Something good is happening in London and our buddy and guest poster Nick Grealy is in the thick of it as part of a venture called London Local Energy.
We couldn’t be more thrilled here to know our friend and frequent contributor, Nick Grealy, the publisher of three superb websites on the subject of shale oil and gas development (NaturalGas2.0, NoHotAir and ShaleGasInfo) is now part of a venture to drill for shale gas under the great city of London. Yes, London Local Energy has applied to the UK Department of Energy and Climate Change for a licence to extract shale gas under an industrialized part of London that is also home to roughly a million people. The fractivists over there are going mad as hatters over it, of course, but the facts are on Nick’s side.
According to a story in GetWestLondon, their Green Party leadership is predictably opposed. The Brent Council head has said “fracking is a dirty word,” but its planning committee may have to review London Local Energy’s well drilling application. That should be interesting. Hopefully, cooler heads will prevail and one suspects, in the end, they will.
Here’s some more from the report:
Nick Grealy, of Kingston-Upon-Thames, south-west London, and the director of London Local Energy, said: “It’s not one of the obvious areas of the UK [to drill], which would be Yorkshire or parts of Surrey. The oil and gas business is all about getting the oil and gas where no-one else thinks to look. Perhaps I’m a contrarian but contrarians are often right.”
He said: “The license is for six years and we have to commit to a work program.
“What we would need to do is drill three or four boreholes because the geology of London hasn’t really been studied but the news on fracking from the US is they appear to be finding gas in places that had been considered exhausted or discounted.”
He said the initial outlay would be modest – about £2million – and the significant investment would come if the company struck shale gas…
Mr. Grealy said: “The Park Royal industrial estate has 500 hectares of industrial and warehouse land, and lots of trucks and noise, and we would only need 5 acres above ground but we could explore 200 sq km below ground.
“The test well would have a derrick of about 25ft and would be there for a maximum time of six weeks with existing technology, although technology is improving. What we would need to do is drill a core and we would go down probably about a mile and take the ground out and study it. That would give us which direction to put the drill.
“We would only need three of four of these boreholes to triangulate the geology. We would look to have only one exploration station.
“Previously in oil and gas you could only go down vertically and the only way to extract the fuel would be to put lots of holes in the ground.
“What we would do is drill down and if we were to find something prospectively we would then drill down 2 miles approximately and not less than a mile, and then the drill can go sideways. The ‘spokes’ go out up to 10 km…
Mr. Grealy said extracted oil and gas is taxed at 62 per cent and could therefore generate huge amounts of income for the Government which London Local Energy would like to see invested in renewable energy.
He said: “We expect that we would be able to produce in the region of £100 million by the early 2020s.”
Nick shared some further perspectives that he had offered to the UL press when we wrote to congratulate him on his new venture and our New York State readers should take heart from those comments:
“Nick Grealy told us out that a successful licence application means gaining 74,000 acres for cents an acre at the start, and producing at the end into a market sitting on top of local pipelines at a 2020 gas price in the UK estimated at $7 to $10 MMBTU.
In the middle is the hard part, but the oil and gas industries have been in far more difficult places and the UK government wants to make this happen.
Nick first got the idea from fracktivists who constantly asked would he want oil and gas development under his back yard. He then started speaking to geologists who at first were dismissive, but have recently become quite optimistic given how shale is turning up in some unlikely spots all over North America.
“I’ve had to be under the radar on this one ahead of the license round. But whenever I speak to people about it now, about 10 minutes after they stop saying am I crazy, they ask how they can help.”
“I’m doing this because I think there’s oil and gas to be found and money to be made. But I’m also doing it, in my home town of London, the world’s greatest city, to help the shale industry all over the world. Even in New York State!”
Having given Nick a tour of Dimock a couple of years ago and having introduced him to some Cabot and WPX landowners from Susquehanna County, I knew he was an extremely bright fellow and that’s why I love to republish his material, but I didn’t appreciate just how gutsy the man is.
Going into the heart of London and taking on the fractivists and Green Party types in a city that not so long ago was governed by “Red Ken” Livingstone takes a special form of self-confidence. He’ll need it but he’s already won a victory by simply being unafraid to advance common sense and demonstrating the courage of his convictions. The economic and environmental facts are with him. May they be the force that takes the venture over the finish line.
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