The last barrel

For those of us whose paychecks are derived from hydrocarbons, the past couple of years have been—let me be polite—somewhat rough. We’ve all seen more layoffs, bankruptcies and cutbacks than we would care to recall. However, as we kick off the new year, there are some hopeful signs on the horizon—not the least of which is the improvement in crude prices to what, at the time of writing, was near an 18-month high.

Fracing distortion. So, in keeping with the oil and gas industry’s apparent change in fortune, I was intrigued by a recent spat over in the UK. The dispute—surprise, surprise—was fought over a number of claims made by an environmental group, Friends of the Earth (FOE), about hydraulic fracturing. The group released an anti-fracing leaflet, which was somewhat dramatically entitled Pat Saved Her Home From Fracking. You Can Save Yours too, that made a number of claims, which could not be backed up by evidence.

The fundraising leaflet featured a landscape shot taken in the Lake District, which is arguably one of the most beautiful parts of the island nation, under the slogan “Don’t let fracking destroy all of this.” However, what makes the image choice particularly interesting is that there are no plans to frac in that particular area.

Not content with questionable imagery, the leaflet also raises a number of  supposed concerns and urges readers to protect their communities from “chemicals that could cause cancer; air pollution and higher asthma risk; water contamination and plummeting house prices, and bigger insurance bills.”

However, my favorite claim was that fracing “could trigger catastrophic global temperature increases, if we burn shale in addition to other fossil fuels.” Very dramatic, I must say. Such a bold claim appears to ignore the fact that natural gas, of which the UK is said to hold considerable in-place reserves in the Bowland shale, has been credited with reducing emissions in the U.S. Also, the argument appears to be somewhat naïve, in that even if the UK chooses to leave its shale resources in the ground, the hydrocarbons needed will simply be imported. For all the hype about so-called green energy, there is, currently, nothing capable of fully replacing fossil fuels.

FOE reprimanded. In an age of misinformation, it was a relief to see common sense prevailing, in that the Advertising Standards Authority (ASA), the UK’s independent regulator for advertising, based on the evidence it reviewed, told FOE that its claims shouldn’t be repeated. As you can imagine, given fracing’s status as the resident whipping boy, the news prompted some debate, and FOE played down the reprimand, claiming that ASA had “dropped the case.”

However, Guy Parker, the ASA’s chief executive, took up his pen in defense of the agency’s decision, which followed a 14-month-long investigation. And while making clear that the ASA had not, and would not, take a side, Parker slapped down the suggestion that the case was dropped, saying that this wasn’t “an accurate reflection.”

Parker, writing in an opinion piece posted on the organization’s website, said, “We told Friends of the Earth that based on the evidence we’d seen, claims it made in its anti-fracking leaflet or claims with the same meaning cannot be repeated, and asked for an assurance that they wouldn’t be. Friends of the Earth gave us an assurance to that effect. Unless the evidence changes, that means it mustn’t repeat, in ads, claims about the effects of fracking on the health of local populations, drinking water or property prices.” Bravo!

Unsurprisingly, the ASA’s decision received a warm welcome from the UKOOG, the representative body for the UK’s onshore oil and gas industry, with Ken Cronin, the group’s chief executive, saying, “The opponents of onshore oil and gas development must withdraw their scaremongering rhetoric and argue on the basis of the facts, which quite clearly show that the risks associated with fracing can be mitigated by the strong regulation and world-renowned best practice that we benefit from in the UK.”

Well, I don’t know about you, but if I was just a regular Joe, with no exposure to the oil and gas industry, such emotionally-charged claims would most certainly have given me pause for thought. And while the ASA’s decision will likely make lobby groups more careful about making such claims in the future, the downside is that the leaflets are more than likely to have already further poisoned the minds of many. Fracing will continue to be dogged by controversy, and the industry must continue its efforts to proactively educate the public.

Exploration. Meanwhile, sticking across the Atlantic, another nugget of good news emerged from Norway at the start of the new year, with Statoil announcing its intention to drill around 30 exploration wells, as both operator and partner, this year. According to Tim Dodson, the company’s executive V.P. of exploration, the plan seeks to balance “proven, well-known basins and new frontier opportunities.” And while the number may not sound too significant, it represents an increase of about 30% since 2016.

Of these wells, the company is aiming to spud 16-18 wells in Norwegian waters, with 5-7 wells planned for the Barents Sea, a marginal sea of the Arctic Ocean. “This campaign can provide us with crucial information about the long-term future of the Norwegian shelf,” said Dodson. Coming in the aftermath of the controversial bars against Arctic exploration by both the outgoing Obama administration and Canadian Prime Minister Justin Trudeau, it’s nice to know that at least one country is capable of long-term thinking.