Industry

Cuadrilla-Third Energy deal on Yorkshire gas

Cuadrilla and Third Energy have entered an agreement on gas appraisal plans in Ryedale, North Yorkshire.

Today’s deal covers PL81 and PEDL347. Map: Oil & Gas Authority

The deal covers an area from near the coast at Filey inland to about five miles east of Malton, Third Energy told DrillOrDrop today

The news was announced in a short statement early this morning to the Australian stock exchange by Cuadrilla’s owner, the mining group AJ Lucas.

The statement said the agreement would appraise a gas prospect spanning licences held by both companies.

It said:

“Third Energy will operate and entirely fund an appraisal well to assess the potential commerciality of a natural gas prospect in the relatively shallow Sherwood sandstone.”

It added the gas play was “a conventional one and no hydraulic fracturing will be required”.

Both companies have previously made unsuccessful attempts to frack for gas.

Cuadrilla’s shale gas operations at Preston New Road in Lancashire caused earthquakes and led to a moratorium on fracking in England, which is still in force.

Third Energy, under its previous owners, Barclays, got planning permission to frack an existing well at Kirby Misperton in Ryedale but failed to get final consent from the government.

Production split

Today’s agreement, which must be confirmed by regulators, would split any future gas production 75% to Third Energy and 25% to Cuadrilla.

Third Energy said the agreement covered its PL081 licence and Cuadrilla’s PEDL347.

Asked where the appraisal well would be, Third Energy’s managing director, Russell Hoare, told us:

“No location has been identified yet.”

On the timetable for the project, he added:

“No timescales yet, only an agreement on split of future production.”

He said any work would need planning permission. The deal covered just the commercial split of any gas:

“Because the gas-bearing formation spans both licences, any development of that formation would need to be done with an understanding of the commercial split of the production and this agreement defines that in advance. It also gives control of any development to Third Energy as Operator.

“The formation is relatively shallow and would not be suitable for hydraulic fracturing. Cuadrilla have retained their rights to the deeper shale formations on their license.

Third Energy has previously announced proposals for geothermal energy using existing wellsites in the Ryedale area. Russell Hoare said:

“Our geothermal strategy remains in place for many of our current wells. We are looking at a range of energy projects across our assets including geothermal and solar but gas is deemed by the UK government to be an essential part of their Net Zero 2050 strategy. It therefore makes sense to consider domestic gas production over and above the increasing need to import gas.”

Reaction

David Davis, of Frack Free Ryedale, said:

”Frack Free Ryedale are disappointed that Third Energy are to recommence fossil fuel exploration and development given their many statements relating to ‘green’ solutions throughout the last 12 months.  The truth is we are dealing with a company and an industry that is driven by speculation.  Third Energy clearly will continue with their normal business of extracting fossil fuels.   Third Energy are showing the community their true colours – and those do not include green!”

Hazel Winter, a member of the Kirby Misperton community liaison group, said:

“Third Energy have held this licence since the 1960s so it does seem strange they have not investigated the Sherwood Sandstone Group as a potential source of gas in this PEDL area before now.

“The British Geological Survey have identified deep saline aquifers, including the Sherwood Sandstone Group as one of the best prospects for a heat resource for geothermal energy. They are also currently conducting research into sandstone formations as possible reservoirs for hydrogen storage.

“Given Third Energy’s recent pledge ‘to be at the forefront of North Yorkshire’s transition from fossil fuels’ I am disappointed that they appear to be reverting back to a quest to find gas.”

Steve Mason, of the campaign umbrella group Frack Free United, said:

“This seems to be a last throw of the dice for onshore extraction. Conventional or fracking onshore in the UK is a bit like ‘flogging a dead horse’. It is pointless and in very bad taste, especially in the current context of policy, social licence, the climate emergency and in the year of COP26.

“Business as usual is not an option, especially as the ‘we need indigenous gas to transition’ argument has failed when they argued for fracking, it’ll fail again.

“I urge Third Energy to keep its recent greener pledges to the community on track and forget forever a quest for fossil fool’s gold.”

  • Cuadrilla holds eight shale gas licences in Yorkshire, including PEDL347. Third Energy has been ordered by the Oil & Gas Authority to plug and abandon its existing wells in Ryedale. Today’s agreement does not affect these wells, the company said today.

21 replies »

  1. Well, looking at the CURRENT use of gas in the UK, it actually IS a case of business as usual, Steve.

    You may wish it to be different, and can try and get energy out of wind when there isn’t any, or sunshine when there isn’t any, but it looks as if an awful lot of people in the UK are relying upon gas currently, and that is even without much business.

