Fracking hell: What’s the future for shale gas in the UK?
Last updated on 28 July 2014, 7:54 am
Twelve months on from the battle of Balcombe, Britain is little closer to exploiting its shale gas reserves
By Megan Darby
A year ago on 25 July, activists converged on the West Sussex village of Balcombe for a quintessentially British protest.
Tea and flapjack circulated as locals, environmentalists and minor celebrities politely refused access to lorries carrying drills destined for a shale exploration rig.
They were objecting to efforts by oil and gas company Cuadrilla to exploit previously untapped reserves in shale rocks.
Activists feared that would involve the controversial technique of hydraulic fracturing or “fracking”: pumping water and chemicals into the well at high pressure to break up the rock and release its valuable hydrocarbons.
Over the next twelve months, the fracking debate was to intensify.
Politicians hailed shale gas as the answer to Britain’s energy woes and set about enabling the fledgling industry.
A few days before the anniversary of Balcombe, West Sussex County Council rejected a bid by Celtique Energy to drill not far from the site. It is believed to be the first time a local authority has refused permission to a shale exploration company.
A few days after, the government opened up half the country to bids for shale exploration licences.
After all the hype and placard-waving, what future is there for fracking in the UK?
It is not hard to see the political appeal of shale gas. Widely credited with slashing energy prices in the US, shale gas offers the alluring prospect of cutting household bills at a time when the cost of living is top of the national agenda.
Politicians who also care about the environment point to the greenhouse gas emission cuts the US achieved painlessly by switching from more-polluting coal to gas. Using gas straight from the ground is also lower carbon than importing it as LNG, which involves liquefying, shipping and regasifying the fuel.
As production from North Sea oil and gas fields declines, onshore development could slow the UK’s increasing dependence on imports.
Energy security is a hot topic throughout Europe, as tensions between Russia and the Ukraine elicit fears of disruption to key gas and oil pipelines. The downing of Malaysian airliner MH17 over the Ukraine last week, reportedly by pro-Russian rebels, only raised the temperature.
While the UK is far less reliant on Russian imports than other European countries, the crisis has highlighted the geopolitical risks of buying in fuel. Domestic production provides a buffer against those risks.
Then there is tax: the North Sea has historically been a major source of revenue. While the government is offering some tax breaks to the emerging shale industry, it can expect a net gain to the Treasury coffers.
For all these reasons, the government has been vocal in support of the shale gas industry.
Chancellor George Osborne says he wants Britain to be “a leader of the shale gas revolution”, which “has the potential to create thousands of jobs and keep energy bills low for millions of people”.
Ed Davey, the Liberal Democrat energy and climate change secretary takes a somewhat less bullish tone than his Conservative coalition partners.
“We must explore the benefits and investment shale gas may bring but that should not come at the expense of the environment,” he says.
The Labour Party, in opposition, says much the same. Three years ago it was calling for a moratorium on fracking, but it has since come round to the idea.
“Gas will remain an important part of our energy mix in the future, and if shale gas can replace our rapidly depleting North Sea reserves it could help improve our energy security,” says shadow energy minister Tom Greatrex.
He stresses there must be “robust regulation and comprehensive monitoring” to address “legitimate environmental and safety concerns”, however.
On the other side of the debate, shale gas fracking pushes plenty of buttons for activists.
Aside from the juvenile appeal of a drilling technique that resembles a certain four-letter word (why else would an opposition group call itself Frack Off?), it raises a potent mix of global and local environmental concerns.
These have filtered through into the public consciousness. The government’s public opinion tracker shows three quarters of people were aware of fracking, at the last count.
Some 22% of people opposed shale gas extraction, 29% were in favour and 44% stayed neutral.
On a global level, it is exploiting a new vein of fossil fuels at a time carbon sums show the world cannot safely burn its proven reserves.
That was the core objection of Caroline Lucas, the UK’s only Green Party MP. She joined the protestors at Balcombe and was arrested for her pains. Magistrates subsequently found her not guilty.
Speaking after her acquittal in April, Lucas said: “It is clearer than ever that exploiting new sources of fossil fuels such as shale gas is fatally undermining the government’s stated ambition to protect Britain from the worst impacts of climate change. The only safe and responsible thing to do with shale gas is to leave it in the ground.”
