a lot of money and a lot of time, very expensive.
Thats the entire process. So the demand for gas is driven primarily by the market, there is a correlation not an absolute correlation. Which is good for us ... It may not have been economically fracking
Anything else, what have I missed? Methane? Now what do you know about methane - that is another load of tosh that is being bandied about. The gas is methane. It is the methane that is the consumable, 98% methane CH4 2% ethane. C2H6. a little bit of nitrogen. North Sea Gas is mostly methane. What the antis are referring to as fugitive emmission - the only time you get fugitive emmissions is when you are not doing your job properly.
Back to the 20% CO2 emmissions ... and back to the US fugitive emmisions, they vent and flare, we don't and have no need to.
So you say you have off shore ... chit chat about mind maps .... in the Southern North Sea ... so you have licences already, where abouts? All around here and here. Is it on your web site? Yes, but we have just had a big discovery that is not on there yet. Is this Doggerbank development going to be in conflict ? How long have you got ... The Doggerbank windfarm .... to be continued.
Summary of important bits:
We intend to sequence our schedule. Our testing work is to schedule the sequence to produce to a commercial level. There are two unknowns to full commercial production. Firstly the volume rate in cubic metres - we need to test the absolute rate, until tested the correctional volume is unknown, we suspect their is a large connected volume, hence our investment, until this is quantified we can't calculate our production rate.
Over the long term, months, until the production test we cannot caluclate the amount of electricity we can produce. Third Energy already have four sites and wells to prove our concept.
It has to be viable economically.
And the US 'measle' effects - their problems are not ours.
Here is your aquifer 6-800 ft below the surface, We have five vertical sequences on top of each other, the old well went down to 11,000ft, we reckon other sequences exist up to 12,000ft. Unlike Texas, not only do we have geological knowledge from historical drilling, we use siesmic technology to map different horizons.
About depth? In the US the depth of the shales gas is 600ft. The depth of our shale gas here is greater at 5000ft, that is thickness not depth. Lateral thickness. We expect 7 to 12 times more ...
We would have 20 wells on one site the only buildings needed would like like farm buildings and we expect to extract for up to 25 years.
Any destruction of the enviroment is not acceptable to us.
There are seven protective casings. These casings are concentric the first outer casing is dropped to 200ft, the remaining casings (cascade down) at intermittent depths until at the shale level only the 7.58" and 3.58" casings are used to extract the gas safely. These casings are designed specifically to prevent environemtnal damage and leakages. We need to stop the hole from collapsing and isolate the bit in the middle. The full paste is mixed to fit the geology requirements, as in conventional enough pressure to withstand the geology. Here it is very low permeable. The gas comes up the 3.5" tube. The 7" line is perforated with holes every six inches. This liner absorbs the gas into the conduit, the 'anulus'. The 'donut' packer rides on top of the perferated conduit. As you can see there are several safety zones.
The actual frack in the rock is less than one inch - as Doc pointed to a picture of an actual 'frack'. Blimey - could hardly see it
Many thanks to Doc for his very informative and impressionable whirlwind tour of Third Energy's perspective on 'fracking'
And for this: not in the glossies:
Fascinating, absolutely fascinating.
Part two of this article will address some external issues to Third Energy
Meanwhile, I am now very unsure about the credibility of Anne McIntosh's claim of broken 'promises'
Is waiting for the truth fairy? Nope - will keep digging , erm, I mean drilling .....
This article is first draft & will be edited at will. EOE.
This is due to the timing of the public consultation still ongoing