We can understand each other.
The team we have working with us is quite experienced in many different aspects of the business. We recently put on our technical advisory board, with the illustrious title of global completions specialist, a fellow who has done, along with his team, several hundred fracture stimulations around the world, including in the US, Canada, Mexico, Hungary, the UK and China. We have no concerns about that. The company is only two years old. It was founded by a fellow with 40 years of direct mining experience in Australia, so that is super. His whole ambition has been to convince people that they do not want to do these things from scratch. There is no need to reinvent the wheel when 50,000 wells have already been drilled and there is so much to learn from those. The whole point of building the company was to select people such as myself who have extensive experience with such projects. Another person on our technical advisory board is recognised as the globe's expert on geochemistry, for example, and is most experienced in every single type of project around the world. We are not doing this in a light way but trying to bring in as much horsepower as possible.
Deputy Flanagan mentioned chemicals. To be clear, if it is one of our wells, nothing goes into it during hydraulic fracturing, whether it is us or somebody after us. Some committee members may not realise that when one drills a well, one goes through the water layers - aquifers and shallow zones - and these are typically drilled with air or simply water to avoid exposing any water-containing rock to chemicals. However, once one is past that and has cemented and protected that zone, it is typical for the drilling process to include what is called a mud. Essentially, this consists of a few chemical additives that are designed to prevent water from leaking into any other zone and to lift up all the drilled particles and put them in solution so they can be pushed out of the well as drilling proceeds. No chemicals ever touch the groundwater in the process. Given that neither we nor anyone affiliated with us would ever use them in our process, there will be no chemicals in the groundwater. That is a good example of how every project is different.
The 1% impact is important because according to Deputy Flanagan's maths, there would be a thousand acres under concrete. Originally, I thought we might concrete these things, but that is not the normal practice. The normal practice is thick gravel. My concerns were to do with the fact that there is a lot of rain out west; I wondered whether a pad would be more stable if it were concreted. However, they are telling me that six inches of quarry material will pack anything down. Final designs are needed in every site selection, but that is the general point. All of this is completely recyclable and removable when the pads are done. That is the point - pads have to be rejuvenated, when the operation is finished, to the condition that the ground was found in or better.
There were various comments about the area. We have had the good fortune to meet a lot of people in the last two weeks. We hosted information meetings, and we videoed all of them and studied the rambunctious crowd in the audience that made their views known at times - they would get up and stamp and cheer - and the other half sitting quietly, trying not to draw attention to themselves and just listening. At some meetings they outnumbered the stampers. We know these meetings attract a lot of attention. We recognise the views of the people, but right now we are getting 40 times as many positive e-mails about this project as negative ones. That includes résumés, business inquiries and so on. While I realise I am inviting discussion about the project, the fact is we discuss the matter with people who do not wish to be singled out in public but who are keen to know more about it. The company's obligation is to share that information and we are doing so.
As for decisions, we follow the rules; we do not make them. If the Government and the respectful community of Ireland are involved in these things and have different opinions about what should and should not be done, our role is not to discuss this. Our role is to follow the rules in place. We provide all the information we can.
Deputy McLellan is correct to suggest fishing, tourism and other local impacts must be taken into account as part of the environmental impact assessment. As fortune has it, our focus area is in the northern part and the middle of our leases. It is entirely outside the Shannon catchment area, more in the areas heading north west towards Lough Melvin. Other companies may have other issues, as has been suggested, and they must be considered. Manorhamilton is the largest vicinity with people in our focus area. It no longer has a hotel; apparently, it lost it a number of decades ago. From that standpoint, we are respectful of the people in the area and their tourism aspirations. However, right now they are not in high impact areas, which is fortunate for the project.
There may be some misunderstandings with regard to wastewater that I will address. All recovered water in our process is placed in tanks on-site. These tanks are completely sealed with environmental emission-capture on top. They are burned around the sides in order that if they fell apart, none of the water would be able to leak from the site. This is an important point on wastewater. Not one single drop of wastewater will leave the Tamboran site. It will be 100% recycled into the ground. There is a vast truckload of water on the site. Also, water cleaning facilities will be standard on every wellpad, the specifications for which are being prepared, but we have not chosen a vendor at this stage. However, the directive will be to make the water clean enough to drink. Our people on site will be drinking that water. We will have recycling to ensure that effect.
The main thing that comes back with wastewater is salt; there can be up to 100,000 parts per million. Unique to our formation in this case is that we do not see mobile or reactive finds and so forth. We simply have salt and some other minerals to deal with. However, it will always go back into our next frack job. By the time we have 500 wells, the last well will have some recovered water which will have to be cleaned and the solids dealt with. The bottom line is that there be no waste.
