Gasbagging

There’s been quite a flurry in the local media this week over Tamboran’s much-trailed ‘announcement’. In fact the press release, written by the PR giants Weber Shandwick (specialisms include ‘baby-boomer marketing’ and product placement), contained a lot more fluff than substance and several of the industry’s hoarier old tricks.

State the obvious

“Energy company Tamboran Resources Pty Ltd (“Tamboran”) is pleased to announce that initial studies have confirmed that a substantial natural gas field is present in southwest County Fermanagh in Northern Ireland.”

Even my dog knows this. The important question for Tamboran is ‘will they be able to extract and sell it at a rate which would make them enormous profits?’ The important question for the rest of us is ‘what effect would this industrial process have on our economy, environment and future?’

 

Think of a number …

“A gas exploration project for Northern Ireland could create 600 full time jobs, up to 2,400 indirect jobs”

No one knows where the 600 figure comes from; as the Green Party point out, Tamboran has previously estimated 800 for the whole of Ireland while according to TV3, the (same?) 600 jobs are going to be in Country Leitrim. Could it possibly be a figure plucked from the air, big enough to offer hope to the desperate while small enough to still sound plausible? 2,400 is another suspiciously exact number. Is there perhaps some list of economic pseudo-statistics that states that every direct job involves four indirect ones? (More or less, we discover later, from Domhnall Ó Cobhthaigh’s analysis.) In any case, the magic words ‘could’ and ‘up to’ make the whole exercise pretty meaningless – ‘up to 2,400 jobs’ could mean three as easily as two thousand. Contrary to some of the excited headlines, there are no promises here.

What jobs there might be; and we realise that if the fracking goes ahead then someone will be paid for doing something, are equally vague. Full time is not, of course, the same thing as permanent, and we suspect that many of these will be contracts to dig a hole or drive a lorry. If you employ someone for a week three times a year over a ten year period is that one job or thirty? In neither case is it a lot of help. Meanwhile the few plum jobs; mining engineers and the like, will almost certainly go to people brought in from the gas industry in North America.

The numbers that of course aren’t mentioned are the jobs and small businesses that will be threatened by fracking. The twin poles of our county’s economy are farming, specifically food production, and tourism, particularly eco-tourism. Both of these depend absolutely upon the perception of Fermanagh as clean, safe and unspoiled. We can’t afford to gamble with that.

 

Compare like with unlike

“and deliver natural gas energy security for the next 50 years.”

This is later explained as the

“[p]otential for ultimate production of up to 2.2 trillion cubic feet (tcf) of shale gas. This equates to 50 years of the current daily consumption of gas in Northern Ireland;”

We don’t, of course, expect either Tamboran or Weber Shandwick to know it, but in Fermanagh, as in much of Northern Ireland, we don’t consume any mains gas at all. Fifty times hardly anything is, er, not very much. It’s a bit like asking an old lady how much lager she drinks, multiplying it by fifty and presenting her with a six-pack, saying that should deliver her liquid requirements for the next 50 years.

 

Think of a bigger number

“The company, which proposes to invest £6 billion in Northern Ireland, was commenting following completion of the first part of its analysis to determine the feasibility of shale gas exploration in Northern Ireland. Tamboran’s technical team of over 20 professionals have been involved in substantial natural projects worldwide and have very high confidence that they can commercially develop this project in Northern Ireland. The full analysis will be published by the end of this year.”

£6 billion may well be an amount of money Tamboran are hoping to obtain for this project from shareholders and banks following their planned flotation on the Australian stock market this year. That’s not quite the same thing as investing in Northern Ireland in the sense that most of us would understand.

 

Repeat it

“Tamboran, who last year was granted an Exploration Licence by the Department of Enterprise, Trade and Investment, is focusing its Northern Ireland operations in the southwest area of County Fermanagh. The Company has been granted a Licensing Option in an adjacent area in the Republic of Ireland where it is focusing in north County Leitrim.

The north-west region of Ireland is the only part of the island which is not currently connected to the gas network.

Outlining its initial analysis, which was based on its own and other recent studies, Tamboran identified a range of economic and energy benefits for Northern Ireland from the project, including:

§ Potential for ultimate production of up to 2.2 trillion cubic feet (tcf) of shale gas. This equates to 50 years of the current daily consumption of gas in Northern Ireland;

§ Full natural gas security of supply in Northern Ireland for at least 20 years and a substantial reduction in imports for over 30 years leading to removal of Northern Ireland’s 100% dependency on imported gas;

§ Excess gas supply at peak production, enabling Northern Ireland to become a significant net exporter of natural gas;

§ The creation of 600 direct jobs and an estimated 2,400 indirect jobs in County Fermanagh;

§ Tax revenues of up to £6.9 billion (including royalties, corporation tax, Vat, employment taxes and exploration tax); and”

Yes, that £6 billion had a nice ring about it, didn’t it? Well worth using again, of course with the safety precaution of ‘up to’. There’s no mention of what period this is supposed to cover – if it’s over the fifty plus years they’ve referred to in other contexts then it doesn’t sound quite so exciting. What is certain is that for any of this money to come to the UK government (and it would not of course, be earmarked for Northern Ireland) Tamboran would have to be making pretty substantial profits out of a resource which is supposed to belong to the people of this country.

