Shell Spinning its Wheels

Shell, Cradock

Shell’s meeting with invited public on 8 June 2015 in Cradock.

By Julienne du Toit

Photographs by Chris Marais

Shell held a public meeting in Cradock on Monday 8 June 2015, but no one could quite figure out why.

The last time they’d hosted such a meeting in Cradock was on 10 March 2015 at the local golf club. It was embarrassingly badly attended. Barely a dozen people pitched up to listen to their plans to explore for shale gas in the Karoo.

Those who did attend though, noticed that Jan-Willem Eggink, general manager of Shell Upstream in South Africa, seemed uncharacteristically jocular and cheerful.

Five days later, the reason became clear. The Business Times broke the news that Shell was withdrawing its shale gas team from South Africa, including Eggink who was heading back to the Netherlands.

Every anti-fracker in South Africa lifted a glass to that news.

And yet here they were again. What for?

loshell0007

Hydrogeologist Dr Stefan Cramer on left, closest to camera, taking notes as Jan-Willem Eggink listens to his replacement, Herman Neethlling.

Yet Another Meeting. Why?

The invitation wasn’t really much help. All it said was:

“The purpose of the meeting (at Vusubuntu Centre) is to present members of our Executive management team, discuss our application and update you on where we are with this project.”

German hydrogeologist Dr Stefan Cramer and his wife Erika drove over from Graaff-Reinet to see if there was anything noteworthy to learn. So did lawyer Derek Light, who represents hundreds of Karoo landowners opposing fracking.

Also present were a few farmers, Inxuba Yethemba’s acting mayor and acting municipal manager, a few local ward representatives from Michausdal and Lingelihle and one lone Cradock businessman.

But it turned out to be curiously anticlimactic and almost as badly attended as the golf club meeting – with a total of 18 in the audience and 5 Shell people upfront.

The Shell team was there to glad-hand, to answer questions, to put their case across, and probably to conform to their corporate agenda of approachability and public participation. Box ticked.

Jan-Willem Eggink

Jan-Willem Eggink, former biologist, is the outgoing general manager of Shell Upstream in South Africa.

Shell’s Karoo Meeting Methodology

These are a few of the dependable features of any Shell meeting in the Karoo nowadays.

  • The Upstream Shell team will generally fly in from Cape Town, hire a car and stay in a decent local guesthouse. Their top guys. Even for a one-off, tiny gathering of random people;
  • There is always a projector present for a tedious Powerpoint presentation;
  • One hapless Shell person has to stand up before the meeting to alert attendees that the doors they’ve just entered by can double up as exits in the case of any kind of emergency;
  • They always bring a little model with them to show how awesome and impermeable their underground well casings are. It is perched on a table until someone asks about water pollution;
  • There are snacks.
cradock, shell

Shell people and their well casing model. From left to right: Riaan van der Walt, Herman Neethling and Mbuyiselo Nombembe.

Unbelievably, it seemed that this was going to be yet another of those meetings. Even the usual suspects were present:

  • Shell Upstream general manager Jan-Willem Eggink (shivering in the Karoo winter cold with only shirtsleeves and a jacket);
  • His colleague Niall Kramer. Both Eggink and Kramer must have been to hundreds of meetings with grumpy Karoo locals by now;
  • Shell’s local community liaison officers, Mbuyiselo Nombembe and former Cradock Courant editor Riaan van der Walt.

Eggink’s Replacement

Jan-Willem Eggink, Herman Neethling, Shell

Jan-Willem Eggink (left) and his replacement Herman Neethling.

But this time they’d brought along someone new: the man who replaces Jan-Willem Eggink when he departs South Africa for Holland at the end of June.

The new Shell Upstream General Manager is a remarkably youthful-looking chap by the name of Herman Neethling. He is a South African and is so new to his position that his business card still has his last job description on it: “Business Development Manager, Shell International Exploration & Production BV, The Hague, The Netherlands”.

