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Energy Efficiency

Digital tools and transparency will be key to the fracking debate

The following is an article written by Rob Lamb, Cloud Business Director, UK & Ireland, EMC

Last month the UK offshore oil and gas industry reported its worst annual performance in four decades. According to Oil & Gas UK, falling oil prices and rising costs has meant the sector spent £5.3bn ($8bn) more than it earned from sales during 2014. As a result of the news, some parties are suggesting that the falling oil price reduces the need for the pursuit of contentious projects such as the extraction of shale gas by hydraulic fracturing, or fracking as it has become known. However, the counter view is that the current geo-political situation in Eastern Europe and Russia’s apparent belligerence towards the West increases the need to explore alternative gas sources.

As with all industries, transparency (both regulatory and voluntary) is vital and the only effective way to keep all stakeholders, decision-makers and the public more informed about the realities of the situation and individual initiatives.

Transparency can reduce environmental concerns and confusion that involved parties might have, ultimately reduce any associated risks and secure the industry’s long-term future. This is equally as true for the potential decommissioning of North Sea oil and gas fields as it is for the extraction of shale gas by fracking.

Fracking has the potential to revolutionise the supply of energy in the short to medium term and as such cannot be ignored. In the United States, shale gas has seemingly emerged from obscurity to become the main engine of economic recovery in the country. Meanwhile, Europe’s future gas supply has seldom been less certain. According to figures from Oxfam, Europe currently imports half of its energy, with Russia the top supplier for both oil and gas. Indeed, European countries paid more than £200 a person to Russian oil and gas companies last year, according to The Guardian.

Europe clearly needs a long-term solution to its energy needs and one that will allow it a measure of independence. On the surface, it can be argued that shale gas is the perfect fit.

But many Europeans are not so sure. For some, the perceived social and environmental impacts of fracking are too big a price to pay for a secure energy supply. Many worry that fracking will disrupt their local communities and bring with it mining techniques that may not be safe. There is a perception that fracking could cause pollution, either of water supplies through leakage into the water table or air pollution during the extraction and processing. There is also the concern that there will be a depletion of available water supplies by the high use of water in the extraction process. Though these contentions have yet to be proved, the worry and debate remains.

Opinions and legislation on fracking vary greatly across EMEA. In France, Bulgaria and Romania fracking is illegal because their governments are concerned about the potential environmental impact. Other countries, such as Germany and the Czech Republic, are considering moratoriums to give themselves ample time to consider the evidence. Elsewhere, such as in the UK, governments who have adopted the use of shale gas have seen an economic boom similar to that enjoyed in the US. However, this is often in the face of widespread opposition from the public.

In the main, the battle over fracking is about information. The question of transparency, data governance and collaboration – and practicalities over how such information can be made available – keeps fracking in the hot seat for debate. 

At a bare minimum, fracking projects must be approached with diligence and care if critics are to be persuaded. As part of this, any of the possible benefits of each individual case must be fully explored, understood and communicated to all stakeholders before action is taken. Digital technology will be key to enabling this.

As with any large-scale oil and gas project, Engineering Procurement and Construction (EPC) contractors and operators must conduct a great deal of research on issues such as health and safety, environmental impact and compliance before even thinking about boring a well. As much data as possible must be collected, analysed, reported on, shared and discussed to ensure that all outcomes of an individual project have been taken into account.

A lot of this research is already conducted and documented during traditional gas and oil drilling operations. This is where transparency is required: EPCs should not be afraid to make much of this information available to the public. If local communities can see the work that has gone into weighing economic benefits of a fracking project against any negatives and that extensive studies of all the safety concerns have been conducted with the risks identified and mitigated, then they are far more likely to be won over to the extraction of shale gas.

It is here that digital technology becomes essential, with information management solutions set to play a key role. Modern engineering document control solutions with big data analytics capabilities can help EPCs to create, manage and review reports and intelligence. Current solutions include unified information repositories so that all critical information is stored in a centralised location. This provides all stakeholders with a common pool of information and analysis on which to base their decisions and predictions, while also leaving auditable reports for compliance purposes. The past two years or so have seen a huge and growing interest in big data analysis because of its potential to unlock new business models and power economic growth.

This type of analysis has been embraced in a number of commercial sectors. Retail firms use it to power loyalty card schemes, alter pricing dynamically to ensure top billing on price comparison sites, and provide tailored recommendations based on previous shopping habits. In financial services, it’s used to detect and prevent fraud, and even car insurance providers are using it alongside black box devices in vehicles to provide their customers with cheaper premiums. In manufacturing and engineering it is used to optimise the supply chain and to carry out maintenance proactively rather than waiting for machines to break down. The same opportunity is available in the oil and gas sector, particularly around transparency with government, management of sites and locating new sources of shale gas.

These reports, as well as other relevant information, can then be shared with local communities by allowing them restricted access to the unified content repository. In addition, information management solutions can make it possible for companies that want to be transparent to create public-facing reports and documents more widely available. All commercially sensitive information and intellectual property can stay protected, but the public will be granted permission to view reports and findings of surveys for a completely transparent and balanced view of the operations.

All this is possible now. Oil and gas decision makers must make the investment though in order to open up the opportunities around future growth and to encourage public support. The technology doesn’t have to start from scratch either; new tools can support legacy systems, without an entire overhaul, but the clarity of data around sites, resources and public opinion could make for significant progress in this field. If the industry wants to shift public opinion, the level of transparency afforded by data is a crucial step in doing so. In my view, it’s an investment which the industry can’t afford to avoid any longer.

In the debate currently raging around fracking, the ability of oil and gas companies to win governments and local communities over will largely come down to how well they can marshal and leverage the information at their disposal. The more open they can be about addressing stakeholder concerns, the more likely they are to build trust and move forward.

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