A company that tried to frack in North Yorkshire three years ago says it wants to re-use old gas sites for renewable energy.
Third Energy has told local people it is looking to generate geothermal energy as a way to extend the life of its wells in Ryedale.
The scheme could see the end of gas production in the area.
“If successful, this could have a revolutionary impact on the UK onshore oil and gas sector”, the company said.
It is also updating its gas-fired power station and considering solar projects and battery storage.
The company’s change of direction has been cautiously welcomed locally.
“Prohibitive costs” of abandonment
Third Energy said geothermal projects could extend the value of its wells for up to 40 years. They were also part of a solution to what the company described as the “prohibitive” costs of decommissioning.
A legal challenge at the High Court argued this summer that Third Energy might not be able to afford to decommission its Ryedale gas wells.
In a public presentation this week, the company acknowledged the cost could reach £1.5m per onshore well.
The Third Energy website also said:
“the current P&A [plugging and abandonment] practices of the oil and gas industry are cost prohibitive, resulting in delays to abandonment (as companies attempt to avoid the high cost), and poor abandonment practices that may be harmful to the environment.”
But it said:
“Fortunately, there are solutions to this problem. Our ambition is to use new and innovative technologies to P&A the wells in a more effective and sustainable manner, and first to extend the period our wells may service the community by re-purposing them for geothermal energy.”
For more than 25 years, the company piped gas from six well sites to an electricity generating station at Knapton.
In 2016, it received planning permission, despite much local opposition, to frack the existing KM8 well at Kirby Misperton. But despite preparing the site, the company did not get final hydraulic fracturing approval from the government. Last week, bags of fracking sand were finally removed from the site.
Third Energy said the wells on its site at the Pickering Showground could be repurposed to produce geothermal energy to heat glasshouses, nearby homes or the Flamingoland theme park.
Other wellsites being considered for geothermal schemes included Malton and Kirby Misterton, the company said.
Third Energy said it was:
“working with several companies to assess the feasibility of using some of our wells for geothermal energy which could provide clean renewable energy for 30-40 years. An initial capacity study has already been undertaken and the next step is to get techno economic feasibility undertaken.”
The company said the cost of drilling was normally 40-60% of the capital expenditure of a geothermal project. Because no drilling would be needed, this would be a “significant saving” for projects using any of the company’s 12 former gas wells, it said. Third Energy’s geological knowledge and site infrastructure were also advantages, it said.
Third Energy is the second onshore oil and gas company to look at geothermal energy recently. Earlier this month, IGas announced it had acquired GT Energy UK Limited, which has geothermal plans in Stoke on Trent.
New plugging and abandonment techniques
Third Energy said it also wanted to test new abandonment techniques on its depleted gas wells. This would, it said, allow tools to be practiced onshore before applying them in the North Sea.
The company said the estimated cost of traditional decommissioning oil and gas wells in the UK continental shelf was £49bn:
“It is unlikely the private sector will be able to fund the full programme which risks the bill being left with the UK tax payer.”
Third Energy said alternative methods would be quicker, cheaper and more effective. They would also reduce the amount of cement used in plugging and abandonment, resulting in a lower carbon footprint.
The company said it was working with the Oil & Gas Technology Centre in Aberdeen to develop decommissioning techniques and a supply chain of companies.
In another development, Third Energy said it was applying for planning permission for new 49.5MW capacity gas engines to generate electricity at Knapton for times of peak demand.
The aging generating turbines were ordered to close by 2021 and have now been decommissioned.
Gas for the new generating equipment would be supplied from the grid, not the Ryedale well sites, Third Energy said. Plant that processed the Ryedale gas before use in the power station was being decommissioned and removed.
Third Energy said:
“This is … the clearest near-term project from which TE [Third Energy] can become cash-flow positive and support its various other projects.”
The company said emissions from the new generators would be lower than the previous turbine. It had held talks with a research firm on testing carbon capture technology, it added.
The generator site, now called Knapton Energy Park, could also host battery storage, combined heat and power, hydrogen and solar energy schemes, the company said.
Third Energy has not published a timescale or budget for the projects. No one from the company was available to answer our questions today. But DrillOrDrop will be publishing an extended interview with the company early next week.
“Considerable change in direction”
Hazel Winter, a member of the Kirby Misperton community liaison group (clg), said today:
“Third Energy’s plans show a considerable change in direction towards greener energy solutions and I am particularly pleased the company accepts their responsibility to decommission wells which are no longer viable.
“They have acknowledged that the current practices of the oil and gas industry are inadequate as companies delay closing down wells in an attempt to avoid the high cost or resort to poor abandonment practices that may be harmful to the environment.
“This week the Energy Minister Kwasi Kwarteng invited anti-fracking MPs Lee Rowley and Alexander Stafford to celebrate victory as he confirmed fracking is no longer something the government envisages as part of its progress towards net zero.
“Despite our local MP Kevin Hollinrake not taking the same stance on behalf of his constituents, campaigners’ hard work means that Ryedale can also celebrate as Third Energy move ever further away from fracking.
“I am hopeful the open discussions via the CLG will continue and that we are able to work together to bring benefits both in terms of sustainable energy and local jobs. After all the disruption and conflict of the past, I look forward to a much more positive and transparent relationship with Third Energy which will allow the community to continue its healing process.”
Local Lib Dem councillor, Steve Mason, said:
“Way back in January, as the local councillor for KM8, I challenged Third Energy to work closely with the community on greener plans for the future and, I have to say, I was pleasantly surprised by the response. Russell Hoare, Third Energy’s managing director, opened up conversations and the discussions have been ongoing since then.
“Rather than talking down to the community, the conversations have been open and honest, and a real welcome change from the division and mistrust from previous years. There was a lot of division within the community and there is still a lot of healing that needs to happen, That said, these open and frank discussions are a breath of fresh air but you can be certain that there will be a high level of scrutiny from us councillors, the [Kirby Misperton] Community Liaison Group, and residents as a whole.
“Third Energy presented to the Community Liaison Group on Monday proposals that are a big step away from fracking in this part of Ryedale. We watch this space with interest.”