Parish and Town Councillors meetings Chesterfield, Frodsham and Malton

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1 Parish and Town Councillors meetings Chesterfield, Frodsham and Malton 9-11 May 2016 This is a consolidation of the three presentations given in each regional area

2 Presenters Tom Crotty - Communications Director, INEOS Group Gary Haywood CEO, INEOS Shale* Tom Pickering Operations Director, INEOS Shale *Excluding the second Frodsham and the Malton presentation

3 AGENDA Introduction to INEOS The importance of gas for energy and manufacturing Our approach to shale gas in the UK Shale gas extraction Common concerns Q&A

4 INEOS safety performance OSHA Recordable Rate Per hrs: Employees + Contractors Chemical Manufacturing 1.00 Best in Class 0.3

5 INEOS Who Are We? A leading global chemical company Sales $40bn 17,000+ employees* 65 manufacturing sites in 16 countries including 6 in the UK 60 million tonnes of chemicals capacity 20 million tonnes of refinery products (400,000 bbls/day) We also produce gas from the North Sea to serve 1 in10 homes Our name isn t on the product label but we make the vital chemicals that go into the manufacture of everyday items

6 We Keep People Healthy Housed Mobile Clothed And in Touch

7 INEOS Energy Consumption To make our products and power our sites we need: Gas (methane) = Power generation INEOS uses 2% of the UK s gas supply Feedstocks (ethane) = Plastics We make raw materials and chemicals that go on to make items we all use in our everyday lives

8 UK Energy Mix - Gridwatch Energy demand at 6.30am today Energy demand at 7.00am today

Securing jobs Grangemouth Ethane Tank under construction

9 Investing in the Future INEOS has invested $1bn to bring ethane from the US A boost to our UK manufacturing Securing jobs Grangemouth Ethane Tank under construction 2015 Dragon ships to carry ethane from the US to Grangemouth

10 Before INEOS invested - we did our homework Are there likely to be viable shale gas reserves in the UK? Yes, but we need to drill and test production to confirm that What experience do we need to bring in to help us? Assembled a team of UK onshore experts and brought in top expertise from US on shale gas geology, drilling and fracking What can we learn from the US experience? Analysed data on evolution of techniques and best practice and on incidents and accidents to understand how and why they arose Can we extract gas safely and protect the environment? Yes, through engineering excellence combined with operational rigour

11 The INEOS approach UK Shale gas is a national asset and an opportunity Manufacturing Industry The Treasury Communities Security of supply Protect existing jobs Create new jobs and exportable skills Our approach is to demonstrate Technical rigour Transparent and open communications

12 INEOS Licences

13 INEOS Licences - East Midlands

14 Surface Assessment East Midlands

15 INEOS Licences - Cheshire

16 Surface assessment - Cheshire

17 INEOS Licences Cleveland Basin

18 Surface assessment Cleveland Basin

19 INEOS Shale - Likely activities 2016 to 2020 Currently reviewing existing seismic and other data Expect to undertake seismic data acquisition later this year and next Processing and interpretation of existing and new seismic data will inform planning applications for Vertical coring wells to understand the gas content in the shale rock Results of core wells will inform planning applications for Horizontal wells to be hydraulically fractured and flow tested Further core wells Results of flow tests will tell us if commercial production is viable

20 Resource in a Licence Petroleum Exploration and Development Licences can include the following resources: Coal Bed Methane Shale Gas Shale Oil Conventional Oil & Gas

21 Independent Assessments Trusted and independent bodies have studied the evidence and concluded that Shale Gas development is safe provided it is subject to best practice and robust regulation These include; The Royal Society The Royal Academy of Engineers The Health and Safety Executive The Environment Agency Public Health England Independent environmental campaigners also support Shale Gas development as a part of a balanced and transitional energy mix

22 UK Shale Regime & Regulations DECC Environmental Regulations The Health and Safety Executive Local Planning Approval Independent Well Verification

23 Royal Society Report: Shale gas extraction in the UK: a review of hydraulic fracturing The health, safety and environmental risks associated with hydraulic fracturing (often termed fracking ) as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation.

$Leadership for the environment Stephen Tindale: climate and energy consultant from the Green Alliance, ex Executive Director of Greenpeace UK climate campaigners should support fracking for shale gas.$

24 Leadership for the environment Stephen Tindale: climate and energy consultant from the Green Alliance, ex Executive Director of Greenpeace UK climate campaigners should support fracking for shale gas. Shale gas is not the best energy source. Renewables are better. But we cannot afford to make the best the enemy of the good..[a review of] 424 academic, government, industry and NGO publications [concludes that] shale gas is only per cent as climate damaging as coal is.

