Guest post by Nick Grealy
As shale companies prepare to explore for gas in the East Midlands, North Yorkshire and Lancashire, would-be operator Nick Grealy says there’s a whiff of hypocrisy about why London – and other cities in the south – have been left out of the dash to drill.
In this Guest Post he makes his pitch for fracking in the capital and questions why his company and a competitor were turned down for a licence in south central London in 2014.
Why should we explore for natural gas under London?
Natural gas is the fuel seven and half million Londoners depend upon at home for heating, a use for which there is no currently available viable alternative. For example, a new or replacement central heating system is installed, in London alone, every 40 seconds of a 50-hour working week.
Shouldn’t we just leave gas in the ground?
We should leave gas in the ground. But not the gas under our feet, if it can be discovered. We can only discover through scientific enquiry and exploration. If exploration leads to discovery, we intend to portray importing natural gas to London as indefensible as importing milk from Russia, bread from Texas or water from Qatar.
What is the climate change impact of using locally sourced natural gas from under our feet compared to the alternatives?
This is a key question for us. If we are to continue to use natural gas, then the best choice for our city and the planet is to use London natural gas, which would be the lowest carbon natural gas on earth. That’s a great hope for our home, the greatest city in the world. The key word is “could”. We may not. But if we don’t look the answer will only be in the negative. We’re the liberal metropolitan elite too. We shop in Waitrose or Whole Food. Our carbon footprint isn’t empty words. It’s what we do. We cannot wait for solutions that may never come. We are the enemy of no other technology except coal. There’s room for everyone. But the perfect cannot be made the enemy of the good.
How big a project would this be? Won’t it take up too much space in somewhere as crowded as London?
London is not only crowded, it’s expensive. We wouldn’t even consider this project if we didn’t believe there would be any more than minimal surface footprint. Development would be inconspicuous to 99.9% of Londoners. Our exploration proposal includes one drilling rig half as tall again as a double decker bus. After preparation of the site in any number of brownfield locations, we would be finished in as little as ten days – or less.
Won’t this mean investment takes funds away from renewable sources?
No. Let’s not put the production cart before the exploration horse. Our exploration stage, precisely because it will take place in a developed area, will be far cheaper than exploration in sensitive habitats offshore, in pristine forests or deserts. For example, if the resource was discovered, the delivery system for gas in London already exists. It won’t be as easy as taking gas out of one hole in the ground and simply putting it in another. But it wouldn’t present any serious or expensive issues either.
This could well be the shortest route to market of any natural gas project on earth. It won’t be up to us what to do with the tax revenue from natural gas, but others might consider how it could at least partially accelerate renewable investment. London uses 9 billion cubic metres of gas per year, almost none of which is used to generate electricity. The current value of £1,350,000,000 ($1.65 billion) could pay tax of 50% or more. We think a potential annual income for the UK and London of £675 million wouldn’t ordinarily be dismissed in the best of times.
Natural gas under London? Isn’t that ridiculous?
We’ll share our geology with investors under a standard confidentiality agreement. We will shortly release enough detail to not only reassure the public, but also to excite them. We don’t want Londoners to simply be acquiescent or accepting of the project. We want Londoners to be excited about it.
Is this just some kind of publicity stunt?
This is a joint effort of myself and several others who we will be introducing over the next few weeks. They have world-wide experience in exploring for oil and gas. Others are academic geologists of impeccable and proven reputation. They share our excitement over how we may have uncovered an entirely new oil and gas province literally underfoot. A location nowhere more exotic or environmentally sensitive – or expensive – than within London Underground Zone 3.
What’s stopping you?
The Oil and Gas Authority have no current plans to open the next licence round (for the entire UK). We’ve asked them on several occasions when we can expect the process to open -to no avail. Ordinarily onshore licence rounds take place every two years. There was a gap between 2008 and 2014. We’re past due for the next licence round, one we aim to be successful in. It may, or may not be helpful to ask the OGA the following question: When will the 15th Onshore Oil and Gas Licensing Round take place? We hope you have better luck.
Our background to drilling in London
In 2014, London Local Energy, a company I was involved with but which is now re-forming, applied to what was then Department of Energy and Climate Change, now the Oil and Gas Authority, to explore for oil and gas in three 100km2 blocks under London. Two were in north west London and one in south central London.
We considered the block in south central London, focussed on the borough of Merton, almost as an afterthought. But it was also of interest to another company. Perhaps gas under London wasn’t such a romantic idea after all?