And somehow, quite legally of course, companies that make enormous profits don’t always end up paying quite as much tax as the initial figures would suggest. Barclays Bank, for example, made profits in 2009 of £11.6 billion. Incredibly, their tax bill, which at a rate of 22% would have been over £2.5bn, came out as a mere £113m – around 1 per cent. It would, we think, be very unwise for any country or region to depend on getting tax revenue from a foreign-owned company, especially when that company’s activities threaten the balance sheets of local businesses.

 

try a sweetener

“§ A community investment fund directed entirely within County Fermanagh, estimated to lead to additional local benefits in excess of £2 million per year once the project reaches expected commerciality in 2015.”

Out of those hoped-for profits, £2 million would of course be peanuts. But then, peanuts are a useful thing to fling around when you want to distract the monkeys from what you’re doing to their tree. Again, nothing is promised, but we can expect to see some small boys in glossy Tamboran football shirts for a great photo-opportunity.

 

quote yourself as an authority

“Describing the project as ‘an energy and economic game changer for Northern Ireland’, Richard Moorman, Chief Executive of Tamboran said:

‘Our initial analysis suggests very substantial shale gas reserves in the southwest Fermanagh area. Allowing for even modest rates of recovery, the energy and economic benefits would be tremendous.’

‘Security of energy supply is a primary concern for all governments. Our analysis indicates that the island of Ireland is in the fortunate position to have substantial gas reserves under its feet. In southwest Fermanagh alone, we believe that there is up to 50 years of the present daily gas consumption of Northern Ireland. Realising these reserves would secure gas supply for decades, protect consumers and businesses from market uncertainty and negate the risks associated with being over dependent on unpredictable external supplies. County Fermanagh would be able to attract additional businesses that would benefit directly from a secure local natural gas supply.'”

As we’ve pointed out, we have no gas infrastructure here, and there is no reason to think that this gas would be used within Northern Ireland or indeed the Republic, rather than being exported. ‘Market uncertainty’ is about price rather than supply, and Tamboran’s profits will depend upon the price being as high as possible.

The real problem with fossil fuels, as every primary schoolchild, though oddly not Richard Moorman, realises, is that they are creating devastating levels of climate change which will alter all of our lives for the worse within just a few short years. Shale gas, because of the crude nature of the extraction process and the amount of gas which is consequently wasted, is at least as bad if not worse than coal in this respect. If we really care about our children’s future we will take steps to switch to the renewable energies in which Northern Ireland is naturally and richly endowed, rather than wasting time and worse on unecessary hydraulic fracturing.

 

quote a celebrity – or even better, two

“Natural gas from shale has made a substantial positive impact in North America already. In his State of the Union address on the 25th of January, US President Barack Obama stated: “We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use. America will develop this resource without putting the health and safety of our citizens at risk.”

President Obama’s comments are similar to statements by former US President Bill Clinton in his recently published book “Back to Work: Why we need smart government for a strong economy”, in which he wrote: “With proper care, I think we can extract the gas. We need it, and it can make us both more energy independent and contribute to job creation and growth.”

Somehow other parts of President Obama’s address, the bits about renewable energy, wind turbines, and energy efficiency, didn’t get quoted, along with the bits condemning lax regulation, overpaid executives and gambles that lead to people losing their jobs. But we know all about the problems that the fracking industry has created in America and how impossible it has been for those charged with protecting health and the environment to do anything about it. Richard Moorman has told us many times that the American experience has nothing to do with the situation in Ireland, which makes it rather odd that his PR people are now wheeling out not one but two US presidents. Did they try, and fail, to find a respected Irish or European politician who would support their case?

 

repeat yourself

“Mr Moorman further stated ‘Our projections of the economic gains for Northern Ireland from this proposed £6 billion investment includes up to £6.9 billion in tax revenues over the lifetime of the project, 600 full-time, long-term direct jobs by 2025 (with up to 2,400 indirect jobs), for a total of about 14,000 direct person-years of employment through to the year 2050. Tamboran expects to provide comprehensive and continuous training to all of its local employees to ensure they can commercially succeed within Tamboran.'”

We get some more figures here, along with the headline ones, but they don’t quite seem to add up. Between now and 2050 is 38 years and 14,000 ‘person-years of employment’ divided by 38 gives 368, not 600. As for ‘comprehensive and continuous training’, isn’t that what burger-flippers get at McDonald’s?