I do not intend to touch on the issue of jobs, unless the committee expressly wishes me to. Nevertheless, obviously, a project of this magnitude has some interesting potential for a period of up to 50 years. There is nothing minor about it. It is a considerable project within the area of expertise of this and other committees.
With respect to extraction, no water will be taken from any public lake or site. We have made this commitment several times. The water will come from four groundwater wells located on the edge of our lease area and the rainfall gathered in it. One might think that would not amount to a great deal, but a pond measuring 50 ft. x 50 ft. gathering 1 metre of rainfall per year will encompass 500,000 gallons. If this is done at a reasonable pace, we can use a considerable amount of rainfall in the process. As part of an environmental impact assessment, we cannot take water from an area in which there is clear evidence that it would be taken from a local landowner.
The drilling process would probably take place during daylight hours only. I am unsure whether Ireland's rules would allow us to go beyond this. It would probably two or three weeks to drill a well working 12 hours per day. Fracturing is roughly an eight hour process according to our estimation for the project. All the water will be injected within eight hours. It is rapid and the speed of the injection is what causes the rock to crack.
We can always think about accidents, containment of the fields of water and how not to allow any of the water to come out. I will place myself in the US environment. If a truck full of produced water drives off the road – although we will not have this, it is normal in a US project for produced water to be trucked from place to place - one has a localised impact. Despite some of the concerns raised, all of these things result in a localised impact. If a gas well begins to blow bubbles into the local water table, one shuts the well and abandons it. One does not allow it to continue. To be blunt, technically, the gas inside it dissipates in a tremendous water table and would not be noticed one mile away. I do not mean to make light of this, but there are always localised impacts because there is only so much involved.
Reference was made to chemicals. The chemicals used are soaps and guar gum. These are the materials used in most US operations and dilute heavily over a period of time and within one mile. The impact is limited. As the committee is aware, the objective is to prevent any incident occurring. That is why the pad design is critical towards reducing most of the traffic that would contribute to it.
A question was asked about the 13 leases. I gather I must fix the relevant webpage which was lifted from a slide we used in public presentations which showed 13 wells circled on our map. These are the wells drilled during the past 50 years. Normally, when we present the information, we say as much, but they are not labelled in that way on the website, which gives the impression that there are 13 leases already planned. However, these are the wells drilled in the basin in Northern Ireland and Ireland in the past 50 years. That is the reason we know anything about it.
A question was asked about the energy required. A tremendous number of studies have been carried out in this area in the United States. By definition, the hydraulic fracturing process is more energy intensive than simply punching holes in the well, which was all we had to do in the good old days to make the gas flow. However, it is absolutely dwarfed by the amount of energy released. In our case, an eight hour fracturing process could produce 1 billion cubic ft. of natural gas to burn from a single well. It is certainly not carbon neutral. We burn this stuff. I understand on the island of Ireland in the region of 1 billion cubic ft. is burned per day. It is, therefore, a real issue.
Another question was asked about the use of water and sand. There is no real impact in this regard. We have discussed where the water comes from. It has a localised impact where it is withdrawn from; it would only affect the local water table within a short distance. The advice we received from professional water-well drillers who carry out this work 100 times a year is that no well more than 100 m away would have an impact on another in the areas at which we are looking. In all likelihood, we will not be within 1 km of any residents, simply to avoid aggravating any person because of any noise or activity. With a horizontal reach of more than 1 km we have no reason to do so. We have a good deal of flexibility about where we place things.
I appreciate the comments made about reputational risk. To be fair, this is true of every commercial business. In the mining industry as in any business engaged in activity the responsibility is strongly on the individuals concerned. As an engineer, I do not take this obligation lightly. That is a critical function. I advocate good regulation. It was not always popular in the USA when I worked there, but, in fact, it is better for everyone if the public has confidence in it and can see that it is not a case of a company suggesting it will do better. We will be as good as the rules in place and the rules are good. We have a good deal of confidence in the drilling, pipeline and other rules in place in Ireland, of which there is no question. There have been many wells drilled here and there are some tremendous offshore wells. These are complex, hard issues that have been dealt with well and regulated by the Department. However, hydraulic fracturing is new, but it is only one piece of the process. Every regulatory agency in North America was obliged to incorporate rules. With over 20 states and several provinces in Canada now doing this there are probably approximately 30 sets of regulatory rules one could review and incorporate the best pieces of as a starting point.
