Shale gas in the United Kingdom

See also: Hydraulic fracturing in the United Kingdom

Shale gas in the United Kingdom has attracted increasing attention since 2007, when onshore shale gas production was proposed. A number of wells have been drilled, and favourable tax treatment has been offered to shale gas producers.

In July 2013 UK Prime Minister David Cameron had claimed that, "fracking has real potential to drive energy bills down". However, in November 2013 representatives from industry and government, such as former BP Chief Executive and government advisor Lord Browne, Energy Secretary Ed Davey and economist Lord Stern said that fracking in the UK alone will not lower prices as the UK is part of a well connected European market. As of December 2014, there has been no commercial production of shale gas in the UK.

Areas

The Department of Energy and Climate Change (DECC) originally identified large areas of eastern and southern England as having the "best shale gas potential":

The main area identified runs from just south of Middlesbrough in a crescent through East Yorkshire, Lincolnshire, Northamptonshire, Buckinghamshire and the Cotswolds to Somerset and Wiltshire. It then turns along the South Coast and Downs, including most of Dorset, Hampshire, Sussex, Surrey and Kent. Shale gas sites are under investigation in the Sussex commuter belt, near Haywards Heath, the Mendip Hills, south of Bath, in Kent, Lincolnshire, south Wales, Staffordshire and Cheshire, as well as more sites near the existing find in Lancashire.

However the British Geological Survey report released in October 2014 said that there was little potential for shale gas in the Weald Basin. (see 'Weald Basin' below)

Bowland Basin

As of June 2013, the Bowland Basin was the only area in the UK where wells have been drilled specifically for shale gas. Four wells have been drilled by Cuadrilla Resources, and one by IGAS Energy. None of the wells have produced gas.

Cuadrilla started drilling Britain's first shale gas exploration well, the Preece-Hall-1, in August 2010. The well penetrated 800m of organic-rich shale. The company hydraulically fractured the well in early 2011, but suspended the operation when it triggered two small earthquakes, one of which was large enough to be felt by people at the surface. Work on the well stopped in May 2011, and the government declared a moratorium on hydraulic fracturing that was lifted in December 2012, subject to additional controls to limit seismic risk.

In September 2011, Cuadrilla announced a huge discovery of 200 trillion cubic feet (Tcf) of gas in place under the Fylde Coast in Lancashire. Cuadrilla stated that it would be happy if it could recover 10–20% of the gas in place. Lord Browne ignored this latter point in media interviews, claiming that the Lancashire discovery could satisfy the UK's gas consumption "for 56 years", with similar, sensational media reports claiming that the find was "so rich it could meet Britain's needs for decades", or that it had "the potential to do more for Lancashire than the cotton industry." (For comparison, the cotton industry in Lancashire employed, at peak penetration in 1811, 37% of the county, or about 70,000 people; Cuadrilla believes fracking will create 1,700 jobs in Lancashire, current population 1.1m). The British Geological Survey—responsible for producing inventories of the UK's mineral resources, and far more cautious in its estimates—felt prompted, however, to re-evaluate its projections in light of the find, which Cuadrilla believes could provide 5,600 jobs in the UK at the peak of production. Industry estimates suggest shale gas in Lancashire alone could deliver £6bn of gas a year for the next three decades.

In July 2013, Cuadrilla applied for a permit to hydraulically fracture its previously drilled well at the Grange Hill site. In April 2014, Cuadrilla published news of their continuing consultation with residents shale gas exploration sites in the Fylde.

In 2011 and 2012, IGas Energy drilled a deep well to evaluate shale gas, and found gas shows in the Bowland Shale, with total organic content averaging 2.7%. The formation was reported to be thermally mature, in the wet gas window. IGAS bought large blocks of gas licences in 2011, much of which is reportedly prospective for shale gas.

IGas announced that it would drill a well to evaluate shale gas at Barton, near Manchester. Drilling would begin in October 2013, and take two to three months. IGas has not applied for a permit to hydraulically fracture the well.

Weald Basin

A BGS/DECC report from May 2014 indicates that there is little potential for shale gas fracturing in the Weald Basin, south of London. It does suggest that there is the possibility for the extraction of light tight oil from shales (LTO)

Northern Ireland

According to February 2013 reports from PricewaterhouseCoopers, there could be £80 billion in reserves in Northern Ireland, although these claims were criticised as being sensationalist.

Resource estimates

According to a 2011 report of the Energy and Climate Change Select Committee, "Shale gas resources in the UK could be considerable—particularly offshore—but are unlikely to be a "game changer" to the same extent as they have been in the US, where the shale gas revolution has led to a reduction in natural gas prices." The Committee's chairperson, Tim Yeo, revised his personal opinion in 2012, however, and argued shale gas is a "game changer" that could "transform the UK's energy independence". Interest in fracking came just as imports of gas to the UK had surpassed domestic production in 2011 for the first time since the 1960s.