Neethling did not have very much to say beyond introducing himself, pronouncing himself excited to be joining the project, and explaining he’s been working abroad for various countries with Shell.

Fortunately, we were spared Shell’s Powerpoint presentation this time because the projector had a bulb meltdown, providing an interesting image of Shell’s Karoo concession being slowly devoured by black dots.

Then it was the usual angry raising of issues from the floor, with the Shell team batting them down, dismissing them or denying them.

Niall Kramer, Shell

Niall Kramer in front of the misbehaving projector image.

Double Downer: Oil Price and MPRDA

Some of the more notable facts that emerged were:

  • Because of the low oil price, Shell “has to be frugal with its investments and areas of exploration”, according to Eggink. He said Shell was prioritising shale development in North America, China and Russia. “South Africa is an option. It depends on the regulations and our application.”
  • Eggink confirmed that Shell would not sign any exploration agreement, even if the exploration licence were given to them tomorrow. “We and other companies are unhappy with the (current version of the) Minerals and Petroleum Resource Development Act. We want that finalised before we commit.”
  • Eggink and his team mostly talk about 6 exploratory wells these days – that’s their minimum contractual obligation. Back in 2011 they spoke more about drilling 24 exploration wells across their 90 000 square kilometre concession);
  • Finding commercially viable quantities of shale gas in the Karoo is not a foregone conclusion. Eggink and Kramer emphasised this point several times.
Jan-Willem Eggink, Shell

This was one of Jan-Willem Eggink’s last meetings with Karoo locals.

Derek Light pointed out that no matter how strong their well casings, cement and steel inevitably crack and corrode and 100% of the wells would leak sooner or later. Eggink denied this was the case, but didn’t satisfactorily explain how they could possibly be immortal.

Eggink said the recent US Environmental Protection Agency report proved that fracking did not cause any risk to water resources. Dr Stefan Cramer corrected him, saying the American environmental regulator’s report had been compromised by lack of co-operation from oil and gas companies as well as non-disclosure agreements between victims of fracking pollution and companies.

The Shell people still cannot say where the water will come from if they enter full production, except to say trucking it in would not be their first choice, and that part of exploration would involve examination of deep briny water far below the freshwater aquifers.

Derek Light pointed out that if they go ahead with full production using the figures they mention of 32 wells on a frack pad 5 kilometres apart, the sums completely overwhelm normal calculators. The quantities of water needed are staggering – at least twice what the Gariep Dam holds.

Eggink retorted they would recycle the produced water from fracked wells so the numbers would not be as huge.

Cradock Shell

Erika Cramer (foreground) pointed out that renewable energy had created 400 000 jobs in Germany.

Karoo Jobs, Renewables and Shale

There was heated discussion over jobs, with Eggink saying electricity produced from shale gas could directly and indirectly create thousands of jobs.

Erika Cramer said he was misleading hopeful jobseekers in the Karoo and pointed out that Germany’s renewable energy projects had already created 400 000 jobs.

Derek Light, Karoo, fracking

Derek LIght has stood firm against fracking in the Karoo since 2009.

Towards the end of the event, lawyer Derek Light, who has stood firm against would-be frackers since 2009, gave a gruff but touching farewell to Eggink.

“Despite our differences, I respect the way in which you have carried yourself. I wish you well.”

Eggink appeared taken aback and genuinely moved.

In return, he recounted the story of the day he had first met Derek Light in a television or radio studio back in 2011. “Derek came forward and shook my hand. Then he said ‘I’m the one who will stop you or delay you.’

“I’ve never forgotten that.”

  • At the end of proceedings, all the combative posturing and hostile questions and retorts faded away. Eggink and Kramer started asking locals where they should go for supper. Kramer was all for hunting down a pizza at Mila’s. But Eggink good-naturedly used his seniority to insist on the delicious buffet at the Victoria Manor Hotel. It would probably be one of the last times he ate Karoo lamb….

