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Oil & Gas no Algarve: Answers by ENMC to ASMAA´s Questions

On the 12 January 2016 during the discloser session hosted by the ENMC at the University of the Algarve, ASMAA handed to them a document with our questions. In the section below you can read their reply which we received. Say your say in the comments section below. We would like to know what are your views.

One question that needs answers is why the government accepted such poor Royalties (for example 10c a barrel for the Lagostim concession and 25c a barrel for Lagosta? And what are the real benefits for the people of the Algarve?

The concession contracts are published and available on the site of the ENMC and are aligned to the best practices used by countries with the same profile as Portugal, namely as a non-producing country.

What will Portugal benefit from these contracts? Especially if one takes into account the fact that all costs incurred from day one are deductible before any payments are due to Portugal?

The contracts are a private investment that allows for the collection of scientific data about the resources available and the mineral development potential in our territory. In the process it is a benefit for not only the Algarve but for the whole country.

Why was there no list of allowable costs included in these contracts - in our opinion it is a risk that Portugal did not have to incur as in our opinion it opens room for such things as inflated inter-company transactions - after all for example Repsol has over 300 companies under its umbrella --there’s nothing legally stopping it from charging management, technical or other services fees by any of its foreign companies to the Portuguese licence-holder and for the Portuguese licence-holder to show losses year on year.

The contracts has the same typical requirements of non-producing countries.

Why does only the concession contracts with Repsol/Partex and Australis have a specific clause of financial indemnity? Which is in our opinion extremely prejudicial to Portugal? Keeping in mind such fact, as that the Australis contract was signed on 30 September 2015.

It´s an opinion, it´s not ours.

One area of serious concern is the fact that no EIA’s are mandatory during exploration phase. Why hasn’t the ENMC motivated a change to the Portuguese legal system for petroleum activities yet so as to include such requirement prior to any exploration taking place?

The ENMC does not make the laws. We only assist in implementing it as an entity that defends the public interest. However nothing can be done without following the inherent requirements of the law.

Why the lack of consultation with local population and local municipal representatives prior to allocation of concession licences?

Everything was done within the law, and if at any moment its identified that there is economic viability then an EIA (environmental impact assessment) and public consultation must take place, which will define if it is or not possible and viable to proceed to the production phase.

Why has the local population been kept in the dark about concrete issues until they were a fact-accompli?

The ENMC has since the first moment assumed responsability for the process, due to the government decision, it was proactive in its clarification efforts, having published the complete contracts, and having taken the initiative to meet with local councils and run clarification sessions with local population.

Why is there a policy and procedure document for onshore exploration but not for offshore?

They did not address this question.

Can you tell us in plain language what is your definition of “Conventional” drilling technologies, and what do you consider to be “Unconventional”? What is your definition of “Horizontal Drilling”, “Hydraulic Fracturing” and “Well Stimulation”? Why is there a lack of definitions in the concession contracts?

These definitions are typical from a technical context, its public knowledge, and have to meet the requirements laid down in the law.

ENMC has stated on various occasions in the media as well as during the AMAL meeting of 16 December that ONLY conventional drilling had been authorised – can you tell us where will we find such confirmation in writing? And can we get copies thereof?

The ENMC has afirmed from the first moment that a request has not been presented by the concessionaries till now for any non-convential exploration, and as a result its not expected to happen.

Onshore contracts for Portfuel (Tavira and Aljezur) mention hydraulic fracturing and other unconventional processes – in addition there’s direct reference to it in the ENMC document of July 2015 named “Operacoes de Pesquisa de Petroleo em Terra (Onshore) is ENMC trying to cloud the issue of fracking and the use of other non-conventional methods?

Not at all. We have always stated that there is no inclusion of that in the Statement of Work (Project Plan) presented by the concessionaries to date, but we have also stated that we acknowledge that there is provision in the contracts because its provided for in law. However we have also stated that should we receive such a request it would require an environmental impact assessement and that it would never be left to the will of the concessionary.

