Transcript of broadcast extracts of interview by the BBC’s James Craig and Gerwyn Williams, of South Western Energy
We’ve had the licences coming up to a year. We’ve done a very reasonable amount of work in that year. We’ve got other work to do as well in other areas. We need to spend at least another year I think on desk-top studies. We will then need to go through the permitting process, which means gaining planning permission, and all the environmental permissions we’ll need before we can drill.
We need land rights, obviously, we need to come to an agreement with the landowner. That’s going to take over a year. It is likely to be two years, I would say, from now, just over, before we are looking at drilling an exploration well.
What makes you the right person to do this job, what makes you capable of going through these first phases, let alone actually drilling in Somerset?
I think we’ve got more experience than most in the UK. We’ve been in this business over 20 years in South Wales. I’ve done a lot of modelling. We’ve spent seven years building our first model. We’ve got six exploration wells. We’ve spent two years constructing a 3D very complex model of the South Wales area. From that experience, you know the geology of Somerset and South Wales has not much difference, only the Bristol Channel in between so I guess we’ve got good experience over the area to do that because of the work we’ve done already.
Do you have examples of wells or sites where you have successfully been able to do what you were looking to do, where you have been able to either produce or actually bring out the gas that you were hoping was there?
We’ve drilled a production well and we’ve got planning permission to put that first production well into production by generating electricity and we’ve got a second site with three production wells permitted in terms of planning permission and a second generating station to go in. So we’re in that process at the moment. Four out of five of the exploration wells that we drilled were successful. One was not successful. That’s the time period we’re in in South Wales now. Then we’re going in from exploration into production.
In financial terms, it is an expensive business, even to investigate this area, can you give us an idea of how much it could cost to drill a well, for example?
We’ve been out to a number of contractors and from the wells we’ve drilled already, we’ve found – which goes against the industry in general I think – that it is better to own our own drilling rig and to bring in experienced drillers and to be in control of our own drilling process in the future. Drilling an exploration well is going to cost around £400,000.
And is that something that you are able to fund because these are huge amounts of money. Are you a serious proposition in that sense?
If we couldn’t do it, we wouldn’t have the licences because one of the tests you had to prove or pass with the government before they will let you have the licence is the financial capability. So that answers itself, I think.
There are some people in Somerset who are fiercely opposed to even the idea of exploration work going on for oil and gas, let alone any potential fracking or drilling down the line. What would you say to those people? How can you answer their concerns?
Well firstly the industry is proved to be safe. By the time we are ready to do anything, other bigger companies will have drilled in the north of England and there will be far, far more information available. So I think that’s the position in terms of fracking itself. If we ever do frack in Somerset.
As far as the people who are objecting are concerned I think they need to take a broader view. We’re not saying that hydrocarbon production, oil or gas, is the be all and end all for energy security in the future for the UK. But what we would say is that if you look at wind, if you look at solar and if you look at tidal, none of those can ever be a base producer. Now, if the wind doesn’t blow in the night and the tide is in a slack period then we’re not going to have any generation from renewables at all.
So we need to look after ourselves. You know, we’re coming out of Europe. We don’t want to be importing energy, gas, from the Middle East. We don’t want to rely on Russian imports. We have to be self-sufficient. We’ve got the gas here and we need to look after ourselves by exploiting that gas, generating electricity, being secure as a nation in terms of energy.
I am not going to give up until we see gas being produced from the areas we’ve been working on for many, many years. I’ve always had a good feeling because the geology in Somerset is very similar to the geology in South Wales, which in turn is very similar to the big gas producing areas in the US because all these continents, before they split, were virtually all the same areas.
So we know quite a lot about the geology in Somerset and we feel that it can be produce gas and we feel that it can change the economy of Somerset around totally.
We don’t see Somerset being a big gas producer and a big electricity generating producer for ever and a day. We’ve got coal stations closing, we’ve got old oil stations more or less gone, nuclear, particularly in Somerset, is coming on line but that’s going to take quite a number of years. In the meantime, we are going to have gaps in generating capacity that have got to be filled.
Other extracts: Gerwyn Williams
Conventional oil or gas is generated by a source rock. It seeps up through the strata until it reaches some form of trap or cap rock. When we drill from the surface into that reserve of conventional oil or gas it will come out under its own pressure. There is no fracking at all required.
Unconventional gas is different in that we know it’s there but it won’t come out under its own pressure, if you like, it needs to be coaxed out. The permeability of the ground is normally too high to leave that gas to flow naturally so we have to improve the permeability.
There are two types of unconventional gas. There’s coal bed methane, which is found in seams of coal that haven’t been worked. Or there’s shale gas. There are various bands of shale gas in the Silurian, Ordovician, as you go deeper down. So, we will look to see what targets there are and then we will decide what to do.
The easiest thing, I suppose, as a producer is to go along and drill for conventional gas in Somerset. It’s likely to be the Devonian measures, the old red sandstone, which is a prolific producer in the Appalachians in the USA. And then once you’ve won that gas, we’ll look at setting up a small modular power station somewhere and generate electricity rather than sending the gas direct in the early days.