Fracking: where and why?

Shale deposits are extensive and development of shale gas could transform the UK’s energy supply. But at this stage there aren’t yet any wells in the UK recovering shale gas commercially – drilling is still only exploratory.  Exploratory drilling still requires various permissions and is a cause of concern for some communities.

Where and how much?

Shale beds, from which gas can be extracted by ‘fracking’, are not found all over the UK but do cover a wide South-East/North-West axis, running from the North East of England down to the South/South West coast.  A report for DECC by the British Geological Survey (BGS) shows the British formations with most shale gas potential. These include the Upper Bowland Shale (the source rock for the Irish Sea conventional fields, and where Cuadrilla were first exploring), and both the Kimmeridge Clay and Lias of the Weald Basin (source rocks for the North Sea and English Channel fields).

The best assessment of potentially recoverable shale gas resources comes from the BGS/DECC Bowland Shale Gas Study. It estimates just under 40 trillion cubic meters of gas are in these deposits alone.  A Parliamentary Office of Science and Technology note shows how this can be extrapolated to potentially recoverable resources of 1,800-13,000 billion cubic meters (bcm). This compares to DECC’s published figures of a current annual UK gas consumption of 77 bcm and potentially recoverable conventional gas resources of 1,466 bcm.

The results from the Bowland study were announced on the same day as the Government revealed its plans to stimulate the emerging shale gas industry. These included guidelines to speed up the planning and permitting regime and a consultation on tax incentives to encourage exploration of shale gas areas.

Exploration

Drilling and exploration are covered by the normal UK regime under which a UK Petroleum Exploration and Development licence (PEDL) allows a company to pursue a range of activities. DECC outlines the onshore licensing system on its oil and gas website.

There is no firm distinction between exploration for shale gas and exploration for conventional oil or gas, so it is difficult to confirm where shale gas exploration is being undertaken. A DECC map shows the onshore licences for all forms of oil and gas recovery but does not differentiate between shale gas and other types of gas.

This doesn’t mean the information is unavailable. Before shale gas drilling can begin planning permission must also be given and the campaign group Frack-Off has attempted to collate this and other information to map out active and planned sites.

Winning over communities

Fracking raises environmental and concerns from campaign groups and as a result opposition to shale gas drilling from communities has been strong – the protests at Balcombe are probably the most publicised.

Concerns over seismic activity around fracking sites and water pollution arise from problems encountered in the US where in some states fracking has been weakly regulated. Having reviewed the risks, the Royal Society and Royal Academy of Engineering concluded that the health, safety and environmental risks can be managed effectively in the UK, by implementing and enforcing best operational practice.

The Government plans to make shale gas more appealing to communities.  Last June it announced that £100,000 would be given to communities situated near each exploratory well along with 1% of revenues from every production site.  Companies have also pledged to engage with communities early (prior to any application for planning permission), and to provide community benefits in areas where shale is commercially extracted. A further statement, made by the Prime Minster last week, announced that local authorities would be able to keep 100 per cent of business rates collect from shale gas sites. This would double the existing 50 per cent figure and according to a Government estimate could be worth up to £1.7 million for a typical 12 well site.

Whether this wins over the public will be an important factor for the industry in the UK. Planning reforms, introduced through the Government’s National Planning Policy Framework and the Localism Act, should provide communities with more say about development in their area and with greater powers to determine the form of local development. However, local authorities, who also have a say in development, will be keen to consider the rates they could receive from commercial wells.

Author: Ed White