We find it interesting that only now, that new drilling techniques like fracking and acidizing are in full swing in the US, Canada, etc, that the oil and gas companies think that the Algarve’s long-known-of natural gas deposits warrant attention. Should we then, really believe that they went through all this effort and expense not to frack in the future? Can we expect that any wells drilled with conventional methods and showing disappointing production will simply be abandoned, or will the companies do whatever it takes to maximize fossil fuel output recovery and to maximise their return on investments incurred?

As we stated previously, the concessionaries have not presented us or requested until now any request involving non-conventional technologies, as a result its not predicted to happen. Should such a state change, we have made it clear that there are legal requirements that have to be met and that its not left to the wishes of a concessionary.

From an ethical perspective we should look at the harms and benefits of hydraulic fracturing and other unconventional processes. In other words, do the potential dangers of fracking and other unconventional processes, including contamination of water supplies, outweigh the potential benefits of producing badly needed oil and gas resources at a time when our national security may be in jeopardy because of our continued reliance on unreliable sources of energy? Is Portugal energy independence more important than the potential for harm to those affected by fracking procedures? Does the alleged job creation and economic growth trump health and safety concerns?

As we stated previously, the concessionaries have not presented us or requested until now any request involving non-conventional technologies, as a result its not predicted to happen. Should such a state change, we have made it clear that there are legal requirements that have to be met and that its not left to the wishes of a concessionary.

What is the intended timeframe for all aspects of the exploration cycles both onshore and offshore? (Including meeting any specific new or enhanced infrastructure requirements)

The typical timeframes are stipulated in the contracts which are public and were published in the ENMC website.

Why has a full public consultation of all aspects of shale gas fracking and other non-conventional methods not been undertaken until today? What motivated the ENMC to organise today’s event?

 Everything was done within the law, and not being expected that unconventional technologies will be used, there isn´t required any public consultation. However, the ENMC wishing to address concerns and wanting to create a spirit of participation decided to run a technical information session to all that were interested.

How will ENMC ensure that groundwater is not contaminated during shale gas fracking or other non-conventional technologies?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will the risk of shale gas fracking fluids migrating into ground water be mitigated and how will the risk of groundwater contamination by methane and other gases be mitigated?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will the ENMC ensure that ‘fractures’ caused by hydraulic fracturing or other non-conventional drilling processes for shale gas, will not extend into aquifers and cause contamination of ground water?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will the ENMC regulate the amount of water made available for Hydraulic Fracturing or other non-conventional drilling technologies?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will ENMC ensure that there is sufficient drinking water for the general public, in the face of drought and the already large demands on water use in the Algarve?

We do not think that a drought problem has any correlation to fossil fuels exploration.

How does the ENMC ensure that chemicals from shale gas fracking or other non-conventional processes, both fracking fluid and flow-back fluids, will not escape into the environment?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will operators dispose of shale gas fracking fluids from flow-back?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will radioactive elements from flow back fluids and other chemical contaminated waste be disposed of?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will well casing integrity and quality be assured? How are well casings tested and how often?

All the work will be done following the appropriate legal requirements as well as standard industry practices.

Apart from ENMC, what independent monitoring arrangements are in place? How are radioactive sources, such as well tools, stored and managed on site? … and do such sources pose a risk to public health?

All the appropriate bodies that are legaly responsible.

What are the plans to mitigate the risk of earthquakes caused by shale gas fracking, and who is going to monitor the implementation of these plans?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

There are some recommendations for onshore exploration drilling and testing, but what will happen if these tests prove that a shale gas development would be commercially viable, with many wells and shale gas fracking or through other unconventional methods over a period of years? Will new guidelines, procedures or policies be drafted and passed into law?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How are the technical experts for such things as induced Seismicity selected by ENMC?

All the experts involved must meet the specifications and qualifications required by law.

