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Spotlight on shale gas

In 2013, the concept of shale gas triggered intense debate in many countries.  This resulted in protests and moratoriums on exploration drilling, alongside national declarations of support and detailed research and debate amongst policy influencers in Europe.

Through all of this, OGP members worked together to address concerns regarding shale gas, which led to the creation of the following technical resources:

  • Frequently asked questions about shale gas  – covering topics including  seismicity, water, chemicals and greenhouse gases
  • NGSFacts.org – a hydraulic fracturing disclosure website
  • An independent study on the economic benefits of shale gas production in Europe
  • Good practice guidelines for the development of shale oil and gas

In addition, OGP members held a series of round tables in the EU Parliament, submitted comments on EU documents and lobbied on specific issues.

Frequently asked questions (FAQ)

In April, with the increased interest in hydraulic fracturing in Europe, OGP provided stakeholders with factual information on issues identified as areas of concern. The Gas from shale Task Force created content for the document, designed in-house at OGP.

The FAQs cover hydraulic fracturing and seismicity, water, greenhouse gases and chemicals. The document contained third-party referenced answers to thirty-two questions regarding shale gas and hydraulic fracturing. Graphics accompany many of the responses.   Translation into German, Russian and Ukrainian is underway, with additional languages planned throughout 2014.

The FAQs can be downloaded at http://www.ngsfacts.org

Hydraulic fracturing disclosure website

In June, OGP launched Natural gas from shale fluid and additive component transparency service, or NGS FACTS.  This  website enables participating companies to disclose the chemicals they use in hydraulic fracturing for shale gas operations – and so help to address public concerns.

Speaking at the launch event, held at the European Parliament, Malcolm Rice-Jones, Chair of OGP’s  Gas from Shale Task Force, said, “We are very keen to facilitate the fact-based debate on shale gas. Our primary focus is to make the chemicals used in hydraulic fracturing available to the public and also to provide more information on shale gas operations.”

NGS FACTS  is open to any internet user and offers updated information for exploratory wells being operated in the European Energy Community by the participating organisations.

Satellite imaging helps locate the wells on a map, and with just a click, anyone can access a fact sheet containing all the relevant data about the water, sand and chemicals used for the hydraulic fracturing of specific wells.

Ten wells are listed at the moment. The site is updated regularly with the website’s coverage expanding as exploration activity increases. In 2014, it is hoped wells outside Europe will be added as exploration takes off around the world. OGP has also committed to an annual review to ensure the disclosure site is ‘fit for purpose’.

For more information visit http://www.ngsfacts.org/

Macro-economic study

In November, OGP commissioned the independent consultancies Poyry Management Consulting and Cambridge Econometrics to do research that would quantify, for the first time, how much Europe’s economy could benefit from domestic shale gas production. The study found that shale gas could add a total of 1.7 trillion to 3.8 trillion euros to the economy between 2020 and 2050.

While it may not be a game changer as in the United States, shale gas development in Europe could lead to significant benefits for the economy, the study noted.

It modelled the impact of domestic shale gas development on the economy of the EU28, using three different scenarios, each with differing production levels.

According to the results, shale gas operations could trigger the creation of between 400,000 and 800,000 new jobs by 2035, and between 600,000 to 1.1 million by 2050. Many of these jobs would be in the industries most affected by Europe’s crisis – and would be in net addition to any new jobs generated by other sectors, including the renewable energy industry.

Domestic production could reduce dependence on gas imports to between 62% and 78%, down from an otherwise predicted 89% of demand in 2035, the study said. The less Europe spends on energy imports, the more it can invest internally, stimulating national and local economies. Between 2020 and 2050, investment in the EU could increase by 191 billion euros, while tax revenues could increase by 1.2 trillion euros.

Indigenous gas production could also reduce energy prices compared with a no-shale gas scenario. Relatively lower prices would increase the income available to households and reduce costs for industry, making European products more competitive internationally.

The report can be viewed at http://www.poyry.co.uk/news/poyry-study-investigates-macroeconomic-effects-european-shale-gas-production

Guidelines

The OGP-IPIECA good practice guidelines for the development of shale oil and gas were published in December.

These guidelines provide stakeholders with an overview of how the oil and gas industry manages the risks associated with its shale operations.

For the majority of issues, good practices for shale oil and gas operations will be identical to those for ‘conventional’ operations.

Given the high level of public interest in shale oil and gas operations, these insights into how safety, environmental, health and community aspects are addressed are particularly relevant. Such information may be used to structure discussions between stakeholders and operators at local level.

The scope of these OGP-IPIECA good practices include all areas of shale gas and oil development, including water protection and the management of waste water, well integrity, air emissions and stakeholder engagement. In some instances, the guidelines may describe practices that reflect the obligations companies have under existing regulation.

In addition to the identified good practices, which include local sourcing, operators may consider community investment as a complementary way to bring benefits to the local communities. Social investment projects are best designed in consultation with communities, to understand their views on the most beneficial community investments, as well as long-term versus short-term benefits.

In developing these good practices, OGP and IPIECA reviewed various national and regional standards and practices from operators and industry organisations as a reference point, such as API, ASRPG, UKOOG, OGP and IPIECA guidelines. The good practices document provides national and regional industry groups with global principles for shale operations upon which specific practices and standards can be added.

As these good practices are carried out and evolve, a periodic review process will encourage continual improvement and further consistency across the industry.

Impact

On 22nd January 2014, the EU published its Communication on shale gas as well as associated Recommendations. Crucially these are non-binding on Member States and many of them are already covered by national legislation. Although advocacy work needs to continue, especially with the new European Parliament after the election in May, the current framework will allow OGP members to continue exploring and appraising shale gas opportunities throughout Europe.

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