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Tuesday 2 September 2014

Q&A: So what's the drill?

Paul Melia

Published 03/03/2014 | 02:30

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Why are we talking about fracking?

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The Environmental Protection Agency (EPA) will shortly undertake a study to determine if hydraulic fracturing, or fracking, will be allowed to take place in Ireland. The method is used to extract natural gas from beneath the surface, but there are concerns it can cause earthquakes, pollute water sources and cause environmental damage.

Two companies, Tamboran Resources (Australia) and Enegi Oil (Canada), had licences allowing them to look for this shale gas underneath parts of Clare, Leitrim, Sligo and Fermanagh. They cannot drill any wells or move to production until the EPA process is completed, and pending a government decision on fracking.

What is shale gas?

Gas is generally found underneath seabeds, like the Corrib Gas field, but shale gas is found in deposits of shale. It was formed millions of years ago, and believed to be available at a few key locations across Ireland.

Tamboran has a licence to explore 986 sq km of the Northwest Carboniferous Basin around Leitrim and Fermanagh, while Enegi Oil have a licence for 495 sq km in the Clare Basin. And Lough Allen Natural Gas Company Ltd was licenced to explore 467 sq km in the Northwest Carboniferous Basin, but has said it would not be doing so.

How is the gas brought to the surface?

This is where the controversy arises. A well is drilled and large volumes of water mixed with sand and chemicals are injected underground at high pressure to create cracks in rocks. This frees the trapped gas, allowing it to flow to the surface, where it is captured.

It sounds complicated?

Similar technologies have been used throughout the US for the past 40 years. Production of shale gas in the US has ramped up from 2005, and represents almost 40pc of all gas production.

Is there much gas there?

The companies believe that more than six trillion cubic feet (tcf) of gas could be extracted in Ireland. Tamboran says more than 2.2tcf could be taken from sites straddling Fermanagh and Leitrim, while Enegi says there could be between 1.49tcf and 3.86tcf under Clare. The Corrib Gas field – which could produce for 20 years – has about 1tcf.

Has it ever been done before here?

There has never been full-scale production, but exploration wells have been fracked as far back as 1981 (Cavan) and more recently in 2002 in Fermanagh, Cavan and Leitrim.

Is shale gas unique to Ireland?

No. The International Energy Agency (IEA) says there's about 190 trillion cubic metres of proven gas reserves worldwide, or about 60 years' current annual production.

But recoverable resources are much larger, perhaps as much as 400tcm. Altogether, there's enough gas for around 250 years based on current consumption rates.

Potential sites for fracking in Europe include the UK, Ireland, Poland, France and Norway. France banned fracking in 2011, but the UK is keen to explore the technology.

What happens to the gas after it's extracted?

It's processed and either shipped by road or fed by pipeline into the national grid network. If gas is discovered in Clare, a gas pipeline already exists. The closest pipeline to the Cavan site is in Cootehill, and it would cost up to €1.5m per kilometre to extend it.

So what does this all mean?

It means that if enough shale gas is found, and it makes economic sense to bring it to the surface, fracking could become a reality in Ireland.

Is this a good thing?

It's either the solution to cutting our energy bills and creating employment, or an environmental nightmare.

What are the pitfalls?

The long-term implications of fracking are not known. The chemical mix used by each company is different, and could contaminate groundwater. There's also the question of how toxic water from the borehole can be safely disposed of.

Exploding rocks beneath the surface has caused minor earthquakes in the UK and US, while wells may also create an ugly blight on the landscape, as well as contaminate our air. There's also a question as to whether there's enough water available to facilitate the process, with between 90,000 and 13.5 million litres of water required per well.

A report from the London School of Economics also says that given a UN commitment to reduce global warming, just 20pc of fossil fuels can be burnt between now and 2050, so spending more on finding and developing more reserves is "largely wasted". US government adviser Deborah Rogers says that most US wells stop producing after five years, and that the price of gas would have to rocket for fracking to make economic sense.

What are the upsides?

Oil and gas companies say the gas will help reduce fuel bills and provide security of supply. We import more than 90pc of our fossil fuels at a cost of €6bn a year, and having an indigenous supply would be of huge benefit.

They also claim that hundreds of jobs will be created, as well as tax revenue, and that environmental concerns can be managed. The US has seen gas prices plummet due to deployment of the technology.

How much would my bills be reduced by?

Very hard to say. Gas is traded internationally, and even if the full potential of Clare and the north-west are exploited, it doesn't mean all the gas would flow to Irish customers. It may be cheaper to source gas from abroad, so it's not clear if consumers will immediately benefit.

What is the Government doing?

It has asked the EPA to carry out a study setting out the concerns, and how they can be addressed. That will take at least two years to complete. No fracking, or exploration wells, will be drilled pending the outcome of the study.

So what's to stop them applying for permission to frack right now?

A regulatory regime is in place, and they could apply under that, arguing that the licensing regime in place is the one which should dictate whether permission should be granted. If it's refused, they could take legal action.

However, the Government is likely to oppose any moves to allow wells be sunk pending the outcome of the EPA study.

Should I be concerned about this?

Yes. While there are economic benefits, there's risks too. There's also the question of whether drilling in areas of natural beauty is worth it. Given it's a new technology to Ireland, everybody should take a keen interest.

If it goes ahead, the State will receive a portion of the windfall, but at what price?

Sources: International Energy Agency; Investor Presentations Tamboran/Enegi Oil; Department Of Communications, Marine And Natural Resources; European Parliament 'Impacts Of Shale Gas And Shale Oil Extraction On The Environment And Human Health'; 'Unburnable Carbon 2013: Wasted Capital And Stranded Assets' From The Grantham Institute Of Climate Change And The Environment, Lse; 'Hydraulic Fracturing Or Fracking: A Short Summary Of Current Knowledge And Potential Environmental Impacts', University Of Aberdeen On Behalf Of The Environmental Protection Agency.

Irish Independent

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