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A blackness beneath the village green

The rolling green hills of Sussex and Surrey have been found to contain huge volumes of oil. Will Dunn spoke to the companies, campaigners and local residents at the centre of the Home Counties oil rush. 

In 1896, engineers working for the London, Brighton and South Coast Railway began drilling beneath the platform at Heathfield Railway Station in Sussex. As they passed 300 feet, the engineers discovered not the water that they had been looking for, but natural gas. For 35 years the gas burned in the station boiler and the platform lights, until the station was connected to the main grid and the well was sealed. For another half-century the hydrocarbons beneath the Weald – the Old English term that describes the wooded hills of Sussex, Hampshire, Kent and Surrey – remained for the most part unexploited until the 1980s when a number of companies drilled exploratory wells in the Weald that produced oil – but not at a scale that interested global firms. For decades these wells kept up a steady trickle of up to a few hundred barrels a day until, in 2015, a flurry of headlines declared that new wells and extraction technologies could make the Home Counties an oil-producing region that could compete with the North Sea. Statements at the time suggested that there could be 100 billion barrels of oil in the Weald.

The headlines were not welcomed by everyone. In 2013 Michael Fallon, who was at the time minister of state for energy, prefigured the debate that was to emerge in the Weald when he told a private Westminster meeting that “the beauty” of the oil in the Weald Basin “is that of course it’s underneath the commentariat. All these people writing leaders saying ‘why don’t they get on with shale?’ – we are going to see how thick their rectory walls are, whether they like the flaring at the end of the drive.” Fallon’s comments, though he never intended them to be made public, were prescient.

A protest against oil exploration in a wood near Balcombe, in West Sussex, began in 2012 and is still under way. Similar protests have emerged at other places in Sussex and Surrey, including Leith Hill, designated as an Area of Outstanding Natural Beauty. “Swampy and the Surrey stockbroker unite” wrote the Daily Mail at the beginning of this year, as middle-class villagers and campaigners joined forces to oppose drilling. Last month, tempers flared again as it was alleged that one company, Angus Energy, had drilled an extension to its well in the village of Brockham, without planning permission.

Brockham surrounds a large, triangular village green that is overlooked by houses, the village church and two pubs. The green, archetypical among Surrey villages, has hosted cricket matches for centuries. WG Grace is said to have played here. A recent survey by a private investment firm listed the surrounding Mole Valley area as the second-most prosperous council area in the UK; and Zoopla lists the village’s average house price at over £650,000. But for Stephen Sanderson, the real value lies further down.

Sanderson, a petroleum geologist who has uncovered multi-billion barrel wells off the coast of Norway, is the executive chairman of UK Oil and Gas (UKOG) – the biggest company involved in exploring oil in the Weald. “We have interest in 12 licenses,” says Sanderson, “which is about 950 square kilometres. Our primary focus is on the Kimmeridge limestones. Think of the white cliffs of Dover – that’s limestone. We tested oil from two of these limestones, which cover pretty much the whole of the south-east of England, and got a stable flow rate of almost 1700 barrels a day. Compared to everything else in the basin, it’s an order of magnitude greater.”

The advantage of the limestones beneath the Weald, says Sanderson, is that “they’re naturally fractured,” meaning expensive and highly controversial fracking is not required. “It all results from the Horse Hill well. That was the first well drilled with modern data acquisition and analysis techniques. I looked at the data from it, and it didn’t fit with the existing model in the Weald, which stated that this Kimmeridge shale rock wasn’t ever buried deep enough to have generated significant volumes of oil. The Horse Hill well showed that to be incorrect. With that information I came to the conclusion that the Kimmeridge limestone is a viable target, and that there could well be a very decent prize in that. The rate that we got out was beyond my wildest expectation.”

The next stage for UKOG will be to conduct production tests, which it will do from the end of this year. At that point, says Sanderson, “we should be able to make a declaration of commerciality.” If commerciality of the Kimmeridge Limestone is proved at Horse Hill and UKOG’s other test wells, the question of oil in the Weald will become much more significant. The whole region may become attractive to a new wave of developers.

One of the people hoping this won’t happen is Ada, a co-founder of Brockham Oil Watch. Ada says she "had not been a part of the anti-fracking movement”, but that she became involved in scrutiny of oil exploration in the area “because it’s all happening on my doorstep.” Ada lives between Brockham and Leith Hill. “When we found out about what was happening it was a shock, especially at Leith Hill, because it’s an Area of Outstanding Natural Beauty. You go there and it’s like being in the mountains, it’s very special. Brockham is different, because there’s been a well there since 1987. People are used to it; they don’t have a problem with it because it’s out of sight.”

