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Gas, Shale Gas

Drilling through the spin – UK shale gas exploration

Shale gas pad drilling. Courtesy Statoil

Cuadrilla Resources, Britain’s first shale gas exploration license holder, claims a 500 square miles area around Blackpool, Preston and Southport contains enough methane to meet national gas demand for at least 50 years and create thousands of jobs. Proponents say Cuadrilla’s resource is revolutionary, opponents say shale gas is unnecessary. Who’s right? Tim Probert digs deep for the answer. This article first appeared in the December 2011 issue of Materials World.

2011 will go down in history as a year of revolution. Tunisia. Egypt. Libya. Blackpool… Blackpool? If Cuadrilla Resources is to be believed, this may not seem so brash.

On 21 September, Lichfield-based Cuadrilla, a joint venture between Australian drilling firm AJ Lucas and American private equity firm Riverstone, announced a 500 square miles area of the Bowland sedimentary rock basin in West Lancashire, for which it holds shale gas exploration licenses, holds a total potential resource of 5.66 trillion m3 of gas, or more than 10 times existing UK natural gas reserves.

This figure came as a shock to the British Geological Survey (BGS), which officially estimates shale gas reserves for the entire nation at 150 billion cubic metres. Cuadrilla said this volume of methane would meet UK natural gas demand for 56 years, lead to £120m in business rates being paid to local councils over 30 years, £5-6bln in tax revenues for the government, and up to 5,600 new jobs created with an average salary of £55,000.

This shale gas El Dorado is found predominantly to the west of the M6 motorway and includes the towns of Southport, Preston and Blackpool, some of the most economically deprived areas of the UK. Since Cuadrilla’s announcement, there has been a plethora of media reports focusing on how shale gas is a potential ‘game-changer’, a lifeline in hard economic times similar to North Sea oil in the 1970s and 1980s.

Bowland Shale Exploration License Area 1. Preese Hall. 2. Grange Hill Farm. Courtesy Cuadrilla Resources.

Much like nuclear power, the shale gas industry has more than its fair share of supporters and opponents. Prominent former Chancellor and energy minister, Nigel Lawson, calls shale gas ‘the most exciting technological development I can recall’. Others, particularly environmental non-governmental organisations (NGOs), are less keen. Concerned about environment degradation and the impact on renewables investment, WWF has called for an outright ban.

The Bowland shale dates from the Carboniferous Period 363-290 million years ago. In contrast to conventional gas extracted from porous rock, shale is relatively impermeable, meaning gas cannot easily move through the shale the well is drilled in.

Getting down to it
In order to release the methane, drillers use a method called hydraulic fracturing, also known as fracking, which essentially involves pumping a large amount of water, sand and chemicals at high pressure. Cuadrilla intends to use a technique called pad drilling, with up to 10 drill wells radiating horizontally for distances of up to six miles from a single site, or pad.

This technique has been used for decades, but the improved ability to steer drillbits using off-the-shelf technology has made horizontal fracking cost-effective. The facility to perform surface data acquisition to locate gas in the rock, rather than drill right through the shale as previously, has also brought down costs.

It must be stressed that Cuadrilla’s figure of 5.66 trillion cubic metres is for ‘gas in place’ in the Bowland basin and not proven reserves. It is very much an estimate, calculated by multiplying the area of shale rock by an average figure of how much gas may be extractable from this particular type of shale.

James Elston, CEO of London-based shale gas consultancy Palladian Energy, says the most that could be realistically extracted is 20%.

That would be roughly equivalent to the Troll gas field in the North Sea, which holds 60% of Norway’s gas reserves. ‘But they’ve only drilled two wells,’ notes Elston. ‘Only when they’ve done seven or eight fracks over a wider area will we get a true idea of how much shale gas is down there and how much can be got out.’

Image of a completed well pad with 10 wells (computer generated). Courtesy Cuadrilla Resources

Standing in the way of development

Despite the huge potential reserves of shale gas in the Bowland basin and elsewhere in the UK, there are many factors that may hamper development – firstly, the huge controversy over fracking. Cuadrilla was forced to halt drilling in May when the BGS suggested fracks at depths of 2.0 and 2.7 kilometres caused two small earth tremors with magnitudes of 2.3 and 1.5 on 1 April and 27 May respectively.

Cuadrilla met with the UK’s Department of Energy and Climate Change (DECC) on 13 October to discuss how the developer intends to mitigate the risk of earthquakes. DECC is currently evaluating the report in tandem with the BGS before it will allow fracking to resume.