How will the Government ensure that seismic events caused by shale gas fracking will not impact existing critical infrastructure?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

If it was determined that shale operations had caused an earthquake, what would the position of ENMC, government and oil and gas companies in relation to liabilities be? Taking into account that insurance companies worldwide are putting restrictions on claims resulting from fracking operations.

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will gas escaping into the air from both the well and shale gas fracking fluids be avoided/monitored?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will air pollution due to site operations be monitored locally and who is responsible for its monitoring?

Everything must be done in accordance with the law which is of public knowledge.

How will ENMC ensure that leaks of methane from the well heads will not be a major contributing factor in increasing GHG and impacting negatively on climate change?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

Who funds the enforcement of the regulatory framework for shale gas exploration and prospection?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

What are the arrangements for a new round of concession licences? Has the new rounds been advertised? Where?

This is still in an evaluation phase. Nothing has been decided yet.

What are the adjudication criteria used by ENMC for awarding concession licences?

The government awards the licences.

Why is Portugal exploring shale gas when we should be investing in low carbon energy?

Portugal is not exploring shale gas. There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

Who will monitor increased traffic movements, and who will be financing road maintenance requirements for example, or new roads, railways, pipelines?

 not asnwered

Why would Portugal exploit shale gas when any fossil fuels exploration is clearly not aligned to reducing the impact on global warming?

Portugal is not exploring shale gas. There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

Does ENMC really believe that investment in shale gas must be at the expense of investment in low carbon technologies such as green technologies or alternative energy sources?

Portugal is not exploring shale gas. There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How does ENMC decide on specific local issues such as: visual impact, traffic movements, natural environment, noise increases, etc when shale gas fracking or other unconventional methods is proposed?

ENMC always acts within the legal framework that governs it, and always in the public interest.

How will the public be engaged? And when?

The ENMC has tried to create an online platform with the maximum amount of information relating to these activities, and following similar programs of other countries.

What has ENMC set as the minimum distance that shale gas fracking or any other unconventional technologies can take place, what is the closest proximity to populated areas?

Portugal is not exploring shale gas. There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

Who is responsible for monitoring and managing any long-term aspects of shale gas fracking. e.g. when shale gas extraction has ceased? And well is decommissioned? Or abandoned?

Portugal is not exploring shale gas. There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

How will ENMC ensure that communities do not suffer ‘property blight’, or higher insurance rates, as a result of hydraulic fracturing activities and what mechanisms exist for compensating people who suffer property damage due to seismic events caused by Hydraulic Fracturing or any other fossil fuel drilling or commercialisation activity?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

Who will monitor the impacts of shale gas fracking activity on agriculture? If agricultural activity is impacted by fracking activity, who will compensate the landowners?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

What if fracking has come up on the conveyance searches completed when buying a house? Or if I own a property but I don’t want to allow fracking in my property, what are the risk of expropriation of my property by the government?

There isn't till present date expected the use of unconventional technologies, as a result this question is irrelevant.

Finally is ENMC willing to sign an agreement with the people of Portugal guaranteeing that no unconventional drilling, including hydraulic fracturing will ever take place in Portugal?  

ENMC is a public bode that ensures the law is followed and acts on intructions based on decisions made by the government of Portugal. ENMC does not make the laws, nor do they make decisions. ENMC just follows government directives as required within the appropriate legal framework.

 

 PS: Current update on the ENMC website that we believe is pertinent when assessing the ENMC answers to our questions.

 

shale-gas-algarve-enmc-portfuel-australis-en

 

Comments   

 
+2 # John W 2016-02-04 10:23
Bloody hell. a 5 year old could provide better answers. So either they incompetent in what they do or its a clear attempt to BS the public.

Either way not a very professional manner to address very valid questions.

A major FAIL to ENMC
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  • ASMAA - Algarve Surf and Marine Activities Association
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    Porto de Môs
    Lagos 8600-580
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