Ada found out about the Brockham well “because there was a camp by the side of the road. Originally, people in the village were just upset about the camp – they were slowing down lorries, blocking traffic on the lane. It’s generally quite a conservative village, politically, and the feeling was, what’s the fuss?”.

That feeling changed abruptly on the 9th March, when a BBC news report alleged that Angus Energy had drilled without permission. “People here trust the regulatory system. They trust the Environment Agency to look after them. So when the news came out, it challenged that trust. There is interest, now from local people, and it’s mostly around these new [extraction] technologies.” The technology that most worries Ada and her fellow villagers is not fracking, but something less well-known: acidisation.

UKOG’s Stephen Sanderson says acidisation “has been around for 120 years or more. We use a dilute hydrochloric acid that dissolves the limestone. Most wells on the planet have a bit of dilute hydrochloric acid in there, to ‘clean up’ the well. We also use it to dissolve a little bit of the limestone immediately surrounding the well, so it allows a good connection from the fractures into the well. It’s not fracking at all. In order to frack a formation you have to inject very large amounts of liquid in, at very high pressures. To do that you need massive pumps, and permission from the Environment Agency. Acidisation is entirely misunderstood, and there’s a huge amount of scaremongering going on. The techniques we use to drill through the rock are exactly those used by the water-well drilling industry.”

Brockham Oil Watch, however, says there is a difference between what Sanderson describes and “matrix acidising, or acid fracking. The “acid wash” is a benign method of cleaning the well. But if you start pumping larger quantities that are squeezed into the formation itself, as opposed to the well, that is a different process. Acidising uses much higher concentrations of chemicals than fracking, and it shares many of the same effects, including the potential for surface and groundwater contamination."

Ada is profoundly sceptical of the reassurances offered by oil companies on this subject. "The industry will say that “we’ve got the same acid in our stomachs”, but it’s not just hydrochloric acid they’re using. Other chemicals are pumped with it too.” Ada refers to a study on acidisation carried out in California that lists 26 chemicals used in the process that are ‘F’ graded as hazardous. “Neurotoxins, carcinogens, developmental toxins. It’s a nasty cocktail. Nothing like that study has been done in the UK. The impact on human health and the environment has not been evaluated.”

Ada says the Leith Hill Environment Agency application includes a request to vary the permit to allow “acid squeeze”, which she understands to mean matrix acidising, while the Markwells Wood application uses a vague definition to “muddy the vocabulary” around matrix acidising.“In California, where acidising is regulated in the same way as fracking, they developed an equation to determine when acid washing becomes matrix acidising. It has to do with the size of the drill bit, the porosity of the rock and the volume of acid. That definition is quite clear. In the UK, there isn’t anything like that.”

It is not only new technologies that concern local residents, but the attitudes of the companies using them. Mole Valley councillor Clayton Wellman says amendments to planning applications at Leith Hill and Brockham were “passed straight up to Surrey”, without local district councillors having the chance to give their opinions. “If it was all above board, that would foster trust,” he says. Wellman does not oppose drilling per se, but he says it’s vital to have “a strategic view, if this is something that’s going to happen often.”

Will it happen often? Joseph Gatdula is a senior analyst at Global Data, which provides intelligence on the energy industry (Global Data is also owned by the same parent company as the New Statesman). Gatdula says the question is not so much whether the oil is there, but whether you can make from getting it out. “The common method that’s used in evaluating whether or not a discovery is economical is looking at the cost to develop it. How much is it going to cost per barrel of oil? That number can float from anywhere from less than five dollars to in excess of 100 dollars a barrel. Where it’s more expensive, you generally need a higher [oil] price to justify it.” Gatdula says that whether the Horse Hill well will warrant development depends on “the cost of the wells in this area of the UK, in addition to the properties of the reservoir.” However, Gatdula also points out that new extraction technologies benefit other producers, too. “It’s a bit of a catch-22, where you develop this great technology, but now it reduces the cost elsewhere. So now you’re going to have to compete with the best metrics in places where it might be a lot cheaper to buy the same thing.” The Weald is therefore unlikely to become a hotspot for the “supermajor” companies, but “smaller firms, without large pockets... this type of investment size fits that type of company.” With investments and profit margins still comparatively small the Weald won’t take off overnight, Gatdula concludes, but “It’s got potential.”

As production increases, the one certainty is that more disputes along similar lines to Brockham will arise between the UK’s various regulators, energy companies pushing for margins, and the villagers who don’t want to see oil wells springing up beyond their mullioned windows. After all, would Stephen Sanderson put up with an oil well at the end of his garden? “As long as I had a royalty on it,” he answers, “yes.”