As Tamboran know, the prospect of jobs is the only real aspect of their plans which is likely to appeal to local people. It’s therefore in their interests to play it up as much as possible. Equally, if we care about the future of our young people, and hope that they will be able to stay in Fermanagh and raise their own families here, we need to look carefully at what is, and what isn’t likely to happen. Domhnall Ó Cobhthaigh has done just this on his excellent blog at http://networkedblogs.com/tvnua which gives a full analysis of the figures used by Tamboran in this statement. On the question of jobs, he says;

“Tamboran say that 600 full-time and long-term jobs will be created if this proceeds. I fail to see how that could be true.

Most jobs created in this industry are associated with building the pads and then with the actual fracking process itself. Once a well is fracked it continues to release methane over many months until it has to be refracked.

Once a well has been fracked the only thing that requires employment is watching that the flow continues from all the wells in the field (one person could almost do this with the appropriate equipment) and with security. 600 full time jobs? It doesn’t sound realistic.

So the direct jobs created sounds like a massive over-estimate. But there’s even worse. The construction phase and development of 150 4-acre pads in this region will destroy the local tourism industry. The threat of benzene-infused waste water escaping into the local water courses will probably kill off any growth in agriculture and organic food and drink production in this area will just disappear as a result. Who wants to drink beer brewed in a place where the water is potentially contaminated by fracking waste-water? Fishing in Lough Melvin and Lough MacNean are potentially finished not to mention the impact of the water demand associated with each of these wells (6 to 8 million gallons of water per well and there could be up to 16 each pad). The environmental impact on agriculture and tourism will be devastating.

These happen to be the only industries in West Fermanagh and North Leitrim so even if Tamboran does create 600 full-time jobs for 25 years it will be at the cost of hundreds of jobs lost in tourism and in agriculture.”

 

 

make a virtue out of necessity

“Tamboran is proceeding with its agreed work programme of analysis, required under its existing licences, and will publish an update later this year. Additionally, the company will undertake a comprehensive Environmental Impact Assessment which will include a 12 month baseline study of all aspects of the environment, including soil, groundwater, air quality, noise levels, and seismic activity. The company will publish these findings upon completion in early 2013 and will then outline its intentions as to how it will request permission to proceed to the next stage of the licensing and planning processes.

Concluding, Mr Moorman said ‘In recent months we have met with and listened to a wide range of stakeholders at community, business, regulatory and political levels. We will continue with this approach, outlining the reality of our proposal while acknowledging that a project of this scale will attract requests for clarity and support.’

‘Tamboran will not utilise any chemicals in its hydraulic fracturing process in Northern Ireland, and we will be bringing together the best technologies developed worldwide into this one project to ensure the safe and responsible development of a tremendous resource for Northern Ireland.’

‘We are undertaking a full Environmental Impact Assessment, which will set out the specific criteria under which the company must safely and responsibly conduct its operations to the very highest standards.’

‘Additionally, we will establish a substantial community investment fund to ensure all benefits are shared at local as well as national levels. We consider it essential to deliver a direct benefit for local residents. Tamboran undertakes to operate safely and our commitment to openness and transparency will remain every step of the way.’

International studies worldwide have shown that natural gas has low carbon content relative to other fossil fuels, which would also allow it to play a significant role in reducing CO2 emissions, acting as a bridge to a low-carbon future (see editors’ notes).

Tamboran invites all stakeholders, especially local residents, to engage with the company and work closely with us to ensure that the project is conducted responsibly to meet the essential economic needs of the community and Northern Ireland.”

The company is legally obliged to carry out an Environmental Impact Assessment: what is significant is not that it will do it, but how independent, complete and reliable it will be. Past experience sadly doesn’t promise much, but we can hope.

The point about chemicals continues to be unclear. It has been pointed out by experts that no hydraulic fracturing for shale gas extraction has been carried out worldwide without using chemicals in the fracking fluid – without them the sand would not remain suspended in the liquid and the equipment would rapidly deteriorate. Tamboran has not explained how it proposes to overcome these basic obstacles. It is also the case that not all the toxic chemicals are strictly within the ‘hydraulic fracturing process’ – many are contained within drilling muds, engine exhausts etc or are brought up from deep underground with the flowback waste. Finally, there is no extension of this pledge (itself not of course legally binding) to the activities of any subcontractor or subsequent purchaser of the licence.

Sadly, there is no evidence that Tamboran has listened to the concerns of local people or done anything tangible to address the issues which they raise. Indeed, on TV3 this week, the company’s Tony Bazley accused people like us who ask questions about their plans of trying to ‘intimidate the local communities’. It is difficult to see how, given such an attitude, local residents are able to engage with the company in any other way than mindlessly agreeing with everything it says. However, we will continue, in our quiet way, to ask the difficult questions, share the information which we have and speak out on behalf of the most vulnerable in our environment and society.

 

p.s. The ‘editor’s notes’ re gas and climate change refer to a study by Massachusetts Institute of Technology which receives significant donations from the gas industry. Their studies on this issue are partially funded by the American Clean Skies Foundation, formed by the billionaire CEO of Chesapeake Energy, the second largest producer of natural gas in the US. Other academic reports have come to different conclusions.

 

 

 

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