There is also considerable concern over the impact on water supplies. Cuadrilla expects to use 13,000m3 (1,000 for the drilling process, 12,000 for fracturing) per well in a six-well pad. Of this volume, equivalent to five Olympic swimming pools, approximately one-third returns to the surface.  Cuadrilla’s fracking fluid consists of 99.75% water and sand, with the remaining 0.25% comprised of three additional ingredients: a friction reducer called polyacrylamide, a biocide to purify water and a weak hydrochloric acid to help open the perforations to initiate frack fluid injection.

As the fracking process takes place several thousand feet below the layers of aquifers, DECC believes it is highly unlikely they will be polluted. However, the USA’s Environment Protection Agency has found there is a serious risk of groundwater pollution from improperly constructed wells, for example where boreholes have not been cased with a steel pipe cemented in place. Cuadrilla says its boreholes will be triple-cased between the drill shaft and the aquifer, while the site will be protected by an impermeable membrane to guard against surface spills – see diagram:

Bowland shale well schematic. Courtesy Cuadrilla Resources

Due to UK ownership rights, where mineral rights belong to the Government and not the landowner, DECC expects shale gas development to be relatively limited. Shale gas drillers have to obtain an exploration license from DECC, but it is up to local councils to allow developers to exploit the shale. This may limit shale gas development in less economically deprived areas such as the Weald Basin, which covers Kent, Sussex and Surrey.

Energy minister Charles Hendry MP says, ‘Getting permission from property owners and landowners will be challenging. Visually, however, these are not intrusive facilities and are of a short-term nature. I think people can be persuaded about shale gas for the wider national good and local benefits in terms of job and wealth creation.’

Spot the difference
The Bowland basin is often compared to the vast Barnett shale in the USA, which provides five per cent of US gas supply, as they are both Carboniferous rock. As Abhen Pather, Senior Geologist with Henley-on-Thames’ RPS Energy, explains, there are some very important differences.

‘The Barnett shale has flat, plane-like deposits. The drilling can go on for miles, flat, in one direction with a good chance of intersecting the shale gas. The Bowland shale is a narrow shoestring rift basin characterised by typical rift scale tectonics. This geology needs complex multi-lateral wells with fancy footwork in order to hit the target.

‘Bowland shale is thicker than anything in the US, where gas reservoirs are typically 100 metres thick. Rift basins are very thick, with gas reservoirs up to around 1,000 metres. That’s why Cuadrilla is quoting 200 trillion cubic feet, but whether they can get it out is a challenge.’

Shale gas wells decline rapidly – Cuadrilla says the typical decline rate is 40% within two years. To exploit the Bowland basin successfully, Cuadrilla may need to drill six to eight boreholes per square mile and up to 50 wells a year, at a cost of £10.5m each.

The lack of suitable drilling rigs, however, is the most important issue impairing shale gas production, according to Joseph Dutton, Unconventional Gas Analyst at Canterbury-based energy researchers Douglas-Westwood. Deep, multiple-stage fracking ideally requires a drilling rig with at least 2,000 brake horsepower (BHP), says Dutton.  ‘We’ve identified only 78 rigs in western Europe, 49 of those have a rated torque of less than 1,500 BHP, 17 have 1,500-2,000 BHP and only 12 with greater than 2,000 BHP. There are big bucks to be made from companies able to step in and address drilling rig issues.’

Bowland shale full-time jobs generated by three test wells. Source: Regeneris Consulting.

Those who assume shale gas production will suddenly explode, as in the USA where it accounts for around a quarter of natural gas supply, may be disappointed. The UK may not become a significant producer of shale gas until 2020, says Dutton, as costs of production are around four times more than pipeline natural gas and twice that of imported LNG.

Elston says, ‘Rabid proponents who say shale gas will lead to lower natural gas prices are being disingenuous. What it does is offer a subsidy-free energy source with security of supply, jobs in depressed areas and government revenue, but it won’t change the need for zero-carbon sources of energy.’

Shale gas is not the environmental catastrophe some NGOs would like us to believe. Equally, it is not quite the cheap and abundant source some proponents say. The shale gas ‘revolution’ appears not to be quite so revolutionary. At least, not yet.