    Wonder if there will be a shiny new rig for this one, thanks to the Super Deduction.

  2. Well Steve, for every MW of unreliable renewable generation connected to the grid, there needs to be another MW instantly available from a reliable dispatchable source connected somewhere else. Wind power generation more or less collapsed around the UK on the 24th February, solar output has also been short and brief as you would expect at this time of year. The fact remains that we have kept the lights on and people warm by mainly burning imported gas, imported coal and imported environmentally questionable wood pellets, along with assistance from sociably unacceptable nuclear and imports of electricity via the inter connectors from Europe. I look forward to hearing your alternative solutions, if business as usual is no longer an option.

    • John – At 0900hrs yesterday morning Electricity Generation UK:

      Demand 40GW
      Gas 60%
      Nuclear 10%
      Biomass (Drax) 7%
      Hydro 2%
      Coal 2%
      PV < 1%
      Wind < 1%
      OIL same as wind……
      Imports 11%

      And we don't need fossil fuels……. no one on this BB has ever presented a viable alternative to gas. I bet the Oil generation wasn't cheap yesterday….perhaps Steve Mason will enlighten us?

      • “no one on this BB has ever presented a viable alternative to gas.”

        Nope. Wrong again Paul. As you very well know. But you do attempt to trot out this apocryphal myth about every year or so, as if you didnt know the answer returned with pleasure each time.

        Perhaps you should go and do some research? Or jog your memory again?

        Any time you wish, I can assist you with references and links…..but of course you know that dont you?

        Have a nice weekend!

      • Exactly Paul.

        As Prof. Sir David McKay stated (he was chief scientific adviser to UK government):

        “There is this appalling delusion that people have that we can take this thing (renewables) and we can just scale it up and if there is a slight issue of it not adding up, then we can just do energy efficiency. Humanity really does need to pay attention to arithmetic and the laws of physics.”

        That was stated in 2016, but if he was still alive and read some of the posts on here, he would be shocked that the myth persists still.

        I am reminded of the applicant for the footie managers job, stating he is not going to play 4:4:2 and then asked what he would put in place, comes up with the “answer” 4:4;4. Alternative, yes, but fantasy also.

        • That one of your “spokespersonas” now Paul? Which one?

          However, Asides aside (aside rule?), diversions diverted, and personas personified…..

          If you want to do your own research on the alternative(s) to oil and gas, you need look no further than past conversations on Drill or Drop where that very question was answered several times.

          However, there are plenty of other sources out there of course. Giggles are best left to those who larp about such things. Though I suspect the larp is on them.

          You just need to take that first step. Every journey starts with one step, preferably followed by the next step, and so on and so forth, or fifth and sixth, however many it takes.

          No-one can do that for you. If you aren’t willing to take that first step, then you can’t claim not to know whether anyone on this BB has ever presented a viable alternative to oil and gas can you?

          I’ll give you two clues Paul:-

          1. Fantasy football fanatics have nothing to do with the real world alternativ(s) to oil and gas.

          2. The question has already been answered.

          Have a nice Saturday afternoon and Sunday.

          Always a pleasure.

          • PhilC – no one has offered a viable alternative on this BB – including you. I don’t use Google – but you should know that from previous posts.

            Still waiting…..

            • Yes they have. And so have I. The only reason you don’t remember, is because it couldn’t be refuted. So it was conveniently ignored and forgotten.

              That is an unfortunate habitual attitude amongst the fossil fuel protagonists. To blank out any uncomfortable truths, if the answer contradicts the far more preferable dogmatic myth.

              The protective strategy, is therfore to forget it ever happened. It can’t be true, so it isn’t true. Therefore it never happened. And can be forgotten.

              That is very much in evidence amongst those fossil fuel protagonists who trot out the same statement that was truthfully answered and proved otherwise previously. Sometimes in the previous post? No names. No frack drill.

              So you’ll just have to do that research won’t you?

              As I’ve said before. I don’t do your research for you.

              It’s all there, just as I said. All you have to do is look.

              Fun this isn’t it?

              Enjoy!

              Enjoy!

  3. Renewables do not fill the gap in which the fossil fuels ⛽️ produce the necessity! Nimby’s & Anti’s will argue because they don’t want industry to be seen, they don’t own it but they consume it!!! HYPOCRITES!!

    The UK is addicted to GAS, and if not produced here, we’ll buy it from the Russians!
    I’d rather invest in homeproduced energy, but I have a hand in Russian energy! Win-Win!!

    • Any suggestion that failed start up Research and Development company Cuadrilla could have anything to do with UK energy security is frankly laughable. 11 years and no gas in case you have not been watching.