Comparison of natural gas prices in Japan, United Kingdom, and United States, 2007-2011

Estimating the size of recoverable resource is difficult due to the uncertainty of the usually small percentage of shale gas that is recoverable. In addition, companies may embrace large estimations of reserves to boost share prices. In the United States, companies had been subpoenaed in 2011 on suspicion that the projections they provided to investors, including press-release figures, were inflated. In 2012, national agencies in the U.S and Poland revised dramatically downward their estimates of shale gas resources.

Part of the problem in evaluation is also the uncertainty of decline curve analysis from early data: shale gas wells can fall off sharply during the first year or two, then level off to a slower decline rate; the shape of the curve, and therefore the ultimate recovery, is difficult to predict from early production rates.

Before drilling, IGas estimated gas in place of 4.6 Tcf in the Ince Marshes site, though it was unlikely that more than 20% of it could be recoverable; After drilling their first well, IGas announced that the estimated gas in place was at least double their previous estimate.

In early 2012, Celtique Energie estimated that there might be as much as 14 Tcf of recoverable reserves in countryside south of Horsham, West Sussex. Preliminary estimates in 2011 suggested that there may be £70bn worth of shale gas in South Wales, and 1.5bn bbl oil equivalent in Northern Ireland according to a report by PwC.

British Geological Survey

In June 2013, the British Geological Survey estimated the gas in place within the Bowland Shale of central Britain to be within the range of 822 TCF to 2281 TCF, with a central estimate of 1,329 trillion cubic feet (37,600 km³), but did not estimate how much of the gas was likely to be recoverable, and cautioned:

"Estimates of the amount of recoverable gas and the gas resources are variable. It is possible that the shale gas resources in UK are very large. However, despite the size of the resource, the proportion that can be recovered is the critical factor."

Industry estimates were that about 10% of gas in place could be extracted. 130 TCF would supply Britain's gas needs for about 50 years.

Comment from the British Geological Survey suggested even more substantial shale gas reserves offshore.

US Energy Information Administration

In June 2013, the US Energy Information Administration issued a world-wide estimate of shale gas, which included an incomplete estimate of recoverable shale gas resources in the UK. The Carboniferous shale basins of North of England and Scotland, which include the Bowland Basin, were estimated to have 25 trillion cubic feet of recoverable shale gas. The Jurassic shales of the Wessex Basin and Weald Basin of southern England were estimated to have 600 billion cubic feet of recoverable shale gas and 700 million barrels of associated oil. The agency noted that the UK shale basins are more complex than those in the US, and therefore more costly to drill. On the other hand, as of June 2013, the price of natural gas in the United Kingdom was reported to be more than double the price in the US and Canada by one source and three times higher by other sources.

Climate change

File:DECC electricity data.pdf Shale gas is largely methane, a hydrocarbon fuel. As such the carbon dioxide it produces contributes to global warming, although less so than coal. Of more concern is leaking or fugitive emissions of unburned methane, which is a greenhouse gas. It has been argued that, in opening a new source of hydrocarbons, it may reduce the incentive and financing of renewable sources of energy.

The 2008 Climate Change Act committed the UK to reducing CO2 emissions by 50% in 2030, and by 80% by 2050. Currently the UK is generating more than 30% of its electricity from coal, and replacing this with shale gas would be one possible solution that provides reliable on demand electricity as it has a greenhouse gas equivalent value of about half that of coal. Current National Grid energy sources can be seen on a live link

In April 2014, the Intergovernmental Panel on Climate Change (IPCC) issued its 5th Assessment report. With regard to natural gas, and the shale gas debate, it states "GHG emissions from energy supply can be reduced significantly by replacing current world average coal‐fired power plants with modern, highly efficient natural gas combined‐cycle power plants or combined heat and power plants, provided that natural gas is available and the fugitive emissions associated with extraction and supply are low or mitigated (robust evidence, high agreement). In mitigation scenarios reaching about 450 ppm CO2eq concentrations by 2100, natural gas power generation without CCS acts as a bridge technology, with deployment increasing before peaking and falling to below current levels by 2050 and declining further in the second half of the century (robust evidence, high agreement)".

A 2013 government-sponsored study of the effect of large-scale natural gas development in Britain concluded that emissions from shale gas could be consistent with meeting climate change targets so long as the emissions were counteracted by similar size reductions elsewhere in the world, although the authors suggest that 'without global climate policies...new fossil fuel exploitation is likely to lead to an increase in cumulative carbon emissions and the risk of climate change'.

In November 2014, the UK Energy Research Centre issued a report that stated "gas could play an important role as a ‘bridging fuel’ to a low-carbon economy, but warns that it won’t be long before gas becomes part of the problem rather than the solution". It noted that the UK imports more than half its gas, and that "gas use beginning to fall in the late 2020s and early 2030s, with any major role beyond 2035 requiring the widespread use of carbon capture and storage" It also states "Instead of banking on shale, UKERC recommends rapidly expanding investment in alternative low-carbon energy sources and investing in more gas storage, which would help protect consumers against short-term supply disruption and price rises"

See also

• Hydraulic fracturing in the United Kingdom
• Oil and gas industry in the United Kingdom

External links

• The Geological Society, Shale gas
• UK Onshore Operators Group, UK Onshore Shale Gas Well Guidelines, February 2013.