The Carbon Tracker Initiative estimates 80% of known fossil fuel reserves must stay in the ground if global temperature rise is to be kept to 2C. Beyond that warming threshold, scientists say runaway climate change is likely, with potentially catastrophic effect.
In the medium term, shale gas could deliver some carbon savings by displacing coal or LNG from the energy mix.
This is not as clear cut as it appears, however. Gas burns more cleanly than coal, emitting roughly half the carbon emissions for the same power output.
But that benefit could be undermined by so-called fugitive emissions, when methane leaks from shale wells. The jury is still out on how significant these leaks are.
What is more, activists argue a “dash for gas” could keep the UK locked into fossil fuel use for longer than would otherwise be the case. They would rather see the support go to developing renewables.
The UK’s former chief climate diplomat John Ashton puts it starkly in an article for RTCC.
He says: “You can be in favour of fixing the climate. Or you can be in favour of exploiting shale gas. But you can’t be in favour of both at the same time.”
Perhaps more obstructive to would-be shale gas developers are local objections, which range from fears of groundwater contamination to earth tremors.
In dramatic scenes of the 2010 film Gasland, residents near US shale wells set fire to water coming out of their taps. They blamed that and a number of chronic health problems on fracking activity.
The industry disputed many of the claims in the film and said hydrocarbons found in the water came from natural sources, not fracking.
There was plenty in the documentary to give regulators pause for thought, however. It has focused attention on the integrity of shale wells and the chemicals used in fracking fluid.
In the UK’s first fracking trials, it was seismic activity that raised alarm. Exploration company Cuadrilla suspended drilling in 2011 after a tremor was recorded near its site in northwest England.
At magnitude 2.3 on the Richter scale, the effect was reportedly similar to a heavy lorry driving past.
Experts from the British Geological Survey found fracking was the likely cause of the mini-quake, but said the risk of further rumbling was small and Cuadrilla could safely resume drilling.
UK regulator the Environment Agency has given cautious backing to shale exploration and promised robust safeguards.
Fracking proponents hope to replicate the US shale gas revolution in the UK. There are several reasons to suggest it will not be that easy – but the government is doing its best to smooth the way.
The British Geological Survey (BGS) has assessed three regions: the Bowland shale in Lancashire; the Weald Basin in the south of England; and Scotland’s Midland Valley.
It found substantial gas resources in only one of these, Bowland, with a central estimate of 38 trillion cubic metres. The Midland Valley holds around 2 trillion cubic metres and the Weald a negligible amount.
The Weald, which lies under Balcombe, and Midland Valley are estimated to hold around 11 billion barrels of oil. There may be an energy security case for extracting this oil, but certainly not a green one.
The BGS estimates are for “gas-in-place” and it is not yet clear how much can be recovered.
In the US, recovery rates typically range between 20% and 30%, according to the US Energy Information Administration.
If the UK extracted 10%, it could supply household demand for around 40 years.
However, critics point out that the geology, land rights, taxes, regulatory regime and supply chain in the UK all militate against a high yield and cheap gas.
To state the obvious, the UK is more densely populated than the US. As we have seen, there is lively opposition to shale developments that seems unlikely to go away.
And the environmental regulations that must be robust to reassure doubters are also bound to slow down development and increase costs.
Then there are the technical issues. It takes time to gain permits, carry out geological studies and drill test wells.
Development is still at an embryonic stage.
Cuadrilla, which has led the charge, is two or three years away from knowing whether its UK operations are commercially viable, according to a Reuters report.
If all constraints were removed, chief executive Francis Egan says “it would take two, three or four years to get up to appreciable production rates”.
In the absence of emergency measures, it is likely to take a little longer, with commercial production ramping up in the early 2020s.
The UK government has set up an Office of Unconventional Oil and Gas (OUGO) to encourage shale gas development.
A Freedom of Information request showed OUGO has a budget of £1.8 million this year and the equivalent of 10 full time staff on the case.
Other countries that have taken a more cautious stance on fracking, such as France and Germany, will be watching the experiment with interest.
So what does the future hold for fracking in the UK? It’s increasingly clear the economic prize of shale gas is evidently too tempting for UK politicians to ignore.
But there is a broad swathe of opposition across the country that will slow the industry down. And perhaps most critically, the economics of extracting shale gas have yet to be proven.