      ‘if not produced here, we’ll buy it from the Russians! ‘

      A ridiculous comment trying in vain to imply that it’s our gas or Russian gas and those are the only 2 options.

      Intermittent predictable wind power versus failed onshore R and D company. I think you will find the wind has produced a lot more electricity in the last 11 years.

      Do keep giving your money to onshore gas company directors. Why loose a little when you can loose a lot.

      • jp: please elaborate, electricity is one component in production of the energy industry?, You argued Gas versus Electricity! Now that is ridiculous and laughable, ( falling off my seat)!! John are you even in the energy producing industry, maybe you could be a pioneer and throw your penny’s in to the mix, mmmm not a gambler?!? eh! Your so right, and cuadrilla was so wrong, YOU come up with an alternative!

  4. Sorry, Guys, but is there not a bit of a problem with Green House Gas Emissions – or am I dreaming ?

    Are you saying that the present mix is both desirable and inevitable ? Or are you willing to see a change that will inevitably have to use a form of accounting that factors in Environmental harm ? Market Economics alone will not save the planet..

    Neither Steve nor I are hypocrites – we are simply campaigning for a more sustainable energy policy. And yes, it’s tricky. We are well aware that Market Economics serve to institutionalise the use of hydrocarbons.

    It used to be perfectly acceptable to put raw sewage straight into water courses and the sea – and it was certainly cheaper. Fortunately we changed our minds. In the same way, carrying on with Gas consumption at its present level is not a cause for celebration : it is a cause for serious concern.

    • Philip – no problem with a change that doesn’t impact the grid / electricity supply. But what are you proposing to replace the gas (and biomass as it is just as bad) with?

    • Well, Philip, maybe change should/may happen once real solutions have been tried and tested? (I quite like off shore wind turbines, in the correct place and numbers, but they will not be a game changer.)

      I have changed to incorporating an air sourced heat unit, because it is convenient and works well. I still use gas, for the same reason. I have not changed to an EV because I tried (twice) and the product was rubbish.

      Perhaps everyone should change to diesel? Remember that?

      Your point about Market Economics does your cause no favours. EVs are costing the Treasury £1000 per year each, on average, in lost fuel and vehicle tax. You may want to misrepresent that sort of reality, but it is something that the majority of the motoring public are already well aware of, and know that will result in costs being applied fairly soon, (road tolls?) so perhaps campaign without misrepresentation and you may get more support. And be careful regarding environmental harm. Alternatives have the same issue, they are not exempt and imports have the same issue in terms of transport emissions and risk of maritime environmental disasters. There are two sides to an equation. The public know that.

      Reference putting raw sewage in the sea, perhaps take that up with Greta? Airlines deal with that issue for you.

      Glad, though, you are doing you bit, by using the plastic keyboard rather than the plastic bucket!

  5. I come back to the central point. There is incontrovertible harm being caused by greenhouse gas emissions.

    I think it is your fatalism and acceptance of this that is so depressing. Can you not make a single constructive suggestion that might reduce our consumption of hydrocarbons ?

    Of course it’s complicated and any major change will take years to have a beneficial impact – and, yes, it requires global co-operation. We know all that.

    But is it really necessary to keep posting denigratory remarks about contributions that are at least suggesting a better way forward ?

    Most of the time I am reminded of the over-weight couch potato who enjoys a family bucket of fries and sneers at those who eat well and take exercise. A healthy planet is similar to a healthy body – no pain, no gain.

    • Hi Philip – the problem people who have worked in the oil and gas industry (extensive experience, mostly upstream oil and gas, and at least one also in the coal industry) is that we are practical people, used to working under pressure in highly technical, high cost and difficult health and safety operations, is that we see things for what they are. On this BB we are generally talking about electricity generation (including for EVs) and natural gas. The current generating system just about works. But as fossil fuel plants are “replaced” by renewables the grid becomes potentially more unstable. We all agree that cutting demand i.e. consumption is a must, this is being done albeit slowly. If we had cut another one or two gas plants plus the remaining coal generation, we would have had outages over the recent high pressure / no wind and somewhat foggy period. What we would like to see, and I am sure we would all support it, is a practical, viable and reasonably cost effective alternative. We are licencing more offshore wind farms – a useful technology when it is windy. We could have had 10 times as many offshore wind farms the other day and we would still have needed the gas / coal / even oil to maintain our electricity supply. Replace our vehicle fleet with EVs (a given at some stage) and the problem is exponentially worse, smart grid or not. All we are asking on this BB is for a suitable alternative with viable technology. Batteries may be the answer but we are a long way off sufficient capacity where they can contribute to replacing fossil fuels. Perhaps nuclear is the answer – although this only provides base load and cannot be used to replace intermittent / weather dependent generation. At the moment only pumped hydro and fossil fuels can do this. Natural gas for heating could be replaced by hydrogen which could be stored in huge volumes some how. Natural gas is currently stored in salt caverns / depleted gas reservoirs – perhaps hydrogen can also be stored this way. Molecules are smaller but the gas grid may be okay for transmission. However how will the hydrogen be made in sufficient quantities cost effectively? Green hydrogen is still very expensive, costs will come down, electricity demand will go up, it still won’t be windy for many days of the year etc etc. As we keep asking, please let us know how fossil fuels are to be replaced for electricity generation and heating.