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6 Responses to Shell Spinning its Wheels

  1. Jonathan Deal June 10, 2015 at 2:15 pm #

    Thank you Chris and Julie for a great account – just what we needed. My mommy tried to get me to practice that ‘if you don’t have anything nice to say, then don’t say anything at all’ – so apropos Shell and their smiley staff – mums the word!

  2. Yetypu June 10, 2015 at 2:32 pm #

    Whimsical report, thank you.

    Just to comment on why Derek Light is wrong & Eggink right with “that no matter how strong their well casings, cement and steel inevitably crack and corrode and 100% of the wells would leak sooner or later. Eggink denied this was the case, but didn’t satisfactorily explain how they could possibly be immortal”.

    Immortality is not needed – once a well has ceased producing, after some 20 to 60 years of life, uncemented casings could be removed & the well filled with cement. In England the abandonment requirement is that it be plugged from bottom to top with cement. In 1930s Pennsylvania sacks or logs were stuffed down & several sacks of cement dropped on top with a bucket, called a dump-bailer. I’d recommend SA adopts the English standard.

    As to this 20 to 60 years – degradation of steel or cement in a well is quite different from its occurrence on the surface. The downhole environment is relatively anaerobic, the temperature higher, the cement is constrained, stopping ‘cracking’, etc. The downhole environment needs to be known – its electric charge, the fluids & solids present etc. Neither steel nor cement are single simple substances – carbon steel & chrome steel {‘stainless’} are very different & so are the various compounds in set cement – these should be tailored to the planned use.

    • Jan Arkert June 10, 2015 at 3:56 pm #

      Yetipu

      I wish that I could share your confidence about casing that does not need to be immortal.

      1. All rocks and therefore the boreholes that are drilled into them are subjected to a stress regime., The failure of the outer cement due to stress, bearing in mind that cement is strong in compression but weak under tensile stress. The resulting cracks will enable fluid migration with time.

      2. A geothermal gradient, with hotter fluids at depth and cooler fluids nearer the surface, will enable circulation of fluids through the borehole.

      3. Natural fractures within the host rock are not devoid of oxygen and therefore the conditions may not be anarobic as you suggest.

      I am strongly of the opinion that once a borehole has been drilled it is there forever, however the well isolation systems cannot be designed to last forever. And “forever”is a time span that exceeds the best abilities of Shell and any other gas company.

      Jan Arkert

      • Yetypu June 10, 2015 at 4:42 pm #

        Jan,

        We know about the stresses in rocks – that is one pre-indicator of fracture direction. What tensile stress do you envisage on a bounded cement column under pressure?

        Most people don’t see the three dimension nature of the casing/ cement arrangement. The casing provides a radial seal, is circular, hence strong, in cross-section and is supported on all sides by the cement. The cement in turn is providing a longitudinal seal, exceeds the hundred feet recommended seal thickness & is constrained under pressure so as not to be exposed to tensile loading. It should also be checked for shear & compression bonding by logging before any fraccing.

        I said ‘relatively anaerobic’.

        There is much science & engineering behind well construction & stimulation, especially by a company like Shell {google their Rijswijk facilities} – but Julie would prefer me not to monopolise her posts BTL, so I’ll end here.

  3. Fanie van der Walt June 13, 2015 at 7:44 am #

    Whatever the merits or demerits of fracking, it seems to me that people are losing sight of the final issue: we need to reduce carbon emissions. Gas means methane and other hydrocarbons, which are carbon based. Much better to spend the money on photovoltaics, in my humble opinion. And battery development.

  4. Paul Botha June 21, 2015 at 7:26 pm #

    This sums it up for me: “Fortunately, we were spared Shell’s Powerpoint presentation this time because the projector had a bulb meltdown, providing an interesting image of Shell’s Karoo concession being slowly devoured by black dots.”

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