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A big 'fraccing' conversation needed

AJ LUCAS executive chairman Allan Campbell is most annoyed with the challenges facing shale gas c...

Blair Price
A big 'fraccing' conversation needed

The drilling specialist is disappointed with progress in the UK, where it has a 42% stake of shale pioneer Cuadrilla Resources and direct 25% stakes in a Bowland Basin permit and a Weald Basin permit.

“In the wake of the successful farm-in by Centrica into the Bowland prospect announced in June 2013, we had high hopes that exploratory activities would accelerate,” Campbell said at the AJ Lucas annual general meeting.

“Instead, uncoordinated and, in some cases, unclear regulatory and permitting requirements, both red and green tape, have served to slow the next stage development even more.

“We will eventually meet all of the necessary permitting requirements but the protracted delays are a great irritation.”

Campbell took the opportunity to criticise the UK government.

“If shale gas in the UK is to become a viable alternative energy source, there is no doubt that changes in legislation and current regulation are required,” he said.

“This impetus has to come from the top. This is recognised by Britain’s Prime Minister, David Cameron, who is on record as saying that legislative change is required to simplify the permitting system to accelerate the fraccing approval process.

“It is pleasing to have this support but so far, we have seen no actual evidence of such change.”

The chairman also called for a wider educational response to anti-fraccing interest groups in the UK and Australia.

“There exists a vacuum when it comes to the facts and that vacuum is being filled by misinformation or nonsense, generally by self-proclaimed public commentators who have made little or no attempt to come to grips with the scientific facts relating to pipelines, drilling, extraction methods and, yes, ultimately stimulation of the resource using hydraulic fracturing techniques, to increase hydrocarbon yields.

“We are advocating ‘a big conversation’, so that the facts can be placed on the table and let people reach an informed opinion.

“We do not advocate that everybody agree – we merely advocate that people have an opportunity to make up their own minds, having regard to facts and opinions rooted in fact ... as well as the science.

“We cannot afford that a democratic process in a civilised society is hijacked by emotional uninformed comment designed to sell newspapers, increase ratings or push a personal philosophic agenda.

“Australia deserves better than that.”

Other fronts

Amid his disappointment with AJ Lucas’ annual financial results, Campbell said he didn’t think anybody expected the severity of the coal industry contraction, while the foray into water infrastructure services had created substantial losses within two years.

“Needless to say, we have now exited general contracting work and are instead focusing on our core specialist engineering activities, specifically pipelines and related infrastructure, gathering systems, horizontal directional drilling and similar activities where we have a long track record of successful delivery,” he said.

Campbell took some solace in the successful capital raising efforts of a few months ago and noted that a lack of liquidity and leveraged balance sheet impacted AJ Lucas’ ability to win work last year.

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