  6. Surely, Philip, the central point is for you to make the constructive suggestion(s)?

    I did within para 2 of my last post.

    What I view from the antis is exactly that-anti something, without putting forward coherent alternatives, and often distorting the maths. to try and make it look like the answers are there for all, forgetting that the all will pay the costs and would rather rely upon their own maths.

    I am reminded of the myopic jigsaw fanatic who uses a hammer to force in pieces that do not fit, and then tell others, “look, it was all so simple.”

    No pain, no gain and a healthy body! So, for those who currently can not afford to heat and eat, then not affording to heat OR eat is a solution? Pretty drastic, but it would eventually reverse man made climate change. And, whilst on that subject, let’s not confuse climate change with man made climate change. If man is to pay the bill, let’s be certain it is for something that can be adjusted, because there is a big part that can’t.

    Another constructive suggestion, from myself and others, is that the UK minimises transport emissions through maximising local production. But, whilst you can not argue against that on environmental grounds, you campaign against it! Maybe constructive suggestions are not really what you are after?

  7. I think it a little unrealistic to expect a short posting on this forum to cover every detail that would steer us towards a world with a level of emission that was not injurious to our well being.

    However, although this message board generally concerns itself with carbon emissions, the overall problem is the totality of green house gas emissions. If Transport, Industry ,Agriculture and Aviation reduced its contribution, then less of an immediate burden would fall on energy production. It is unreasonable to expect all other sectors to carry on as normal and look to energy production to solve the entire problem.

    In all these sectors I would argue that carbon pricing would need to be introduced. We all know that burning fossil fuel is the most effective ,efficient and economic way to generate energy – provided you ignore the impact of emissions. Left to market forces, there will be no serious change of habit.

    The unit costs of energy must take into account the damage they cause.by their consumption . Of course you can easily trash this ambition by arguing that because the precise contribution to climate change made by anthropogenic activity is debatable – then we should carry on as we are until the division is fully agreed.

    As regards those in “fuel poverty” being unable to pay the increased bills, this is not insoluble . Fuel Poverty and the use of Food Banks are already the consequence of an Economic System in which many wages are below the level at which it is possible to support a family. Low wages are subsidised by the State. Obviously with increased energy prices ( albeit with properly insulated housing stock) we would need a wages policy that paid living wages. But I think you know that.

  8. Your solutions, Philip, just refer to increasing costs to the end user and then adding even more cost by subsidising those who are less well off. Just much more of what alternatives are already causing.

    Once the younger proportion of the population are told that is coming to them to carry, in addition to paying for the cost of Covid and recovery from it, there is a problem. “Saving the planet” by sacrificing their own futures is hardly likely to get too many willing to agree. It didn’t in Australia, and try the same in UK and the result will be the same.

    And, I don’t think it a very compelling case that you are campaigning AGAINST local production of gas/oil whilst large volumes of imports are continuing. It is yourself who is arguing carry on as we are, when a simple solution is there. Not a big solution, but small gains are better than no gains. If you just look at the Industry bit, is it really better to be importing goods from the other side of the world where the end user has no say upon the manufacturing process, and then accept the pollution aspect of maritime transport? Of course it isn’t, and no different for oil and gas.
    Jobs that pay a living wage? Yes indeed, let’s pay good wages to UK people to work on producing stuff in UK rather than importing it, so UK people benefit and their taxation funnels into paying a living wage to others less fortunate.

    I planted my courgettes today, to add to the tomatoes that have already germinated. Sorry Spain, sorry HGV driver, sorry ferry crew, but if I can produce in UK why import? Every little helps.

  9. Martin: you couldn’t have said it better!, 👍

    There’s a lot of elder selfishness for the next generation, green fields but no industrialisation, Phil Tate, you may have enjoyed your career, pension and standard of living, But it’s not inspiring to stunt progression for the NEXT tax payers, who are going to carry the can for the last generations failures!

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