Third Energy’s John Dewar

Three weeks today could see the approval of the first shale gas well to be fracked in the UK since 2011.

Third Energy’s proposal to hydraulically  fracture the existing KM8 well at Kirby Misperton goes before members of North Yorkshire County Council’s planning committee.

The company’s operations director, John Dewar, was sounding confident this week that his scheme would be approved.

Speaking in Scarborough at an invitation-only seminar, he said of KM8:

“This is probably my last opportunity. My crowning glory. I was one of the founders of this oil and gas company and so it’s now giving me the opportunity to put a lot back.”

With Cuadrilla’s plans to frack in Lancashire still being considered by a planning inspector, Third Energy could be the first company to frack since the process caused an earthquake five years ago.

Mr Dewar said:

“It wasn’t by design that it looks like we’re going to be the first company to do a frack in the UK. We were quite happy to follow in the wake of Cuadrilla but that is not going to happen. And it looks like we are now centre stage of this industry to do the first frack in the UK.”

At one point in a presentation he said he was hoping for a good result and, if he got it, the well would be fracked in the third or fourth quarter of the year. But later, answering questions from the audience, he gave the impression that he felt permission was a foregone conclusion and that the frack would go ahead. What he wasn’t predicting was the outcome of the operation:

“We’ve picked from the logs, from the cores, we’ve picked five zones that we think have great interest that we’d like to frack. So positivity, I don’t want to display it, I don’t want to jump our gun, let’s just keep it inside for the time being and you’ll know before the end of the year, I hope, whether, how successful we’re going to be.”

“I love this industry”

John Dewar described himself as working in the oil and gas industry “boy and man”.

“As a boy I went on a drilling rig in Holland and from that day onwards I was hooked. I’ve been in the industry ever since. It’s now over 40 years.”

Before Third and Moorland Energy, he worked with Shell, the Shell start-up Swellfix, and BG.

“I have really loved this industry”, he says. “I have given it everything and it’s given me a lot back. And I would love for your children and your friends to have the same wonderful experiences and career opportunities that I’ve had.”

But not everyone loves the idea of a fracking industry in Ryedale. In 2014, when the company announced it would be applying to frack in North Yorkshire the then local MP, Anne McIntosh, said:

“I am at a loss to understand how Third Energy have suddenly developed the technology, when they gave me an assurance within the last year that they themselves neither had the technology nor any intention of hydraulically fracking at depth anywhere in Ryedale.”

There have now been more than 3,000 formal objections to the Kirby Misperton application. Ryedale District Council recommended refusal and there have been objections from town councils at Malton, Norton on Derwent and Helmsley, as well as the parish councils of Habton, Rillington, Great and Little Baugh, Kirby Misperton, Marishes and Normanby.

“Scaremongering and myths”

Mr Dewar blamed what he calls “scaremongering and myths” for the opposition. During the seminar, he discounted concerns about toxic or radioactive flowback water, earthquakes, pollution, water consumption, and industrialisation. They were myths that were being debunked, one by one, he said. “The truth will out”.

He said he could prove mathematically that the risk of fracking fluids reaching the aquifer was 1×10^-13_. “For those of you who aren’t mathematicians that’s a very, very, very, very, very small number”, he said.

To make his point that Ryedale would not be industrialised, he compared the impact of a well pad with wind turbines or solar panels.

“One well pad – and we’ve got lots of them round our area and you wouldn’t even know where they are because they are hidden – is the equivalent to 87 wind turbines and not small ones. These are big ones.  These are 2 ½ to 3 ½ megawatt wind turbines – massive structures. And they are equivalent to 1.25m solar panels. So what would you sooner have: 87 wind turbines or one 2ha well pad?”

Mr Dewar didn’t go into detail about the source of the data behind his comparison. But Third Energy’s spokesperson told DrillOrDrop the numbers came from a blog written in August 2014 by Professor Sir David MacKay. He assumed a hypothetical shale gas pad with 10 wells that would produce gas capable of generating 9.5 terawatt hours of electricity over 25 years. The comparison didn’t take account of the land area needed by a gas-fired power station and it assumed a drilling rig of 26m, smaller than the rigs proposed by Cuadrilla in Lancashire (53m drilling rig and 36m workover rig).

“Any lie gets spread so easily”

Mr Dewar also blamed Gasland, the documentary about communities in US fracking areas, for encouraging opposition to the industry. He alleged the film contained faked scenes and had not been challenged.

“We’ve let that film be made and we didn’t take any action on it. We should have jumped on it right there and then. It’s grown arms and legs and we’ve all suffered as a result.”

“Any lie gets spread so easily, so quickly, so powerfully and it hurts us. And we take it.”

“That’s the way we are. I’d sooner spend my time and energy in doing things right instead of defending the things that are wrong against us. It’s just not in our DNA.”

Mr Dewar alleged: “I asked the prominent anti-fracker why he lied so much and he said ‘because we have to’.”

We asked Third Energy’s spokesperson when and where this conversation took place and who the person was. The spokesperson said: “Third Energy will not be commenting on this”.

“Trust me”

The industry, in contrast, was different, Mr Dewar said. “We always say the truth. And we don’t lie because we don’t need to lie”, he said.

He painted for his audience a reassuring picture of a shale gas industry: “the best regulations in the world”, “very competent set of regulators”, “an excellent safety and environmental track record”, and “statistics to back up all that”.

 “If we can’t do it safely, trust me, we don’t do it. So when people say can you do this safely, of course we can, we wouldn’t be doing it otherwise.”

To a member of the audience who questioned the economics of shale gas, he said:

“I don’t think you or anyone else needs to worry about the economics of an oil and gas company. That’s our concern. If it’s uneconomic in the longer term that will come out. And our shareholders will eventually stop us.”

“But we’re an industry that is used to spending millions, tens of millions, hundreds of millions and even thousands of millions of pounds in exploration and appraisal to determine what the long-term opportunities are there. That’s the nature of our business. So if we spend around £10 million on an exploration well that’s on our cost.”

He said people also didn’t need to worry about what would happen if there were problems. Under the obligations of the licence the site had to be cleaned up and restored, he said. But in his answer did he also hint at the possibility of takeover?

“We have insurance. As long as we’re there, or anyone else who takes us over, as the licence holder they will have to maintain and fulfil the obligations of that licence.”

“If we’re not going to be successful, one of the four, five companies close down, so be it. But as long as the gas is there the opportunity is there, others will step in to our shoes and move the industry forward.”

“Fracking is political”

Mr Dewar also dismissed talk of Yorkshire being a guinea pig for fracking or the need for moratoriums in some European countries. He said:

“Fracking’s become a political arena, not an engineering one. From an engineering point of view, there’s no reason why you shouldn’t do it. From a safety point of view, there’s no reason why you shouldn’t do it.”

He said countries that had a gas resource and a need for gas would find a way to get it out of the ground safely.

“Right now, we’re being led by politics, pressure groups and various other things.”

“I don’t think there’s one single country on the planet that can put their hands in the air and say from a safety and environmental point of view they are not pursuing shale gas. Because that’s a government that’s lying.”

Transcript of presentation by John Dewar