Will Dunn is the New Statesman's Special Projects Editor. 

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Why Hinkley Point C is an investment well worth the wait

Nuclear power has transformative potential for the UK’s energy sector which should be embraced, according to Ian Liddell-Grainger, chair of the APPG on energy studies.

 

It is a strange feeling to be part of a new industrial revolution in the United Kingdom – that is what I believe the construction of Hinkley Point C really means. It will bring thousands of jobs into Somerset and secure the future of many more elsewhere across the country. Big-name British companies will benefit; and hundreds of smaller firms with specialist expertise in forgings, valves, pumps, cranes, electronics, refrigeration and every other industrial discipline are also in line for contracts.

The impact upon my constituency is enormous. It is no exaggeration to say that Hinkley C is changing life in Bridgwater and West Somerset for the good. This is an infrastructure scheme that dwarfs the London Olympic Games. It is the largest project ever undertaken in Europe. The investment will top some £20bn.

I was a twinkle in my mother’s eye when the diggers arrived on that windy stretch of land by the Bristol Channel and started to prepare the site for Hinkley A, Britain’s first new Magnox power station. Back then, as is the case now, there was national concern about meeting ever-increasing demands for electricity. Nuclear power provided a timely and cost-efficient answer. Hinkley A was completed in 1957 and came into operation around my sixth birthday. It generated power for 35 successful years. Many of the technicians who ran the plant still live in the area. Who can blame them? This part of Somerset is special.

Hinkley B was a more advanced version. It was switched on in 1976 and has been generating ever since. Chances are it will still be going strong until Hinkley C is ready to roll. During that time the policy of different governments towards nuclear energy wavered and changed. Incidents and accidents elsewhere in the world turned public opinion sour about the risks. But perhaps the biggest deterrent to investment by the state was the size of the sums involved.

The old nationalised Central Electricity Generating Board wanted to build a new pressurised water reactor at Hinkley as long ago as 1990. The government of the day balked at the cost. Instead, they privatised the industry and allowed the French company EDF to purchase all the assets of British Energy, including Hinkley. Throughout this change of ownership Hinkley B kept on generating power. By the time Hinkley C comes on stream its predecessor will have clocked up 50 years of active service.

Such a lifespan is rare in industry. Computers, mobile phones, washing machines and cars are all considered out of date after a very few years. It requires a completely different commercial or governmental mindset to pioneer and manage such projects. I have watched EDF at work in my constituency for almost two decades. I have come to understand – and admire – their patience and dogged determination to pursue an idea that will not earn them a single penny piece for at least 25 years.

Power stations like this require exacting standards and astronomic investment. They have to be built to last. The development of this project could never afford to ride rough-shod over the anxieties of local residents. The planning, and public information provided by the company has been exemplary – helped, it must be said, by the painstaking efforts of Sedgemoor District Council to negotiate generous compensation agreements from EDF and ensure that Whitehall was always on side.

The rewards are already significant. Bridgwater is now recognised nationally as a vital hub in the development of nuclear energy. We are training tomorrow’s nuclear engineers. We now have a new, vibrant Somerset Energy Innovation Centre helping to link local companies to the ever hungry Hinkley supply chain. There are job opportunities, business openings, and a real buzz in an area that survived the recession and is now heading for a new prosperity.

The safety records of Hinkley A and Hinkley B have been excellent. The public have good reason to believe that all the risks – and, of course, there are a few – have been properly calculated and intelligently minimised.

Inevitably, there are those who continue to argue against nuclear power. But they are a shrinking minority. Every reliable poll of public opinion now suggests that the nuclear solution is widely accepted as carbon-friendly. And the high price of installation is evened out by the very long life of every new power plant. Most people realise that “when the sun don’t shine and the wind won’t blow” we cannot rely on so-called “green” technologies of solar and wind power. Renewable energy is not the only answer to meeting Britain’s electricity needs. The “strike” price – to be paid by the government for power that Hinkley C will eventually produce – was always controversial. EDF struck a bargain that many consider hard. But I know the government worked equally hard to secure that fine balance between paying a fair price and looking after public interest.

So-called “Little Englanders” may be miffed that this is a French innovation financed with French money. But the ancient history of Hinkley has some important lessons. In Neolithic times a tribe, known as the Beaker people, arrived from France and settled on the peninsula. They came with something entirely new: the vital know-how to extract metal from the ground and make it work for mankind. Today, if you drive out to Hinkley, you can still see Wick Barrow, the Bronze Age burial mound, where the Beaker people’s remains were discovered. The French have been innovating at Hinkley for 4,000 years.