The other company was given at least ten licenses elsewhere in England. We assume they had applied for other licenses in South London. But neither we nor them were offered the London licences, a situation without precedent in the UK.
We also have reason to believe that they applied for licences under Oxford and Swindon. Yet they weren’t given those licenses either, despite being considered fit and proper enough to be given them in rural areas.
Shale demonstrators in Northern England may well have a point when they feel they are asked to bear the brunt of shale gas exploration. It’s a complex matter and the London decision doesn’t stink of hypocrisy to us. But there is at least a whiff of it.
I only recently found out about the other company and the unprecedented situation where both they and London Local Energy were denied licenses.
If I had known this detail in 2015 when the LLE licenses were denied, I would certainly have considered legal action against the OGA.
The value of the resource would be at least $250 million, based on a very conservative 5 million barrels of recoverable conventional oil.
But this isn’t only about money. What I told the parliamentary select committee on energy and climate change six years ago still applies. Christopher Pincher asked “Do you anticipate the need for a subsidy here to encourage UK drilling”. I replied:
“No. With respect, from what I see of the activities of your Committee, you are used to a large amount of people coming here and saying, ‘We need a subsidy for CCS, we need a subsidy for wind, we need a subsidy for nuclear’ and so on.
“The shale gas industry wants to give you money. It wants to participate. ….. This is where shale is unique, in that nobody is here with their hand out.”
The United Kingdom must be unique too that one has to consider legal action in order to invest in it. Some may find it ironic that we have also been told to consider legal action against the government on climate change grounds.
One of the great things about London is how, in the marketplace of ideas, we constantly meet people and ideas bounce off and provide positive energy. That has made us even more confident today of what could be possible, for London, the UK and most importantly the planet.
That’s another reason why we’re going public now. Not everyone will agree with us, but we also know many will support us and enrich the project with new ideas.
Using other people’s natural gas in our central heating not only enriches other governments instead of our own, it places prosperous Londoners in direct competition for gas with any number of countries who won’t be able to afford the transition from coal to gas if we outbid them. That’s simply not fair.
We can’t predict what impact producing gas on local prices will be. It is very unlikely that if we produce gas, it will make it more expensive.
The absence of proof that there is gas under London is not proof of its absence.
Given the technology and economics of a hundred years ago, it would have been impossible to produce gas or oil. But that doesn’t mean it wasn’t there. And if it was there then, it’s still there today. Yet today, what was once called unconventional gas is now the new normal.
Yesterday’s breakthrough quickly becomes the mainstream of today. Those techniques already promise an entirely new paradigm of natural gas production for London, if geology allows. The same methods improve every day.
Historical oil and gas fields all over the world are being reassessed with 21st century technology. Except in London. On this map, the green lines are seismic exploration lines of which there are almost none under London.
We think it is morally indefensible to refuse to even explore for oil and gas resources under London.
In 1911, oil was discovered at the White Heather Laundry in Willesden. This is what it looks like today.Any of over 20 sites within 2KM of this site may be more suitable. An outdated gas fired power station may be one place to look that most members of the public may find reasonable. That particular decision would rest with Uniper, the owners of the site.
I’m sure there would be some protestors, but I think most of London’s 8 million people might find the idea of a People’s Protection Camp outside of site like this to be ludicrous.
We agree with the Climate Change Minister, Nick Hurd MP, who said:
“I look at shale gas through the lens of energy security.
“It is primarily an energy security issue for me. We import a lot of gas. If we have the capacity to generate our own gas in this country and we can do it while reassuring people about the impact on the environment, personally, I think it would be irresponsible to future generations not to answer the question can we do it.”
Nick Hurd is the MP for a portion of the area we’d like to explore under. If we find anything, then we can all decide -or not – whether to leave it in the ground. The most important partners are those who use natural gas. Under UK law, they, and everyone else, also own the gas. That makes the decision to explore a national, as well as local issue.
One reason I haven’t gone public before on this was the chance that someone would, to use an old oil and gas business term, jump our claim. But all oil and gas projects need partners, so together we can make it work. We want to just do it.
A fundamental part of the challenge in the UK and EU is to gain public acceptance. Going public now is a key part of our strategy, and telescoping the acceptance process makes sound commercial sense.
- Nick Grealy writes at No Hot Air
The OGA confirmed to DrillOrDrop there was no date for a new licence round. Last year, the OGA refused DrillOrDrop’s Freedom of Information request for the reasons why bidders were unsuccessful for licence block TQ26 in south central London. The refusal was upheld by an internal review.
Categories: guest post