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About timprobert

Journalist & Owner, Millicent Media

Discussion

8 thoughts on “Drilling through the spin – UK shale gas exploration

  1. There are currently 4 licenses for shale gas exploration in Northern Ireland. The most contentious (so far) is the Tamboran licence for west Fermanagh which specifically states hydraulic fracturing will be used. A group of people who are are very concerned about fracking have been lobbying MLAs and presented a petition to our Assembly on 6th December requesting a moratoriumon on fracking and withdrawal of the licences. Following the handing over of the petition, our MLAs held a debate on ‘Hayfraulic Fracturing’. The motion proposed was ‘That this Assembly believes that a moratorium should be placed on the onshore and offshore exploration, development and production of shale gas by withdrawing licences for hydraulic fracturing (fracking), at least until the publication of a detailed environmental impact assessment into the practice; notes that hydraulic fracturing can put local water sources at risk of contamination; further notes that, amongst a variety of adverse environmental impacts, the process of fracking can cause serious well blowouts, which put both workers and local communities at risk; considers that the production of hard-to-reach fossil fuels is not compatible with efforts to achieve carbon reduction targets; and urges the Minister of Enterprise, Trade and Investment to give greater support to the generation of energy from renewable sources instead.’

    49 MLAs voted for the motion, 30 voted against and 13 abstained. However the moratorium/withdrawal of licences cannot be legally enforced so the campaigners expect that the party with the veto, the DUP- who all voted against – will ignore the result of the motion.

    That’s just a bit of background if you are interested in covering these licences. A good starting point is http://www.detini.gov.uk/deti-energy-index/minerals-and-petroleum/petroleum_licensing_2.htm.

    Hope you cover this as the issue is getting very little coverage in the local Northern Ireland media and none at on in the national media.

    Posted by Majella McCarron | 11/12/2011, 7:35 PM
  2. Hi Majella,

    Thank you for your comments.

    Fracking is certainly highly contentious.

    As an impartial journalist, I can see both sides of the argument. What I will say is that environmental regulations are much more strict in the UK than in the US. The early days of fracking were a kind of Wild West, a free-for-all where developers fracked first and asked questions later.

    This is mostly due to slack regulation – the then US vice-president/ex-CEO of Halliburton Dick Cheney exempted fracking from federal Clean Water and Safe Drinking Water Acts in 2005 – and there is growing evidence that rivers and other water sources have been polluted.

    As I state in my article, the risk comes from inadequate well construction. It is not at all clear that US wells were all cased with a steel pipe cemented in place, much less triple-cased between the drill shaft and the aquifer as Cuadrilla insists will happen in England.

    Tony Grayling, head of environmental policy at the UK Environment Agency, seems pretty sure that the risks from fracking can be managed. Last month he said the EA had conducted several tests at Cuadrilla’s fracking sites for abnormal levels of methane in water etc. and the levels were not cause for concern.

    Grayling also says the high volume of water needed for fracking will result in a relatively high amount of naturally occurring radioactive material (NORMs) flowing back to the surface. Again, this can be managed.

    The EA thinks the disposal of these fluids at wastewater treatment facilities should require an environmental permit, which adds to the cost of fracking. A representative from Veolia told me that the cost of water treatment in the US is up to $3 million per frack, but due to deeper European wells up to three times more water may be required.

    A US energy lawyer tells me that water costs will be ten times higher here than in the US and may actually make shale gas uneconomic.

    Posted by timprobert | 13/12/2011, 10:24 AM
  3. http://www.scientificamerican.com/article.cfm?id=the-truth-about-fracking

    Hello Tim
    I live in America at the moment but come from NI so am involved with this issue in both places. Certainly there is a perception that regulation in America is lax. Thus when I heard about the proposals for the UK I was alarmed as I had assumed that stricter EU laws would almost automatically rule out Fracking. I do not believe the industry is either reputable or safe. I appreciate this is only an opinion but it is an informed opinion. I would refer you to the Scientific American article above. This gives a pretty balanced view of some of the issues involved. One thing it takes into consideration is the idea that making the concrete casing stronger will fix the problem of leaks to the upper water aquifers. Stronger casings are of course a good idea but with the earthquake variable I do not think it will be possible to accurately predict how strong this needs to be. I have a lot of friends who work in stress engineering and have asked their opinions on this. Although they all specialize in metals they concurr that there are too probably many variables to analyse what is happening underground.
    When I heard about the proposals for NI I wrote to the Department involved asking what new regulations had been put in place to cover the process of Fracking. I was told that existing regulations would be adequate. Existing regulations cover mining and there have been examples of inadequate controls in mines in NI.
    Another issue is the legal aspect of the lease. It is typical for landowners to regret the decision to allow gas fracking onto their land but it is almost impossible to get out of the lease and many landowners have had the terms of the lease changed or “force majore” declared. I asked about this also to see if the UK would be making any special provisions to protect landowners or regulate the gas companies regarding this. I was told it would be advisible for landowners to see a solicitor before signing a lease. The American landowners did this but there are not many international petrochemical specialist solictitors locally availiable in rural locations. Those with the expertise in this area tend to be working for the gas companies. These companies have a habit of dissolving reforming, being subsidaries, subcontracting work, changing name etc. which makes claiming compensation extremely difficult. I would like to see a journalist investigate the depths of this issue. I just recieved word from a friend in Ohio who has not signed a lease but most of the landowners around her have. They have all just received new leases from a new company different from those they signed and they have no recourse.
    Thankyou for covering this issue, it has many aspects but one common theme is how unhappy the people are in the places where this takes place. There is often a hoenymoon period when the money starts to come in but this seems to be replaced by regret and a desire to let everyone else know not to trust the gas companies. I have been following this story for 4 years and have not found anywhere yet where there has been a different story. With that in mind I do not see why the UK should rush into lots of gasfields at the same time a cautious approach seems most prudent. Let these international companies prove the new technolgy but not on our densely populated islands.