Deputy Catherine Murphy referred to the independent nature of the EIA. I view it as writing a test. We come forward with our best efforts on what is needed. For example, what kind of industry would come forward to say it is going to do something the EIA says would have an immediate conflict with something like tourism or water? If a well pad has flaws, the EIA reveals it is not appropriate to bring it forward. In theory, the only well pad that can be brought forward in an EIA is one that already passes what we believe are all the rules.
It is completely within the rights of regulators to impose conditions. The EPA imposed a lot of conditions on Masonite when it first did its project. They are the rules. If it examines our EIA and says more is needed, one has to go back to the drawing board. We have covered the scale of the issue.
Senator Keane asked about the actual contributions that have been made. As was rightly said, no one knows what will come out of the ground. The truth of the matter, however, is that for a project to be successful, it has to pass certain thresholds. Our current estimate is that a successful well in Ireland, based on projected costs, would have to produce in the region of 1 million cu. ft. per day on initial completion.
If one does the maths on wells drilled over a 15 year period, which is our intended drilling window to get to 500 on each side of the Border, we estimate the total volume of gas would produce approximately 20% of the island's natural gas consumption needs for up to 20 years. It is a lot of gas and would represent in excess of 1 trillion cu. ft. of gas in its lifetime. It is to be hoped it would produce more than that if successful. If less than that is produced, the project would not go past the exploratory stage. Unless gas prices went through the roof it probably would not pay our way to proceed.
Having said that, until there is an exploratory well in the ground, we have no idea whether it will work. In about 25% of the cases in the US where projects showed promise at the beginning, things showed up later that caused production to fall off faster or did not create the volumes expected. Such projects could not proceed. We do not know what will happen until exploration begins.
We discussed chemicals and water, which we hope will be sourced on site. We need four water wells to constantly monitor the quality of our water. If we notice a gas bubble we will know we have a problem before we are audited and will stop and drink it. At up to 1 million gallons per well we anticipate recycling approximately 250,000 gallons per well. The other three quarters will be trapped in the rock down below. A kilometre or more of rock starts to close because fracking has stopped.
Some interesting research in the US has shown that because water molecules are much larger than methane molecules the water acts as a prop like sand in the hairline cracks. As Mr. Stanley-Smith said, the recoveries in the US have ranged from 10% to 50%. We estimate we will recover 25% but we will not know until we begin.
A study in the US on fracturing, using the most advanced technology called micro Seismic, showed that we never fracture more than 200 m to 300 m above the target zone at the deepest levels. The shallowest point for our exploration, at 500 m, is probably deeper than that. When groundwater is 100 m or shallower, there is a 400 m gap. We would never anticipate anything like that.
Micro Seismic technology is three dimensional real-time imaging of the noise made by cracking in the fracks. We see where the cracking is going live. Therefore there is no question as to where the cracks went. It has been done in more than 1,000 wells in the US and there is a tremendous database. Not a single case shows cracks emanating up to a point where it would hit a ground water table. It is a remarkable technology and is not covered in a lot of the opposition literature. It does not seem to be aware of it.
The pads would be gravel. We have to have cement containment under tanks and lining because I refuse to leave anything to chance. Concrete is an option and would be good for business but it creates something that has to be cleaned up, which I do not want. If I did not need it, I would not do it.
A very good question was asked on the best available techniques. Some people attending public meetings have heard me say the phrase "very good" 100 times. Every project is different. Therefore the techniques for cracking different shale are unique and considered proprietary. Companies are reluctant to share their so-called art. The reality is the fundamental aspect is very common, namely, using high pressure and injecting water to crack the rock.
I agree best practice on that level could be written. Most of the so-called secret recipes are not very different when push comes to shove. The value is in the artist and if one is an artist, one wants people to think one has a unique approach. I support the idea. Industry associations such as the Canadian Society for Unconventional Gas and the American Petroleum Institute would probably be able to provide the committee with information on best practices.
Unfortunately Deputy Daly has left the meeting. She mentioned the banning of fracturing in France and its suspension in the UK and one province in Canada. Let us be clear. France banned the practice during the summer. The UK case was a voluntary suspension by the operator of its fracturing operations. It continued to drill and my understanding is a press release will be issued in the coming week on the findings of the study on the earthquakes that occurred coincidentally to the drilling. The Barnett shale drilled more than 8,000 wells before a single earthquake was recorded and this is a very clear demonstration that there is no correlation. I look forward to the press release. There has been no suspension in the UK
Quebec put a moratorium on fracturing . Approximately 30 jurisdictions in the US have done so. In cases where there has been a ban or moratorium, there were no incidents before they were put in place. In most cases drilling had not even taken place and in a few cases there had been a handful of drills. They were completely arbitrary moves made as a matter of principle. One respects the countries that did so. If they studied the data, as was advocated by a Deputy, perhaps they would not have done so.
