HEYCO has a very large footprint in the Bowland Shale, specifically in the Gainesborough Trough of the East Midlands. Yates enthusiastically explains that the in-place reserves there “have wonderful looking rock, full of gas.” The IP reserves are 650 billion cf per section, which is more than the Marcellus and Haynesville, and all above 10,000 feet.
On March 8, Ukraine President Volodymyr Zelensky addressed the United Kingdom Parliament from his bunker in Kyiv, just two weeks after Russia had invaded his country. He invoked Winston Churchill’s famous speech during World War II, saying, “We will fight for our land, whatever the costs. We will fight in the forests, in the fields, on the shores, in the streets.”
Zelensky’s address asking for additional aid in battling Russia was preceded by a presentation to Parliament from George Yates, CEO of Dallas-based HEYCO Energy. He was part of a group of U.K. shale gas industry leaders who were there to convince lawmakers to give them access to untapped shale gas on the island nation.
Yates believes the timing was a turning point. Many forces are coalescing to illustrate how he—a typically under-the-radar, third-generation industry veteran with experience in the Permian Basin, Spain, and the Bowland Shale in the U.K.—is the right man to play a constructive, practical role in Europe’s much-needed energy continuity. “The dominoes are falling,” he says.
The world is awakening to the realities of an energy transition that is driven by numerous competing factions. In an era where social media creates quick visceral reactions and narratives spin, piercing the veil of truth is a challenge. Yates brings a measured and balanced perspective. “We have to outline our objectives clearly: What is an energy system supposed to do?” he says. “You have to think big. Energy systems are fundamental to human lives.”
A fundamental need that’s ever-increasing. Globally, energy needs are expected increase 50 percent by 2050. “Net zero—as an absolute—will not deliver; you have to be flexible,” says Yates, an entrepreneur with a deep vein of geology informing his perspectives and actions. Climate science is complex and not perfectly understood. Low carbon cannot exist in isolation without energy security, he suggests. “Adequate supplies that are affordable and reliable are key,” he says.
The energy crisis in Europe began before the Russian invasion of Ukraine, revealing its bite in the winter of 2021. Yates notes that in Spain, as of late July, gas was selling for $50 mmbtu (a measurement that represents 1 million British thermal units). Dutch gas futures, called “TTF,” in mid-September for year-end delivery are approximately $64 mmbtu.
In Europe, electricity prices are high owing to its deregulated market; effectively, the most expensive and least efficient megawatt influences the direction of price—usually upward—when there are energy shortfalls. “At the margin, natural gas prices all electricity, which is why Europe’s natural gas prices are six to 10 times that of the U.S.’s,” says Jay Hatfield, CEO and founder of New York-based InfraCap Ltd., a firm that focuses on energy infrastructure investment funds. He expects upward pressure on prices through the winter with some convergence in the future. Large-scale infrastructure projects are a form of capital stock lock-in. As such, Hatfield believes that natural gas has a 30-to 40-year run, oil slightly less, even while addressing decarbonization.
Human necessity and welfare are the compounding factors, more so than any other time in the energy industry’s cyclical history. It’s not driven by boom and busts, shortages and surpluses—as is typical of oil and gas markets—but the necessity of what energy does, including lifting people out of poverty, Yates says. As a top global powerhouse, the United States is being called to action for a role in Europe’s energy security. “We are entering a cycle like no other in a cyclical business because of such different characteristics, underpinned by geopolitics and undercapitalization,” says Yates, whose impact and lifelong achievements in the industry are being recognized by D CEO with the top honor in its 2022 Energy Awards program.