    Posted by Dawn Bourke | 13/12/2011, 5:07 PM
  4. Hi Dawn,

    Thank you for your (excellent) comments.

    I’ve only been following shale gas for a few months in my capacity as a freelance journalist but I find it fascinating subject matter.

    There seem to be two camps. Rabid proponents and fierce opponents with too few people in between to give balance.

    I’ve written a number of articles about shale gas now and my view is that the environmental dangers are overblown and the people spouting that shale gas is like North Sea oil all over again are usually disingenuous, anti-renewable, climate change sceptic types I wouldn’t trust with a fiver.

    The earthquake thing is a red herring. The weak link seems to be in the water and wastewater issues. Off the record, very senior people at the British Geological Survey say that it and the UK Environment Agency aren’t on top of these issues and the public concern over potential groundwater and water supply contamination has caught them out.

    As I wrote in my article (http://millicentmedia.com/2011/11/02/british-geological-survey-cuadrilla%e2%80%99s-shale-gas-estimate-unreliable-to-release-new-figure/), ‘British Geological Survey: Cuadrilla’s shale gas estimate unreliable, to release new figure’, it and the EA have not yet conducted a baseline study into the impact of fracking and potential methane contamination of groundwater.

    Mike Stephenson, head of energy at BGS, said: ““We want to determine the background levels of methane in groundwater before anybody fracks so that any other methane found can be attributed to fracking.

    “It’s very important to do a baseline study. It can be done quickly, it’s just a case of measuring wells and the amount of methane in them. It’s a priority, but it doesn’t need to stop the fracking process.”

    I must put in a call to the BGS to ask how the baseline study is coming along…..

    Posted by timprobert | 13/12/2011, 5:55 PM
    • Tim
      Can you keep us up to date on the BGS baseline study.
      Thanks
      Majella

      Posted by Majella McCarron | 17/12/2011, 1:42 AM
      • Hi Majella,

        The BGS has just put out a press release about this: http://www.bgs.ac.uk/news/NEWS/Groundwater%20Methane%20final.pdf

        UK Shale Gas and Groundwater Methane

        The British Geological Survey is undertaking a new project to establish the baseline of methane levels in groundwater throughout the UK.

        Evidence from the USA has shown very high methane concentrations in groundwater in areas of shale gas exploitation, which have been directly related to shale gas operations.

        However there is considerable uncertainty as to the source of methane, its migration pathways and transport processes, and crucially there is no baseline data on methane concentrations in groundwater from before the onset of shale gas exploitation.

        In the UK, the BGS are therefore establishing a baseline for methane in groundwater in different aquifers before shale gas development gets underway, against which future environmental impacts can be assessed and appropriate management decisions taken.

        Professor Mike Stephenson, Head of Energy at the British Geological Survey says “this is a unique survey which will serve as a baseline for all future shale gas activities and ensure that we protect our precious groundwater.”

        The survey will establish the background concentrations of methane in groundwater in different hydrogeological settings with an initial focus on those areas identified for future shale gas exploration, starting with the northwest of England.

        Posted by timprobert | 20/12/2011, 4:12 PM
  5. Hi Tim,
    and thanks for presenting both sides’ arguments, however, I think it is important to consider thorouhly the impact and stability of polyacrylamide, since it will most likely partly monomerize (due to time and pressure) and end up heavily polluting the surrounding water, during the construction of the tunnel in Hallandsasen in Sweden (http://en.wikipedia.org/wiki/Rhoca-Gil).

    Posted by David Westsson | 30/11/2012, 3:04 PM

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