After less than two years of a moratorium in New York the state is completely reversing its decision and there will probably be 1,000 horizontal fractured shale wells there by 2012, even though it was the first jurisdiction and the most significant to put a temporary ban on fracturing. I take great issue with the moratorium issue because it is why we are here and are being open about everything we are doing. We believe the most important thing for industry to do is not just to follow the rules but to make itself available for all questions or questioning so that people can know everything they want to know in order to make their decisions about what they should or should not do with this process.
In answer to Deputy Tony McLoughlin I like the idea of government inspection. The UK conducted such an inspection. They visited the Marcellus on the east coast of the United States. One would have to travel to North America to get any significant exposure. Poland has fracturing work being carried out at the moment with some 13 wells drilled in Poland and a few of them are already fractured. Their resource base is some 50 times what we estimate is available in Ireland. Poland anticipates that within a decade it will be able to produce somewhere in the region of five to ten times what it currently consumes and buys which is 90% from Russia. Poland is absolutely committed to this effort. On the question whether Poland is taking as much time upfront as Ireland, when the Polish President himself has said it will happen, that is their issue and I respect Ireland's position. I would advise that the more everyone knows, the better.
In answer to Deputy O'Donovan's question, population density is a fun topic for me because, for once, I can address an issue that is quite far from my expertise. We discovered that Ireland and Poland have very similar population densities, at about 60 people per square kilometre. Texas, with more than half of the world's shale gas wells, has a density of 100 people per square kilometre. Places such as Pennsylvania have a density of about 50% higher than that and this is where the newest and biggest shale project in the United States, the Marcellus, is under way. Nothing says it better than the Barnett shale, the first big deep shale in the United States. Almost 20,000 wells have been drilled there. It is situated in north Texas. This represents almost 40% of the wells drilled in the world. Dallas-Fort Worth sits on top of the side of the Barnett shale. More people live in Dallas-Fort Worth than in the entire Republic of Ireland. It has a population of almost 6 million. All of their water comes from the lakes, streams and ground water of the Dallas-Fort Worth area. I would not necessarily recommend that Ireland should put wells under the airport or have 100 wells in the downtown areas, as happens in the city of Fort Worth, but that is how they do it. The value of the gas underneath means they have never hesitated to do so and they just found rules to do it. With 6 million people living in direct proximity to the world's largest shale gas project, there is no question that they pay close attention to what happens there. The question of population density is interesting. Of course, there is a low population density out west but the people living there want to have the information and it is their right.
In the United States today, somewhere in the region of one million people work directly or indirectly in the hydraulic fracturing business in the oil and gas companies. There is no shortage of expertise on which to draw for any agencies wishing to access such expertise.
I will address the issue of tailings ponds. In most places in the United States, recovered water goes into an open pit. Members may have seen horrible pictures of evaporators and I am sure they will agree this does not look like a good idea. It is allowing contaminated water - which at the very least is full of salt - be aerated and sprayed like a sprinkler across the pond so that it evaporates quicker. Water tanks are the only way to go. The only open pond we have is fresh water gathered from the ground water wells and if we clean any of the recycled water rather than push it back in on the next well, it will have to be of drinking water standard before it enters an open pit. There will be absolutely zero open exposure, including in our drilling. An open pit is used in the drilling world, usually to settle out solids but we plan to use tanks for everything. I do not want any fugitive emissions from tanks and pits and all these things all over the place. The central well pad design, which is as a result of Ireland's mineral rights arrangement and they are under State control, means that we can implement these efficiencies. That means there are no tailings ponds and no materials because they all go back into the next fracturing job.
Deputy O'Donovan made a good point about emissions scrubbers. As regards the water pit, if the water comes back then all the little gas bubbles are going straight into the atmosphere. By using these conical tanks, all the emissions can be captured at top. They can be put through what is called a vapour recovery unit, a very common device in the United States. This unit gathers everything and compresses it into the equivalent of what in Ireland might be called bottled gas. Once the project is up and running, all these emissions just go into the sales pipeline. The emissions are gathered and the natural gas is sold rather than ventilated. Deputy O'Donovan wished to ask another question.