Public Health England: Review of the potential public health impacts of exposures to chemical and radioactive pollutants as a result of shale gas extraction The currently available

25 Public Health England: Review of the potential public health impacts of exposures to chemical and radioactive pollutants as a result of shale gas extraction The currently available evidence indicates that the potential risks to public health from exposure to emissions associated with the shale gas extraction process are low if operations are properly run and regulated.

26 Community Benefits INEOS is committed to sharing the benefits of shale gas development with landowners and the community 6% of shale gas revenues will be distributed to homeowners, landowners & communities close to well sites An area 10km by 10km could receive 375m over the life of production

27 Geological Review & Surface Management

28 28 East Midlands Geological Cross-Sections

29 29 Cleveland Basin Geological Cross-Sections

30 30 Widnes/Cheshire Geological Cross-Sections

31 Stages of Site Development Drilling rig

32 Stages of development - Hydraulic Fracture Spread

33 Stages of Site Development - Production

34 UK four-well gas production site aerial view

35 aerial view adjusted to resemble a shale site

36 UK four-well gas production site ground level view

Vertical Well Vertical drilled well uses multiple casing layers to ensure aquifer protection First string to below aquifer level using only water as the drilling fluid Casing

37 Vertical Well Vertical drilled well uses multiple casing layers to ensure aquifer protection First string to below aquifer level using only water as the drilling fluid Casing is cemented back to surface creating a further barrier Second casing string to m below aquifer, and cemented to surface Subsequent casing strings all cemented to surface

38 Horizontal Well Construction of the well site is done over a 3-4 week period Drilling a horizontal well will take 30 days 24hr operations UK shale on average 3,000m deep Horizontal section extends up to 2,000m

$5%) Well is hydraulically fractured in stages taking 1 hour for each stage Sand carried in the fluid props open the fissures$

39 Hydraulic Fracturing Frack fluid consists of water (98%), sand (1.5%) and chemical additives (0.5%) Well is hydraulically fractured in stages taking 1 hour for each stage Sand carried in the fluid props open the fissures created during the fracturing process

$5% of the frack fluid consists of chemical additives The number of additives used will depend on the specific characteristics of the rock for each well site.$

40 Hydraulic Fracture Fluid 0.5% of the frack fluid consists of chemical additives The number of additives used will depend on the specific characteristics of the rock for each well site. Very low concentrations are used The additives in frack fluid are classified by the Environment Agency as non-hazardous in the proportions proposed

Fracking Additives Uses In Everyday Life GUAR GUM Thickens water and found in cooking sauces, toothpaste and ice

table salt substitute SCALE INHIBITORS Used in antifreeze FRICTION REDUCERS Used in water treatment and face

BREAKERS Used in detergent and hair cosmetics CORROSION INHIBITORS Prevents corrosion of pipes.

41 Fracking Additives Uses In Everyday Life GUAR GUM Thickens water and found in cooking sauces, toothpaste and ice cream CROSSLINKERS Used in soap and cosmetics BRINE Typically produced with potassium chloride, a low sodium table salt substitute SCALE INHIBITORS Used in antifreeze FRICTION REDUCERS Used in water treatment and face creams HYDROCHLORIC ACID Used in food production, cleaning swimming pools and created naturally in the stomach BREAKERS Used in detergent and hair cosmetics CORROSION INHIBITORS Prevents corrosion of pipes. Used in pharmaceuticals, food flavouring, cosmetics and beverage production ADJUSTING AGENTS Used in soap, water softener, glass and ceramics

42 Concerns raised & how industry addresses them CONCERN Earthquakes Chemicals in fracking Aquifer protection Industrialisation of the countryside Truck movements Fugitive emissions Baseline monitoring On-going monitoring Responsibility for damage Public health Waste water disposal NORM s and other containments Fracking under property RESOLUTION 3D seismic to identify faults and traffic light seismic monitoring system Must be disclosed and classified as non-hazardous by Environment Agency Multiple layers of steel and cement to provide well integrity Very small footprint after drilling and fracking operation ends Established road network combined with traffic management plan Closed loop systems and ongoing monitoring Will be undertaken ahead of operations Wells, equipment and surrounding area to be monitored If we cause damage it is our responsibility to pay Public Health England satisfied no issue if properly run and regulated Captured, treated and disposed of safely & under licence Captured, treated and disposed of safely & under licence Possible but in a hole 15-23cm wide at more than 2.4km below ground

43 A common concern - Well Spacing

44 Our Commitment To Communicate We will be open and honest in our dealings with stakeholders We will explain our plans in detail with local communities We will keep stakeholders informed and involved in our activities

45 Thank you

Thorpe Salvin Parish Council

Thorpe Salvin Parish Council 13 February 2017 INEOS Who Are We? A leading global chemical company Sales $40bn 17,000+ employees* 65 manufacturing sites in 16 countries including 6 in the UK 60 million