Information transparency in the European oil and gas industry

Europe fears its energy ties to Russia, but most countries refuse to embrace fracking as an alternative. Will more information change hearts and minds? What is technology's role?

By Jasmit Sagoo November 28, 2014

Transparency (both regulatory and voluntary) is vital to any industry as it is the only effective way to keep all stakeholders, decision-makers, and the public more informed about the realities of individual initiatives. This is no more important than in the oil and gas industry. Transparency can reduce environmental concerns or confusion that parties involved in the process might have, and ultimately reduce associated risks. This is nowhere more important than in contentious projects, such as those associated with fracking.

Fracking has the potential to revolutionize the supply of energy in the short to medium term, and as such cannot be ignored. In the U.S., shale gas has emerged seemingly overnight from obscurity to becoming the main engine of economic recovery in the country. Meanwhile, Europe’s future gas supply has seldom been less certain. According to figures from Oxfam, Europe currently imports half of its energy, with Russia the top supplier for both oil and gas. Indeed, European countries paid more than $310 per person to Russian oil and gas companies last year.

Europe clearly needs a long-term solution to its energy needs and one that will allow it a measure of independence. On the surface, shale gas seems the perfect fit.

Fear of fracking

But many Europeans are not so sure. For some, the social and environmental impacts of fracking, the process by which shale gas is extracted, are too big a price to pay for a secure energy supply. Many Europeans worry that fracking will disrupt their local communities and bring with it mining techniques that may not be safe. There is a perception fracking could also cause gas to leak into the water table, potentially polluting potable water reserves. Though these contentions have yet to be proved, the worry remains.

Opinions on fracking vary greatly across EMEA. In France, Bulgaria, and Romania, fracking is illegal because their governments are concerned about the potential environmental impact. Other countries, such as Germany and the Czech Republic, are considering moratoriums to give themselves ample time to consider the evidence. Elsewhere, such as in the UK, governments who have adopted the use of shale gas have seen an economic boom similar to that enjoyed in the U.S. However, this is often in the face of widespread opposition from the public.

Information vs. rumor

To a large extent, the battle over fracking in Europe is about information. The question of transparency, governance and collaboration – and practicalities over how such information can be made available – keeps fracking in the hot seat for debate.

At a bare minimum, fracking projects must be approached with diligence and care if critics are to be persuaded. As part of this, any of the possible benefits of drilling in each individual case must be fully explored, understood, and communicated to all stakeholders before action is taken. Digital technology will be a key means to enable this.

The role of EPCs

As with any large-scale oil and gas project, EPC (engineering procurement and construction) contractors and operators must conduct a great deal of research on issues such as health and safety, environmental impact, and compliance before even thinking about drilling. As much data as possible must be collected, analyzed, reported on, shared, and discussed to ensure that all outcomes of an individual project have been taken into account.

A lot of this research is already conducted and documented during traditional gas and oil drilling operations. This is where transparency is required: EPCs should not be afraid to make a great deal of this information available to the public. If local communities can see the work that has gone into weighing economic benefits of a fracking project against any negatives and that all safety concerns have been identified and mitigated, then they are far more likely to be won over to the extraction of shale gas.

Technology to control distribution

It is here that digital technology becomes essential, with information management solutions set to play a key role. Modern engineering document control solutions with big data analytics capabilities can help EPCs create, manage, and review reports and intelligence. Current solutions include unified information repositories so that all critical information is stored in a centralized location. This provides all stakeholders with a common pool of information and analysis on which to base their decisions and predictions, while also leaving auditable reports for compliance purposes.

Further, these reports, as well as other relevant information, can then be shared with local communities by allowing them controlled access to the unified content repository. Further, information management solutions can make it possible for companies that want to be transparent to create public-facing reports and documents and make them available. In this manner, all commercially sensitive information can stay protected, but the public will be granted permission to view reports for a completely transparent and balanced view of the operations.

In the debate currently raging around fracking, the ability of oil and gas companies to win governments and local communities over to their cause will largely come down to how well they can marshal and leverage the information at their disposal. As with any oil and gas project, the more open they can be about addressing stakeholder concerns, the more likely they are to build trust and move forward.

Jasmit Sagoo is a principal systems engineer, EMC Information Intelligence Group.

Original content can be found at Oil and Gas Engineering.